Service matter - whether respondent No. 2 is entitled to pension as claimed by him or he is eligible to get his retirement benefits under Contributory Provident Funds Scheme (for short “the C.P.F. Scheme”).= No- as he failed to choose his option with in 3 months of notification - Delay can not be accepted as it carry no value in the eye of law = The appellant-University accepted the option exercised by respondent No. 2 and therefore, it cannot be said that the deeming fiction incorporated in the Notification would help respondent No. 2. For sake of convenience, relevant extract of the Notification dated 17th August, 1991, is reproduced hereinbelow :- “….Thus all employees who were in service on 1.1.1990 shall have to exercise their option in writing, either for the pension scheme under these regulations or for continuance under the existing C.P.F. Scheme, within 3 months from the date of notification of this provision and shall submit the same to the Comptroller, Rajasthan Agriculture University, Bikaner in the prescribed form. The existing employees who do not exercise option within the period specified under these regulations shall be deemed to have opted for the pension scheme. Option once exercised shall be final and irrevocable…” 22. Though, respondent No. 2 did not exercise his option within the period prescribed under the aforestated Notification, when he had exercised the option on 3rd January, 1992, for continuing to be under the C.P.F. Scheme and when the appellant-University had graciously accepted the option exercised by respondent No. 2, he would not get benefit under the deeming fiction incorporated in the Notification. It would be unfair to the University if the submission of respondent No. 2 is accepted. A special favour was done to respondent No. 2 by accepting his option even after the prescribed period was over. Now, at this stage, after his retirement, respondent No. 2 wants to take undue advantage of the favour done to him by the appellant university, which cannot be permitted. Had respondent No. 2 not exercised his option at all, he would have been surely treated to have accepted the Pension Scheme but as he had given his option late, which had been graciously accepted by the appellant-University, it cannot be said that respondent No. 2 should be treated to have accepted the Pension Scheme. 23. All averments pertaining to employees of other universities are not relevant because each employer university would have its own scheme with regard to payment of retirement benefits to its employees. 24. We may add here that respondent No. 2 is a highly literate person and he must have known the consequences, when he had opted for the C.P.F. Scheme under his letter of option dated 3rd January, 1992. It was his conscious effort to see that he continues with the C.P.F. Scheme and the said effort was respected by the appellant- University by showing special favour, as his option was accepted even after the time prescribed in the Notification was over. 25. For the aforestated reasons, we are of the view that the High Court was in error by giving a direction to the appellant- University that respondent No. 2 should be given pension as if he had opted for the Pension Scheme. 26. The appeal stands allowed with no order as to costs.

                              published in   http://judis.nic.in/supremecourt/imgst.aspx?filename=40698                           
     REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                      CIVIL APPEAL NO.   7160  OF 2013
                  (Arising out of SLP (C) No. 7781 of 2011)






Rajasthan Agriculture University, Bikaner          .....Appellant



                                Versus

State of Rajasthan & Ors.                            …..Respondents







                               J U D G M E N T


1 ANIL R. DAVE, J.




      1. Leave granted.


      2. Being aggrieved by the judgment delivered in  D.B.  Civil  Special
         Appeal (Writ) No. 32 of 2008 in S.B. Civil Writ Petition No.  1738
         of 2003 dated 20th January, 2001, by the High Court of  Rajasthan,
         the Rajasthan Agriculture University has filed this appeal.


      3. The facts giving rise to the present appeal, in a nutshell, are as
         under :-


         Respondent No. 2 was in employment  of  the  appellant-University.
         Prior to his employment under the appellant-University, respondent
         No. 2 had worked with the State  of  Rajasthan  in  Veterinary   &
         Animal Husbandry Department.  After  taking  voluntary  retirement
         from his State service,  he  had  joined  the  erstwhile  Mohanlal
         Sukhadia University, Udaipur. Subsequently,  the  said  university
         had been  bifurcated  and  the  appellant-University  was  formed.
         Service of respondent No. 2 had been taken over by the  appellant-
         University.


      4. The question which is to be decided is
whether respondent No. 2 is
         entitled to pension as claimed by him or he is eligible to get his
         retirement benefits under Contributory Provident Funds Scheme (for
         short “the C.P.F. Scheme”).


      5. Upon taking voluntary retirement  from  the  State  of  Rajasthan,
         respondent No. 2 is getting pension from the State of Rajasthan in
         respect of the services rendered by him to the State of Rajasthan.
         After being in employment of the appellant-University, along  with
         entire staff of the appellant-University,  respondent  No.  2  was
         also asked to give his option whether he was inclined to opt for a
         Pension Scheme or for a C.P.F. Scheme. The options were invited by
         the        appellant-University         under         Notification
         No.Pension/RAJAU/C/91/F-75/3668- 768 dated 17th August,  1991.  It
         was stated in the said Notification  that the employees  who  were
         in service of the appellant-University as on                   1st
         January, 1990, shall have to exercise  their  option  in  writing,
         either for the  Pension  Scheme  or  for  continuation  under  the
         existing C.P.F. Scheme within  3  months  from  the  date  of  the
         Notification. It was further provided in the Notification that the
         employees, who would not exercise the option within 3 months  from
         the date of the Notification,  would be deemed to have  opted  for
         the Pension Scheme.


      6. Unfortunately, respondent No. 2 could not intimate his  option  to
         the appellant-University within the period prescribed but  by  his
         letter dated 3rd January,  1992,  he  had  opted  for  the  C.P.F.
         Scheme. He specifically stated  in  his  communication  dated  3rd
         January, 1992 that he did not opt for the Pension Scheme.  Perhaps
         as a special case, the option exercised by him had  been  accepted
         by the appellant-University and the acceptance was kept on  record
         after the authorized signatory  of  the  appellant-University  had
         accepted the option. Thus, his option for continuation  under  the
         C.P.F. Scheme had been accepted by the appellant-University.


      7. On 30th June, 1997, respondent No. 2 retired from service  and  as
         per the record of the University, as he had opted for  the  C.P.F.
         Scheme, he was paid all his retirement  benefits  payable  to  him
         under the C.P.F. Scheme.


      8. Respondent No. 2, thereafter made a grievance that as he  had  not
         exercised his option within the prescribed period of 3 months from
         the date of the Notification dated 17th August, 1991, as  per  the
         conditions incorporated in the said Notification, he  should  have
         been deemed to have opted for the Pension Scheme and therefore, he
         should be paid pension as per the Pension Scheme.


      9. The request made by respondent No. 2 had not been accepted because
         the appellant-University had already accepted the option of C.P.F.
         Scheme exercised by him.


