ORIENTAL INSURANCE CO LTD vs AVINASH SINGH AND SONS

-ORDER dated 17. 10. 2005 passed by the Divisional Forum Jammu (hereinafter to be referred to as the Forum) has been taken in this appeal which was presented in the Commission on 21. 12. 2005 accompanied by an application for condoning the delay (application No. 2856 ). Vide order dated 13. 2. 2007, the application for condonation of delay was decided and appeal was registered under above stated number.

THE factual matrix of the case in brief is that the respondent herein was the owner of a petrol tanker No. 5638 which he had insured with the appellant herein under policy cover note No. 31/891/2000 and it had to remain effective from 28. 5. 2003 to 27. 5. 2004. On 5. 6. 2003, the said petrol tanker met with an accident on the national highway while being driven from Srinagar to Jammu and its driver was Mr. Mohd. Shokin. After the accident, the respondent raised a claim with the appellant and in support thereof along with other documents, driving licence of said Mr. Mohd. Shokin driver was also produced. The date of issuance of the driving licence was 24. 2. 1997 for a period of three years and it expired on 23. 4. 2000. Thereafter it was got renewed up to 14. 5. 2003. Lastly, it was got renewed on 30. 7. 2003 i. e. after the date of accident and had to expire on 29. 7. 2006. The appellant herein contended that it was a breach of the terms and conditions of the insurance policy as driver was not having a valid licence. The claim was repudiated information whereof was given to the respondent vide letter dated 27. 10. 2003. After that, the respondent filed the complaint in the Forum and in terms of the impugned order that was accepted and appellant was directed to pay the amount to the respondent as assessed by the surveyor of M/s. Elite namely, Sham Sunder along with interest @ 6% per annum after three months from the date of the report of said surveyor till its realization along with litigation charges fixed at Rs. 3,000. The said order has been challenged inter alia in this appeal on the main ground that the driver Mohd. Shokin was not having a valid and effective driving licence on the date of accident which was renewed on 30. 7. 2003 i. e. after 46 days from the date of expiry. The record has established that application for renewal was made after more than 30 days from the date of expiry so it had become valid from the date of renewal and not retrospectively. Section 149 of the Motor Vehicles Act of 1988 provides that if there is a condition in the insurance policy that only a licensed driver has to drive the vehicle, the insurer cannot be held liable because of the breach of the term and condition of the policy. Mr. Chauhan, the learned Counsel appearing for the appellant has contended that on facts it is established that driver was not having a duly valid licence issued in his favour to drive the petrol tanker in question which was renewed on 30. 7. 2003. It had become effective from the date of the renewal which fact exonerated the appellant to reimburse the insured for the liability of the damage suffered. In support of his contention he has cited the following decided cases: (a) National Insurance Co. Ltd. v. Laxmi Narain Dhut, III (2007) CPJ 13 (SC)=iv (2007) SLT 102=ii (2007) ACC 28 (SC)=2007 (2) Supreme 721. (b) National Insurance Co. Ltd. v. Jarnail Singh and Ors. , 2007 (2) JKJ 16 (SC ). (c) Ishwar Chandra and Ors. v. Oriental Insurance Co. Ltd. and Ors. , III (2007) SLT 437=ii (2007) ACC 63 (SC)=2007 (2) JKJ 25 (SC ). Mr. Surinder Singh, the learned Counsel appearing for the respondent is defending the impugned order on the plea that respondent had hired the services of Mohd. Shokin driver at a time when he was holding a valid driving licence under the bona fide belief and that its renewal will be retrospective because he was not disqualified on any of the grounds mentioned in Section 15 of the Motor Vehicles Act. The award of the Forum is in accordance with law and should be upheld.

From the perusal of the record, it becomes crystal clear that driver Mohd. Shokin remained without a driving licence from 15. 5. 2003 to 30. 7. 2003 i. e. after 46 days. It is an admitted fact that application for its renewal was made after more than 30 days from the date of its expiry as it stands renewed from the date of renewal and not from the date of expiry. The renewal of the licence cannot be stretched retrospectively from 15. 5. 2003 as is being contended by the Counsel of the respondent. Such a view finds support from the interpretation as given by the Apex Court to Section 15 (1) of the Motor Vehicles Act in the case of National Insurance Co. Ltd. v. Jarnail Singh and Ors. (supra ). In the case of Ishwar Chandra and Ors. v. Oriental Insurance Co. Ltd. and Ors. , the Apex Court has held that the proviso appended to Section 15 (1) of the Motor Vehicles Act in no uncertain terms states that whereas the original licence granted despite the expiry remains valid for a period of 30 days from the date of expiry, if any application for renewal is filed thereafter, the same would be renewed from the date of renewal. In the case of National Insurance Co. Ltd. v. Laxmi Narain Dhut (supra) the Hon''ble Supreme Court has held that Motor Vehicles Act is a beneficial statute one qua the third party but that benefit cannot be extended to the owner of the offending vehicle. The logic of fake licence has to be considered differently in support of third party and in support of own damage. In the claims before the Accidental Tribunal under the Motor Vehicles Act, there are essentially three parties i. e. insurer, insured and the claimants. On the contrary, before the consumer Fora there are only two parties i. e. owner of the vehicle and the insurer. The claimant does not come in the picture, therefore they are the cases where there is no third party involved. The Apex Court in the case of New India Assurance Co. , Shimla v. Kamla and Ors. , Etc. Etc. , III (2001) SLT 150=i (2002) ACC 346 (SC)=2001 (4) SCC 342, has held that once the licence is a fake one the renewal cannot take away its effect of fake licence. In para no. 12 it was observed as follows: "12. As a point of law we have no manner of doubt that a fake licence cannot get its forgery outfit stripped off merely on account of some officer renewing the same with or without knowing it to be forged. Section 15 of the Act only empowers any Licensing Authority to ''renew a driving licence issued under the provisions of this Act with effect from the date of its expiry''. No Licensing Authority has the power to renew a fake licence and, therefore, a renewal if at all made cannot transform a fake licence as genuine. Any counterfeit document showing that it contains a purported order of a Statutory Authority would ever remain counterfeit albeit the fact that other persons including some statutory authorities would have acted on the document unwittingly on the assumption that it is genuine. "

NOW adverting to the facts of the present case, we hold that the driver Mr. Mohd. Shokin was without a driving licence when the accident was caused on 5. 6. 2003. In other words ,the petrol tanker No. 5638 was allowed to be driven by the insured in contravention of the terms and conditions of the insurance policy. In case of breach of the term of insurance policy, the insurer is not liable to reimburse the loss. Besides this contractual protection, the insurer is also protected by the benefit extended to it under Section 149 of the Motor Vehicles Act. The learned Forum has fallen into error while not considering the violations of the terms and conditions of the insurance policy as well as statutory benefit available under Section 149 of the Motor Vehicles Act. Accordingly, we accept the appeal and set aside the order of the Forum. The result is that appellant is not liable to indemnify the respondent for the loss suffered by him. On the facts and circumstances of the case, the parties are left to bear their own costs of the appeal. Appeal allowed.