New India Assurance Company Ltd. vs Smt. Uma Bai and Others

M.A. Siddiqui, J.—This appeal u/s 173 (1) of the Motor Vehicles Act, 1988 (hereinafter referred as ''the Act'') has been preferred against award dated 7-9-2011 passed by Additional Member, M.A.C.T., Special Court No. 2, Bhopal presided over by Member Smt. Saiyada Bano Rahman in M.C.C. No. 1537/2012 by which appellant has also been made liable to pay compensation to the tune of Rs. 5,08,200/- alongwith respondent Nos. 6 and 7, driver and owner of the offending jeep. Undisputedly, appellant New India Assurance Company is the insurer of the offending vehicle Jeep No. M.P.-04-G/3328 owned by respondent No. 7, Hariram Kahar and driver respondent No. 6, Santosh.

In short the case is that the claimants (respondent Nos. 1 to 5) filed an application u/s 166 of the Act by claiming grant of compensation of Rs. 35,85,00/- stating that on 30-3-2012 at about 5.00 p.m. deceased Mahesh Mehra was going on his bicycle from Budhwada to Mandi and when he reached near the bus stand the driver of the offending vehicle (respondent No. 6) owned by respondent No. 7 driving it in rash and negligent manner came over there and hit the bicycle of the deceased Mahesh Mehra, and a result he fell down and sustained grievous injuries. He was rushed to District Hospital for treatment where he succumbed to his injuries on 15-4-2011. His post-mortem was performed at Hamidia Hospital, Bhopal. The matter was reported to the Police Station Babai District Hoshangabad where Crime No. 79/2012 was registered and the jeep was seized and charge-sheet was filed.

Respondent Nos. 6 and 7 (driver and owner of the offending vehicle) filed their separate statements denying the averments made in the claim petition and stated that on the date of the accident the vehicle was insured with the appellant. The appellant (respondent No. 3 in Claim Petition) filed their written statement denying all the averment relating to the accident and it was specifically pleaded that at the time of accident the driver was not having valid and effective licence and insurer was not liable. After examining Jaypal, Vinay and R.T.O. Clerk, Nirmal Mourava it was proved that though respondent No. 6 was having licence but licence was issued by R.T.O. Hoshangabad for the period 2-3-2004 to 10-3-2008 and it was not renewed within the stipulated time period and was renewed after 2 years for the period 6-5-2012 to 6-6-2015. Thus, on the date of the accident the driver was not having effective licence so there was breach of insurance policy and learned Tribunal rejected the plea of the appellant by fastening the liability both jointly and severally on the appellant and respondent Nos. 6 and 7, against which this miscellaneous appeal has been preferred on the following grounds:

(i) For the learned claims Tribunal committed error of law in holding the appellant insurance company is liable to pay compensation as determined. The learned Tribunal committed grave illegality in rejecting the plea of the appellant that the vehicle in question was being plied in contravention of the insurance policy by the driver who was not having valid and effective driving licence. In fact, the learned Tribunal ought to have exonerated the appellant from the liability to pay compensation inasmuch as it was amply proved that the offending vehicle was being driven in contravention of the insurance policy.

(ii) For the learned Tribunal committed grave error of law in drawing presumption that the driver, though was not having valid and effective driving licence on the date and time of accident, could not be said that he was not knowing driving. This finding is absolutely unsustainable in law. In this connection, the appellant may be permitted to draw attention of the Hon''ble Court to the definition of driving licence given in Section 2(1) of the Motor Vehicles Act 1988 which reads thus;

Section 2 (1): Driving licence means the licence issued by a competent authority under Chapter II authorizing the person specified therein to drive otherwise than as a learner a motor vehicle or a motor vehicle of any specified class or description.

Section 15 of the Act says "In any case, where the application for the renewal of a licence is made more than 30 days after the date of expiry the licence shall be renewed with effect from the date of its renewal."

The licence of driving of respondent No. 6 driver was for period 2-3-2004 to 1-3-2008. Accident took place on 30-3-2010. The respondent No. 6 got his licence renewed for the period from 6-5-2010 to 5-5-2015. Thus, from 2-3-2008 to 5-5-2010 (for more than two years), the respondent No. 6 did not have the valid and effective driving licence and since the renewal was apparently after expiry of more than 30 days (after more than two years), i.e., from 6-5-2010, it would be effective only from the date of renewal i.e., with effect from 6-5-2010. The Tribunal has accepted this fact that the licence was renewed w.e.f 6-5-2010 after its expiry of its validity period on 1-3-2008. On the date of accident, therefore, the respondent No. 6 driver did not have the effective and valid driving licence and therefore, in law, the finding of the learned Tribunal which has been recorded on presumption is vitiated in law and has to be set aside.

