Full Text
JUDGMENT
ORIENTAL INSURANCE CO.LTD. ..... Appellant
Through: Mr. Amit Gaur, Advocate
Through: Mr. O.P.Mannie, Adv. for R-1
1. The appellant Oriental Insurance Company Ltd. has impugned the award dated 18th May, 2012 passed in Claim Petition No.76/10/08 whereby the learned Tribunal has granted the compensation of ` 1,02,956/- along with interest @ 9% per annum to the injured/claimant.
2. In brief, the facts of the case are that on 01.01.2008 at about 10.00 pm when the injured/claimant Sudhir Kumar Jha was helping Suresh Kumar in reversing his TATA 407 bearing registration No.HRP-12-2680 at main road near AW Block near Mill Building, Sanjay Gandhi Transport Nagar, Delhi, a 2015:DHC:10064 Canter bearing registration No.HR-38-L-8704 came at a very high speed and hit Sudhir Kumar Jha and also middle back portion of TATA-407 bearing registration No.HP-12-2680 with a great force. As a result of said impact, the petitioner fell down on the road and received grievous injuries.
3. Claim Petition No.76/10/08 has been filed by the claimant/injured. After inquiry, the learned Tribunal awarded a total compensation of ` 1,02,956/under the following heads:- Under the head Compensation granted by Tribunal Pecuniary damages (special damages): a) Medical expenses b) Loss of income c) Special diet expenses d) Conveyance charges Rs.2,498/- Rs.10,548/- Rs.10,000/- Rs.10,000/- Non-pecuniary damages (general damages): e) Pain, suffering, mental shock and trauma Rs.70,000/- TOTAL ` 1,02,956/-
4. Notice of the appeal was sent to the respondents. The claimant/respondent No.1 had appeared through counsel, Mr.O.P.Mannie. Respondent Nos.[2] and 3 failed to appear despite service.
5. The quantum of compensation has not been challenged by the appellant/insurance company. The main contentions raised on behalf of the appellant/insurance company are that:-
(i) The driving licence of the driver of the offending vehicle on verification was found to be fake.
(ii) The cheque given by the insurance company towards premium was dishonoured.
(iii) The interest @ 9% p.a. awarded by the Tribunal is contrary to the decision of Apex Court in Rajesh Vs. Rajbir Singh, 2013 (6) SCALE 563.
(iv) The learned Tribunal should not have awarded the counsel fee and out of pocket expenses.
6. Learned counsel for the appellant/insurance company has contended that in this case on verification, the driver of the offending vehicle was found holding a fake driving licence. Thus, the insured as per the terms and conditions of the insurance policy is not liable to the compensation amount. It has also been contended that the cheque given by the insured towards premium of the Insurance policy was dishonoured, thus the appellant/Insurance Company is not liable at all to pay the compensation even to the third party because it did not receive the premium and the remedy of the claimant was only against owner/driver of the offending vehicle. Learned counsel for the appellant/insurance company has further contended that in view of the decision of Apex Court in Rajesh vs. Rajbir Singh’s case (Supra), the learned Tribunal should not have awarded interest @ 9% p.a.
7. Learned counsel for the appellant/insurance company has also raised the issue of awarding ` 30,000/- as counsel fee and ` 5,000/- as out of pocket expenses in favour of the claimant counsel. It has been urged that in view of the decision of this Court in ICICI Lombard General Insurance Co. Ltd. Vs. Kanti Devi, decided on 30th July, 2012 in MAC.APP.No.645/2012, Tribunal cannot award counsel’s fee unless and until there is a prior agreement between the client and counsel with respect to Court fee and the same is filed on record.
8. I shall now deal with the contentions raised on behalf of the Insurance Company. The first and second contention relate to the liability of the Insurance Company to pay the compensation in view of the fact that driver was holding a fake driving licence and cheque towards premium was got dishonoured thereby making the insurance policy as nonest.
9. Plea in the written statement filed by the Insurance Company in this regard is as under:- “In reply to para No.17 of the claim petition it is submitted that vehicle No HR-38-L-8704 was not insured with the answering respondent at the time of accident. It is submitted that the answering respondent has issued the policy NO. 215201/31/2008/3114 to Shri Nem Prakash H.No. 19/20 ground floor Dakshinpuri, New Delhi for vehicle No. HR-38L-8704 for the period from 00 hrs on 18-09-2007 to 17-09-2008 midnight and received the premium through cheque and cash. The cheque was presented for the payment through bank but the same was dishonoured. The answering respondent has cancelled the policy No. 215201/31/2008/3114 ab initio much before the date of accident.”
