1. Is it necessary for the claimant to establish that there has been no breach of conditions of the policy of insurance by the insured, before obtaining a judgment against the insured and/or the insurers? Upon whom lies the onus of proof that there has been a breach of specified condition of the policy of insurance? In short, the main question for determination is whether the insurer can avoid its liability to satisfy the judgment against person insured in respect of 3rd party risk by taking up a plea that the claimant did not establish that there was no breach of the condition of the policy of insurance. Naturally, the question involves consideration of the provisions contained in Sections 95 and 96 of the Motor Vehicles Act, 1939, for short 'the Act'.
2. This is an appeal by the insurer Under Section 110D of 'the Act' against an award made by the Member, Motor Accidents Claims Tribunal, Kamrup at Gauhati in M.A.C. Case No. 86(K)/72 awarding compensation of Rs. 18,000/- to the claimant with cost and interest.
3. Indeed, it is tragic how the proceedings in claim cases are delayed. The incident happened on 16-2-1969 when the victim of the incident Nilanjan was aged about 11 or 12 years but the appeal still pends before this Court. 16 years have rolled by since the accident but the case has not been finally decided. The boy is now a grown up young man of 27/28 years.
On a technical plea as to whether the amount of compensation awarded is payable by the insurer or the insured, the matter is pending in this High Court since 1975. It is one of those cases where the oft quoted phrase 'Justice delayed is justice denied' is fairly and squarely applicable. Is it a man made injustice? Instead of answering the question let us bring the appeal to a close.
4. Nilanjan Dutta, aged about 11 to 12 years, a school student was returning home by the left side of the road from the Railway Over-bridge side towards Paltan Bazar when a scooter bearing Registration No. ASZ 1198 owned by M/s. Oriental Marketing Corporation, Kamarpatty, Gauhati and insured with the appellant M/s. Premier Insurance Company Ltd., coming at high speed avoided collision with the cyclist but dashed against the boy causing injuries. As a result of the impact his two bones, Tibia and Fibula of the right leg, were fractured. The boy had to be continuously treated for about six months. The boy stated that after effect of the injuries made his right leg very weak. His memory or the power of recollection was affected, he could not pursue outdoor activities including sports and games in which he was proficient and represented the School. Indeed, if two vital bones are fractured a person cannot have his mental and physical bearing as he is constantly haunted by his 'disability'. The outdoor activities of the boy, just flowering to be youth was affected seriously and the youthful life of vigour, vim and vitality was surely lost. The cherished dream of a young person was vitally Impaired by the accident.
5. The claimant stated in the petition that M/s. Oriental Marketing Corporation was the owner of the vehicle and it was insured with the appellant M/s. Premier Insurance Company. These facts were not denied by the opposite parties. The plea taken by the owner of the scooter was that it was never involved in the accident, as claimed by the claimant. In the written statement filed by the Insurance Company, the appellant, it supported the plea of the owner that, the scooter was not at all involved in the incident. We state at the stage that the Insurance Company did not take up the plea that there had been a breach of a specified condition of the policy, that is, the scooter was driven by a person not duly licensed, nor did it claim any exemption of its liability due to breach of any condition by the insured as specified in the conditions of the policy. In consequence thereof no issue was framed that the insured breached the condition of the policy of the insurance in allowing the scooter to be driven by an unauthorised person or driven by a person not duly licensed.
