NATIONAL INSURANCE COMPANY LIMITED vs JAGJIT SINGH

IN this revision petition, filed under Section 21(b) of Consumer Protection Act, 1986 (for short, ''Act''), there is challenge to order dated 17.7.2007, passed by State Consumer Disputes Redressal Commission, Chandigarh UT (for short, ''State Commission''), in F.A. No.785 of 2007.

BRIEF facts are that Respondent-Complainant got his Maruti Zen Car insured from the Petitioner -Opposite Party vide insurance policy which was valid upto 14.3.2006. The said car met with an accident on 27.11.2005 and was badly damaged. Respondent informed the Petitioner about the accident and got his car repaired from Swami Motors Pvt. Ltd. where he spent Rs.43,873/-. However, petitioner repudiated the claim on the ground that respondent was not holding valid driving licence on the date of accident. Respondent challenged the repudiation on the ground that his driving licence was renewed from 2.5.2003 to 29.12.2010. Thus, he was holding valid driving licence on the date of accident. Petitioner in its reply took the stand that the insured was not holding valid driving licence at the time of alleged accident which had expired on 2.5.2003. Therefore, the claim was rightly repudiated. District Forum vide order dated 20.4.2007, allowed the complaint in the following terms;- ''''As such, we allow the complaint for compensation as per report of survey and direct the O.P. to pay Rs.32,069/- with 9% interest after three months from the submission of the claim till payment. Complainant is also entitled to Rs.2,000/- as costs of litigation and interest would serve as compensation. Compliance of the order be made within one month from the receipt of copy of "

Aggrieved by the order of District Forum, Respondent filed an appeal before the State Commission which dismissed the same in limine.

HENCE , this revision petition.

ON 24.7.2013, when the matter was listed for final hearing, none appeared on behalf of respondent. However, respondent had already sent his written submissions by post on 31.8.2012. We have heard learned counsel for the petitioner and gone through the written submissions of the respondent as well and perused the record.

THE main plea of learned counsel for the petitioner is that it is an admitted case that respondent was not holding a valid driving licence on 27.11.2005 and produced a driving licence which was renewed later but from the date of expiry. Further, as per Section 15 of the Motor Vehicles Act, 1988 a holder of a licence on the expiry of the licence is required to get the licence renewed within a period of 30 days from the date of expiry of licence. Admittedly, respondent produced the driving licence dated 30.12.2005 and the said licence could not have been dated back to the date of accident i.e. 27.11.2005 and it cannot be held that the licence which had been issued to the respondent on 30.12.2005 would be held valid w.e.f. 02.05.2003. Therefore, the order passed by the fora below are not sustainable and are liable to be set aside. In support, learned counsel has relied upon the following judgments; i) New India Assurance Company Ltd. Vs. Suresh Chandra Aggarwal, (2009) 15 Supreme Court Cases 761 and

ii) Ram Babu Tiwari Vs. United India Insurance Company Limited and others, (2008) 8 Supreme Court Cases 165.

ON the other hand, respondent in its written submissions has stated that he got renewed his driving licence from the date of its expiry from the concerned authority after paying penalty for the expiry period. Further, as his licence was renewed from 2.5.2003 upto 29.12.2010, so it cannot be said that at the time of accident, respondent was not having driving licence. Moreover, respondent was not issued any fresh driving licence rather the old one was renewed from the date of its expiry, that is, w.e.f. 2.5.2003. Further, both the fora below have rightly held that rights and liabilities are governed by the insurance policy and according to policy conditions, petitioner can only repudiate the claim if the driver was disqualified from holding a driving licence. In the present case, respondent was not disqualified from holding the driving licence and his driving licence has been renewed from the back date. It is an admitted fact that respondent ''s car had met with an accident on 27.11.2005. It is not in dispute that on the date of accident, the driving licence of the respondent had already expired on 2.5.2003. Though as per respondent ''s case the same was renewed later on, but w.e.f. 2.5.2003.

