Insurance Co. Ltd. Vs. Rakesh Kumar Arora & Ors.  INSC 1634 (24
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 5876 OF 2008 (Arising
out of SLP(C) No. 23751/2004) UNITED INDIA INSURANCE CO.LTD. ...Appellant(s)
Versus RAKESH KUMAR ARORA & ORS. ...Respondent(s) ORDER Delay condoned.
setting aside the abatement is allowed.
This appeal is
directed against the judgment and order dated 20.5.2004 passed by a Division
Bench of the Punjab and Haryana High court at Chandigarh whereby and whereunder
the Letters Patent Appeal preferred by the appellant herein from the judgment
and order dated 9.10.2000 passed by the learned Single Judge in the said
F.A.No. 2627 of 1998 was dismissed.
One Balwant Singh
filed an application claiming a sum of Rs. 10,00,000/- (Rupees Ten Lakhs) by
way of compensation for death of his son Virender Singh in -2- an accident
which took place on 5.2.1997. The owner of the vehicle contested the said
claim. Appellant herein, inter alia, raised a contention before the Tribunal
that the driver of the vehicle, namely, Karan Arora was a minor on the date of
the accident and was not holding a valid and effective driving licence and thus
it was not liable to reimburse the owner of the vehicle.
In view of the
aforementioned stand taken by the appellant inter alia the following issue was
Whether the accident
resulting in death of Virender Singh alias Rinku, took place due to rash and
negligent driving of car bearing registration No. HR41/3347 by respondent
driver Karan Arora? While determining the said issue the learned Tribunal
opined that the Insurance Company was not liable for payment of the amount of
compensation to the claimants, stating:
-3- "From the
bare perusal of the evidence of respondent driver Karan Arora appearing as RW1,
which has been reproduced almost in its entirety in para nos. 19 to 22 at pages
10 to 13 of this award, it becomes absolutely clear that he was aged about 15
years, he does not know driving; he was born on 7.8.1983 and that he is not
having any driving licence till 25.7.1998, when his statement was recorded. In
these circumstances, I return a firm finding that respondent driver Karan Arora
had no valid/effective driving licence on the day of the accident i.e.
An appeal under
Sec.173 of the Motor Vehicles Act 1988 was filed before the High court which
was marked as First Appeal from Order No.2627/1998. A learned single Judge of
the said Court allowed the said appeal, holding:
considering the rival contentions of the parties, I am of the opinion that the
material point for determination is whether there was any breach of contract
between the -4- owner of the vehicle and the insurance company. If the breach
is committed on behalf of the vehicle, certainly the Insurance Company has a
case. In order to bring the case within the mischief of "breach" it
has to be proved that there was a willful default on the part of the insured. I
have already stated above that no sane father would like to give the custody or
keys of the vehicle to his minor son aged 14 years much less to the friend of
the minor. Had Rakesh Kumar Arora parted the possession of the vehicle to his
son he would have contemplated very easily that by doing so he would have
incited the trouble. The Hon'ble Supreme Court 1987 while interpreting the
expression "Breach" came to the conclusion that if it is proved on
the record that the owner of the vehicle had done every thing his power to
keep, honour, and fulfil the promise, in such a situation he cannot be held
guilty of a deliberate breach.
There is no evidence
on the record to indicate that the owner of the vehicle parted the keys of the
vehicle to his son deliberately or knowingly. If in the absence of the father
son takes the keys of the vehicle and drives the vehicle for a fun and caused
accident, it cannot be said that there was an express or implied consent on the
part of the owner. The judgments which have been relied upon by the learned -5-
counsel for the Insurance Company may not be any assistance to him for the simple
reason that in the said judgments it has proved prima facie that there was a
breach of contract on the part of the insured."
A Letters Patent
Appeal was preferred thereagainst, which was entertained.
The Division Bench of
the High Court by reason of the impugned judgment dismissed the said appeal,
only relying upon or on the basis of some precedent, viz. V. Mepherson and
another vs. Shiv Charan Singh and others 1998 ACJ 601 and Skandia Insurance
Company Limited vs. Kokilaben Chandravadan and others 1987 ACJ
Mr. K.L. Nandram,
learned counsel appearing on behalf of the appellant contended that keeping in
view the provisions of Secs.4 and 5 of the Motor Vehicles Act 1988, the
question of any willful default on the part of the owner is wholly irrelevant
in this case as neither a -6- licence could be granted in favour of minor nor
in fact the driver of the vehicle was holding a valid licence. Reliance in this
behalf has been placed on National Insurance Co. Ltd. vs. Kaushalaya Devi &
Ors. (2008 (8) SCALE 500.
