National Insurance Co. Ltd. @APPELLANT@Hash Aleem Khan

These Civil Misc. Appeals under sec.173 of the Motor Vehicles Act 1988 have been filed against judgment & award dated 12.09.2002 passed by

Motor Accident Claims Tribunal, Churu in Claim Case No.28/2001 (Aleem Khan & others v. General Manager, National Insurance Co. Ltd. &

others).

Appeal No.114/2003

In Appeal No.114/2003, the appellant insurance company has contended that the learned Tribunal while passing the award has ordered liability to pay

compensation jointly & severally by the non-applicants including appellant Insurance Company. It was also contended that issue No.4 regarding

holding of driving license has been decided by the learned Tribunal after appreciating entire evidence as well as legal position in very casual and

perfunctory manner. This issue as such speaks about effect of submissions made by the appellants by way of written statement in the claim

proceedings. Those submissions were exhaustive enough to submit that the Driver Mehboob Khan was not holding a valid driving license on the date

of the accident and as such, no liability could have been fastened on the appellant-insurer.

It was also specifically submitted by way of pleadings, evidence and final arguments submitted for & on behalf of appellant-insurer before the Tribunal

that as on the date of accident the Driver Mehboob Khan’s driving license was not valid.

NAW-2 Bhanwar Lal, serving at the office of DTO Churu, submitted in evidence that the driving license No.15068 was issued for Light Transport

Vehicles on 19.10.1993 in the name of Mehboob Khan s/o Nizammudin Khan. It was valid from 19.10.1993 to 18.10.1996, thereafter from 28.10.1996

to 18.10.1999 and thereafter from 09.04.2001 to 08.04.2004. If entire oral evidence as well as documentary evidence placed before the Tribunal are

looked into minutely and carefully, it is perfectly revealed that invalidity of the license was duly proved during the claim proceedings and therefore, not

considering the same before reaching erroneous conclusion on the part of the Tribunal has made passing of the entire impugned award absolutely

vitiated and therefore, the same deserves to be set aside.

Per contra, it is submitted on behalf of respondents that the Driving License No.15068 issued in favour of Mehboob Khan s/o Nizamuddin was later on

renewed on 09.04.2001 and therefore, the learned Tribunal has committed no illegality in fastening the liability on the appellant-insurer.

Heard rival submissions of the parties and scanned entire evidence placed on record.

In the present case, NAW2 Bhanwar Lal, who was working as LDC in District Transport Office, Churu in his statement stated that Driving License

No.15068 in the name of Mehboob Khan s/o Nizamuddin, resident of Ward No.27, Churu, was issued for LTV, on 19.10.1993. This license was valid

from 19.10.1993 to 18.10.1996, thereafter it was renewed from 28.10.1996 to 18.10.1999 and thereafter it was again renewed from 09.04.2001 to

08.04.2004. From perusal of this evidence, it is clear that on the date of the accident i.e. 30.03.2001, the driving license of Mehboob Khan was not

renewed.

NAW2 Bhanwar Lal in his cross-examination has further stated that on 28.03.2001, Driver Mehboob Khan had not submitted any application for

renewal of his driving license. He further stated that he has not brought original application with him and he also stated that it is true that he has not

seen the original application and he has no knowledge whether on the original application date 28.03.2001 is written or not. He also stated that on

submitting application on 28.03.2001 for renewal, why the license was not renewed by the DTO during this period is not known to him and it is true

that from 1993, the driving license of Mehboob Khan was never suspended nor the Driver was declared incompetent to drive a vehicle.

Learned counsel appearing for the appellant placed reliance on judgment of the Apex Court in Ishwar Chandra and others v. Oriental Insurance Co.

Ltd. & others: (2007) 10 SCC 650 and contended that from bare perusal of sec.15(1) of the Act and first proviso appended thereto, the owner would

not have right to be indemnified by the insurer where accident occurs after expiry of grace period. It was observed by Hon’ble Apex Court as

follows:

“8. Section 15(1) of the Act and the first proviso appended thereto reads as under :

Renewal of driving licences. (1) Any licensing authority may, on application made to it, renew a driving licence issued under the provisions of this

Act with effect from the dale of its expiry:

Provided that in any case where the application for the renewal of a licence is made more than thirty days after the date of its expiry, the driving

licence shall be renewed with effect from the date of its renewal:

From a bare perusal of the said provision, it would appear that the licence is renewed in terms of the said Act and the rules framed thereunder. The

proviso appended to Section 15(1) of the Act in no uncertain terms states that whereas the original licence granted despite expiry remains valid for a

period of 30 days from the date of expiry, if any application for renewal thereof is filed thereafter, the same would be renewed from the date of its

renewal. The accident took place 28.04.1995. As on the said date, the renewal application had not been filed, the driver, did not have a valid licence on

the date when the vehicle met with the accident.â€​

In National Insurance Co. Ltd. v. Kusum Rai: (2006) 4 SCC 250, Hon’ble Apex Court after referring to Swaran Singh’s case {(2004) 3 SCC

397}, opined as under:

This Court in Swaran Singh clearly laid down that the liability of the Insurance Company vis-a-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-`-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 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.’

