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High Court of Kerala
R. BASANT & M.C. HARI RANI
New India Assurance Company Ltd.
Versus
Balakrishnan & Others
M.A.C.A. No. 5 of 2008
Decided on : 29-09-2011
driver - passenger autorickshaw - Motor Vehicles Act - Section 149(2), Section 3(1) - The court considered whether the driver of a passenger autorickshaw should possess a further authorization/badge in addition to the driving license, even when the vehicle is being used personally by the driver for his personal purposes. The court also discussed whether the mere non-availability of such authorization amounts to an infraction of the conditions of the insurance policy under Section 149(2) of the Motor Vehicles Act. The court referred to the relevant provisions of Section 149(2) and Section 3(1) of the Act and interpreted the concept of fundamental breach and main purpose rule as established in the case of National Insurance Co. Ltd. v. Swaran Singh. The court also considered the subsequent decision of the Supreme Court in Oriental Insurance Co. Ltd. v. Angad Kol. and concluded that the absence of a badge for the driver cannot be held to be sufficient to enable the insurer to avoid liability to the insured.
Fact of the Case:
The claimants, parents and a sibling of a minor child, sought compensation for injuries and death resulting from an accident involving a passenger autorickshaw. The insurance company contended that the driver was not duly licensed to drive the autorickshaw, and therefore, the company was entitled to avoid liability under Section 149(2) of the Motor Vehicles Act.
Finding of the Court:
The court found that the driver did not possess the requisite authorization to drive the passenger autorickshaw, and there was an infraction of the provision of Section 3(1) of the Act. The court also held that the breach was self-evident and amounted to a breach under Section 149(2)(a). However, the court concluded that the breach was not fundamental and did not contribute to the cause of the accident, based on the main purpose rule and the concept of fundamental breach established in the case of National Insurance Co. Ltd. v. Swaran Singh.
Issues: The issues included whether the driver should possess a further authorization/badge to drive the passenger autorickshaw, whether the absence of such authorization amounts to an infraction of the insurance policy conditions, and whether the breach of the policy condition was fundamental and contributed to the cause of the accident.
Ratio Decidendi: The court held that the absence of a badge for the driver cannot be held to be sufficient to enable the insurer to avoid liability to the insured, based on the main purpose rule and the concept of fundamental breach as established in the case of National Insurance Co. Ltd. v. Swaran Singh.
Final Decision: The court dismissed the challenge against the impugned award, concluding that the absence of a badge for the driver did not constitute a fundamental breach and did not contribute to the cause of the accident, and therefore, the insurance company was not entitled to avoid liability to the insured.
1. The Judgment of the Court was delivered by Basant, J.-(i) Should the driver of a passenger autorickshaw (LMV-motor cab) possess a further authorisation/badge in addition to the driving licence to drive the said vehicle?
(ii) Even when the said vehicle is being used personally by the driver for his personal purposes (other than to carry passengers), should/can such authorisation be insisted?
(iii) Whether the mere non availability of such authorisation amounts to infraction of the conditions of the policy of insurance under Section 149(2) of the Motor Vehicles Act (hereinafter referred to as ‘the Act’)?
(iv) In the facts of the case odes that infraction amount to breach within the meaning of Section 149(2)(a) of the Act?
(v) Assuming that there is a breach, can that infraction/breach be held to be a breach attracting application of Section 149(2) of the Act applying the rule of main purpose and the concept of fundamental breach referred to in para.102 (vi) of National Insurance Co. Ltd. v. Swaran Singh (2004 (1) K.L.T 781 (S.C.)?
(vi) Is the decision in Moidu P.T. v. Oriental Insurance Co. Ltd. (2007 (4) K.L.T. 790) valid in the light of the subsequent decision of the Supreme Court in Oriental Insurance Co. Ltd. v. Angad Kol. and ors. (A.I.R. 2009 S.C. 2151)? The above questions do arise for consideration in this case.
2. To the vitally relevant facts first. The claimants are parents and a sibling-a minor sister, of a minor child, who suffered injuries and succumbed to injuries in an accident which took place on 13-8-2005. They claimed an amount of `3 lakhs as compensation. The deceased was a 9 year old minor child on the date of the accident. The deceased was a pedestrian. The vehicle in question-a passenger autorickshaw, was owned and driven by the 4th respondent. The vehicle was validly insured against third party risks with the appellant insurance company.
3. The insurance company contended, inter alia, that the driver of the autorickshaw, though he had a valid driving licence to drive an LMV, was not duly licenced to drive the passenger autorickshaw in question inasmuch as he did not possess the requisite authorisation to drive a transport vehicle. The Tribunal by the impugned award came to the conclusion that the claimants are entitled for an amount of `1,80,000 as compensation along with interest and cost. The Tribunal did not accept the contention of the appellant/insurance company that the appellant is entitled to avoid liability under Section 149(2) a(ii) of the Act. Inasmuch as the owner/driver was not duly licenced, it was contended that the appellant was entitled to recover the amount under the proviso the Section 149(4) of the Act. That contention was not accepted by the Tribunal. The relevant discussion appears in para.7 of the impugned award.
4. The learned counsel for the appellant contends that there has been a breach of the relevant condition under Section 149(2) a(ii) and consequently the Tribunal ought to have issued a direction in favour of the appellant to recover the amount from the 4th respondent owner/insured after satisfying the award by making payment to the claimants.
5. We shall look at the law first of all. The relevant provisions appear in Section 149(2) of the Act which we extract below:
“149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks-
(1) * * * *
(2) No sum shall be payable by an insurer under sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of
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