Insurer can recover amount paid to claimant from the owner of insured vehicle if terms of insurance are violated: High Court of Jammu and Kashmir
In a motor accident, if the owner of the offending vehicle has violated the terms and conditions of the insurance policy, the insurer of the offending vehicle can recover the amount paid to the claimant from the owner of the vehicle. This was held in the judgement passed by Justice Vinod Chatterji Koul of the High Court of Jammu and Kashmir High Court in the case of United India Insurance Company Limited v Mst. Shameema and others [CMAM no. 182/2014] pronounced on 22nd June 2021. The appellant, United India Insurance Limited was directed by the Motor Accidents Claims Tribunal, Srinagar to pay a compensation of Rs. 1,50,000 along with 6% interest per annum from date of institution of claim to the respondent, Mst. Shameema. In the case of Mst. Shameema v. United India Insurance Co. ltd, the present respondent filed a claim petition before the tribunal as she was injured in an accident which took place on 11th September 2003 on the National Highway due to rash and negligent driving of another vehicle which was insured by United India Insurance. The appellant pleaded before the court that the owner of the offending vehicle wilfully violated terms and conditions of the insurance policy by allowing his son, respondent no: 2 to drive the vehicle, which lead to the accident. Respondent no: 2 held a learner’s licence to drive light motor vehicle and two wheelers and the appellant contended that the vehicle he was rashly driving was a Tata Sumo which should not be classified as a light motor vehicle. The appellant also added that a learner’s licence was issued so that the person can learn to drive and so he should not be permitted to drive a vehicle carrying passengers. The Motor Accidents Claims Tribunal, Srinagar had thoroughly discussed the validity and effectiveness of the learner’s licence held by respondent no: 2. The tribunal cited the case of New India Assurance Co. Ltd. v Latha Jayraj (II) [1999 ACC 303], where it was held that a learner’s licence would still be considered valid in case of an accident and for insurance purposes. However it was pointed out that in that case the offending vehicle had been a light motor vehicle unlike in the present case. The High Court noted that the case cited by the tribunal would not be appropriate since the vehicle in the present case belonged to a different weight category. The High Court cited the case of Pappu and others v Vinod Kumar Lamba [(2018) 3 SCC 208], where it was established by the Supreme Court that if the insurer succeeded in establishing their defence, the court would direct the insurer to pay the claimant and then allow the insurer to recover the same from the owner of the insured vehicle.
 HIGH COURT OF JAMMU AND KASHMIR AT SRINAGAR CMAM no. 182 2014 United India Insurance Company Limited Mst. Shameema and others Reserved on: 20.04.2021 Pronounced on: 22.06 .2021 Through: Mr. N. H. Khuroo Advocate Through: Mr. M. Amin Tibetbaqal Adv. for 1 None for respondent 2 and 3. HON’BLE MR JUSTICE VINOD CHATTERJI KOUL JUDGE 1. Impugned in this Appeal is Award dated 10.06.2014 passed by Motor Accident Claims Tribunal Srinagar on a Claim petition bearing File no. 120 2004 titled Mst. Shameema v. United India Insurance Co. ltd. and others directing appellant Insurance Company to pay compensation in the amount of Rs. 1 50 000 along with 6% interest per annum from the date of institution of claim till realization on the grounds made mention of therein. 2. A claim petition as is discernible from perusal of the file was filed by respondent Mst. Shameema before the Tribunal on 12.06.2004 averring therein that the petitioner Mst. Shameema aged 32 years injured in an accident which took place on 11.09.2003 at Hyderbeigh Pattan National Highway due to rash and negligent driving of driver of offending vehicle bearing Registration no. JK01 G 0911 which was insured 2 CMAM no.182 2014 with appellant Insurance Company. Claimant respondent sought compensation to the tune of Rs.19 96 000 3. Appellant Insurance Company resisted the claim petition. It was stand of appellant before the Tribunal that driver of offending vehicle was not 4. The Tribunal in view of pleadings of parties framed following Issues for having valid driving licence. determination which are: a) Whether on 11 09 2003 the petitioner while waiting on the road at Hyderbeigh on Srinagar Baramulla NHW was hit by Sumo bearing JK)1 G 0911 while being driven rashly and negligently by respondent no. 2 whereas the vehicle belonged to respondent no. 3 and was insured with respondent no.1 OPP b) If the issue no. 1 is proved in affirmative whether the petitioner is entitled to compensation on account of the injury suffered and if so to what extent and from whom OPP 5. Claimant respondent produced and examined one witness before the Tribunal. Appellant Insurance Company also produced one witness. 6. By impugned Award the Tribunal found claimants respondents entitled to receive compensation of Rs. 1 50 000 along with 6% interest per annum. 7. Heard and considered. 