     10. In the circumstances, after about 6 years, respondent No. 2  filed
         S.B. Civil Writ Petition No. 1738 of 2003 praying for a  direction
         to the effect that the appellant-University should pay pension  to
         him. The High Court allowed the petition by giving a direction  to
         the appellant-University to consider the case of respondent No. 2.
         Being aggrieved  by  the  aforestated  direction,  the  appellant-
         University had filed D.B. Civil Special Appeal (W) No. 32 of  2008
         and at the same time  a  decision  was  taken  by  the  appellant-
         University not to change its  decision   with  regard  to   giving
         benefit of the C.P.F. Scheme to respondent No. 2.


     11. By virtue of the impugned judgment delivered by  the  High  Court,
         the  appellant-University  was  directed  to   give   pension   to
         respondent         No. 2. Thus, the Division  Bench  of  the  High
         Court has directed the appellant-University to change  the  manner
         in which retirement benefits should be calculated and give pension
         to respondent No. 2 as if he had opted for the Pension Scheme.


     12. The appellant-University has been  aggrieved  by  the  aforestated
         judgment and therefore, this appeal has been filed.


     13. The learned counsel appearing  for  the  appellant-University  had
         submitted that having once  opted  for  the  C.P.F.  Scheme  under
         letter dated 3rd January, 1992 and when the said request  made  by
         the respondent No. 2 had been accepted by the appellant-University
         and as the amount payable to respondent No. 2 had already paid  to
         him, it was not open to respondent No. 2 to change his  stand  and
         ask for pension as if he had opted for  the  Pension  Scheme.  The
         learned counsel had further submitted that the writ  petition  had
         been filed after more than 5 years and that too,  after  accepting
         the total amount payable to him under the C.P.F. Scheme.


     14. The learned counsel had submitted that respondent No. 2 could  not
         have been permitted to change his stand after his  retirement.  He
         had drawn our attention to the letter of option  duly  signed  and
         filed before the appellant-University by respondent No. 2 and  the
         said option exercised by him, even though at a belated stage,  had
         been accepted by the appellant-University. This was a favour  done
         to respondent No. 2 by the appellant-University.


     15. According to the learned counsel, it  was  not  a  case  where  no
         option was  exercised  by  respondent  No.  2.  It  is  true  that
         respondent No. 2 did not exercise his  option  within  the  period
         prescribed but his delay in exercising option had  been  impliedly
         condoned and the option exercised by respondent No. 2 was accepted
         by the appellant-University and  therefore,  the  deeming  fiction
         incorporated in the Notification would  not  be  of  any  help  to
         respondent No. 2, so as to treat him as if he had  opted  for  the
         Pension Scheme by default.


     16. The learned  counsel  for  the  appellant-University  had  further
         submitted that the  University  has  limited  funds  and  if  such
         changes  in  exercise  of  option  is  permitted,  the  appellant-
         University would be in great financial difficulties. He  had  also
         submitted that the High Court had become  unduly  lenient  towards
         respondent No. 2. He had, therefore,  submitted  that  the  appeal
         should be allowed and the direction given by the High  Court  with
         regard to payment of pension to respondent No. 2 be quashed.


     17. On the other hand, the learned counsel  appearing  for  respondent
         No. 2 had vehemently submitted that once respondent No. 2 had  not
         exercised  his  option  within  the  period  prescribed   in   the
         Notification dated 17th  August,  1991,  he  ought  to  have  been
         treated as if he had opted for  the  Pension  Scheme  as  per  the
         deeming fiction incorporated in the Notification. He  had  further
         submitted that immediately upon retirement, respondent No.  2  had
         made a grievance that he was wrongly considered to have opted  for
         the C.P.F. Scheme and had written several letters  and  therefore,
         in fact, there was no delay as alleged. The  learned  counsel  had
         also tried  to  compare  provisions  with  regard  to  payment  of
         retirement  benefits  by  other  universities  of  the  State   of
         Rajasthan and had made an effort to persuade  this  Court  to  the
         effect that respondent No. 2 ought to have been given  pension  in
         view of the  fact  that  similarly  situated  employees  of  other
         universities were also paid pension.


     18. We have heard the learned counsel and  also  have  considered  the
         relevant record forming part of the paper book.


     19. We are of the view that the High Court ought not to have  given  a
         direction  to  the  appellant-University  to   give   pension   to
         respondent No. 2 as if he had opted for the Pension Scheme.


     20. It is an admitted fact that respondent No.  2  had  exercised  his
         option not within the period prescribed  but little  late.  Though
         late, respondent No. 2 had opted for joining  or  continuing  with
         the C.P.F. Scheme.


     21.  The  appellant-University  accepted  the  option   exercised   by
         respondent No. 2 and therefore, it cannot be said that the deeming
         fiction incorporated in the Notification would help respondent No.
         2. For sake of convenience, relevant extract of  the  Notification
         dated 17th August, 1991, is reproduced hereinbelow :-


               “….Thus all employees who were in service on 1.1.1990  shall
               have to exercise their option in  writing,  either  for  the
               pension scheme under these regulations  or  for  continuance
               under the existing C.P.F. Scheme, within 3 months  from  the
               date of notification of this provision and shall submit  the
               same to the Comptroller, Rajasthan  Agriculture  University,
               Bikaner in the prescribed form. The existing  employees  who
               do not exercise option within  the  period  specified  under
               these regulations shall be deemed  to  have  opted  for  the
               pension scheme. Option once exercised  shall  be  final  and
               irrevocable…”






     22. Though, respondent No. 2 did not exercise his  option  within  the
         period prescribed under the aforestated Notification, when he  had
         exercised the option on 3rd January, 1992, for continuing   to  be
         under the  C.P.F. Scheme and  when  the  appellant-University  had
         graciously accepted the option exercised by respondent No.  2,  he
         would not get benefit under the deeming  fiction  incorporated  in
         the Notification. It would be unfair  to  the  University  if  the
         submission of respondent No. 2 is accepted. 
A special  favour  was
         done to respondent No. 2 by accepting his option  even  after  the
         prescribed period  was  over.   Now,  at  this  stage,  after  his
         retirement, respondent No. 2 wants to take undue advantage of  the
         favour done to him by the appellant university,  which  cannot  be
         permitted. 
Had respondent No. 2 not exercised his option  at  all,
         he would have been surely treated to  have  accepted  the  Pension
         Scheme but as he  had  given  his  option  late,  which  had  been
         graciously accepted by the appellant-University, it cannot be said
         that respondent No. 2 should  be  treated  to  have  accepted  the
         Pension Scheme.


     23. All averments pertaining to employees of  other  universities  are
         not relevant because each employer university would have  its  own
         scheme with regard  to  payment  of  retirement  benefits  to  its
         employees.