10. The insurance policy and the premium receipts are placed on record as R3W1/11. The schedule of premium of the insurance policy has been given as under:-
SCHEDULED OF PREMIUM
A. OWN DAMAGE B. LIABILITY
BASIC OD COVER 6,531.23 ADD: BASIC TP COVER 5,580.00 LESS: NO CLAIM BONUS-GR27 1,632.81
BASIC TP TOTAL 5,580.00
BASIC OD TOTAL 6,531.23 ADD:PA FOR OWNER DRIVER-GR36A
100.00
OD TOTAL 4,898.00 ADD:LL TO EMPLOYERS 100.00
TP TOTAL 5,780.00
TOTAL PREMIUM 10,678.00
STAMP DUTY 0.50 ADD: SERVICE TAX 1,320.00
TOTAL AMOUNT 11,998.00
11. R3W[1] Ms.Sharda Sharma, Asstt. Manager of the appellant/insurance company in her cross examination by learned counsel for the injured/claimant has stated that a sum of Rs.10698/- was received in cash and Rs.1300/- was received through cheque Ex.R3W1/1 which was dishonoured. It is admitted case of the Insurance Company that the cheque Ex.R3W1/13 which was dishonoured was only for ` 1300/- and dishonour was not on account of insufficient funds but for the reason that signature did not tally. The service tax in the premium receipts has been claimed to be ` 1320/-. At the most, it can be said that the cheque towards service tax was dishonoured. When the total premium has been paid by the insured to the Insurance Company, dishonour of a cheque for a portion towards service tax, does not make the insurance policy nonest. Hence on this ground the Insurance Company cannot be absolved of its liability to pay the compensation to third party.
12. The next contention raised on behalf of the insurance company to absolve its liability to pay the compensation or to seek recovery rights is on the basis of the fact that the driving licence of the driver of the offending vehicle on verification was found to be fake. It is undisputed that though witness from Jabalpur was summoned to prove the fact of driving licence being found to be fake, the said witness was not examined.
13. Legal position is well settled that merely because the driving licence is fake, is no ground to exonerate the insurance company of its liability.
14. In the case of National Insurance Company Limited v. Swaran Singh & Ors. 2004 (3) SCC 297, it was held that to avoid its liability towards the insured, insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by a duly licenced driver or one who was not disqualified to drive at the relevant time. It cannot be said that the Insurance Company has been able to discharge the onus of proving negligence on the owner’s part.
15. In the case of United India Insurance Company Ltd. v. Lehru & Ors. 2003 (3) SCC 338, it was held by the Supreme Court that owner of a vehicle while hiring a driver is not expected to check the records of the licencing officer to satisfy himself that the driving licence is genuine. If the driver produces a driving licence which on the face of it looks genuine, the owner cannot said to be negligent. The relevant para of the report is extracted as under:- “20. When an owner is hiring a driver he will therefore have to check whether the driver was a driving licence. If the driver produces a driving licence which on the face of it looks genuine, the owner is not expected to find out whether the licence has in fact been issued by a competent authority or not. The owner should then take the test of the driver. If he find that the driver is competent to drive the vehicle, he will hire the driver. We find it rather strange that Insurance Companies expect owners to make enquiries with RTO's, which are spread all over the country, whether the driving licence shown to them is valid or not. Thus where the owner has satisfied himself that the driver has a licence and is driving competently there would be no breach of Section 149(2)(a)(ii). The Insurance Company would not then be above of liability. If it ultimately turns out that the licence was fake the Insurance Company would continue to remain liable unless they prove that the owner/insured was aware or had notice that the licence was fake and still permitted that person to drive. More importantly even in such a case the Insurance Company would remain liable to the innocent third party, but it may be able to recover from the insured. This is the law which has been laid down in Skiandia's Sohan Lal Passi's and Kamla's cases. We are in full agreement with the views expressed therein and see no reason to take a different view.”
16. In the absence of any evidence being led by the insurance company to prove that the driving licence was found to be fake, the initial burden put on the insurance company to this effect was not discharged. Hence, neither the insurance company can be absolved of its liability to pay the compensation to the third party nor recovery rights can be granted against the owner/driver.
17. Another contention raised on behalf of the insurance company is that interest awarded @ 9% pa is on higher side and learned Tribunal should have awarded the interest @ 7.5% p.a. as per the decision of the Apex Court in Rajesh Vs. Rajbir Singh’s case (supra). The learned Tribunal while awarding interest @ 9% p.a. has relied upon the decision reported as New India Assurance Co. LTd. vs. Bhudhia Devi and Ors. 2010 ACJ 2045. In the said case, the Tribunal awarded the interest @ 12 % p.a. which was considered to be on higher side by the Apex Court and interest was awarded @ 9% p.a. Taking into consideration the rate of interest on long term deposit prevalent at the time when this award was passed, awarding of interest @ 9% p.a. cannot be termed to be so high as to warrant interference by this Court.
18. It may also be noted here that in Rajesh Vs. Rajbir Singh’s case (supra) the interest was awarded by the Tribunal @ 7.[5] % p.a. which was maintained by the Apex Court and the date of decision of that case is 12.04.2013 whereas award in this case has been passed on 18.05.2012.
19. So far as the last contention raised by learned counsel for the appellant/insurance that the learned Tribunal could not have awarded a sum of Rs.30000/- plus Rs.5000/- towards fee of the counsel and out of pocket expenses, is concerned, the impugned award to the extent of awarding expenses is liable to be set aside in view of the decision of this Court in MAC.APP. No.645/2012 titled as ICICI Lombard General Insurance Company Ltd. vs. Kanti Devi decided on 30.07.2012.
20. The appeal stands allowed only to the limited extent that the amount of expenses is not payable by the appellant/insurance company.
21. Statutory amount deposited by the appellant/insurance company at the time of filing of the appeal, be refunded to the appellant/insurance company.
22. LCR be sent back alongwith copy of this order. As prayed, copy of the order be given dasti to learned counsel for the appellant/insurance company. CM No.16838/2012 (Stay) Dismissed as infructuous.
JUDGE DECEMBER 09, 2015 ‘pg’