6. Learned Tribunal decided all Issues in favour of the claimant. It held, on the basis'of the evidence adduced by the witnesses for the claimant that the scooter No. ASZ 1198 was involved in the accident, it was driven rashly and negligently and that M/s. Oriental Marketing Corporation was the owner of the scooter, at all relevant time. The claimant also proved that the scooter was insured with the appellant. The identity of the vehicle was established by the injured who stated clearly that scooter No. ASZ 1198 caused the accident. Similarly, P.W. 3 the claimant stated that he could learn immediately after the accident that scooter No. ASZ 1198 caused the injuries to the boy. It appears that immediately after the accident the claimant made enquiries as to the ownership of the scooter as well as its insurer and find out their names. As such, right from the time of the accident all were aware and informed that scooter No. ASZ 1198 was involved in the accident. There was also a Criminal Case instituted and the offending scooter was identified as ASZ 1198. Against this evidence the Manager of the firm deposed that the scooter belonged to M/s. Oriental Marketing Corporation. It was an unregistered partnership firm. He claimed that he used the scooter himself and did not permit anybody to ply it. He stated that he had licence for driving the scooter. Learned Tribunal believed the version of the claimant and rejected the plea of the Manager that the vehicle was not at all put on road on the date of the accident. On the evidence adduced by the doctor and the Casualty Officer of the Gauhati Medical College Hospital, the Tribunal reached the conclusion that the boy sustained fractures of two bones of his right leg for which his leg had to be plastered for a long time and treated by medical practitioner. Dr. B. Dawka, Professor of Surgery proved the grievous injuries sustained by the boy. Learned Tribunal held on the evidence adduced by the claimant that before the accident the boy was a regular football and cricket player of his school but after the accident his outdoor activities were impaired as he lost strength in his right leg. On the evidence adduced learned Tribunal held that the scooter was driven rashly and negligently. He awarded a sum of Rs. 18,000/- as compensation. Against the award the owner of the vehicle has not preferred any appeal but the insurer has preferred this appeal before us. The Insurance Company would normally be confined in its defence to the grounds specified in Section 96(2) of the Act. Mr. D. K. Talukdar' learned counsel for the appellant Insurance Company realised the scope of the provisions of Section 96(2) and limited his contentions to Section 96(2)(b)(ii) of 'the Act'. Be that as it may, we have scrutinised the evidence and found that the learned Tribunal was justified in reaching be conclusion that scooter No. ASZ 1198 caused the injuries to Nilanjan Dutta, a young boy, in consequence whereof he sustained grievous injuries. We have also taken into consideration the evidence adduced by the doctor, the physical and mental sufferings and the consequence of the accident and find that the award of compensation made is just and proper.
7. The main contention raised by Mr. Taiukdar, learned counsel for the appellant is that there was limitation put in the policy of Insurance that the scooter would be driven by the 'insured' or any person, provided that the person driving holds a licence to drive she vehicle and was not disqualified for holding or obtaining such a licence. No evidence was adduced by the claimant that the scooter was driven by an authorised person competent to drive it in accordance with the terms of the policy, and, as such, the insurer is not liable to pay the amount of compensation.
8. Let us examine the question. Section % provides for the satisfaction by the insurer of the judgment amount adjudicated against the insured in respect of the 3rd party risks. The insured received the notice of the action, made a party and contested the action by filling written statement. As such, the insurer got the notice under Section 96(2) of the Act. The policy in question covers the insured for his liability to 3rd parties, and, as such the insurer is bound to indemnify a 3rd party Under Section 95(5) of 'the Act'. The same is the affect of Sub-section (1) of Section 96 which makes the insurer to pay to the person entitled to the benefit of a decree he obtains in respect of any liability covered by the terms of the policy against any person insured by the Policy. Once the insurer has issued a certificate of insurance in accordance with Section 95(4) it has to satisfy the decree obtained against any person insured by the policy.
Section 96(1) obligates an insurer to satisfy the judgment passed against the insured in cases of third party risks under the policy of insurance. The rights and liabilities of the insurer have been summed up by the Supreme Court in British India General Insurance Co. v. Itbar Singh, AIR 1959 SC 1331 as follows :
(1) 'apart from the statute an insurer has no right to be made a party to the action by the injured person against the insured causing the injury.'
(2) 'Sub-section (2) of Section 96 however gives him the right to be made a party to the suit and to defend it.'
(3) 'the right therefore is created by statute and its content necessarily depends on the provisions of the statute'.
(4) 'An insurer to whom the requisite notice of the action has been given' shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely, 'after which comes an enumeration of the grounds'.
(5) 'It would follow that an insurer is entitled to defend on any of the grounds enumerated and no others. If it were not so, then of course no grounds need have been enumerated.'
(6) 'Therefore Sub-section (6) clearly contemplates that he cannot take any defence which is not mentioned in Sub-section (2). If he could, then he would have been in a position to avoid his liability in a manner other than that provided for in Sub-section (2). That is prohibited by Sub-section (6)'.
