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2003 Supreme(Raj) 172
Supreme Court
Honble S.N. VARIAVA & B.N. AGRAWAL, JJ.
United India Insurance Company Ltd. - Appellant
Versus
Lehru & Ors. - Respondents
Civil Appeal No.1959 of 2003
Decided On : February 28, 2003
Vishnu Mehra and B.K. Satij, Advocates, for Appellant S.K. Bansal, Mrs. Savitri Bansal, Dharam Bir Raj Vohra, Gagan Gupta and S.S. Khanduja, Advocates, for Respondents
Headnote:Motor Vehicles Act, 1988, Sec. 149(2)(a)(iii) – Liability of Insurance Company to third party – Third party insurance compulsory – The aim and purpose being that an Insurance Company would be liable to pay – In order to avoid liability it is not sufficieint to show that the person driving at the time of accident was not duly licensed – The Insurance Company must establish that the breach was on the part of the insured. (Paras 17 to 22)
The owner himself would be an innocent sufferer. It is for this reason that the Legisla- ture, in its wisdom, has made insurance, at least third party insurance, compulsory. The aim and purpose being that an Insurance Co. would be available to pay. The business of the Company is to insurance. In all businesses there is an element of risk. All persons carrying on business must take risks associated with that business. Thus it is equitable that the business which, is run for making profits also bears the risk asso- ciated with it. At the same time innocent parties must not be made to suffer or loss. These provisions meet these requirements. We are thus in agreement with what is laid down in aforementioned cases viz that in order to avoid liability it is not sufficient to show that the person driving at the time of accident was not duly licensed. The Insu- rance Co. must establish that the breach was-on the part of the insured. (Para 18)
(2). Heard parties.
(3). This appeal is against a judgment of the High Court dated 5.12.2000.
(4). By this appeal, the Insurance Company seeks to avoid its liability on the ground that the licence of the driver of the car was a fake licence. As is indicated hereafter the question whether an Insurance Company can avoid liability to a third party who is involved in the accident is no longer res integra. It is fully covered by decisions of this Court. We find that in spite of the point being fully covered. in a large number of matters the Insurance Companies are still seeking to get out of liability to third parties on the ground that the licence was fake. We have noticed that many matters are still being brought to this Court on this point. It is therefore necessary to again reiterate the legal position. In this case the Appellants have not even been able to prove that the licence was fake. Yet they have deprived the claimants of use of the money for all these years by filing unnecessary appeals.
(5). In this case, the driver, at time of accident was one Janu s/o Kallu. During trial he filed, before the Motor Accident Claims Tribunal, his original licence. The licence bore number 9195/MTR/96P dated 15.05.1989. The Appellant-Insurance Company sought to prove that a licence bearing No.5195/MTR/96P had been issued in the name of one Kalpana Gupta and not in the name o the Driver. The Insurance Company get produced records of the concerned RTO for the year 1996. They made no efforts to get produced concerned records of 1989. To be noted that the year 1989 comes before 1996. Therefore even presuming there was some confusion whether the number of the licence was 5195 or 9195, still the records of 1989 were required to be produced. It is clear that the licence issued on 15.05.1989 had nothing to do with the licence, if any, issued to Kalpana Gupta in 1996. If anything the licence issued in 1996 could have been a renewal of a fake licence. The Motor Accident Claims Tribunal did not accept that the licence was fake. It held that, even if the licence was fake, the law was that Insurance Company was liable to pay the compensation as they had failed to prove that the insured had deliberately committed any breach of any condition.
(6). The Appellants then filed an Appeal before the High Court. The High Court dismissed the Appeal without going into the question whether the licence was fake or not. The High Court held that even if the licence was fake, the settled law was that the Insurance Company had to first pay to the claimants and they could then recover from the owner, if in law they were entitled to do so. One would have thought that now that two Courts had pointed out the settled law the Insurance Company would honour its commitment. Alas better sense has still not prevailed.
(7). As stated earlier. in this case the Appellants have not proved that the licence was fake. For that reason itself they should have paid up the amount awarded the claimant. But the Appellant - Insurance Company wants this Court to reconsider its earlier decisions and hold that the Insurance Company is absolved of its liability to pay to the claimant if it proves that the licence was fake.
(8). We have heard the parties. Mr.Vishnu Mehra, learned counsel for the Appellants has attempted, with great fervor, to convince us that the settled law is riot correct. We remain unconvinced.
(9). In the case of British India General Insurance Co. Ltd. vs. Captain Itbar Singh and others (1), the question was whether an Insurance Company can take up defences other than those enumerated in Section 96(2) of the Motor Vehicles Act, 1939. The provisions of Section 96 including Section 96(6) were considered. It was held that the Insurance Company got a right to defend or file an appeal only by virtue of statute and therefore the right could only be exercised subject to the restriction laid down by the statute. It was held that an Insurance Company could o
