1 IN THE HIGH COURT AT CALCUTTA CIVIL APPELLATE JURISDICTION APPELLATE SIDE Present: The Hon’ble Justice Ananya Bandyopadhyay F.M.A 721 of 2023 Kalpana Mukherjee -Vs- The National Insurance Co. Ltd. & Ors For the Appellants : Mr. Sk. Abu Abbas Uddin Ms. Nahid Rahaman For the Respondents : Mr. M.P. Chakraborty Ms. Ratnadipa Karmakar Heard on and judgment on : 07.05.2025 Ananya Bandyopadhyay, J.:- 1. The Learned Advocates representing the respective parties are present. 2. Four claimants of the deceased victim filed an application under Section 166 of the M.V. Act in the Court of Motor Accident Claims Tribunal-cum- Additional District Judge, First Court, Hooghly at Chinsurah being MAC Case No.104/2012, claiming an award of Rs. 42,00,000/- whereby the victim expired due to a road traffic accident on 03/01/2012 at about 22:15 hrs. The offending vehicle, being a lorry bearing Registration No. WB38WB- 12W/8323 hit the aforesaid deceased in a rash and negligent manner while he was travelling by a motor cycle. Consequently, the victim expired on the spot. Chanditala PS Case No. 05/12 dated 04/01/2012 was initiated against the owner of the driver. 2 3. The owner of the offending vehicle did not contest the case and the case proceeded ex parte against him. 4. The respondents, National Insurance Company Limited contested the aforesaid MAC case. 5. The Learned Tribunal as aforesaid disposed of the issues framed considering the oral as well as documentary evidence dismissed the claim. 6. The Learned Tribunal, inter alia, observed as follows: - “In the instant case, the appellant has relied on the judgement dated 21.02.2017 passed by this Court in Civil Appeal No(s).3047 of 2017 titled as “Manuara Khatun & Ors. Vs. Rajesh Kr. Singh & Ors”. In the said case also, a Bench of this Court, having referred to the earlier decisions in Para- 15 and 16 of that Judgment, has concluded that normally, three would be no order to “Pay and recover”. 10. Therefore, on the legal aspect, it is clear that in all cases such order of “pay and recover” would not arise when the Insurance Company is not liable but would, in the facts and circumstances, be considered by this Court (means Supreme Court) to meet the ends of justice.” In the case on hand most surprisingly, the petitioner claimants side declined to cross-examine OPW-1, an authorized person (vide Exbt.A). Therefore his statement in examination-in-chief and his documents vide Exbt.B, Exbt.C as also Exbt.A remains unassailed from all corners. He proved to be truthful and reliable insofar as his evidence to that extent is concerned. We have no contra evidence on hand that the offending vehicle driver was authorized to drive transport vehicle or say the offending lorry on the material date of accident. I am of clear opinion that the drier has no 3 valid and effective driving licence to drive the offending lorry on the date of the accident. The entire deposition of OPW-1 is unchallenged. Even the side of the petitioner did not bother to give any suggestion as well. Deposition of OPW-1 has thus gone wholly unrebutted. The Side of the claimant took no trouble to belie Exbt.B and Exbt.C by placing any impeaching document. In view of the observations and discussions based on facts and circumstances of this case, coupled with evidence on the face of the record, the position of law, this is a clear case of policy violation by the insured Anima Paul Steel Private Ltd. being owner of the offending vehicle bearing no.WB-11A/2644 and further, this is not a case of ‘pay and recover’. I can thus, safely hold that the case is not maintainable in law. Accordingly, this issue is decided against the claimants and thus, disposed of. Consequent thereupon, i find to reason and basis to discuss in respect of the meaning six issues as the decision in respect of the those issues will not change the position.” 7. The Learned Advocate representing the appellant/claimant submitted that the learned Tribunal dismissed the instant MAC Case No.104/2012 since the driver of the offending vehicle did not possess a valid driving licence to run the transport vehicle. The driver has a licence to drive another transport vehicle effective from 07/08/2002 to 31/03/2003. 8. The Learned Advocate representing the respondent no.1/insurance company submitted that the violation on the part of the driver of the offending vehicle to drive the same in contravention with the permission granted through the driving licence, the respondent no.1/insurance company was not entitled to 4 disburse the compensation and that the learned Tribunal had justifiably dismissed the claim case. 9. Heard the submissions of the learned advocates representing the respective parties. 10. The insurance policy issued by the respondent no.1/insurance company had not been disputed. The driver of the offending vehicle to have exceeded the terms and conditions of the driving licence cannot debar the appellant/claimant from legitimate compensation to which she is entitled under the beneficial intent of the legislation. 11. The Hon’ble Supreme Court held the following in IFFCO Tokio General Insurance Co. Ltd. v. Geeta Devi1 12. Thereafter, in National Insurance Co. Ltd. v. Swaran Singh, a 3- Judge Bench of this Court dealt with the interpretation of Section 149 of the Act of 1988. The cases before the Bench involved, amongst others, instances where the driving licence produced by the driver or owner of the vehicle was a fake one. The Bench noted that Section 149(2)(a) opened with the words:‘that there has been a breach of a specified condition of the policy’, which would imply that the insurer's defence of the action would depend upon the terms of the policy. It was observed that an insurance company which wished to avoid its liability is not only required to show that the conditions laid down in Section 149 (2)(a) or (b) are satisfied but is further required to establish that there has been a breach on the part of the insured. Such a breach on the part of the insured must be established by the insurer to show that the insured used or caused or permitted to be used the insured vehicle in breach of the 12023 SCC OnLine SC 1398 5 provisions. The Bench went on to state that where the insurer, relying upon the violation of law by the assured, takes exception to pay the assured or a third party, it must prove a willful violation of the law by the assured. Noting that the proposition of law is no longer res integra that the person who alleges breach must prove the same, the Bench observed that an insurance company would be required to establish the said breach by cogent evidence and in the event an insurance company fails to prove that there has been breach of the conditions of the policy on the part of the insured, such an insurance company cannot be absolved of its liability. 