     24. We may add here that respondent No. 2 is a highly literate  person
         and he must have known the consequences, when he had opted for the
         C.P.F. Scheme under his letter of option dated 3rd January,  1992.
         It was his conscious effort to see  that  he  continues  with  the
         C.P.F. Scheme and the said effort was respected by the  appellant-
         University by showing special favour, as his option  was  accepted
         even after the time prescribed in the Notification was over.


     25. For the aforestated reasons, we are of  the  view  that  the  High
         Court was in  error  by  giving  a  direction  to  the  appellant-
         University that respondent No. 2 should be given pension as if  he
         had opted for the Pension Scheme.


     26. The appeal stands allowed  with no order as to costs.



                 ………………................................J.

      (ANIL R. DAVE)




                                       ….…….................................
                                       ..........J.

                                                (DIPAK MISRA)

New Delhi
August 27 , 2013
-----------------------
10

whether the landlord could still claim bonafide need for himself as well as his dependents. = in Sheshambal v. Chelur Corporation (2010) 3 SCC 470 in which my learned and esteemed brother Thakur J. had perspicuously yet concisely considered the plethora of precedents pertaining to the legal consequences of the demise of the landlord whose bonafide need was the substance of the eviction action, during the pendency of an appeal. After analysing several previous decisions, it has been held that events which transpired subsequent to filing of the eviction petition could and must be kept in perspective if they would have the effect of dislodging the very plinth or substratum of the claim. In Sheshambal, the bonafide need that had been pleaded pertained only to the landlord and his wife. It will be relevant to record that the claim had been concurrently rejected by the courts below, before whom the landlord-husband had passed away. The widow, whose bonafide need had also been set up, unfortunately, also passed away during the pendency of the appeal in this Court. In those circumstances, it was held that the bonafide need, even assuming that it existed at the time of filing of the eviction action, had thereafter lapsed altogether on the death of the petitioning protagonists. = 9. In these circumstances, mindful of the uncertainty of which manner we may decide, the parties through their counsel have arrived at a settlement before us. It has been agreed that the rent shall stand increased to Rs.1500/- per month and that the Respondent-tenant shall be permitted to continue to occupy the tenanted premises for a further period of three years. The Appeal is accordingly allowed. The judgment of the High Court is set aside. However, the Respondent- tenant shall hand over peaceful and vacant possession to the landlord or his legal heirs in the event of his demise on or before 31st August 2016 provided the Respondent pays all the arrears of rent till date (if any); and with effect from September 2013 pays a sum of Rs.1500/- per month towards damages for use and occupation. The usual undertaking to abide by these terms must be filed within four weeks from today failing which he shall be liable to be evicted/ejected forthwith.

                    published in     http://judis.nic.in/supremecourt/imgst.aspx?filename=40697                                     
    REPORTABLE


                        IN THE SUPREME COURT OF INDIA


                        CIVIL APPELLATE JURISDICTION


                   CIVIL APPEAL NO.  7163         OF 2013
                 [Arising out of S.L.P.(C)No.21936 of 2011]




      Baldev Krishan                                    …..Appellant


            Versus


      Satya Narain                                      …..Respondent






                               J U D G M E N T




      VIKRAMAJIT SEN, J.