(iii) For that the interest of justice requires that the illegality which has taken place is corrected by exonerating the appellant from the liability to pay compensation. The insurer cannot be compelled to pay compensation in a case where the offending vehicle was being driven in contravention, of the terms and conditions of the insurance policy. The respondents 6 to 7 (driver and owner) of the vehicle in question are liable to pay compensation determined by the learned Tribunal and the appellant deserves to be exonerated by modifying the award of the learned Tribunal to this extent.

(iv) For that the award impugned suffers from legal infirmity and vitiated in law and hence liable to be set aside to the extent it makes the appellant liable to pay compensation.

Since respondent Nos. 6 and 7 have not preferred any appeal or any cross-objection so the very short point involved in the case is whether the insurance company has wrongly been fastened with the liability as there was no valid and effective licence at the time of accident so insurance company should ought to have been exonerated.

The learned Counsel for the appellant has also placed reliance on the judgment passed in the case of New India Assurance Co. Ltd. Vs. Kusum and Others, And has vehemently argued that there must be valid and effective driving licence and in the absence if it there will be breach and the insurance company cannot be fastened with the liability.

On the other hand learned counsel for the respondents have supported the award and has placed reliance on the case of Hardayal Vs. Sanjay and Another wherein it has been held that where driver of the vehicle was having licence in the past and it was renewed subsequently even if after the date of accident although the time has lapsed but since driver was not disqualified from holding the effective driving licence, it was immaterial that the driving licence was left unrenewed on the date of the accident.

Reliance has also been placed on the judgment of National Insurance Co. Ltd. Vs. Swaran Singh and Others, it has been held that even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards insured unless the said breach or breaches on the condition of driving license is/are so fundamental as are found to have contributed to the cause of the accident.

Section 15 of the Act is very much relevant here wherein it has been stated that where the licence is renewed after 30 days of its expiry, the driving licence shall be renewed with effect from the date of renewal.

From the evidence of Jaypal, Vinay and R.T.O. clerk, Nirmal Mouraya produced from the appellant''s side the licence was issued on 2-3-2004 and was valid till 1-3-2008 (accident took place on 3-3-2010) and licence was renewed on 6-5-2012 to 5-5-2015. Thus, from 2-3-2008 till 5-5-2010 for more than 2 years respondent No. 6 was not having valid and effective driving licence and the renewal was apparently after expiry of more than 30 days (after more than 2 years). So it would be effective only from the date of renewal i.e., 6-5-2010. So it is very much clear that on the date of accident respondent No. 6 was not having valid and effective driving licence. Even respondent No. 6 who examined himself has admitted that he was not having licence at the time of the accident and has renewed the licence after 2 years of the accident. As far as the case of Hardayal (supra) is concerned it is an old authority. Now it has been held the case of Kusum (supra) that there must be valid and effective licence and reasoning given by the learned Trial Tribunal based on the case of Hardayal (supra) that driver was having licence previously and though it was renewed subsequently he was not disqualified so it could not be said that he was not knowing driving at the time of the accident but this reasoning is against the facts and circumstances of the case.

As far as arguments advanced by respondents Nos. 6 and 7 is concerned they have not filed any counter appeal or they have not brought any cross-objections so they cannot question the liability as has been fastened on them by the learned Tribunal by marshelling evidence and respondent Nos. 6 and 7 are liable to pay the compensation which has been awarded against them by the Tribunal to the tune of Rs. 5,08,200/-.

Now it is very much established principle that driver of the vehicle should possess valid and effective driving licence. But in the present case the driver was not having valid and effective driving licence on the date of the accident so there was breach of insurance policy and the insurance company has proved it by the evidence so the appellant insurance company has wrongly been fastened with the liability. In view of the aforesaid discussions the appeal is allowed and the insurance company is exonerated from the liability as has been fastened by the Claims Tribunal by its award dated 7-9-2011 and that respondent Nos. 6 and 7 are held liable to make payment of the compensation awarded by the Claims Tribunal, however, looking to the circumstances of the case it is directed that appellant insurance company will make payment and will recover it from respondent Nos. 6 and 7, driver and owner of the offending vehicle.