Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 5721 OF 2008
(Arising out of S.L.P. (C) No.13174 of 2007)
National Insurance Co. Ltd. …..Appellant
Versus
Vidhyadhar Mahariwala and Ors. ….Respondents
J U D G M E N T
Dr. ARIJIT PASAYAT, J.
1. Leave granted.
2. Challenge in this appeal is to the judgment of a learned
Single Judge of the Rajasthan High Court at Jabalpur
dismissing the appeal filed by the appellant under Section 173
of the Motor Vehicles Act, 1988 (in short the ‘Act’). Challenge
in the appeal was to the award made by the Motor Claims
Appellate Tribunal, Ratangarh (Churu) (in short ‘MACT) in
Claim Case No.89 of 2004. By the said award, a sum of
Rs.4,03,650/- was awarded to the claimant-respondent No.1
in the appeal. The dispute related to the rejection of
appellant’s claim for exoneration on the ground of violation of
policy condition. It was pointed out that the driving license of
the driver of the offending vehicle was not in force on the date
of accident.
3. Factual position in detail need not be indicated because
the issue relates to the liability of the insurance company as
the driving license was not valid on the date of the accident.
4. In the instant case the date of accident was 11.6.2004.
The driver’s license was initially valid for the period from
15.12.1997 to 14.12.2000 and thereafter from 29.12.2000 to
14.12.2003. Thereafter, it was again renewed from 16.5.2005
to 15.5.2008. The appellant filed its objections before MACT
taking the stand that since the driving license was not valid on
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the date of accident it had no liability. The MACT turned down
the plea. According to it though on the date of accident the
driving license was not valid, since the driver’s license was
renewed on 16.5.2005 for a further period of three years it
cannot be said that during the intervening period the driver
was incompetent or disqualified to driver the truck. With
reference to Section 114 of the Indian Evidence Act, 1872 (in
short the ‘Evidence Act’) it was held that at the time of
accident driver was competent to drive the vehicle.
5. In appeal by the impugned judgment the High Court
referred to three judgments of this Court in National
Insurance Co. Ltd. v. Swaran Singh and Ors. (2004 (3) SCC
297), National Insurance Co. Ltd. v. Kusum Rai and Ors.
(2006 (4) SCC 250) and Oriental Insurance Co. Ltd. v.
Nanjappan and Ors. (2004 (13) SCC 224) and came to hold
that the insurance company, the insurer was liable to
indemnify the award. It was held that merely there was a gap
in the renewal of driving license that cannot be a ground for
exoneration.
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6. In support of the appeal, placing reliance on the decision
of this Court in Ishwar Chandra and Ors. v. Oriental
Insurance Co. Ltd. and Ors. (2007 (10) SCC 650), it was
contended that the High Court’s view is unsustainable.
7. Learned counsel for respondent No.2 the owner of the
vehicle on the other hand supported the judgment of MACT.
8. In Swaran Singh’s case (supra) whereupon the
respondent no.2 relied, it was held as follows:
“45. Thus, a person whose licence is
ordinarily renewed in terms of the Motor
Vehicles Act and the Rules framed thereunder,
despite the fact that during the interregnum
period, namely, when the accident took place
and the date of expiry of the licence, he did not
have a valid licence, he could during the
prescribed period apply for renewal thereof
and could obtain the same automatically
without undergoing any further test or without
having been declared unqualified therefor.
Proviso appended to Section 14 in unequivocal
terms states that the licence remains valid for
a period of thirty days from the day of its
expiry.
46. Section 15 of the Act does not empower
the authorities to reject an application for
renewal only on the ground that there is a
break in validity or tenure of the driving
licence has lapsed, as in the meantime the
provisions for disqualification of the driver
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contained in Sections 19, 20, 21, 22, 23 and
24 will not be attracted, would indisputably
confer a right upon the person to get his
driving licence renewed. In that view of the
matter, he cannot be said to be delicensed and
the same shall remain valid for a period of
thirty days after its expiry.”
9. In Kusum Rai’s case (supra) it was held as follows:
14. This Court in Swaran Singh (2004 (3) SCC
297) clearly laid down that the liability of the
Insurance Company vis-à-vis the owner would
depend upon several factors. The owner would
be liable for payment of compensation in a
case where the driver was not having a licence
at all. It was the obligation on the part of
the owner to take adequate care to see that the
driver had an appropriate licence to drive the
vehicle. The question as regards the liability of
the owner vis-à-vis the driver being not
possessed of a valid licence was considered in
Swaran Singh stating: (SCC pp. 336-37,
para 89)
“ 89 . Section 3 of the Act casts an
obligation on a driver to hold an effective
driving licence for the type of vehicle
which he intends to drive. Section 10 of
the Act enables the Central Government
to prescribe forms of driving licences for
various categories of vehicles mentioned
in sub-section (2) of the said section. The
various types of vehicles described for
which a driver may obtain a licence for
one or more of them are: ( a ) motorcycle
without gear, ( b ) motorcycle with gear, ( c )
invalid carriage, ( d ) light motor vehicle,
( e ) transport vehicle, ( f ) road roller, and
( g ) motor vehicle of other specified
description. The definition clause in
Section 2 of the Act defines various
categories of vehicles which are covered
in broad types mentioned in sub-section
(2) of Section 10. They are ‘goods
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carriage’, ‘heavy goods vehicle’, ‘heavy
passenger motor vehicle’, ‘invalid
carriage’, ‘light motor vehicle’, ‘maxi-cab’,
‘medium goods vehicle’, ‘medium
passenger motor vehicle’, ‘motor-cab’,
‘motorcycle’, ‘omnibus’, ‘private service
vehicle’, ‘semi-trailer’, ‘tourist vehicle’,
‘tractor’, ‘trailer’ and ‘transport vehicle’.
In claims for compensation for accidents,
various kinds of breaches with regard to
the conditions of driving licences arise for
consideration before the Tribunal as a
person possessing a driving licence for
‘motorcycle without gear’, [sic may be
driving a vehicle] for which he has no
licence. Cases may also arise where a
holder of driving licence for ‘light motor
vehicle’ is found to be driving a ‘maxi-
cab’, ‘motor-cab’ or ‘omnibus’ for which
he has no licence. In each case, on
evidence led before the Tribunal, a
decision has to be taken whether the fact
of the driver possessing licence for one
type of vehicle but found driving another
type of vehicle, was the main or
contributory cause of accident. If on
facts, it is found that the accident was
caused solely because of some other
unforeseen or intervening causes like
mechanical failures and similar other
causes having no nexus
with the
driver not possessing requisite type of
licence, the insurer will not be allowed to
avoid its liability merely for technical
breach of conditions concerning driving
licence.”
10. Nanjappan’s case (supra) was referred to in Kusum Rai’s
case (supra).
11. In Ishwar Chandra’s case (supra) the three decisions
referred to by the High Court were considered and it was held
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that the insurance company would have no liability in the
case of this nature. We are in agreement with the view. The
appeal deserves to be allowed which we direct. The impugned
order of the High Court is set aside. It is open to the claimant
to recover the amount from respondent No.2.
……………………………..J.
(Dr. ARIJIT PASAYAT)
………………………….….J.
(HARJIT SINGH BEDI)
New Delhi,
September 17, 2008
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