13. Further, in the context of cases where the driver's licence was found to be fake, the Bench observed that the question would be whether the insurer could prove that the owner was guilty of willful breach of the conditions of the insurance policy. It was pointed out that the defence to the effect that the licence held by the person driving the vehicle was a fake one would be available to the insurance company but whether, despite the same, the plea of default on the part of the owner has been established or not would be a question which would have to be determined in each case. The earlier decision in United India Insurance Co. Ltd. v. Lehru4 was considered and the Bench observed that the ratio therein must not be read to mean that an owner of a vehicle can, under no circumstances, have any duty to make an inquiry with regard to the genuineness of the driving licence and the same would again be a question which would arise for consideration in each individual case. The argument that the decision in Lehru (supra) meant that, for all intent and purport, the right of the insurer to raise a defence that the licence was fake was taken away was, however, rejected as not being correct and it was held that such a defence can certainly be raised, but it will be for the insurer to prove that the insured did not take adequate care and caution to verify the genuineness or 6 otherwise of the licence held by the driver. The findings summed up by the Bench, to the extent presently relevant, are as under: ‘(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. (v.) The court cannot lay down any criteria as to how the said burden would be discharged, inasmuch as the same would depend upon the facts and circumstances of each case. (vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards the insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply “the rule of main purpose” and the concept of “fundamental breach” to allow defences available to the insurer under Section 149(2) of the Act. 7 (vii) The question, as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case.’ 14. More recently, in Ram Chandra Singh v. Rajaram, the issue before this Court was whether an insurance company could be absolved of liability on the ground that the insured vehicle was being driven by a person who did not have a valid driving licence at the time of the accident. This Court found that no attempt was made to ascertain whether the owner was aware of the fake driving licence possessed by the driver and held that it is only if the owner was aware of the fact that the licence was fake but still permitted such driver to drive the vehicle that the insurer would stand absolved. It was unequivocally held that the mere fact that the driving licence was fake, per se, would not absolve the insurer. The Hon’ble Supreme Court held the following in National Insurance Co. Ltd. v. Swaran Singh2:- Where the driver's licence is found to be fake 92. It may be true as has been contended on behalf of the petitioner that a fake or forged licence is as good as no licence but the question herein, as noticed hereinbefore, is whether the insurer must prove that the owner was guilty of the wilful breach of the conditions of the insurance policy or the contract of insurance. In Lehru case [(2003) 3 SCC 338 : 2003 SCC (Cri) 614] the matter has been considered in some detail. We are in general agreement with the approach of the Bench but we intend to point out that the observations made therein must be understood to have been made in the light of the requirements of the law in terms whereof the insurer is to establish wilful breach on the part of the insured and not for the purpose of its 2(2004) 3 SCC 297 8 disentitlement from raising any defence or for the owners to be absolved from any liability whatsoever. We would be dealing in some detail with this aspect of the matter a little later. xxx (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. xxx (vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards the insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply “the rule of main purpose” and the concept of “fundamental breach” to allow defences available to the insurer under Section 149(2) of the Act. 9 (vii) The question, as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case. 12. In view of the above observation of the Hon’ble Supreme Court in the decisions cited in National Insurance Company Ltd. Vs. Pranay Shetty & Anr.3 and Sarla Verma & Ors. Vs. Delhi Transport Corporation & Anr4 the impugned award is modified as follows:- Net monthly income Annual Income Age of the victim 32 so multiplier would be 16 Rs.21705 X 12 Rs.2,60,460/- X 16 Claimants are in no.4 deduction would be 1/4th Rs.41,67,360/- Rs.10,41,840/- Compensation would be Deceased was a Govt. Employee as per Pranay Sethi Claimants are entitled to get 50% of future prospect General Damage Rs.31,25,520/- Rs.15,62,760/- Rs. 70,000/- Total compensation would be Rs.47,58,280/- 13. The appellant/claimant is entitled to a sum of Rs.47,58,280/- along with 6% interest per annum to be paid from the date of filing of the application under Section 166 of the Motor Vehicles Act till the date of its realization. 3 2017(4)TAC 673(S.C) 4 (2009) 6 SC 121 10 14. In view of the observation of the Hon’ble Supreme Court in Parminder Singh Vs. Honey Goyal & Ors.5 the appellant/claimant is to provide the detail of Bank Accounts held in the name of the appellant/claimant at the office of the Learned Registrar General, High Court at Calcutta for disbursal of the compensation amount. 15. The Learned Advocate for the respondent No.1/insurance company is to deposit the balance sum of Rs. 47,58,280/- along with interest as aforesaid before the office of the Learned Registrar General, High Court at Calcutta within six months from the date of passing of this order. 16. The office of the Registrar General, High Court, Calcutta shall encash the said cheque and, thereafter disburse the same directly to the bank account of the present appellant/claimant in MAC 104 of 2012 on proof of proper identification of the appellant/claimant subject to payment of ad valorem court fees. 17. The instant appeal is disposed of accordingly. 18. The pending applications, if any, stands disposed of. 19. Copy of the order be sent to the Department as well as the concerned tribunal as expeditiously as possible. (Ananya Bandyopadhyay, J.) 5 2025 INSC 361