8. Learned counsel for appellant Insurance Company has stated that the Tribunal erred in passing impugned Award as it has been specifically pleaded and proved by appellant Insurance Company by sufficient evidence that owner respondent No.3 has violated terms and conditions of insurance policy wilfully and knowingly by allowing respondent no.2 to drive offending vehicle without any valid and effective driving licence. Respondent no. 2 who had been driving the vehicle on the date of occurrence is stated to have been holding a learner’s licence to drive only light motor vehicle and the two wheeler but offending vehicle was a 3 CMAM no.182 2014 passenger carrying vehicle and the driver respondent no. 2 could not have plied the said vehicle as he was not authorised under the licence to do so especially when he was holding only a learner’s licence. According to learned counsel under the common and settled law learner’s licence is being issued only in favour of a person who is in the process of learning the art of driving and under no imagination can be permitted to drive the vehicle carrying the passengers. It is contended that owner of offending vehicle respondent no.3 who seems to be the father of driver respondent no.2 has consciously and willingly and knowingly permitted respondent no. 2 to drive offending vehicle which is a passenger carrying vehicle knowing that respondent no. 2 is only holding a learner’s licence to drive the LMV and motor cycle and not the passenger service vehicle. Under such circumstances it can be easily found that respondent no.3 has wilfully and knowingly committed the breach of the policy condition by authorising respondent no. 2 to drive the offending vehicle without having any valid and effective licence for driving the vehicle of the nature which has caused the accident in the case in hand. The learned Tribunal has erred in exonerating respondents 2&3 and instead has held appellant Insurance Company liable under impugned award in violation of provisions of law and that of terms and conditions of the Insurance contract and accordingly the impugned award is liable to be set aside. 9. As regards above submission the Tribunal had discussed validity and effectiveness of driving licence of driver of offending vehicle while deciding Issue no.1 albeit there ought to have been a separate Issue with respect thereof framed and decided by Tribunal. Nevertheless it would be 4 CMAM no.182 2014 apt to go through contents of impugned Award. The Tribunal after deciding Issue no.2 made some discussion as about driving licence of driver of offending vehicle. According to Tribunal driver of offending vehicle was having driving licence though learners and he could have plied offending vehicle. While saying so the Tribunal has made reliance to New India Assurance Co. Ltd v. Latha Jayraj1999 ACC 303. This judgement however has been incorrectly applied by the Tribunal to pass impugned Award. In the present case driver of offending vehicle possessing learner’s licence was not plying a light motor vehicle but a passenger carrying vehicle. So impugned Award to this extent is liable to be set aside and owner of offending vehicle is liable to be fastened with liability of making payment of compensation. At the first instance appellant Insurance Company shall pay amount of compensation with a right to recover the same from owner of offending vehicle. 10. The question whether Insurance Company can be and ought to be directed to pay claim amount with liberty to recover the same from the owner driver of the vehicle has been answered by the Supreme Court in National Insurance Company Ltd v. Swaran Singh and others3 SCC 297 and reiterated in Pappu and others v. Vinod Kumar Lamba and others 3 SCC 208. On the contention of Insurance Company that once the defence taken by insurer is accepted by Tribunal it is bound to discharge insurer and fix liability only on owner and or driver of vehicle the Supreme Court held that even if insurer succeeded in establishing its defence the Tribunal or the Court could direct insurance Company to pay the award amount to claimant and in turn recover the same from owner of vehicle. The three Judge Bench 5 CMAM no.182 2014 of the Supreme Court in Swaran Singh after analysing earlier decisions on the point held that there was no reason to deviate from the said well settled principle. 11. As regards computation of compensation the Tribunal has elaborately discussed Issue no.2 and has rightly given compensation in the amount of Rs.1 50 000 along with 6% interest. To this extent impugned Award need not be interfered with. 12. For the foregoing reasons the Appeal on hand is partly allowed and the Award dated 10.06.2014 passed by Motor Accident Claims Tribunal Srinagar on a Claim Petition bearing File no.120 2004 titled Mst. Shameema v. United India Insurance Co. Ltd. and others to the extent it holds that driver of offending vehicle was having valid driving licence to drive offending vehicle at the time of accident is set aside. Appellant Insurance Company shall pay if not already paid award amount along with interest as given by the Tribunal to claimants respondents. However appellant Insurance Company shall have a right to recover the same from owner of offending vehicle. 13. Disposed of in terms of above. 14. Record of the Tribunal be sent down along with copy of this judgement. Vinod Chatterji Koul) Judge Whether the order is reportable: Yes No. 