National Insurance Co. Ltd. vs Balbir Kumar

IN nutshell the facts of the case as set out in the complaint are that the respondent-complainant who is employed as Assistant Branch Manager (Sales) with the appellant-opposite party Life INsurance Corporation of INdia posted at Fatehabad, had insured his car Hyundai Santro car bearing registration No. 23B/0406 for the period 24.10.2002 to 23.10.2003 under cover note No. 31/391294 of Book No. 40/05/02/15652, was coming from Bhuna to Fatehabad and when he reached near village Jandli, a Neel cow suddenly came in front of the car as a result of which the front portion of the car struck against the cow resulting in complete damage to the car of the complainant. The complainant gave intimation to the opposite party claiming compensation amount of Rs. 60,000 in respect of the cost of the replacement of the parts of the car. The opposite party on receipt of the intimation of the accident had appointed Surveyor Shri Y.K. Kapoor, who assessed the loss to the tune of Rs. 32,723. The opposite party repudiated the claim as per letter dated 16.1.2004 on the ground that the complainant did not possess a valid driving licence at the time of accident as the validity of the licence had expired on 26.4.2003. Aggrieved by the action of the opposite party, the present complaint was filed wherein apart from the cost of replacement of the parts to the tune of Rs. 60,000, Rs. 10,000 were also claimed on account of mental agony and harassment caused to him besides Rs. 5,000 as litigation expenses. The District Forum rejected the stand of the opposite party and quashed the repudiation letter and directed the opposite party to pay Rs. 32,723 assessed by the Surveyor after deducting the depreciation amount of Rs. 3,272. The deduction of excess clause was held not to be applicable in the present case and Rs. 2,000 was awarded on account of mental agony and harassment caused to the complainant and Rs. 1,000 as cost of the proceedings. The order was to be complied with within six weeks failing which the opposite party was directed to pay interest @ 9% per annum from the date of repudiation till its realisation. It is against this order the present appeal has been filed by the appellant-opposite party.

NONE has appeared to argue the matter from the side of the appellant-opposite party at the time of arguments. Learned Counsel representing the respondent-complainant has been heard at length. As there was no representation from the side of the appellant-opposite party at the time of arguments, the grounds stated in the memorandum of appeal have been taken into consideration. It is stated therein that the District Forum has not only misread the provisions of law applicable in the present case but has misrepresented the evidence produced on record. Repudiation letter dated 16.1.2004 was justified because the complainant did not have a valid driving licence on the date of accident being 30.6.2003 as he had deposited the license fee on 1.7.2003 for renewal with the Licencing Authority while the period of licence had expired on 26.4.2003. In this manner there has been a breach of the provisions of Section 3 and Section 15 of the Motor Vehicles Act, 1988 (hereinafter referred to as the Act, 1988) on the part of the complainant. It was further stated that the matter was referred to Insurance Ombudsman which had dismissed the claim as well. The District Forum while accepting the complaint took view that despite the expiry of the validity period of licence it continues to exist unless the holder of the licence is disqualified to hold the same. Support was sought from the observations made in case, Suresh Chandra Dwivedi v. United India Insurance Co. Ltd., I (2005) CPJ 743=2005 (2) Con.LT 131 (Chhattisgarh). Consequently, it was held that irrespective of expiry of the term of the licence on the date of accident as it was subsequently renewed, it cannot be held that the driver was disqualified to hold a valid driving licence. On the basis of above finding, the above noted amount was awarded. Learned Counsel representing the complainant during the course of arguments has supported the above finding of the District Forum. In addition, he also referred to the judgment of the Hon''ble Supreme Court in case, National Insurance Co. Ltd. v. Swaran Singh and Ors., I (2004) SLT 345=I (2004) ACC 1 (SC)=109 (2004) DLT 304 (SC)=2004 (2) RCR (Civil) 114, wherein it was laid down that mere absence or fakeness or validity of the licence at the time of relevant time are not defences available to the insurer against the insured of third party and non-production of the licence or evidence by the insured cannot be considered as discharge of burden of insurer. Further reference was made to the case , New India Assurance Co. Ltd. v. Kishan Bhai, I (2005) CPJ 81 (NC).