      1.    Leave granted.  We have heard learned counsel for the parties in
      great detail, at the end of which a settlement was arrived at  between
      them, the terms of which we shall spell out later.
      2.    The Appeal assails the order of the learned Single Judge of  the
      High Court  of  Rajasthan  in  Second  Appeal  No.216  of  2010  dated
      11.3.2011 which in turn related to the legal propriety of  the  decree
      of eviction passed by the First Appellate  Court  being  the  District
      Judge, Churu.   The  landlord/Appellant  had  filed  a  Suit  for  the
      eviction of the tenant/Respondent on sundry grounds out  of  which  we
      are presently concerned  only  with  that  under  Section  13(1)(h) of
      the Rajasthan Premises (Control  of  Rent  and  Eviction)  Act,  1950,
      which envisages the eviction of a tenant on  the  predication  of  the
      landlord, “that the premises are required reasonably and  bonafide  by
      the landlord (i) for the use or occupation of himself or  his  family,
      …..”.
      3.    We have perused the Plaint, the salient averments of  which  are
      that “in order to solve his financial problem the plaintiff  wants  to
      start a business of Paapad, Badi and spices in the disputed shop to be
      looked after by his wife.  The wife of the plaintiff also wants to  do
      the same and the plaintiff  after  his  retirement  himself  wants  to
      pursue and continue this industry and business and keep up his  source
      of income.  In these situations since the plaintiff and his  wife  and
      children will also require place for  their  residence  for  which  he
      wants to vacate and utilise two rooms, store and varandah as are built
      on the first floor which is presently with Jaiprakash  on  rent.   The
      plaintiff and his wife also need rooms built at the  second  floor  of
      the house for the business and industry of Paapad, Badi etc., and  for
      their residential purposes and for other  needs.   In  this  way,  the
      plaintiff has legitimate, reasonable and bonafide need of the disputed
      shop and room which is at second floor  for  himself  and  his  family
      members.......”.   After a perusal of these averments, it seems to  us
      that it cannot  be  concluded  that  the  eviction  suit  pleaded  the
      bonafide need of only  the  subsequently  deceased  wife,  either  for
      commercial or residential requirement; the claimed  need  was  of  the
      plaintiff  and his family.
      4.    The Trial Court, by its order dated 4.9.2003, decreed  the  Suit
      in favour of the Appellant-landlord which, as already indicated above,
      was upheld in appeal by the District Judge, Churu, by  judgment  dated
      8.11.2010.  However, in that duration, the  Appellant-landlord's  wife
      had passed away in 2007.  In the impugned  judgment,  the  High  Court
      repelled the contention of the landlord  that  concurrent  finding  of
      fact ought not to be upset by the High Court  in  the  Second  Appeal.
      After doing so, the High Court did not  view  the  claim  of  bonafide
      requirement of the tenanted premises favourably.  This has resulted in
      the filing of the present appeal before us.
      5.    The discussion of the law should properly start with the  three-
      Judge Bench decision  in  Pasupuleti  Venkateswarlu  v.  The  Motor  &
      General Traders (1975) 1 SCC  770.   Our  research  reveals  that  the
      question in hand has not received the attention of  any  larger  Bench
      and hence if the ratio decidendi of Pasupuleti is to be varied, it per
      force has to be done by  a  larger  Bench.   In  these  circumstances,
      Pasupuleti  holds the field on the question of the consideration to be
      given to events which have occurred subsequent to the institution of a
      suit and the disposal of any statutory  appeal.   Pasupuleti  requires
      the Court to “take cautious  cognisance  of  events  and  developments
      subsequent to the institution of the proceeding provided the rules  of
      fairness to both sides are scrupulously obeyed.”   After  laying  down
      these propositions the decision was to the effect that the recovery of
      another accommodation by the landlord during the pendency of the case,
      had material bearing on the right to evict since that right  would  be
      defeated by the statutory provisions itself.  Pasupuleti did not  have
      the occasion to consider Phool Rani v.  Naubat Rai Ahluwalia (1973)  1
      SCC 688; counsel were clearly remiss in not bringing this decision  to
      the Court’s  notice.   Close  upon  the  heels  of  this  decision  is
      Shantilal Thakordas v. Chimanlal Maganlal Telwala  (1976)  4  SCC  417
      also rendered by a three-Judge  Bench.    Phool  Rani  was  cited  and
      overruled in Shantilal and, therefore, the  former  ought  not  to  be
      cited or considered  any  further.   The  tenor  of  Shantilal  is  in
      consonance with and not contrary to Pasupuleti, as it necessarily must
      be.  What has been held is that if the requirement of the Plaintiff as
      well as his heirs is in issue before the Court, the  passing  away  of
      the Plaintiff will not defeat the lis.  Another three-Judge  Bench  in
      Hasmat  Rai  v.  Raghunath  Prasad  (1981)  3  SCC  103  has  followed
      Pasupuleti,  again as it was precendentially bound to.  The  plurality
      was of the view that a decree or order does not become final till  the
      appeal filed against it is finally disposed  of.   In  his  dissenting
      note, Pathak.J emphasised upon the fact that it was only in the course
      of the Second Appeal that the tenant endeavoured to draw the attention
      of the court to the demise of the landlord.  Accordingly, Pathak,J was
      of the opinion that since  there  were  concurrent  findings  of  fact
      rendered by the Trial Court as well as the first Appellate Court,  the
      demise of the Plaintiff-landlord in the course of  the  Second  Appeal
      would not have any detrimental legal consequences to  his  claim.   We
      may add here, by way of emphasis,  that  a  Second  Appeal  would  not
      entail the determination of questions of fact but must conform to  the
      discipline  of  only  considering  question  of  law  of   substantial
      importance.  Shakuntala Bai v. Narayan Das  (2004)  5  SCC  772  is  a
      decision of a two-Judge Bench and, therefore, need not  detain  us  in
      view of the ratio decidendi of larger Benches.  Significantly, it  was
      not brought to the notice of the Court that Phool  Rani   had  already
      been overruled by two larger  Benches.   However,  the  distinguishing
      feature in this case  was  that  consequent  upon  the  death  of  the
      original landlord-plaintiff his legal heirs had  been  allowed  to  be
      impleaded and  the  case  progressed  from  that  stage,  not  in  the
      appellate court but before the Trial Court.  It has been duly noted at
      the final hearing of the eviction Suit by the  Trial  Court,  all  the
      Plaintiff’s sons had specifically set up their own bonafide needs.
      6.     We  have  briefly  considered  the  previous  precedents  since
      disparate decisions inexorably lead to a vexed and a split  exposition
      of the law.  Our objective is to insulate the subordinate courts  from
      choosing between decisions of the Apex Court by  presenting  only  one
      opinion of the law.
      7.    We must immediately refer to the decision of this Court, in  the
      nature  of  a  re-statement  of  the  law, 
 in  Sheshambal  v.  Chelur Corporation (2010) 3 SCC 470 
in which my learned and esteemed  brother
      Thakur J. had perspicuously yet concisely considered 
the  plethora  of
      precedents pertaining to the legal consequences of the demise  of  the
      landlord whose bonafide need was the substance of the eviction action,
      during the pendency of an appeal.  
After  analysing  several  previous
      decisions, it has been held that events which transpired subsequent to
      filing of the eviction petition could and must be kept in  perspective
      if they would have  the  effect  of  dislodging  the  very  plinth  or
      substratum of the claim.  
In Sheshambal, the bonafide  need  that  had
      been pleaded pertained only to the landlord and his wife.  It will  be
      relevant to record that the claim had been  concurrently  rejected  by
      the courts below, before whom the landlord-husband  had  passed  away.
     
 The widow, whose bonafide need had also been  set  up,  unfortunately,
      also passed away during the pendency of the appeal in this Court. 
  In
      those circumstances, it was held that the bonafide need, even assuming
      that it existed at the time of filing  of  the  eviction  action,  had
      thereafter  lapsed  altogether  on  the  death  of   the   petitioning
      protagonists.  
It seems to us that it is arguable  that  the  position
      may change had there been a favourable verdict during their  lifetime.
      Premium should not be placed on the filing of appeals merely to defeat
      a favourable decision on the unfair speculation that the endemic delay
      in disposal of appeals may result in defeating a decree because of the
      death of the landlord.  
It had been clarified in Sheshambal  that 
 “if
      the deceased landlord had any dependent member of the family,  we  may
      have even in the absence of a pleading assumed  that  the  requirement
      pleaded extended also to the dependent member of their  family.   
That
      unfortunately for the Appellant is neither the case  set  up  nor  the
      position on facts”. 
 The second aspect of the decision which needs  to
      be recounted is that the rent had been increased by the High Court  to
      Rs.10,000/- per month with effect from  1.11.2003  and  thereafter  by
      this Court to Rs.25,000/- per month with effect from 1.1.2009.
      8.    Returning  to  the  pleadings  before  us,  we  are  not  seized
       of  an eviction action  in  which  the  bonafide  need  of  only  the
      deceased wife of the Appellant had  been  pleaded.   
It  is  for  this
      reason that we have extracted above the relevant parts of the  Plaint.
      Therefore, it required  our  careful  cogitation  as  to  
whether  the landlord could still claim bonafide need for himself as  well  as  his dependents.
      9.    In these circumstances, mindful  of  the  uncertainty  of  which
      manner we may decide,
the parties through their counsel  have  arrived
      at a settlement before us.  It has been agreed  that  the  rent  shall
      stand increased to Rs.1500/- per month and that the  Respondent-tenant
      shall be permitted to continue to occupy the tenanted premises  for  a
      further period of three years.  
The  Appeal  is  accordingly  allowed.
      The judgment of the High Court is set aside.  
However, the Respondent-
      tenant shall hand over peaceful and vacant possession to the  landlord
      or his legal heirs in the event of his demise on or before 31st August
      2016 provided the Respondent pays all the arrears of  rent  till  date
      (if any); and with effect from September 2013 pays a sum of  Rs.1500/-
      per  month  towards  damages  for  use  and  occupation.   The   usual
      undertaking to abide by these terms must be filed  within  four  weeks
      from today failing which he shall  be  liable  to  be  evicted/ejected
      forthwith.
      10.   Parties shall bear their respective costs.



