& Ors Vs. Sushil Kumar & Ors  INSC 360 (4 March 2008)
S.B. Sinha & V.S. Sirpurkar CIVIL APPEAL NO. 1733 OF 2008 [Arising out of SLP (C) No. 19965 of 2004]
S.B. Sinha, J.
1. Jagiru was a tonga driver. While, he was driving his tonga on 10.2.1985,
he met with an accident, as it collided with a tractor bearing Registration No.
HYC 173. In the said accident, he received injuries and ultimately expired on
15.2.1985. At the time of his death, he was aged 40 years.
An application for payment of compensation by the appellants was filed in
terms of Section 110-A of Motor Vehicles Act, 1939 (for short "the
Act"). Respondent Insurance Company inter alia raised a contention therein
that the driver of the said tractor did not hold a valid and effective license.
2. Before the Motor Vehicle Accident Claims Tribunal (The Tribunal), the
driver of the said Tractor, Sushil Kumar was examined. He categorically stated
that he did not know how to drive a tractor and he never even tried to learn
driving of the tractor. He admitted that he had not been possessing any valid
driving license to drive a tractor. It was accepted by him that he had even
never applied therefor. He also, in answer to a question put to him in
cross-examination, admitted that he did not hold a driving license.
The learned Tribunal answered the relevant issue in the following terms;
"15. It is admitted by respondent No. 1 that he was not holding any
driving licence to drive the tractor at the time of alleged accident and in
fact he never possessed any driving licence. Since the respondent No. 1 was not
holding any driving licence to drive the tractor, so, in view of the conditions
contained in the copy of policy Ex. R1, the respondent No. 3 is not liable to
pay any compensation. Accordingly, this issue is decided in favour of the
respondent No. 3 against the petitioners."
3. In that view of the matter, the application for grant of compensation was
dismissed. An appeal preferred thereagainst by the appellants has also been
dismissed by the High Court. The High Court, however, was of the opinion that
the finding of the Tribunal that no accident took place due to rash and
negligent driving of Sushil Kumar, was not correct holding that the appellants
were entitled to compensation of Rs. 63,000/- from the respondent Nos. 1 and 2.
4. Appellants are, thus, before us.
Nobody has appeared on behalf of the appellants.
5. The question, as regards the purport and object for which the Act had
been enacted and as also the statutory obligations on the part of the owner of
the vehicle to get the same compulsorily insured came up for consideration in a
large number of cases.
This Court, time and again made a distinction between a case where third
party is involved vis-`-vis where the owner of the vehicle was involved in the
accident. The matter relating to grant of license is dealt with in the Act.
There are provisions in terms whereof despite expiry of the period of license,
the same can be renewed. There are also provisions providing for grant of a fresh
license. In certain situation, the authorities are also entitled to refuse to
renew the license.
6. Although, in terms of a contract of insurance, which is in the realm of
private law domain having regard to the object for which Section 147 and 149 of
the Act had been enacted, the social justice doctrine as envisaged in the
preamble of the Constitution of India has been given due importance.
The Act, however, itself provides for the cases where the insurance Company
can avoid its liability. Avoidance of such liability would largely depend upon
violation of the conditions of contract of insurance. Where the breach of
conditions of contract is ex-facie apparent from the records, the Court will
not fasten the liability on the Insurance Company. In certain situations,
however, the Court while fastening the liability on the owner of the vehicle
may direct the Insurance Company to pay to the claimants the awarded amount
with liberty to it to recover the same from the owner.
7. The concurrent finding of fact herein is that Sushil Kumar never held a
license. The owner of the vehicle has a statutory obligation to see that the
driver of the vehicle whom he authorized to drive the same holds a valid
license. Here again, a visible distinction may be noticed, viz. where the
license is fake and a case where the license has expired, although initially
when the driver was appointed, he had a valid license.
The question came up for consideration before this Court in United wherein
it was held;
"12. Under the circumstances, when the insured had handed over the
vehicle for being driven by an unlicensed driver, the Insurance Company would
get exonerated from its liability to meet the claims of the third party who
might have suffered on account of vehicular accident caused by such unlicensed
A three Judges' Bench of this Court in National Insurance Co. Ltd.
provisions of the Act as also the precedents operating in the field, laid
down the following dicta;
"84. We have analysed the relevant provisions of the said Act in terms
whereof a motor vehicle must be driven by a person having a driving licence.
The owner of a motor vehicle in terms of Section 5 of the Act has a
responsibility to see that no vehicle is driven except by a person who does not
satisfy the provisions of Section 3 or 4 of the Act. In a case, therefore,
where the driver of the vehicle, admittedly, did not hold any licence and the
same was allowed consciously to be driven by the owner of the vehicle by such
person, the insurer is entitled to succeed in its defence and avoid liability.
