NEW INDIA ASSURANCE CO LTD vs S Venugopal

THE complainant/respondent who owns a Chevrolet Forrester Car had got the said car insured with the petitioner company. The aforesaid car, while being driven by the complainant during the currency of the policy, met with an accident on 10.05.2004. The complainant claims to have spent a sum of Rs.2,58,675/ - on repair of the said car. The claim lodged by him for reimbursement of the expenditure incurred by him, however, was repudiated by the insurance company that he did not hold a valid driving licence on the date the car met with the accident. Being aggrieved from the rejection of his claim, the complainant approached the concerned District Forum by way of a complaint. The insurance company resisted the complaint on the same ground on which the claim had been repudiated.

VIDE its order dated 16.12.2005, the District Forum directed the Insurance Company to pay a sum of Rs.1,69,650.73 to the complainant alongwith compensation quantified at Rs.5,000/ - and the cost of litigation quantified at Rs.500/ -.

BEING aggrieved the order passed by the District Forum, the Insurance Company approached the concerned State Commission by way of an appeal. Vide impugned order dated 01.10.2010, the State Commission modified the order passed by the District Forum by directing the insurance company to pay a sum of Rs.1,27,238/ - representing 75% of the assessed amount to the complainant alongwith cost of litigation quantified at Rs.500. The direction of the District Forum to pay compensation quantified at Rs.5000/ - was set aside. Being still dissatisfied, the Insurance Company is before this Commission by way of this revision petition. It is an admitted case that the driving licence which the complainant held had expired on 22.11.2003, i.e., more than 5 months before the car met with the accident on 10.05.2004. Section 15 of the Motor Vehicles Act, 1988 provides for renewal of a driving licence with effect from the date of its expiry provided an application for this purpose is made within 30 days from the date of expiry of the licence. It further provides that if such an application is made more than 30 days from the date of expiry of driving licence, the driving licence shall be renewed with effect from the date of its renewal. Admittedly, the complainant did not even apply for the renewal of the driving licence within 30 days from the date on which it expired. Consequently, it could have been renewed only with effect from the date on which the application for its renewal was submitted by him. The complainant applied for the renewal of his driving licence only after this accident had taken place. Thus, neither his driving licence could have been renewed with effect from the date of its expiry nor was it actually renewed with effect from that date. Consequently, the complainant was driving the vehicle without a licence on the date it met with the accident.

IN National Insurance Co. Ltd. vs. Jarnail Singh and Ors., 2001 Supp2 JT 218] , the driving licence of the driver, who drove the vehicle had expired on 16.05.94. The vehicle met with an accident on 20.10.94 and the driving licence was renewed only with effect from 28.10.96. It was held that the proviso of subsection (1) of section 15 became applicable to the case and since the driver had no effective licence to drive the vehicle on the date of the accident, the policy condition was violated and the insurance company was not liable to pay any amount to the insured. The aforesaid decision was quoted and applied by the Hon''ble Supreme Court in New India Assurance Co. Ltd. vs. Suresh Chandra Aggarwal, 2009 AIR(SC) 2987] . In Suresh Chandra Aggarwal , the driver of the vehicle was not holding an effective licence at the time it met with an accident since the said licence had already expired on 25.10.91, whereas the accident took place on 29.02.92. The policy condition applicable in that case required that the person entitled to drive the vehicle should hold or should have held a driving licence and should not be disqualified from holding an effective driving licence. It was noted that though the driving licence had expired on 25.10.91, 4 months prior to the accident it was got renewed only with effect from 23.03.1992 and the driver had not applied for the renewal of the licence within 30 days of its expiry. Referring to the proviso of section 15 sub -section (1) of the Motor Vehicles Act, it was held that in such a case, the licence could be renewed only from the date of its renewal and in the interregnum period between expiry of the licence and the date of its renewal, there was no effective licence in existence. The decision of this Commission holding the Insurance Company liable was, therefore, set aside by the Hon''ble Supreme Court.

IN the present case, the policy condition required that the person driving the vehicle should hold an effective driving licence at the time of accident and should not be disqualified from holding or obtaining such a licence. Since the complainant did not hold any effective licence at the time of accident, he committed breach of the aforesaid condition of the insurance besides violating the provisions of Motor Vehicles Act. The Insurance Company, therefore, was under no legal obligation to reimburse the expenditure incurred by the complainant on the repair of the vehicle.

RELYING upon the decision of the Hon''ble Supreme Court in Amalendu Sahoo vs. Oriental Insurance Co. Ltd., 2010 2 CPJ 9(SC) ", it is contended by the learned counsel for the complainant that the direction of the State Commission to settle the claim on ''non -standard basis'' is eminently justified. However, Amalendu Sahoo was not a case of driving a vehicle without a valid driving licence whereas the decisions of the Hon''ble Supreme Court in Jarnail Singh and Suresh Chandra Aggarwal , pertain to a case where the vehicle was being driven by a person whose driving licence had expired before the date of the accident. Therefore, reliance on the Amalendu Sahoo , in my view is misplaced.

FOR the reasons stated hereinabove, the revision petition is allowed and the orders passed by the Fora below are set aside. Consequently, the complaint is dismissed. The amount which the petitioner company had deposited with the District Forum be refunded to the petitioner company alongwith interest which may have accrued on that amount.