      .................................................J.
                                        [T.S. THAKUR]




      New                                                              Delhi
      .................................................J.
      August 27, 2013.                  [VIKRAMAJIT SEN]



-----------------------
8

M.V. Act - COMPENSATION TO A CHILD = What is the just and fair compensation to be awarded to a child, who suffered disability in a motor accident, is the main point arising for consideration in this case.= In Kum. Michael vs. Regional Manager, Oriental Insurance Company Limited and Another[4], this Court considered the case of an eight year old child suffering a fracture on both legs with total disability only to the tune of 16%. It was held that the child should be entitled to an amount of Rs.3,80,000/- on these counts. 12. Though it is difficult to have an accurate assessment of the compensation in the case of children suffering disability on account of a motor vehicle accident, having regard to the relevant factors, precedents and the approach of various High Courts, we are of the view that the appropriate compensation on all other heads in addition to the actual expenditure for treatment, attendant, etc., should be, if the disability is above 10% and upto 30% to the whole body, Rs.3 lakhs; upto 60%, Rs.4 lakhs; upto 90%, Rs.5 lakhs and above 90%, it should be Rs.6 lakhs. For permanent disability upto 10%, it should be Re.1 lakh, unless there are exceptional circumstances to take different yardstick. In the instant case, the disability is to the tune of 18%. Appellant had a longer period of hospitalization for about two months causing also inconvenience and loss of earning to the parents. The appellant, hence, would be entitled to get the compensation as follows: - | HEAD |COMPENSATION AMOUNT | |Pain and suffering already |Rs.3,00,000/- | |undergone and to be suffered in | | |future, mental and physical shock, | | |hardship, inconvenience, and | | |discomforts, etc., and loss of | | |amenities in life on account of | | |permanent disability. | | |Discomfort, inconvenience and loss |Rs.25,000/- | |of earnings to the parents during | | |the period of hospitalization. | | |Medical and incidental expenses |Rs.25,000/- | |during the period of | | |hospitalization for 58 days. | | |Future medical expenses for |Rs.25,000/- | |correction of the mal union of | | |fracture and incidental expenses | | |for such treatment. | | |TOTAL:- |Rs.3,75,000/- | 13. The impugned judgment of the High Court in M.F.A. No. 1146 of 2008 is accordingly modified. The claimant will be entitled to a total compensation of Rs.3,75,000/- along with interest @ 6% per annum from the date of the petition. First respondent – Insurance Company is directed to deposit the enhanced compensation with interest as above within two months from today. On such deposit, it will be open to the appellant to approach the Tribunal for appropriate orders on withdrawal. The appeal is allowed as above.

                      published in http://judis.nic.in/supremecourt/imgst.aspx?filename=40696
  IN THE SUPREME COURT OF INDIA

                       CIVIL  APPELLATE  JURISDICTION

                        CIVIL APPEAL NO.7139  OF 2013
               [Arising out of S.L.P.(Civil) No. 1676 of 2012]


Master Mallikarjun                           … Appellant (s)

                                   Versus

Divisional Manager, the National
Insurance   Company Limited & Anr.           … Respondent (s)


                               J U D G M E N T

KURIAN, J.:




      Leave granted.


   2. What is the just and fair compensation to be awarded to a  child,  who suffered disability in a motor accident, is the main point arising for consideration in this case.

THE UNDISPUTED FACTS

   3. Appellant at  the  age  of  12  years  was  hit  by  a  motorcycle  on
      05.06.2006. He suffered the following injuries: -
     a. (Right) lower 1/3 leg deformity, movements restricted diagnosis  of
        fracture.

     b. Two abrasions over  left  elbow  posteriorly  over  olecrenon  both
        measuring 4x1 cms.

     c. Abrasion over dorsal aspect  right  hand  at  the  basis  of  index
        finger.



   4. Negligence of the rider was proved. The child was treated as inpatient
      from 05.06.2006 to  01.08.2006,  for  58  days.  He  was  operated  on
      24.06.2006. Six months after the discharge, he was seen by the  doctor
      on 15.02.2007 for follow up. It is in evidence that  the  patient  had
      the following discomforts/ disabilities, i.e.:

      i.    Patient walks with limp on to the right side.

    ii. Puckered scar on and aspect of  middle  1/3  of  (Right)  leg  with
        operated scar on either side.

   iii. Shortening of right lower limb by 1.5 cms.

    iv. Limitation of right knee movements by 30 %.

     v. Muscle power around right knee Gr.IV against Gr.V.

    vi. Limitation of right ankle movement by 20%.

   vii. Muscle power around (right) ankle is Gr. IV against Gr.V.

  viii. Check X ray No. 3791 dated 15.02.2007 shows disunited  fracture  of
        right tibia with plate  and  screw  fixation  in  situ.  Mal  union
        fracture of right tibia.






   5. The surgeon had assessed the disability to the extent of 34% of  right
      lower limb and 18% to the whole body.

   6. The Motor Accidents Claims  Tribunal  in  a  petition  filed  claiming
      compensation to the tune of Rs.4,00,000/-, awarded compensation to the
      tune of Rs.63,500/- under the following heads:-




|HEAD                               |COMPENSATION AMOUNT             |
|Pain and suffering.                |Rs.25,000/-                     |
|Inconvenience caused to parents.   |Rs.10,000/-                     |
|Medical expenses.                  |Rs.4,500/-                      |
|Loss of future amenities.          |Rs.10,000/-                     |
|Conveyance, food nourishment       |Rs.4,000/-                      |
|expenses.                          |                                |
|Future surgery.                    |Rs.10,000/-                     |
|TOTAL:-                            |Rs.63,500/-                     |




   7. On approaching the  High  Court,  the  compensation  was  enhanced  to
      Rs.1,09,500/-. The enhancement was mainly  under  the  head  “Loss  of
      future amenities”  wherein  the  appellant  was  awarded  Rs.50,000/-.
      Appellant still not satisfied, filed this Special Leave Petition.

