New India Assurance Co. Ltd. vs AMRABHAI MULABHAI RATOD

THIS appeal by the New India Assurance Co. Ltd. is directed against the judgment and order dated September 24, 1993 passed by District Consumer Disputes Redressal Forum, Rajkot (District Forum for short) by which the appellant is directed to pay to the respondent (original complainant) a sum Rs. 99,999/- together with interest @ 12% p.a. from the date of complaint till the date of payment.

RESPONDENT is carrying on business of carriage of goods and he had insured his goods vehicle Swaraj Mazda bearing registration No. GJ-3T-2681 with the appellant under insurance policy dated August 20, 1991 for a sum of Rs. 3,00,000/-. The vehicle met with an accident on April 9, 1992 and it was damaged to the extent of Rs. 99,999/-. The respondent filed claim before the appellant for recovery of the said sum. The appellant, however, repudiated the claim. The respondent thereupon approached the District Forum by Complaint No. 688/92 alleging deficiency of service on the part of the appellant in not paying the aforesaid amount, which according to the respondent was legally due to him. The appellant resisted the respondent''s complaint. It was contended that the District Forum had no jurisdiction to entertain the complaint and there was no deficiency of service on the part of the appellant. It was urged that the complaint involved complicated questions of law and facts and, therefore, proper course for the respondent to adopt was to approach the Civil Court. It was further contended that at the time when the accident occurred, the driver who was driving the vehicle was not holding effective driving licence to drive the vehicle and there was, therefore, a breach of relevant condition of the policy. The appellant was, therefore, not liable to pay any compensation to the respondent. The appellant also denied that the respondent had suffered loss/damage to the extent of Rs, 99,999/-. The appellant/therefore, prayed for dismissal of espondent''s complaint.

The District Forum by its impugned order held that it had jurisdiction to entertain the respondent''s complaint. It was further held that it was the duty of the driver who was employed by the respondent to get the driving licence renewed from time to time and the employer was not required to inquire from his driver regularly as to whether his driving licence has been renewed. It was held that once it is found that the employer had engaged a driver holding effective and valid licence, if on a given date the licence was not got renewed by the driver, it could not be said that the owner was guilty of breach of relevant condition of contract of insurance. According to the District Forum, it could not be said that the owner knew that the driving licence was not renewed by the driver and that he had handed over the vehicle to the driver with the knowledge that he had not renewed his licence. According to the District Forum, there was no wilful breach of the conditions of the policy by the respondent who was the owner of the vehicle and, therefore, he could not be held guilty of committing breach of conditions of the insurance policy. There was, therefore, no default on the part of the respondent and he would not be disentitled from getting compensation from the appellant. It was further held that the dispute raised by the appellant was of simple nature which did not require elaborate consideration of complicated questions of law and facts. It was, therefore, not necessary to refer the respondent to Civil Court for adjudication of his claim. The District Forum held that failure to indemnify the respondent established that there was deficiency of service on the part of the appellant. So far as quantum of damage was concerned, the District Forum observed that the damage was surveyed by the Surveyor and there was no serious dispute as regards the quantum of compensation claimed by the respondent. In the result, the District Forum directed the appellant to pay Rs. 99,999/- together with interest @ 12% p.a. as stated above. The appellant was also directed to pay to the respondent cost quantified at Rs. 300/-.

THE only question which is raised by the learned Advocate for the appellant at the time of hearing of this appeal is that since the respondent driver who was driving the vehicle in question was not holding effective and valid driving licence at the time of the accident, the appellant was not liable to indemnify the respondent. It was urged that there was breach of condition of the insurance policy which provided that the insured vehicle should be driven by a person holding effective driving licence. THE District Forum has, therefore, erred in awarding compensation to the respondent. Section 3 of the Motor Vehicles Act, 1988 (Act for short) provides that 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 provides that no owner or person in charge of the motor vehicle shall cause or permit any person who does not satisfy the provisions of Section 3 or Section 4 to drive the vehicle. Section 4 which provides for age limit in connection with driving of motor vehicles is not relevant for our purpose. Section 14 of the Act makes provision for currency of licence to drive motor vehicles and Section 15 provides that any licensing authority may on application made to it renew a driving licence issued under the provisions of the Act with effect from the date of its expiry provided that in case where the application for renewal of 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. Rule 14 of the Central Motor Vehicles Rules, 1989 (Rules for short) lays down the procedure for making application for a driving licence. Rule 15 provides for driving test. Provision for renewal of driving licence is contained in Rule 18. This Rule 18 among other things provides that an application for renewal of driving licence shall be made in From 9 to the Licensing Authority having jurisdiction over the area in which the applicant ordinarily resides or carries on business and shall be accompanied by among other things, appropriate fee as specified in Rule 32. Rule 32 provides for fees which shall be charged for the driving licence and the renewal thereof. Table in the said Rule 32 lays down that fees in respect of renewal of driving licence to drive a motor vehicle for which application is made after the grace period, fees shall be Rs. 15/- and mere will be additional fees at the rate of ten rupees for a period of delay of one year or part thereof, reckoned from the date of expiry of the grace period. Proviso to Section 14(2) of the Act lays down that every driving licence shall, notwithstanding its expiry under Sub-section (2), continue to be effective for a period of thirty days from such expiry. This period of thirty days is the grace period referred to in Rule 32 adverted to above. This is in brief the scheme for driving licence and renewal thereof under the Act and Rules.