HON ''ble Supreme Court in Suresh Chandra Aggarwal (Supra) observed; ''''12. Before we deal with the rival contentions, it would be appropriate to briefly refer to the relevant provisions of the Motor Vehicle Act, 1988 (for short, ''''the Act '''' Section 3(1) of the Act inter alia stipulates that;

''''3. Necessity for driving licence -(1) No person shall drive a motor vehicle in any public place unless he holds an effective driving licence issued to him authorising him to drive the vehicle ''''.

Section 5 declares that no owner or person in charge of a motor vehicle shall cause or permit any person who does not satisfy the provisions of Section 3 of the Act, to drive the vehicle. Section 15 which provides for renewal of driving licence, insofar as it is relevant for our purpose, reads as follows:

''''15. 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 date 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: The Section empowers a licensing authority to renew a driving licence issued under the provisions of the Act with effect from the date of its expiry. However, proviso to the said provision clearly provides that where an application for renewal of a licence is made more than 30 days after the date of its expiry, the driving licence shall be renewed with effect from the date of its renewal.''''

The section empowers a licensing authority to renew a driving licence issued under the provisions of the Act with effect from the date of its expiry. However, the proviso to the said provision clearly provides that where an application for renewal of a licence is made more than 30 days after the date of its expiry, the driving licence shall be renewed with effect from the date of its renewal.

Section 19, relied upon by learned counsel for the claimant, authorizes the licensing authority to disqualify any person from holding a driving licence or revoke such a licence if the licensing authority is satisfied that the holder of the driving licence is indulging in any of the acts, detailed in sub-section (1) of Section 19 of the Act. Indubitably, no such order had been passed against the driver of the vehicle involved in the accident.

Having noted the relevant Statutory provisions, we may now advert to the facts at hand. As noticed above, the stand of the appellant is that the claim preferred by the claimant could not be processed and had to be repudiated because special condition No. 5 of the insurance policy had been violated inasmuch as the driver of the insured vehicle did not have an effective driving licence at the time of the accident.

Special condition No. 5 reads as follows:

''''5 Persons or classes of persons entitled to drive (a) The insured, (b) Any other person who is driving on the insured''s order or with his permission. Provided that the person driving holds or had held and has not been disqualified from holding an effective driving licence with all the required endorsements thereon as per the Motor Vehicles Act and the Rules made thereunder for the time being in force to drive the category of Motor Vehicle insured hereunder.''''

It is manifest that the said condition contemplates that apart from the insured, any other person, authorised by the insured, could also drive the vehicle provided the person driving the vehicle ''''holds or had held and has not been disqualified '''' from holding an effective driving licence.

In the instant case, as noted above, as per the certificate issued by the licensing authority, the driving licence of the deceased driver had expired on 25th October, 1991 i.e. four months prior to the date of accident on 29th February, 1992 and it was renewed with effect from 23rd March, 1992. It is not the case of the claimant that the driver had applied for renewal of the licence within 30 days of the date of its expiry. On the contrary, it is the specific case of the appellant that the driving licence was renewed only with effect from 23rd March, 1992.

From a plain reading of Section 15 of the Act, it is clear that if an application for renewal of licence is made within 30 days of the date of its expiry, the licence continues to be effective and valid without a break as the renewal dates back to the date of its expiry. Whereas, when an application for renewal is filed after more than 30 days after the date of its expiry, proviso to sub-section (1) of Section 15 of the Act, gets attracted and the licence is renewed only with effect from the date of its renewal, meaning thereby that in the interregnum between the date of expiry of the licence and the date of its renewal, there is no effective licence in existence. The provision is clear and admits of no ambiguity.

However, the stand of the claimant before the District and State Fora as also before us was that since the deceased driver was holding a valid licence and had not been disqualified from holding an effective licence, the stipulation in the afore -extracted condition was not infringed. In our view, the argument is stated to be rejected.

Admittedly, having failed to apply for renewal of the driving licence within 30 days from the date of its expiry in terms of Section 15 of the Act, the licence could not be renewed with effect from the date of its expiry and therefore, between the period from 26th October, 1991 to 22nd March, 1992, the deceased driver had no valid and effective driving licence as contemplated under Section 3 of the Act. We are convinced that during this period, he did not hold at all an effective driving licence, as required in the terms and conditions governing the policy on the date of accident i.e. 29-2-1992.