No body appears on
behalf of respondent No.1.
The learned counsel
appearing on behalf of the proforma respondent- Smt. Kaushalya Devi submitted
before us that she has already received the amount of compensation which had
been deposited by the appellant.
Section 4 of the
Motor Vehicles Act prohibits driving of a vehicle by anyperson under the age of
eighteen years in any public place. Section 5 of the Act imposes a statutory
responsibility upon the owners of the motor vehicles not to cause or permit any
person who does not satisfy the provisions of Sec.3 or 4 to drive the vehicle.
The vehicle in
question admittedly was being driven by Karan Arora who was aged about fifteen
years. The Tribunal, as noticed hereinbefore, in our opinion, rightly held that
Karan Arora did not hold any valid licence on -7- the date of accident, namely
The learned single
Judge as also the Division Bench of the High Court did not put unto themselves
a correct question of law. They proceeded on a wrong premise that it was for
the Insurance Company to prove breach of conditions of the contract of
The High Court did
not advert to itself the provisions of Sections 4 and 5 of the Motor Vehicles
Act and thus misdirected itself in law.
This aspect of the
matter has been considered by this Court in Oriental Insurance Co.Ltd. vs.
Prithvi Raj (2008 (1) SCALE 727) wherein upon taking into consideration a large
number of decisions, it was held that the Insurance Company was not liable,
"In the instant
case, the State Commission has categorically found that the evidence on record
clearly established that the licensing authority had not issued any license, as
was claimed by the Driver and the respondent. The evidence of Shri A.V.V.Rajan,
Junior Assistant of the Office of the Jt.
& Secretary, RTA, Hyderabad who produced the official records clearly
established that no driving license was issued to Shri Ravinder Kumar or
Ravinder Singh in order to enable and legally permit him to drive a motor
vehicle. There was no cross examination of the said witness. The National
Commission also found that there was no defect in the finding recorded by the
State Commission in this regard."
Yet again this court
in National Insurance Co.Ltd. vs. Kaushalaya Dvi & Ors. 2008 (8) SCALE 500
took the same view stating:
relating to the necessity of having a licence to drive a vehicle is contained
in Section 3,4 and 10 of the Act. As various aspects of the said provisions,
vis-a-vis, the liability of the Insurance Company to reimburse the owner in
respect of a claim of a third party as provided in Section 149 thereof have
been dealt with in several decisions, it is not necessary for us to reiterate
the same once over again. Suffice it to notice some of the precedents operating
in the field.
In National Insurance
Co. Ltd. vs. Swaran Singh & Ors.
[(2004) 3 SCC 297]
this Court held:
Section 10 of the Act provides for forms and contents of licences to drive. The
licence has to be granted in the prescribed form. Thus, a licence to drive a
light motor vehicle would entitle the holder there to drive the vehicle falling
within that class or description.
89. Section 3 of the
Act casts an obligation on a driver to hold an effective driving licence for
the type of vehicle which he intends to drive. Section 10 of the Act enables
the Central Government to prescribe forms of driving licences for various
categories of vehicles mentioned in sub-section (2) of the said section."
It was furthermore
"90. We have
construed and determined the scope of sub- clause (ii) of sub-section (2) of
Section 149 of the Act, Minor breaches of licence conditions, such as want of
medical fitness certificate, requirement about age of the driver and the like
not found to have been the direct cause of the accident, would be treated as
minor breaches of inconsequential deviation in the matter of use of vehicles.
Such minor and
inconsequential deviations with regard to licensing conditions would not
constitute sufficient ground to deny the benefit of coverage of insurance to
the third parties.
91. On all pleas of
breach of licensing conditions taken by the insurer, it would be open to the
Tribunal to adjudicate the claim and decide inter se liability of insurer and
insured; although where such adjudication is likely to entail undue delay in
decision of the claim of the victim, the Tribunal in its discretion may
relegate the insurer to seek its remedy of reimbursement from the insured in
the civil court."
The decision in
Swaran Singh, however, was held to be not applicable in relation to the owner
or a passenger of a vehicle which is insured."
In view of the
authoritative pronouncement of this Court as noticed hereinbefore, the impugned
judgment cannot be sustained. It is set aside accordingly and that of the
learned Tribunal is restored. However, -11- keeping in view the admitted fact
that as no stay had been granted by the High Court the appellant has deposited
the entire amount which has since been withdrawn by the claimant-respondent; we
direct that the appellant shall be entitled to recover the amount in question
from the owner of the vehicle, namely, respondent No.1.
The appeal is allowed