Kamala Mangalal Vayani & Others vs M/s United India Insurance Co. Ltd. & Others

Kamala Mangalal Vayani & Ors. ... Appellants

Vs.

M/s United India Insurance Co. Ltd. & Ors ...Respondents

O R D E R

The claimants in five motor accident claim cases are

the appellants in these appeals by special leave. The

owner-cum-driver (third respondent) did not contest the

proceedings before the Tribunal. Only the insurer (first

respondent) contested the proceedings. The Motor

Accidents Claims Tribunal allowed the claim petitions by

a common judgment dated 16.5.1996. The first case relates

to death of one Mangalal and the Tribunal awarded

Rs.21,61,965/- as compensation. The other four cases

relate to injuries sustained by the respective claimants

in the same accident and the Tribunal awarded

Rs.84,000/-, Rs.80,000/-, Rs.84,000/- and Rs.1,01,000/-

respectively, as compensation. The Tribunal held that the

owner and insurer were jointly and severally liable and

the amount was recoverable from the insurer. 2

2. The insurer (first respondent) filed appeals before

the Madras High Court contending that the insured vehicle

had been engaged by a group consisting of claimants and

others for a pilgrimage tour in the States of Karnataka

and Tamil Nadu; that the vehicle did not have a permit to

operate as a public service vehicle; that the insurance

policy covered the use of the vehicle only under a

`permit' within the meaning of Motor Vehicles Act, 1988

or such a carriage falling under sub-section (3) of

section 66 of the said Act; and that as the permit was

not produced, the insurer could not be made liable. The

High Court, by its common judgment dated 5.10.2001

accepted the said contentions and set aside the judgement

and awards of the Tribunal insofar as it made the insurer

liable. The said judgment is challenged by the claimants.

3. The fact that the vehicle involved in the accident

was insured with the first respondent under a

comprehensive Commercial Vehicle Insurance Policy on the

date of the accident (27.7.1990) is not disputed. The

insurance cover under the said policy was available from

31.3.1990 to 30.3.1991. The schedule to the insurance

policy shows that the owner of the vehicle had paid in

addition to the basic premium, additional premium to

cover liability in respect of ten passengers as also the

driver. The insurer however contends that as it had 3

denied that the vehicle had a valid permit, the claimants

ought to have proved that the vehicle had a valid permit

on the date of the accident; and as they failed to do so,

it was not liable.

4. As noticed above, the owner-cum-driver had remained

ex parte. Once it was established that the vehicle was

comprehensively insured with the insurer to cover the

passenger risk, the burden to prove that it was not

liable in spite of such a policy, shifted to the insurer.

The claimants are not expected to prove that the vehicle

had a valid permit, nor prove that the owner of the

vehicle did not commit breach of any of the terms of the

policy. It is for the insurer who denies its liability

under the policy, to establish that in spite of the

comprehensive insurance policy issued by it, it is not

liable on account of the requirements of the policy not

being fulfilled. In this case, the insurer produced a

certified copy of the proceedings of the Registering

Authority and Assistant Regional Transport Authority,

Bangalore, dated 7.7.1990 to show that the application

for registration of the vehicle filed by the third

respondent, was rejected with an observation that it was

open to the applicant to apply for registration in the

appropriate class. But that only proved that on 7.7.1990,

the vehicle did not have a permit. But that does not 4

prove that the vehicle did not have a permit on

27.7.1990, when the accident occurred. It was open to the

insurer to apply to the concerned transport authority for

a certificate to show the date on which the permit was

granted and that as on the date of the accident, the

vehicle did not have a permit, and produce the same as

evidence. It failed to do so. The High Court committed an

error in expecting the claimants to prove that the

vehicle possessed a valid permit. We are of the view that

there was no justification for the High Court to

interfere with the judgment and awards of the Tribunal in

the absence of relevant evidence.

5. We therefore allow the appeals, set aside the order

of the High Court and restore the judgment and awards of

the Tribunal. The appellant-claimants will be entitled to

interest on the compensation amount from the date of

application for compensation to date of payment at the

rate 5% per annum.

6. We make it clear that this judgment will not come in

the way of the insurer proceeding against the owner and

recovering the amount paid by it to the claimants, in the

event of the insurer being able to establish, in any suit

it may choose to file against the owner, that there was

violation or breach of the conditions of the insurance 5

policy or that the vehicle was not covered by a permit on

the date of the accident.

____________________J.

(R V Raveendran)

New Delhi; ____________________J.

January 14, 2010. (Surinder Singh Nijjar)