New India Assurance Co. Ltd. vs BRIJ LAL KHANDARIA

CHALLENGE in this appeal is to the order dated 2.9.2005 passed by District Forum, Gurgaon whereby while accepting the complaint of the respondent-complainant directions have been given to the appellant/opposite party to pay Rs. 52,747 along with interest at the rate of 9% per annum to the complainant from the date of submitting the claim till the date of payment.

PUT shortly the facts of the case are that complainant had insured his car bearing registration No. HR-26-V-9918 for a period of one year commencing from 17.3.2005. The said vehicle met with an accident on 1.6.2004. The complainant got the assessment of the damage from authorised company i.e., Apra Auto India Pvt. Limited which assessed the damage to the extent of Rs. 77047 and submitted their report in this regard on 2.6.2004. The same was also checked by the Surveyor appointed by the opposite party who assessed the damage to the car involved in the accident as Rs. 5,1036. Thereafter, complainant lodged a claim with the opposite party after submitting all the related documents and complete the required formalities in this regard. However, the opposite party repudiated the claim as per letter 354101/31/04/203 dated 19.7.2004 on the ground that the driving licence of the driver/complainant had expired on 25.5.2004, which was got renewed by him w.e.f. 7.7.2004 and for that reason he did not hold a valid driving licence during the period 26.4.2004 to 7.7.2004 and thus he violates the provisions of the Motor Vehicles Act as well as terms and conditions of the insurance policy. They justified the repudiation of the claim and prayed that complaint merited dismissal. On scrutiny of the pleadings and evidence adduced on record, the District Forum accepted the complaint and issued the directions noticed earlier as per the order dated 2.9.2005. It is against this order the present appeal has been filed. Learned Counsel representing the appellant has been heard at length. Learned Counsel representing the appellant while assailing the order of the District Forum dated 2.9.2005 mainly urged that it has been proved on record that accident took place on 1.6.2006 and the licence of the driver had expired on 25.5.2004. But as the licence was not renewed within 30 days and was got renewed on 7.7.2004, it has to be construed that vehicle in question at the time of accident was being driven with the consent of the insured in contravention of the terms and conditions of the insurance policy. In support of the stand taken reliance was placed on the judgment of the Hon''ble Apex Court rendered in Civil Appeal No. 7244 of 2001 arising out of SLP (C) No. 17788 of 2000 titled National Insurance Company Limited v. Jarnail Singh and Others wherein the facts were that the driver, who drove the vehicle which got involved in the accident had a driving licence which expired on 16.5. 1994. Accident had taken place on 20.10.2004. The driver had not got the licence renewed for covering period including the date of accident. Rather the specific case was that driving licence was renewed only w.e.f. 28.10.1996. Taking these circumstances into consideration it was observed "under Section 15(i) of the Motor Vehicles Act, 1988 a driving licence can be renewed from the date of its expiry if an application is made to it for that purpose. But the proviso to sub-section says that "where the application for renewal is more than 30 days after date of its expiry, the driving licence shall not be renewed with effect from the date of its renewal. In the present case, the fact that driving licence was renewed only with effect from 28.10.1996 shows that the first proviso to Section 15(i) above quoted had applied and its corollary is that driver had no licence to drive the vehicle on the date of accident i.e., 20.10.1994.

There is no dispute that policy stipulated a condition that vehicle would not be driven by a person without a valid driving licence. It means that policy condition has been violated.

IN the above mentioned case notice was taken of the decision rendered in case titled New INdia Assurance Company, Shimla v. Kamla and Others, I (2002) ACC 346 (SC)=III (2001) SLT 150=2001 (4) SCC 342, wherein it was held that INsurance Company is nonetheless liable to pay the compensation to the third party on the strength of the valid insurance policy issued in respect of vehicle, but the remedy of the insurer when there was breach or violation of the policy condition was to recover the amount from the insured. Under these circumstances the appeal was allowed permitting the appellant/INsurance Company to realise the amount from respondent No. 3 the insured. It was also left to the INsurance Company to apply to the authorities concerned for execution of the direction of the Hon''ble Court as per law. It appears that the facts of the above mentioned case are entirely different than the facts of the present case and for that reason the observations laid down in the above mentioned case would not come to the rescue of the complainant. In this appeal provisions of proviso to Section 14(2)(b)(ii) would govern the controversy raised. As it specifically states "provided that every driving licence shall, notwithstanding its expiry under this sub-section continue to be effective for a period of 30 days from said expiry." The above provision clearly mandates the effectiveness of the driving licence by statutory presumption subject to one condition that accident takes place within 30 days of the expiry of the driving licence. Whereas effectiveness of the driving licence in terms of first proviso to Section 15(1) of the Act is based on the voluntary act of the driver who moves for the renewal of his licence after the expiry of 30 days. Therefore, above stated provisions clearly operate in different situations. In the present case as already noticed that accident had taken place on 1.6.2004, while the driving licence of the driver who was driving the vehicle at the time of accident had expired on 25.5.2004. It means that accident occurred within 7 days from the date of the expiry of the licence and statutory direction contained in proviso to Section 14(2)(b)(ii) of the Act would be applicable to the present case, despite the fact that it was got renewed on 7.7.2004. Under these circumstances the appellant cannot avoid liability in terms of the insurance policy issued. For the aforesaid reasons, there is no merit in the appeal and the same is accordingly dismissed. Appeal dismissed.