   8. It is unfortunate that both the Tribunal and the High Court  have  not
      properly appreciated the medical evidence available in the  case.  The
      age of the child and deformities on his body resulting in  disability,
      have not been duly taken note of.  As  held  by  this  Court  in  R.D.
      Hattangadi vs. M/s. Pest Control  (India)  Pvt.  Ltd.  and  Others[1],
      while assessing the non-pecuniary damages, the damages for mental  and
      physical shock, pain and  suffering  already  suffered  and  that  are
      likely to be suffered, any future damages for the loss of amenities in
      life like difficulty in running, participation in active sports, etc.,
      damages   on   account   of   inconvenience,   hardship,   discomfort,
      disappointment, frustration, etc., have to be addressed especially  in
      the case of a child victim.  For a child, the best part of his life is
      yet to come. While considering the claim by a victim child,  it  would
      be unfair and improper to follow the structured  formula  as  per  the
      Second Schedule to the Motor Vehicles Act for reasons more  than  one.
      The main stress in the formula is on pecuniary damages.  For  children
      there is no income. The only indication in the Second Schedule for non-
      earning persons is to take the  notional  income  as  Rs.15,000/-  per
      year. A  child  cannot  be  equated  to  such  a  non-earning  person.
      Therefore, the compensation  is  to  be  worked  out  under  the  non-
      pecuniary heads  in  addition  to  the  actual  amounts  incurred  for
      treatment done  and/or  to  be  done,  transportation,  assistance  of
      attendant, etc. The main elements of  damage  in  the  case  of  child
      victims are the pain,  shock,  frustration,  deprivation  of  ordinary
      pleasures and enjoyment associated with healthy and mobile limbs.  The
      compensation awarded should enable the child to acquire  something  or
      to  develop  a  lifestyle  which  will  offset  to  some  extent   the
      inconvenience or discomfort arising out of the disability. Appropriate
      compensation for disability should take care of all the  non-pecuniary
      damages. In other words, apart from this head, there shall only be the
      claim  for  the   actual   expenditure   for   treatment,   attendant,
      transportation, etc.

   9. Sapna vs. United Indian Insurance Company Limited  and  Another[2]  is
      the case of a 12 year old girl who suffered 90% disability in her left
      leg. This Court granted a lump sum amount of  Rs.2,00,000/-  on  these
      heads.

  10. In Iranna vs. Mohammadali Khadarsab Mulla and Another[3],
 a  Division
      Bench of the Karnataka High Court granted an amount  of  Rs.4,00,000/-
      on these heads to the child who suffered 80% permanent disability.

  11. In Kum. Michael  vs.  Regional  Manager,  Oriental  Insurance  Company
      Limited and Another[4], 
this Court considered the  case  of  an  eight
      year old child suffering a fracture on both legs with total disability
      only to the tune of 16%. 
It was held that the child should be entitled
      to an amount of Rs.3,80,000/- on these counts.

  12. Though it  is  difficult   to  have  an  accurate  assessment  of  the
      compensation in the case of children suffering disability  on  account
      of a motor vehicle accident, having regard to  the  relevant  factors,
      precedents and the approach of various High Courts, 
we are of the view
      that the appropriate compensation on all other heads  in  addition  to
      the actual expenditure for treatment, attendant, etc., should  be, 
 if the disability is 
above 10% and upto  30%  to  the  whole  body,  Rs.3 lakhs; 
upto 60%, Rs.4 lakhs; 
upto 90%, Rs.5 lakhs and  
above  90%,  it should be Rs.6 lakhs. 
For permanent disability upto 10%, 
it should  be Re.1  lakh,  
unless  there  are  exceptional  circumstances  to   take
different yardstick. 
In the instant case, the  disability  is  to  the
      tune of 18%. 
Appellant had a  longer  period  of  hospitalization  for
      about two months causing also inconvenience and loss of earning to the
      parents.  
The  appellant,  hence,  would  be  entitled  to   get   the
      compensation as follows: -
| HEAD                              |COMPENSATION AMOUNT            |
|Pain and suffering already         |Rs.3,00,000/-                  |
|undergone and to be suffered in    |                               |
|future, mental and physical shock, |                               |
|hardship, inconvenience, and       |                               |
|discomforts, etc., and loss of     |                               |
|amenities in life on account of    |                               |
|permanent disability.              |                               |
|Discomfort, inconvenience and loss |Rs.25,000/-                    |
|of earnings to the parents during  |                               |
|the period of hospitalization.     |                               |
|Medical and incidental expenses    |Rs.25,000/-                    |
|during the period of               |                               |
|hospitalization for 58 days.       |                               |
|Future medical expenses for        |Rs.25,000/-                    |
|correction of the mal union of     |                               |
|fracture and incidental expenses   |                               |
|for such treatment.                |                               |
|TOTAL:-                            |Rs.3,75,000/-                  |





  13. The impugned judgment of the High Court in M.F.A. No. 1146 of 2008  is
      accordingly modified.  
The  claimant  will  be  entitled  to  a  total
      compensation of Rs.3,75,000/- along with interest @ 6% per annum  from
      the date of the petition. 
First  respondent  –  Insurance  Company  is
      directed to deposit the enhanced compensation with interest  as  above
      within two months from today. 
On such deposit, it will be open to  the
      appellant  to  approach  the  Tribunal  for  appropriate   orders   on
      withdrawal. 
The appeal is allowed as above.

  14. There is no order as to costs.



…………….…..…………J.
                                             (GYAN SUDHA MISRA)




.……..……………………J.
                                             (KURIAN JOSEPH)
New Delhi;
August 26, 2013.





      -----------------------
[1]    (1995) 1 SCC 551
[2]    (2008) 7 SCC 613
[3]    2004 ACJ 1396
[4]    JT 2013 (3) SC 311

-----------------------
                                                                  REPORTABLE


-----------------------
8

Motor Vehicles Act Section 149(2)(a)(ii) = Breach of conditions under Section 149(2)(a) of the Motor Vehicles Act, 1988 absolves the insurer of its liability to the insured. - NO = even after it is proved that the licence possessed by the driver was a fake one, - whether there is liability on the insurer is the moot question. As far as the owner of the vehicle is concerned, when he hires a driver, he has to check whether the driver has a valid driving licence. Thereafter he has to satisfy himself as to the competence of the driver. If satisfied in that regard also, it can be said that the owner had taken reasonable care in employing a person who is qualified and competent to drive the vehicle. The owner cannot be expected to go beyond that, to the extent of verifying the genuineness of the driving licence with the licensing authority before hiring the services of the driver. However, the situation would be different if at the time of insurance of the vehicle or thereafter the insurance company requires the owner of the vehicle to have the licence duly verified from the licensing authority or if the attention of the owner of the vehicle is otherwise invited to the allegation that the licence issued to the driver employed by him is a fake one and yet the owner does not take appropriate action for verification of the matter regarding the genuineness of the licence from the licensing authority. That is what is explained in Swaran Singh’s case (supra). If despite such information with the owner that the licence possessed by his driver is fake, no action is taken by the insured for appropriate verification, then the insured will be at fault and, in such circumstances, the insurance company is not liable for the compensation.= On facts, in the instant case, the appellant employer had employed the third respondent Nirmal Singh as driver in 1994. In the process of employment, he had been put to a driving test and he had been imparted training also. The accident took place only after six years of his service in PRTC as driver. In such circumstances, it cannot be said that the insured is at fault in having employed a person whose licence has been proved to be fake by the insurance company before the Tribunal. As we have already noted above, on scanning the evidence of the licensing authority before the Tribunal, it cannot also be absolutely held that the licence to the driver had not been issued by the said authority and that the licence was fake. = In the above circumstances, the appeal is allowed. The fourth respondent - insurance company is liable to indemnify the appellant and, hence, there can be no recovery of the compensation already paid to the claimants. 11. There is no order as to costs.