The matter, however, may be different where a disputed question of fact arises
as to whether the driver had a valid licence or where the owner of the vehicle
committed a breach of the terms of the contract of insurance as also the
provisions of the Act by consciously allowing any person to drive a vehicle who
did not have a valid driving licence. In a given case, the driver of the
vehicle may not have any hand in it at all e.g. a case where an accident takes
place owing to a mechanical fault or vis major. (See Jitendra Kumar 22 .)"
SCC 250], a Bench of this Court (wherein one of us was a member) held;
11. It has not been disputed before us that the vehicle was being used as a
taxi. It was, therefore, a commercial vehicle. The driver of the said vehicle,
thus, was required to hold an appropriate licence therefor. Ram Lal who
allegedly was driving the said vehicle at the relevant time, as noticed
hereinbefore, was holder of a licence to drive a light motor vehicle only. He
did not possess any licence to drive a commercial vehicle. Evidently,
therefore, there was a breach of condition of the contract of insurance. The
appellant, therefore, could raise the said defence.
14. This Court in Swaran Singh clearly laid down that the liability of the
Insurance Company vis-vis the owner would depend upon several factors. The
owner would be liable for payment of compensation in a case where the driver
was not having a licence at all. It was the obligation on the part of the owner
to take adequate care to see that the driver had an appropriate licence to
drive the vehicle.
The question as regards the liability of the owner vis-`-vis the driver
being not in possession of valid license has also been considered in para 89 in
Swaran Singh (supra).
(13) SC 246], the Court stated the law in the following terms:- "33. In
the present case, all the facts were before the District Forum. It considered
the assertion of the complainant and defence of the Insurance Company in the
light of the relevant documentary evidence and held that it was established
that the vehicle which met with an accident was a 'transport vehicle'. Ram
Narain was having a licence to drive Light Motor Vehicle only and there was no
endorsement as required by Section 3 of the Act read with Rule 16 of the Rules
and Form No. 6. In view of necessary documents on record, the Insurance Company
was right in submitting that Ashok Gangadhar does not apply to the case on hand
and the Insurance Company was not liable."
However, Swaran Singh (supra) has been distinguished by this Court in some
cases holding that where the owner of the vehicle himself is involved,
insurance company will not be liable.
531], a Bench of this Court following Kusum Rai (supra), opined;
"10. In the case of National Insurance Co. Ltd. v.
Kusum Rai and Ors. (2006) 4 SCC 250, the vehicle was being used as a taxi.
It was, therefore, a commercial vehicle. The driver of the said vehicle was
required to hold an appropriate licence therefor.
Ram Lal, who allegedly was driving the said vehicle at the relevant time,
was holder of a licence to drive light motor vehicle only. He did not possess
any licence to drive a commercial vehicle. Therefore, there was a breach of
condition of the contract of insurance. In such circumstances, the Court
observed that the appellant-National Insurance Co. Ltd., therefore, could raise
the said defence while considering the stand of the Insurance Company. This
Court, pointing out the law laid down in Swaran Singh (supra) concluded that
the owner of the vehicle cannot contend that he has no liability to verify the
fact as to whether the driver of the vehicle possessed a valid licence or not.
However, taking note of the fact that the owner has not appeared, the victim
was aged only 12 years, the claimants are from a poor background and to avoid
another round of litigation applying the decision in Oriental Insurance Co.
v. Nanjappan (2004) 13 SCC 224 and finding that though the
appellant-Insurance Company was not liable to pay the claimed amount as the
driver was not possessing a valid licence and the High Court committed an error
in holding otherwise, in the peculiar facts and circumstances of the case and
in exercise of jurisdiction under Article 136 of the Constitution declined to
interfere with the impugned judgment therein and permitted the appellant-
Insurance Company to recover the amount from the owner of the vehicle."
727], however, noticing Swaran Singh (supra), it was opined;
"10. In the instant case, the State Commission has categorically found
that the evidence on record clearly established that the licensing authority
had not issued any license, as was claimed by the Driver and the respondent.
The evidence of Shri A.V.V. Rajan, Junior Assistant of the Office of the Jt.
Secretary, RTA, Hyderabad who produced the official records clearly
established that no driving license was issued to Shri Ravinder Kumar or
Ravinder Singh in order to enable and legally permit him to drive a motor
vehicle. There was no cross examination of the said witness. The National
Commission also found that there was no defect in the finding recorded by the
State Commission in this regard."
[2007 (4) SCALE 292], this Court held;
"9. From a bare perusal of the said provision, it would appear that the
licence is renewed in terms of the said Act and the rules framed thereunder.
The proviso appended to Section 15(1) of the Act in no uncertain terms states
that whereas the original licence granted despite expiry remains valid for a
period of 30 days from the date of expiry, if any application for renewal
thereof is filed thereafter, the same would be renewed from the date of its
renewal. The accident took place 28.04.1995. As on the said date, the renewal
application had not been filed, the driver, did not have a valid licence on the
date when the vehicle met with the accident."
9. For the reasons aforementioned, there is no merit in this appeal which is
accordingly dismissed. However, in the facts and circumstances of this case,
there shall be no order as to costs.