IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.8221-8225 OF 2002

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. 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  

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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  

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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  

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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)

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