'We therefore think that Sub-section (2) clearly provides that an insurer made a defendant to the action is not entitled to take any defence which is not specified in it'.
(7) 'What the legislature has done is to enumerate in Sub-section (2) the defences available to an insurer and to provide by Sub-section (6) that he cannot avoid his liability excepting by means of such defences.'
(8) 'The statute has no doubt created a liability in the insurer to the injured person but the statute has also expressly confined the right to avoid that liability to certain grounds specified in it'.
9. It follows therefore that an insurer is entitled to defend on any of the grounds enumerated in Sub-section (2) of Section 96 of the Act and no others. Under Section 96(2) read with Section 96(6) of the Act the insurer cannot avoid his liability excepting by means of taking up the defences available to it under Section 96(2).
10. In our opinion where the insurer has been impleaded as a party he must take the plea available to it under Section 96(2) of 'the Act', including the plea of the breach of the terms of the policy and the onus lies on the insurer to establish the plea. In the instant case the insurer contested the action so did the insured. However, the appellant-insurer did not take the plea open to it under Section 96(2)(b)(ii) to the effect that a person other than the authorised person drove the scooter. An insurer to whom notice of an action has been given, can defend the action on the ground that there has been a breach of a specified condition of the policy namely, 'a condition excluding driving by a named person or persons or by any person who is not duly licenced or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification'. In our opinion, the defence is open to the insurer Under Section 96(2) of 'the Act'. It is for the insurer to take up the plea and establish the fact that the vehicle was driven by a person who was not authorised under Section 96(2)(b)(ii) of 'the Act'. The onus of plea that the driver was not the awner or had no valid licence is entirely upon the insurer. Indeed if a plea is taken that the driver was not authorised to drive the insured vehicle under the terms of policy of insurance, it is for the owner and/or the driver to establish that the vehicle was driven by an authorized person. When no plea is taken by the insurer that the vehicle was driven by an unauthorised person the presumption would be that the vehicle had been driven by an authorised person.
11. Turning to the instant case we find that the insurer though made a party to the action did not take up any plea open to it under Section 96(2)(b)(ii) of 'the Act'. Naturally, no issue was framed. As such, the plea open to the insurer was not taken during the trial of the case, no evidence was laid and even no suggestion was made to the Manager of the insured who examined himself as a witness, to the effect that the vehicle was driven by an unauthorised person. There is no provision in the Act which emburdens the claimant the burden or onus to establish that the vehicle was not driven in breach of the terms of the policy of the Insurance to obtain a judgment in his favour against the owner of the vehicle. Once a judgment against the owner and/or insured is passed the insurer is obligated to satisfy the claim unless the insurer establishes that no such sum is payable by it under the provisions of 'the Act'. However, when such a plea is taken by the insurer the onus is shifted upon the owner or the driver to establish that the vehicle was driven by an authorised person in accordance with the terms of the policy.
12. In our opinion the plea under Section 96(2)(b)(ii) must be taken by the insurer in the pleading. It must call upon the Tribunal to frame as issue on the basis of its pleading. No plea has been taken nor any issue framed to that effect in the instant case. As such, the plea raised for the time in the appeal must be rejected. Further the plea must be rejected in view of the facts and circumstances of the case. The insurer took up plea supporting the case of the owner (insured) that the scooter was not involved in the accident. However, on the evidence adduced learned Tribunal reached the conclusion that 'the scooter' caused the accident in question. The affirmative statements of the Manager of the vehicle was that he had a valid licence to drive the scooter and none except himself could drive the vehicle at all relevant time. The Tribunal held that the scooter caused the accident. It follows therefrom that it was driven by D.W. 1 Devkinandan Keyal and that he had a valid licence to drive the vehicle. As such from the conclusive findings that the scooter was involved in the accident it follows that it was driven by D.W, 1 Devkinandan Keyal who had a valid licence. We also find from the evidence of D.W. 1 that the scooter could not have been driven by any person other than him and he had a valid driving licence. As such, the plea is also not tenable on the facts and circumstances of the case.
13. As such we are constrained to hold that there is no merit in the appeal, and, accordingly it is dismissed with costs of Rs. 300/- payable by the appellant to the claimant.