                      published in  http://judis.nic.in/supremecourt/imgst.aspx?filename=40695
 IN THE SUPREME COURT OF INDIA

                       CIVIL  APPELLATE  JURISDICTION

                        CIVIL APPEAL NO. 8276 OF 2009


Pepsu  Road Transport Corporation       … Appellant (s)

                                   Versus

National Insurance Company              … Respondent (s)





                               J U D G M E N T

KURIAN, J.:





1.    Breach of conditions under Section 149(2)(a)  of  the  Motor  Vehicles
Act, 1988 absolves the insurer of its  liability  to  the  insured.
Section
149(2)(a)(ii) deals with the conditions regarding driving licence.  
In  case
the vehicle at the time of accident is driven by a person who  is  not  duly
licensed or by a person who has been disqualified from holding or  obtaining
a driving licence during the period of disqualification, the insurer is  not
liable for the compensation.
 In the instant case, we  are  called  upon  to
deal with a situation where the driver  allegedly  possessing  only  a  fake
driving licence.



   2. Widow and two minor sons of late Gurjinder Singh  Modi  are  claimants
      before the Motor Accidents Claims Tribunal, Chandigarh in M.A.C.T. No.
      63/481 filed in the year 2002. The  allegation  was  that    Gurjinder
      Singh Modi died out of a motor accident on 04.10.2001  on  account  of
      the negligent driving of  bus  no.  PB-11-K-8512  of  the  Pepsu  Road
      Transport Corporation (for  short,  ‘PRTC’),  Patiala,  the  appellant
      herein. Rs.30,00,000/- was claimed  as  compensation.  Negligence  was
      proved. The Tribunal awarded Rs.11,03,404/- as compensation.  However,
      the insurance company was absolved of its liability since the  licence
      issued to the driver was found to be fake. The insurance company  took
      the Local Commissioner to licensing authority, Darjeeling, West-Bengal
      and, on verification of the available records, it was reported that no
      such licence as possessed by the driver has been issued  by  the  said
      licensing Authority at Darjeeling. Thus, aggrieved, the owner  of  the
      vehicle, viz., PRTC, Patiala has come up in appeal.

   3. It is the contention of the appellant  that  they  had  appointed  the
      third respondent - Nirmal Singh as driver with PRTC in  1994,  he  was
      given proper training from the driving school at  Patiala  and,  thus,
      having taken reasonable steps in verifying the  driving  licence  and,
      thereafter, having trained the driver  by  the  employer  himself,  it
      cannot be said that the insurance company is not liable. There  is  no
      breach of any conditions  by  the  insured.  In  other  words,  it  is
      contended that even if the licence is fake, the owner having taken all
      reasonable steps, the insurer  is  liable.  The  other  contention  on
      merits is that the insurer had not  established  before  the  Tribunal
      that the licence issued to Nirmal Singh was fake. In this context, our
      reference has been invited to  Annexure-2-evidence  of  the  licensing
      authority before the Tribunal. It is stated that as per the  available
      office records, no driving licence  was  issued  to  Nirmal  Singh  on
      12.06.1985 with no.12385 of 1985.  Licence  numbers  of  1985  as  per
      record start from 22579 of 1985. Photocopy of the register  maintained
      for issuing the licences was marked  as  R-1.  However,  it  was  also
      stated that: -
      “…It can be possible that other licence register  pertaining  to  year
      1985 are not available today as  it  might  be  misplaced  during  the
      shifting of our office…”



      Still further, it was stated:
      “… It is possible that the registers which are misplaced might contain
      the name of Nirmal Singh.”




   4. Though the appellant is entitled to succeed on  the  ground  that  the
      insurer had not proved beyond doubt that driver Nirmal Singh  did  not
      possess a valid driving licence, we shall also  advert  to  the  legal
      position regarding the liability of the  insurance  company  when  the
      driver of the offending vehicle possessed a fake driving licence.

