National Insurance
Company Ltd. Vs. Meena Aggarwal [2009] INSC 146 (23 January 2009)
Judgment
IN THE SUPREME COURT
OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 396 OF 2009 (Arising out
of SLP(C ) No. 19513 of 2006) National Insurance Company Ltd. ......Appellant
Versus Meena Aggarwal ......Respondent
Dr. ARIJIT PASAYAT,
J.
1.
Leave
granted.
2.
Challenge
in this appeal is to the order passed by the National Consumer Disputes
Redressal Commission, New Delhi, (in short the `National Commission').
3.
Background
facts in a nutshell are as follows:
Respondent was the
owner of a vehicle- a Maruti van which was the subject matter of insurance with
the present appellant for a period from 27.1.2003 to 26.1.2004. The Vehicle in
question met with an accident on 12.6.2003 and was badly damaged. The estimate
of the cost of repair was prepared by Automobiles Satya of Bilaspur. According
to him the estimated expenditure on total repair of the vehicle was
Rs.2,00,000/-. Intimation of the same was given by the complainant to the
present appellant and claim was made. The same was rejected on the ground that
the driver of the vehicle did not possess a valid driving licence and the
vehicle which was a private vehicle was insured for personal use, but was being
used as a taxi for carrying marriage parties. a marriage party was being
transported in the vehicle after charging rent of Rs.2100/- when the accident
occurred. The driver did not possess a valid licence and, therefore, the
vehicle was being plied against the terms of the insurance policy. The District
Consumer Disputes Redressal Forum Sarguja, Ambikapur Chhattisgarh, rejected the
claim petition. An appeal was preferred before the State Consumer Dispute
Redressal Commission, Rajpur (in short the `State Commission'). By order dated
17.10.2005, the appeal was allowed. It was held that it would be proper to
declare the claim of complainant as "Non-standard" consequent to the
violation and breach. Therefore, the present appellant was directed to pay
Rs.90,000/- i.e. 75% of Rs.1,20,000/- i.e. the amount assessed by the surveyor
of the insurance company along with 9% interest. The only reason given by the
State Commission was that even if the vehicle was being used as a taxi, there
was no fundamental breach of the terms of the policy. A revision petition was
filed before the National Commission which came to be dismissed by the impugned
order. The National Commission held that even though the vehicle was being used
as a commercial vehicle and the driver did not have a valid driving licence,
there was no fundamental breach of the terms of the policy.
According to the
appellant the insured vehicle was being used as a commercial vehicle, and the
driver of the vehicle is required to hold an appropriate licence. If the driver
who was driving the vehicle at a relevant point of time did not possess any
licence to drive a commercial vehicle, there is a breach of the conditions of
the policy and such plea was available to be raised as a defence.
4.
This
Court in National Insurance Co. Ltd. v. Swaran Singh [2004(3) SCC 297] clearly
laid down that the liability of the Insurance Company vis- `-vis the owner
would depend upon several factors. The owner would be liable for payment of
compensation in a case where the driver was not having a licence at all. It was
the obligation on the part of the owner to take adequate care to see that the
driver had an appropriate licence to drive the vehicle. The question as regards
the liability of the owner vis-`-vis the driver being not possessed of a valid
licence was considered in Swaran Singh's case stating:
"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. The various types of vehicles described for which a driver may obtain
a licence for one or more of them are: (a) motorcycle without gear, (b)
motorcycle with gear, (c) invalid carriage, (d) light motor vehicle, (e)
transport vehicle, (f) road roller, and (g) motor vehicle of other specified
description. The definition clause in Section 2 of the Act defines various
categories of vehicles which are covered in broad types mentioned in
sub-section (2) of Section 10. They are `goods carriage', `heavy goods
vehicle', `heavy passenger motor vehicle', `invalid carriage', `light motor
vehicle', `maxi-cab', `medium goods vehicle', `medium passenger motor vehicle',
`motor-cab', `motorcycle', `omnibus', `private service vehicle',
`semi-trailer', `tourist vehicle', `tractor', `trailer' and `transport
vehicle'. In claims for compensation for accidents, various kinds of breaches
with regard to the conditions of driving licences arise for consideration
before the Tribunal as a person possessing a driving licence for `motorcycle
without gear', [sic may be driving a vehicle] for which he has no licence.
Cases may also arise where a holder of driving licence for `light motor
vehicle' is found to be driving a `maxi-cab', `motor- cab' or `omnibus' for
which he has no licence. In each case, on evidence led before the Tribunal, a
decision has to 4 be taken whether the fact of the driver possessing licence
for one type of vehicle but found driving another type of vehicle, was the main
or contributory cause of accident. If on facts, it is found that the accident
was caused solely because of some other unforeseen or intervening causes like
mechanical failures and similar other causes having no nexus with the driver
not possessing requisite type of licence, the insurer will not be allowed to
avoid its liability merely for technical breach of conditions concerning
driving licence."
5.
The
matter came up for consideration again before this Court in National Insurance
Corpn. Ltd. v. Kanti Devi [2005 (5) )SCC 789] wherein this Court upon
consideration of the observations made in Swaran Singh's case opined:
"12. The
decision in Swaran Singh case was not before either MACT or the High Court when
the respective orders were passed. Therefore, we think it proper to remit the
matter to MACT for fresh consideration. It shall permit the parties to lead
such further evidence as they may intend to lead. The matter shall be decided
keeping in view the principle enunciated by this Court in Swaran Singh case."
6.
In
a case of this nature, therefore, the owner of a vehicle cannot contend that he
has no liability to verify the fact as to whether the driver of the vehicle
possessed a valid licence or not.
7.
The
aforesaid aspect was thereafter highlighted in National Insurance Co. Ltd. v.
Kusum Rai [2006(4) SCC 250]. The said case related to the liability in the case
of a third party. In the instant case, no such claim is involved and the claim
is related to the damage of a vehicle.
8.
The
respondent has not appeared in spite of service of notice.
9.
We
find that the State Commission and the National Commission have not practically
indicated any reason for coming to the conclusion that there was no fundamental
breach of the terms of the policy. Both the State Commission and the National
Commission observed that the vehicle was being driven by a person who did not
have a valid driving licence. In addition to that the vehicle which was insured
for personal use was used for commercial purposes.
10.
Looked
at from any angle the impugned orders of the State Commission and the National
Commission are unsustainable, deserve to be set aside, which we direct. No
costs.
............................................J.
(Dr. ARIJIT PASAYAT)
..............................................J.
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