In the present case, the Driving License in the name of Mehboob Khan was issued on 19.10.1993, which was valid for the period 19.10.1993 to

18.10.1996 and thereafter renewed from 28.10.1996 to 18.10.1999. It was again renewed from 09.04.2001 to 08.04.2004. There is no evidence on

record that Mehboob Khan applied for renewal of his license within 30 days from the date of its expiry and hence, his license was later on renewed

from 09.04.2001 to 08.04.2004. From the above, it is manifestly clear that on the date of the accident i.e. 30.03.2001, Mehboob Khan was not holding

valid driving license nor he had submitted any application for renewal of his license before the date of accident.

In view of this, present appeal is allowed. Appellant-insurer is absolved from liability to pay compensation awarded by the Tribunal vide judgment &

award dated 12.09.2002 in Claim Case No.28/2001. However, in the facts and circumstances of the present case, the appellant-insurer shall first pay

the compensation awarded by the Tribunal to the claimants and then recover the amount of compensation paid from registered owner Shamshad Ali

(RC holder).

Appeal No. 3228 / 2011

In this appeal, the appellant Nizamuddin s/o Ilahi Bux has contended that in the Claim Petition, Shamshad Ali and Nizamuddin were shown to be

owners of the offending vehicle but Registration Certificate of the vehicle is in the name of Shamshad Ali and the vehicle was also released to him.

The insurance policy of the vehicle is also in the name of Shamshad Ali for the period from 06.01.2001 to 05.01.2002. On the date of the accident,

Shamshad Ali was the owner of the vehicle. Hence, the appellant Nizamuddin is not liable. Therefore, the learned Tribunal has wrongly passed the

impugned judgment & award against him as owner of the offending vehicle.

In support of his contentions, the counsel for the appellant relied on a recent judgment of Hon’ble Apex Court in the case of Naveen Kumar v.

Vijay Kumar & others: Civil Appeal No.1427/2018 decided on 06.02.2018. Hon’ble Apex Court analyzed and held regarding ‘owner’ of the

vehicle as follows:

“12. The consistent thread of reasoning which emerges from the above decisions is that in view of the definition of the expression ‘owner’ in

Section 2(30) , it is the person in whose name the motor vehicle stands registered who, for the purposes of the Act, would be treated as the

‘owner’. However, where a person is a minor, the guardian of the minor would be treated as the owner. Where a motor vehicle is subject to an

agreement of hire purchase, lease or hypothecation, the person in possession of the vehicle under that agreement is treated as the owner. In a situation

such as the present where the registered owner has purported to transfer the vehicle but continues to be reflected in the records of the registering

authority as the owner of the vehicle, he would not stand absolved of liability. Parliament has consciously introduced the definition of the expression

‘owner’ in Section 2(30), making a departure from the provisions of Section 2(19) in the earlier Act of 1939. The principle underlying the

provisions of Section 2(30) is that the victim of a motor accident or, in the case of a death, the legal heirs of the deceased victim should not be left in a

state of uncertainty. A claimant for compensation ought not to be burdened with following a trail of successive transfers, which are not registered with

the registering authority. To hold otherwise would be to defeat the salutary object and purpose of the Act. Hence, the interpretation to be placed must

facilitate the fulfilment of the object of the law. In the present case, the First respondent was the ‘owner’ of the vehicle involved in the accident

within the meaning of Section 2(30). The liability to pay compensation stands fastened upon him. Admittedly, the vehicle was uninsured. The High

Court has proceeded upon a misconstruction of the judgments of this Court in Reshma and Purnya Kala Devi.

The submission of the Petitioner is that a failure to intimate the transfer will only result in a fine under Section 50(3) but will not invalidate the

transfer of the vehicle. In Dr T V Jose, this Court observed that there can be transfer of title by payment of consideration and delivery of the car. But

for the purposes of the Act, the person whose name is reflected in the records of the registering authority is the owner. The owner within the meaning

of Section 2(30) is liable to compensate. The mandate of the law must be fulfilled.â€​

As per Registration Certificate, Shamshad Ali s/o Rahim Khan was owner of the offending vehicle. Thus, in view of ratio of aforesaid judgment in

Naveen Kumar’s case (supra), the Tribunal erred in holding appellant Nizamuddin liable for payment of awarded compensation as owner of the

vehicle along with Shamshad Ali. The owner (RC holder) of the vehicle, Shamshad Ali, is liable for payment of the compensation in terms of the

judgment & award dated 12.09.2002 passed in Claim Case No.28/2001 (Aleem Khan & others v. General Manager, National Insurance Co. Ltd &

others).

This appeal, therefore, is allowed to this extent.

The judgment & award dated 12.09.2002 passed by the Motor Accident Claims Tribunal, Churu in Claim Case No.28/2001 (Aleem Khan & others v.

General Manager, National Insurance Co. Ltd & others) is modified in terms of aforesaid decision in aforesaid Appeals No.114/2003 and 3228/2011.