IN the instant case, the driver of the respondent who drove the vehicle at the time when it met with the accident was holding a valid driving licence which was effective upto February 11, 1992. The accident took place on April 9, 1992. It is in the background of these facts that it is urged that the driver was not holding a valid and effective licence when the accident occurred. It is urged mat from February 12 to April 9, 1992, the driver was not holding effective driving licence and, therefore, there was clear breach of the relevant term or condition of the insurance policy. The relevant term of the insurance policy under the head ''person or class of persons entitled to drive'' provides that any person including insured would be entitled to drive provided that a person driving holds an effective driving licence at the time of the accident and is not disqualified from holding or obtaining such a licence. It is further provided in the insurance policy that the insured is not entitled to be indemnified if the vehicle is used or driven otherwise than in accordance with the schedule which provides for the term referred to above. It is relying on the aforesaid term in the insurance policy that it is urged that there was breach of the term of the insurance policy in asmuch as the driver was not holding effective driving licence at the time of the accident and consequently the respondent was not entitled to be indemnified. We do not find any substance in the contention raised on behalf of the appellant. It is not disputed that the driving licence of the driver was renewed on April 10, 1992. The renewal of licence was under Section 15 read with Rules 18 and'' 32 of the Rules. Since the licence was renewed after expiry of the grace period of thirty days, the driver must have paid fee of Rs. 10 /- in addition to the Rs. 15/- for renewal of his licence. It must be remembered that on payment of renewal fees and additional fees under Rule 32 the driving licence which the driver was holding was renewed. No fresh driving licence was issued in favour of driver. Additional fees are obviously charged after expiry of me grace period of thirty days to make the driving licence effective from the date it has expired. Rule 32 would not have provided for additional fee of Rs. 10/- for delay of one year or part thereof unless the licence was to be validated and made effective from the date it expired. The scheme under sections and Rules referred to above dearly envisage renewal of the driving licence which has been issued in favour of a person and the word renewal itself suggests that the driving licence would become effective and valid from the date it expired on its renewal. The Dictionary meanings of the word renew given in the Universal Dictionary of the English Language published by Words worth Editions Limited (1989 Edition) are "to restore to original condition of freshness, to give, gain, back, the old vigour, vitality". These Dictionary meanings also support the view which we are inclined to take. The renewal of the driving licence would, in our opinion, infuse life into the driving licence which had expired. In other words, the driving licence which has expired would be revived as a result of its renewal under Section 15 read with Rules 18 & 32 referred to above. Once the licence was renewed on April 10, 1992, it became valid and effective throughout from the date it was issued till the date upto which it was renewed. It is true that under the first proviso the Sub-section (1) of Section 15 where the application for renewal of licence is made more than thirty days after the date of its expiry, the driving licence is to be renewed with effect from the date of its renewal. In our opinion, this provision has reference only to the period of renewal and not effectiveness or validity of the driving licence. In our opinion, therefore, once the driving licence was renewed on April, 10, 1992, it takes effect from the date it had expired i.e. February, 11, 1992. It must, therefore, be held that the driver of the vehicle in question was holding valid and effective driving licence on the date of the accident which took place on April 9, 1992. There is, therefore, no breach of any term of the insurance policy by the respondent.

WE also agree with the view taken by the District Forum that there was no wilful breach of the aforesaid term of the insurance policy by the respondent. The respondent had engaged the driver who was holding a valid driving licence and it could not be within his knowledge that the driver had not renewed his driving licence. The respondent could not, therefore be said to have committed wilful breach of the insurance policy. In our opinion the principle laid down by the Supreme Court in Sadiq Sheikh v. Chandrakant D. Volvoikar & Ors., II (1992) ACC 374 (SC)=1993 ACJ 291, will apply to the facts of the present case. As held in that case, the respondent could not be treated to have been guilty of breach of condition of the insurance policy and the Insurance Company i.e., the appellant would be liable to indemnify the respondent. Under the circumstances, in our opinion, the appellant was liable to indemnify the respondent for the loss he has suffered due to the accident.

NO arguments were advanced on the quantum of compensation awarded by the District Forum. In other words, it was not urged that compensation of Rs. 99,999/- awarded by the District Forum was excessive or unreasonable. It is, therefore, not necessary for us to examine the question whether or not the respondent is entitled to claim the aforesaid amount from the appellant. In the result, this appeal is dismissed with cost which is quantified at Rs. 1,000/-. Appeal dismissed with cost.