It deserves to be stated at the outset that above mentioned cases to which reference has been made from the side of the respondent-complainant do not advance the case of the complainant. In this case the dispute is not that the complainant who was the driver of the vehicle at the time of accident had possessed a fake licence or was guilty of negligence as profounded in the above mentioned cases which primarily related to the liability of the third party in terms of the provisions of Section 149 of the Act, 1988. In this case the evidence brought on record fully established that the complainant had obtained the licence bearing No. 10884 dated 4.9.1992 from the Licensing Authority, Karnal, the validity period of which was upto 26.4.2003. Thereafter, according to the complainant he had handed over the licence to S.D.O. (C) exercising the powers of Licensing Authority for renewal and had obtained the receipt dated 20.5.2003 Ex.C-2 which was valid upto 16.6.2003. He has also produced another receipt dated 2.7.2000. There was no authorisation of the Licensing Authority in his favour to drive the vehicle in question despite the fact that the driving licence had been deposited with the Licensing Authority. The accident had taken place on 30.6.2003 and on that day there was no authorisation of the Licensing Authority for him to drive the car. This licence was renewed by the Licensing Authority, Fatehabad vide receipt No. 394 for Rs. 80 dated 1.7.2003, which was valid upto 25.4.2008, on 2.7.2003 vide T.R. No. 184. The confirmation letter in this regard was placed on record dated 16.12.2003 of Shri Rajender Goyal, Advocate of the opposite party. That letter is Ex. R-2. Another letter Ex. R-1 has also been placed on record which contains the report of the Licensing Authority dated 16.12.2003 in this regard. It has come on record that when the opposite party had come to know about the existence of the receipt dated 26.4.2003, whereby the period of renewal of the licence was allowed from 26.4.2003 to 25.4.2008, the matter was taken up by the Divisional Manager with the S.D.O. (C) because it was brought to his notice that the licence fee had been deposited by the complainant with the Licensing Authority on 1.7.2003 and not on 20.5.2003. The Licensing Authority accordingly amended the certificate by rectifying the effective date of renewal of the driving licence and rather it was certified that fee was deposited on 1.7.2003 and licence was renewed on 2.7.2003 and was valid upto 25.4.2008. The necessary record was also produced before the Insurance Ombudsman, Chandigarh, whose report is on the record as Ex. R-4. It deserves notice here that the Central Motor Rules, require that the application for renewal of the driving licence should be accompanied with the renewal fee. It is not the case of the complainant that he had deposited any renewal fee on 20.5.2003. It is for that reason the Licencing Authority had corrected the position by making endorsement whereby the receipt dated 20.5.2003 had been cancelled. Therefore, no legal sanctity is attached to the receipt dated 20.5.2003 because it was not accompanied by any deposit of fee as required under the rules and it has to be taken that the complainant had applied for renewal of the licence by depositing renewal licence fee on 1.7.2003 for which receipt had been issued by the Licensing Authority.

IN view of the position discussed above the facts have to be recapitulated at the risk of repetition. The accident had taken place on 30.6.2003. The expiry date of the licence issued to the complainant was 26.4.2003. He had applied for renewal of the licence on 1.7.2003 renewed from 2.7.2003 to 25.4.2008. It means that the licence was renewed after a gap of 2 months and 6 days approximately. Under Section 15(1) of the Act, 1988 a driving licence can be renewed from the date of expiry if an application is made to do so for the said purpose. Proviso to the said sub-section clearly states that where an application for renewal is made more than 30 days after the date of expiry, the driving licence shall not be renewed w.e.f. the date of expiry. As the driving licence of the complainant was renewal w.e.f. 2.7.2003, first proviso to Section 15(1) of the Act, 1988 would apply and the net conclusion would be that the driver had no driving licnece to drive the vehicle on the date of accident. The Hon''ble National Commission in case , Salvador Rodrigues Margo v. New INdia Assurance Company Limited, I (2005) CPJ 71 (NC)=2005 (1) CPC 531, upheld the order of dismissal of the complaint because it was found that the driving licence was not renewed within the prescribed limit of 30 days of expiry. IN para No. 8 of the order it was observed: "IN the cited case (2004) 3 Supreme Court 297 (supra), the Hon''ble Supreme Court had held that upon expiry of the licence it shall remain valid for a period of only 30 days after the expiry. IN this case the licence had expired on 9.5.1996, further 30 days expired on 9.6.1996, the accident took place on 15.6.1996 and it was renewed on 4.7.1996. Hence, it is clear that on the date of accident, this driver did not have a valid driving licence. Thus, two things emerge. One that there was no validity of the licence as it was issued contrary to law."

In view of the position explained above, the only conclusion that can be drawn is that the complainant had full knowledge that he had no licence to drive the vehicle at the time of accident and for that reason the complainant committed breach of the terms of the insurance policy and for that reason, the complainant is not entitled to any compensation amount as claimed in the complaint. The above stated law and facts were not given due consideration by the District Forum and for that reason the order of the District Forum, as such, cannot be sustained.

FOR the aforesaid reasons, while accepting the appeal, the impugned order is set aside and the complaint is dismissed. The amount of Rs. 20,689 deposited by the appellant at the time of filing the appeal be refunded to the appellant against proper receipt and identification in accordance with rules. Appeal allowed.