VERY IMPORTANT POINTS
1. If the insured has taken all precautions by appointing a duly licensed driver to drive the vehicle in question and it has not been established that it was the insured who allowed the vehicle to be driven by a person not duly licensed, then the insurance company cannot repudiate its statutory liability u/s 96(1) of the Motor Vehicles Act, 1939 only by showing that at the relevant time it was being driven by a person having no licence.
2. In accident claim cases, while interpreting the contract of insurance, the Tribunals and Courts have to be conscious of the fact that right to claim compensation by heirs and legal representatives of the victims of the accident is not defeated on technical grounds.

Headnote:Motor Vehicles Act, 1939-Section 96(2)(b)(ii)-Scope-Accident Claim-Liability of Insurance Company-Accident took place when vehicle was being driven by a person not holding driving licence-Person who has got insured the vehicle has appointed a duly licensed driver-Vehicle being driven by a person not duly licensed on basis of authority of driver duly authorised to drive vehicle -Whether Insurance Company shall be absolved from its liability ?-(No)-Insurance Company will have to establish that insured was guilty of an infringement or violation of a promise.
       Held : Sub-section (2) of Section 96 only enables the insurance company to defend itself in respect of the liability to pay compensation on any of the grounds mentioned in sub-section (2) including that there has been a contravention of the condition excluding the vehicle being driven by any person who is not duly licensed. This bar on face of it operates on the person insured. If the person who has got the vheicle insured has allowed the vehicle to be driven by a person who is not duly licensed then only that clause shall be attracted. In a case where the person who has got insured the vehicle with the insurance company, has appointed a duly licensed driver and if the accident takes place when the vehicle is being driven by a person not duly licensed on the basis of the authority of the driver duly authorised to drive the vehicle whether the insurance company in that event shall be absolved from its liability? The expression "breach" occuring in Section 96(2)(b) means infringement or violation of a promise or obligation. As such the insurance company will have to establish that the insured was guilty of an infringement or violation of a promise. The insurer has also to satisfy the Tribunal or the Court that such violation or infringement on the part of the insured was wilful. If the insured has taken all precautions by appointing a duly licensed driver to drive the vehicle in question and it has not been established that it was the insured who allowed the vehicle to be driven by a person not duly licensed, then the insurance company cannot repudiate its statutory liability under sub-section (1) of Section 96. In the present case far from establishing that it was the appellant who had allowed Rajinder Pal Singh to drive the vehicle when the accident took place, there is not even any allegation that it was the appellant who was guilty of violating the condition that the vehicle shall not be driven by a person not duly licensed. From the facts of the case, it appears that the appellant had done everything within his power inasmuch as he has engaged a licensed driver Gurubachan Singh and had placed the vehicle in his charge. While interpreting the contract of insurance, the Tribunals and Courts have to be conscious of the fact that right to claim compensation by heirs and legal representatives of the victims of the accident is not defeated on technical grounds. Unless it is established on the materials on record that it was the insured who had wilfully violated the condition of the policy by allowing a person not duly licensed to drive the vehicle when the accident took place, the insurer shall be deemed to be a judgment-debtor in respect of the liability in view of sub-section (1) of Section 96 of the Act. It need not be pointed out that the whole concept of getting the vehicle insured by an insurance company is to provide an easy mode of getting compensation by the claimants, otherwise in normal course they had to pursue their claim against the owner from one forum to the other and ultimately to execute the order of the Accident Claims Tribunal for realisation of such amount by sale of properties of the owner of the vehicle. (Para 10)
       (ii) MOTOR ACCIDENT CLAIMS -While interpreting contract of insurance, Tribunals and Courts have to be conscious that right to claim compensation by heirs and legal representatives is not defeated on technical grounds.

JUDGMENT

N.P. Singh, J.-Leave granted.

2. An accident took place on 8th June 1980 at Panaji between a bus bearing No. DLP-5843 and scooter bearing No. GDC-9713, as a result whereof one Dr. P. Ramachandra Reddy who was driving the scooter fell down and succumbed to the injuries, the same day. A claim petition was filed before the Motor Accident Claims Tribunal by respondent Nos. 1 and 2 claiming compensation. The appellant is the owner of the bus which had been insured by respondent No. 3, the Oriental Fire and General Insurance Company Limited (hereinafter referred to as the Insurance Company ).

3. According to the claimants, the respondent No.4, Rajinder Pal Singh who was the clearner/conductor of the bus was driving the bus at the relevant time when the accident took place resulting into the death of Dr. P. Ramachandra Reddy, on account of his rash and negligent driving. The claim for compensation was resisted by the appellant (owner of the vehicle) contending that when the accident took place, the bus was driven by Gurbachan Singh who was employed by him as a driver and who had the licence to drive the bus in question and as such the respondent Insurance Company was liable to pay the compensation. The Insurance Company, however, took the defence that as the bus was being driven by respondent No. 4, Rajinder Pal Singh, cleaner/conductor of the bus who was not holding the driving licence and, therefore, the Insurance Company cannot be held liable to pay compensation because under the terms of the policy only person holding a driving licence could have driven the bus in question.

4. The Tribunal on consideration of materials on record came to the conclusion that accident was the result of rash and negligent driving of the bus by respondent No. 4 who did not have a driving licence. On that finding the Tribunal discharged the liability of the Insurance Company and directed the owner and the driver i.e. appellant and respondent No. 4 to pay an amount of Rs. 66,000/- along with interest at the rate of 6 per annum to the claimants as compensation. One appeal was filed on behalf of the claimants for enhancement of the amount of the compensation, whereas the other appeal was filed on behalf of the appellant along with respondent No. 4 for setting aside the award of the Tribunal. The High Court enhanced the amount of compensation from Rs.66,000/- to Rs. 1,57,500/- and directed payment of interest at the rate of 12 per annum to the claimants. In respect of the dispute regarding the liability to pay the compensation between the appellant, the owner of the bus, vis-a-vis the Insurance Company, the High Court came to the conclusion that the Insurance Company was not liable because the vehicle was being driven by a person at the time of the accident, who was not holding a driving licence. The High Court rejected the claim of the appellant holding that at the time of the accident the vehicle was being driven by Gurubachan Singh who was holding the driving licence.

5. From the orders of the Tribunal and the High Court, it appears that Gurubachan Singh was the regular driver of the bus, but at the time of the accident Rajinder Pal Singh who was cleaner/conductor of the bus was driving the bus - obviously with the consent and authority of the regular driver Gurubachan Singh. Gurubachan Singh was examined as a witness on behalf of the appellant and he asserted that it was he who was driving the bus and had not allowed Rajinder Pal Singh, the cleaner/conductor to drive the bus when the accident took place. But on basis of the materials on record the Tribunal and the High Court, have rightly come to the conclusion that Gurubachan Singh, the duly appointed driver having licence had allowed Rajinder Pal Singh to drive the said vehicle and it was due to rash and negligent driving of Rajinder Pal Singh, the accident took place resulting into the death of Dr. P. Ramachandra Reddy.

6. On behalf of the appellant a stand was taken that as he had appointed G

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1996 Supreme(SC) 1079

Cases Referred (4)