Insurers must prove owner's negligence regarding driver’s license to avoid liability under Motor Vehicles Act.

PANKAJ JAIN, J. (Oral)

1. Owner is in appeal aggrieved of the recovery rights granted against him by Motor Accidents Claims Tribunal, Panchkula in an award dated 24.7.2019 arising out of claim petition filed under Section

166 of the Motor Vehicles Act, 1988 .

2. Counsel for the appellant has drawn attention of this Court to the findings recorded on issue No.2, wherein the owner has been held ultimately liable for the compensation awarded. The insurer has been granted rights to pay and thereafter recover the same from the owner. He refers to the testimony of RW3 Anil Kumar, who appeared as GPA of the owner Phool Chand, who was 80 years old at the time of proceedings. He submits that Anil Kumar, who was employed as Manager and was acting as a GPA, categorically deposed before the Tribunal on oath that at the time of employing Gurmeet-the driver, his license was perused. His driving test was conducted. It was only after he was satisfied, Gurmeet was employed, he submits that no evidence has come on record to rebut the same. Thus, in view of ratio of law laid down by Supreme Court in the case of National Insurance Co. Ltd. v. Swaran Singh reported as (2004) 3 SCC 297, the Tribunal erred in granting right to the insurer to recover the amount from the insured.

3. Per contra, Mr. Chaudhri submits that the GPA was not competent to depose on behalf of the owner with respect to personal satisfaction of the owner and it is for this reason that the Tribunal rightly relied upon ratio of law laid down in Janki Vashdeo Bhojwani vs.

Indusind Bank Ltd., 2005(2) SCC 217 .

4. I have heard counsel for the parties and have carefully gone through the records of the case.

5. The issue with respect to liability of the owner in the light of the license of the driver having been proved to be fake, has been elaborately dealt by a larger bench of the Supreme Court in Swaran Singh's case (supra) observing as under:-

“(ii) An insurer is entitled to raise a defence in a claim petition filed under Section 163-A or Section 166 of the Motor Vehicles Act, 1988 , inter alia, in terms of Section

149(2)(a)(ii) of the said Act.

(iii) The breach of policy condition e.g. disqualification of the driver or invalid driving licence of the driver, as contained in sub-section (2)(a)(ii) of Section 149 , has to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the Insurer against either the insured or the third parties. To avoid its liability towards the insured, the 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 licensed driver or one who was not disqualified to drive at the relevant time.

(iv) Insurance companies, however, with a view to avoid their liability must not only establish the available defence(s) raised in the said proceedings but must also establish "breach" on the part of the owner of the vehicle, the burden of proof wherefor would be on them.”

6. The issue with respect to right of GPA to appear and depose on behalf of witness has been elaborately explained by Supreme Court in the case of Man Kaur (Dead) By Lrs vs. Hartar Singh Sangha 2010(10) SCC 512, after considering the entire thread of precedents, including Janki Vashdeo Bhojwani observing as under:-

“11. To succeed in a suit for specific performance, the plaintiff has to prove: (a) that a valid agreement of sale was entered by the defendant in his favour and the terms