As a matter of fact, in view of the clear mandate of Section 3 of the Act, the deceased driver was not even permitted to drive the insured vehicle in a public place. Furthermore, the claimant not only committed breach of the terms of the policy, he also violated the provisions of Section 5 of the Act by entrusting the vehicle to a person who did not hold a valid licence on the date of the accident.''''

TO similar effect is the decision of Ram Babu Tiwari (Supra), wherein Apex Court after analyzing the provisions of Section 15 of the Motor Vehicle Act, 1988 observed ; ''''18. It is beyond any doubt or dispute that only in the event an application for renewal of licence is filed within a period 30 days from the date of expiry thereof, the same would be renewed automatically which means that even if an accident had taken place within the aforementioned period, the driver may be held to be possessing a valid licence. The proviso appended to sub -section (1) of Section 15, however, clearly states that the driving licence shall be renewed with effect from the date of its renewal in the event the application for renewal of a licence is made more than 30 days after the date of its expiry. It is, therefore, evident that as, on renewal of the licence on such terms, the driver of the vehicle cannot be said to be holding a valid licence, the insurer would not be liable to indemnify the insured.

The second proviso appended to sub -section (4) of Section 15 is of no assistance to the appellant. It merely enables the licensing authority to take a further test of competent driving and passing thereof to its satisfaction within the meaning of Sub -section (3) of Section 9. It does not say that the renewal would be automatic. It is, therefore, a case where a breach of the contract of insurance is established. This aspect of the matter has been considered by this Court in National Insurance Co. Ltd. v. Kusum Rai and Ors. [(2006) 4 SCC 250] holding :

"11. It has not been disputed before us that the vehicle was being used as a taxi. It was, therefore, a commercial vehicle. The driver of the said vehicle, thus, was required to hold an appropriate licence therefor. Ram Lal who allegedly was driving the said vehicle at the relevant time, as noticed hereinbefore, was holder of a licence to drive a light motor vehicle only. He did not possess any licence to drive a commercial vehicle. Evidently, therefore, there was a breach of condition of the contract of insurance. The appellant, therefore, could raise the said defence."

It was furthermore held :

"14. 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."

It was opined :

"16. In a case of this nature, therefore, the owner of a vehicle cannot contend that he has no liability to verify the fact as to whether the driver of the vehicle possessed a valid licence or not."

The principle laid down in Kusum Rai (supra) has been reiterated in Ishwar Chandra and Ors. v. Oriental Insurance Co. Ltd. and Ors. [(2007) 10 SCC 650], referring to sub -section (1) of Section 15 of the Act, this Court stated the law, thus :

"9. 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 -4 -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."

As per averments made in the complaint, it is respondent ''s own case that driving licence had expired on 2.5.2003 but rather the old one was renewed from its date of expiry i.e., 2.5.2003. However, respondent for reasons best known to him has not placed on record either original driving licence or copy thereof.

BE that as it may, respondent in its entire complaint has nowhere mentioned as to on which date he applied for renewal of his driving licence which had admittedly expired on 2.5.2003. However, after scanning the entire record, we note that as per letter addressed to this Commission received on 12th March, 2012 (copy placed at page no.48 of the paper book. Respondent admits that ; ''''The valid and effective Driving Licence No.R8334/00 was renewed vide No.R -14344 dated 30.12.2005.''''

THUS , the driving licence of the respondent which had expired long ago on 2.5.2003 was renewed only w.e.f. 30.12.2005, that is, after about 2 years and 8 months after its expiry. Under these circumstances, we have no hesitation in holding that at the time of accident, respondent was not having a valid and effective driving licence. Moreover, in view of the above authoritative pronouncements of the Apex Court quoted above, since, the driver of the car was not having a valid and effective driving licence, it is manifestly clear that both the fora have committed grave error in allowing the complaint of the respondent.

ACCORDINGLY , we allow the present revision petition and set aside the orders passed by the fora below, with the result that, the complaint filed by the respondent before the District Forum shall stand dismissed. Parties shall bear their cost.