   5. In United India Insurance Company Limited vs. Lehru and  Others[1],  a
      two-Judge Bench of this Court has taken the view  that  the  insurance
      company cannot be permitted to avoid its liability only on the  ground
      that the person driving the vehicle at the time of  accident  was  not
      duly licensed. It was further held  that  the  wilful  breach  of  the
      conditions of the policy should be established. Still further  it  was
      held  that  it  was  not  expected  of  the  employer  to  verify  the
      genuineness of a driving licence from the  issuing  authority  at  the
      time of employment. The employer needs to only test  the  capacity  of
      the driver and if after such test, he has been appointed, there cannot
      be any liability on the employer. The  situation  would  be  different
      when the employer was told that the driving licence of its employee is
      fake or false and yet the employer not taking  appropriate  action  to
      get the same duly verified from the issuing authority. We may  extract
      the relevant paragraphs from the judgment:
           “18. Now let us  consider  Section  149(2).  Reliance  has  been
      placed on Section 149(2)(a)(ii). As seen in order to  avoid  liability
      under this provision it must be shown that there  is  a  "breach".  As
      held in Skandia and Sohan Lal Passi cases the breach must be  on  part
      of the insured. We are in full agreement with that. To hold  otherwise
      would lead to absurd results. Just  to  take  an  example,  suppose  a
      vehicle is stolen. Whilst it is being driven by the thief there is  an
      accident. The thief is caught and it is ascertained  that  he  had  no
      licence. Can the Insurance Company disown liability? The answer has to
      be an emphatic "No". To hold otherwise would be  to  negate  the  very
      purpose of compulsory insurance.  The  injured  or  relatives  of  the
      person killed in the accident may find that  the  decree  obtained  by
      them is only a paper decree as the owner is a man of straw. The  owner
      himself would be an innocent sufferer. It is for this reason that  the
      Legislature, in its wisdom, has made insurance, at least  third  party
      insurance, compulsory. The aim and purpose  being  that  an  insurance
      company would be available to pay. The  business  of  the  company  is
      insurance. In all businesses there is an element of risk. All  persons
      carrying on business must take risks associated  with  that  business.
      Thus it is equitable that the business which is run for making profits
      also bears the risk associated with it.  At  the  same  time  innocent
      parties must not be made to suffer  or  loss.  These  provisions  meet
      these requirements. We are thus in agreement with what is laid down in
      aforementioned cases viz that in order to avoid liability  it  is  not
      sufficient to show that the person driving at the time of accident was
      not duly licensed. The  insurance  company  must  establish  that  the
      breach was on the part of the insured.”
           “20. When an owner is hiring a driver he will therefore have  to
      check whether the driver has a driving licence. If the driver produces
      a driving licence which on the face of it looks genuine, the owner  is
      not expected to find out whether the licence has in fact  been  issued
      by a competent authority or not. The owner would then take the test of
      the driver. If he finds that the driver  is  competent  to  drive  the
      vehicle, he will hire the driver.  We  find  it  rather  strange  that
      insurance companies expect owners to make enquiries with  RTOs,  which
      are spread all over the country, whether the driving licence shown  to
      them is valid or not. Thus where the owner has satisfied himself  that
      the driver has a licence and is driving competently there would be  no
      breach of Section 149(2)(a)(ii). The Insurance Company would not  then
      be absolved of liability. If it ultimately turns out that the  licence
      was fake, the insurance company would continue to remain liable unless
      they prove that the owner/insured was aware or had  noticed  that  the
      licence was fake and  still  permitted  that  person  to  drive.  More
      importantly, even in such a case the insurance  company  would  remain
      liable to the innocent third party, but it may be able to recover from
      the insured. This is the law which has  been  laid  down  in  Skandia,
      Sohan Lal Passi and Kamla cases. We are in  full  agreement  with  the
      views expressed therein and see no reason to take a different view.”

   6. The matter was subsequently considered by a three-Judge Bench of  this
      Court in National Insurance Company  Limited  vs.   Swaran  Singh  and
      Others[2]. The said Bench was of the view that in case the insured did
      not take reasonable and  adequate  care  and  caution  to  verify  the
      genuineness or otherwise of the licence, the liability would still  be
      open-ended and will have to be determined on the  basis  of  facts  of
      each case. The relevant discussions are available  at  paragraphs  92,
      99, 100 and 101, which are extracted below:

           “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, 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 disentitlement from raising any
      defence  or  for  the  owners  to  be  absolved  from  any   liability
      whatsoever.”
           “99. So far as the purported conflict in the judgments of  Kamla
      and Lehru is concerned, we may wish to point 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 companies, 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  will  have  to  be
      determined in each case.”
           “100. This Court, however, in Lehru must not  be  read  to  mean
      that an owner of a vehicle can under no circumstances have any duty to
      make any enquiry in this respect. The same, however, would again be  a
      question which would arise for consideration in each individual case.”
           “101. The submission of Mr. Salve that in Lehru case, this Court
      has, for all intent and purport, taken away the right  of  insurer  to
      raise a defence that the  licence  is  fake  does  not  appear  to  be
      correct. Such 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 otherwise of the licence held  by
      the driver.”

   7.  Swaran Singh’s case (supra) was subsequently  considered  by  a  two-
      Judge Bench of this Court in National Insurance  Company  Limited  vs.
      Laxmi Narain Dhut[3]. It was explained that:
      “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 duly licensed  driver  or  one
      who was not disqualified to drive at the relevant time…”



   8. In a claim for compensation, 
it is certainly open to the insurer under
      Section 149(2)(a)(ii) to take a defence that the driver of the vehicle
      involved in the accident was not duly licensed. 
Once such a defence is
      taken, the onus is on the insurer.
But
even after it  is  proved  that
      the licence possessed by the driver was a fake one, 
whether  there  is
      liability on the insurer is the moot question.
As far as the owner  of
      the vehicle is concerned, when he hires a  driver,  he  has  to  check
      whether the driver has a valid driving licence. Thereafter he  has  to
      satisfy himself as to the competence of the driver.  
If  satisfied  in
      that regard also, it can be said that the owner had  taken  reasonable
      care in employing a person who is qualified and competent to drive the
      vehicle. 
The owner cannot be expected to go beyond that, to the extent
      of verifying the genuineness of the driving licence with the licensing
      authority before hiring the  services  of  the  driver.  
However,  the
      situation would be different if  at  the  time  of  insurance  of  the  vehicle or thereafter the insurance company requires the owner of  the vehicle to have the licence duly verified from the licensing authority  or if the attention of the owner of the vehicle is  otherwise  invited   to the allegation that the licence issued to the  driver  employed  by   him is a fake one and yet the owner does not take  appropriate  action   for verification of  the  matter  regarding  the  genuineness  of  the  licence from the licensing authority. 
That is  what  is  explained  in
      Swaran Singh’s case (supra). If  despite  such  information  with  the  owner that the licence possessed by his driver is fake, no  action  is   taken by the insured for appropriate verification,  then  the  insured  will be at fault and, in such circumstances, the insurance company  is   not liable for the compensation.

   9. On facts, in the instant case, 
the appellant employer had employed the
      third respondent Nirmal Singh as driver in 1994.  
In  the  process  of
      employment, he had been put to a driving test and he had been imparted
      training also. 
The accident took place only after  six  years  of  his
      service in PRTC as driver. In such circumstances, it  cannot  be  said
      that the insured is at fault in having employed a person whose licence
      has been proved to  be  fake  by  the  insurance  company  before  the
      Tribunal.
As we have already noted above, on scanning the evidence  of
      the licensing  authority  before  the  Tribunal,  it  cannot  also  be
      absolutely held that the licence to the driver had not been issued  by
      the said  authority  and  that  the  licence  was  fake.  
Though  the
      appellant had also taken a contention that the compensation is on  the
      higher side, no serious attempt has been  made  and  according  to  us
      justifiably, to canvas that position.

  10. In  the  above  circumstances,  the  appeal  is  allowed.  The  fourth
      respondent - insurance company is liable to  indemnify  the  appellant
      and, hence, there can be no recovery of the compensation already  paid
      to the claimants.

  11. There is no order as to costs.


                                                             …………….…..…………J.
                                              (GYAN SUDHA MISRA)



                                                             .……..……………………J.
                                              (KURIAN JOSEPH)
New Delhi;
August 26, 2013.





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[1]    (2003) 3 SCC 338
[2]    (2004) 3 SCC 297
[3]    (2007) 3 SCC 700

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                                                                  REPORTABLE


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