Raipur, Chhattisgarh Vehicle D.I. Chhattisgarh. Raipur (Insurer Of v. 1 - Tikam Verma S/o Umend Verma, Aged About 45 Years R/o Village Ameri
Case Details
1 Digitally signed by SHAYNA KADRI 2025:CGHC:36631 AFR HIGH COURT OF CHHATTISGARH AT BILASPUR MAC No. 1638 of 2018 1 - The Oriental Insurance Co. Ltd. D.O.-3, R.K. Plaza, Pachpedi Naka, Raipur, District No. C.G.-04/h.U./3762).............Insurer, District : Raipur, Chhattisgarh Vehicle D.I. Chhattisgarh. Raipur (Insurer Of ... Appellant versus 1 - Tikam Verma S/o Umend Verma, Aged About 45 Years R/o Village Ameri, P.O. Kunda Raipur Hasoud, Chhattisgarh................Claimant, District : Raipur, Chhattisgarh Police Station Mandir District (Tekari), 2 - Abhay Yadu S/o Tansingh Yadu, Aged About 20 Years R/o Siltara, Damadpara, Police Station Dharsiwa, District Raipur Chhattisgarh. (Driver Of Vehicle D.I. No. C.G.-04/h.U./3762)............Driver, District : Raipur, Chhattisgarh 3 - Shivam Kumar Dubey S/o Vasisth Dubey, Aged About 33 Years R/o Nearby D.M. Tower, R.T.O. Office Birgaon, Flat No. 301, House No. A-2, Police Station Urla, District Raipur (Chhattisgarh) Presently Residing At Rajdhani Vihr, Saddhu, Police Station Vidhansabha, District Raipur Chhattisgarh. (Owner Of Vehicle D.I. No. C.G.- 04/h.U./3762)...........Owner, District : Raipur, Chhattisgarh ... Respondent(s) (Cause-title is taken from Case Information System) For Appellant : Mr. Raj Awasthi, Advocate
Legal Reasoning
For Resp. No. 2 & 3 : Mr. C. R. Sahu, Advocate SB- Hon'ble Shri Justice Amitendra Kishore Prasad 28/07/2025 Order on Board 1. This appeal has been filed under Section 173 of the Motor Vehicle Act, 1988, against the award dated 28.06.2018 passed by the learned 6th Additional Motor Accident Claims Tribunal, Raipur, District – Raipur (C.G.), in Motor Accident Claim Case No. 534/2017 (“Tikam Verma vs. 2 Abhay Yadu & another.”) 2. The averment in the claim petition, in brief, is that on 04.03.2017 at approximately 10:30 a.m., while Tikam Verma and Domar Verma were walking toward their truck in the village of Tekari, they were struck by a DI vehicle bearing registration number C.G.-04-HU-3762. The vehicle was allegedly being driven in a rash and negligent manner, which resulted in a serious accident. Both Tikam Ram and Domar Ram sustained grievous injuries and were immediately admitted to Balaji Hospital in Raipur for medical treatment. Upon examination, the doctor confirmed that Tikam Ram had suffered a fracture in his right leg. An FIR was lodged under Crime No. 54/17 for offences punishable under Sections 279 and 337 of the Indian Penal Code at Police Station Vidhansabha, Raipur. At the time of the accident, Tikam Ram, the first respondent, was employed in a private job earning Rs. 8,000 per month. Consequently, he filed a claim for compensation under Section 166 of the Motor Vehicles Act, seeking Rs. 11,50,000/- from the owner and insurer of the offending vehicle. Following due service of notice, the driver and owner of the vehicle submitted a joint written statement. They denied responsibility for the accident, asserting instead that the accident was caused by the rash and negligent actions of the claimant, Tikam Ram. They also stated that the vehicle was duly insured and the driver possessed a valid and effective driving license. Hence, in the event that compensation was to be awarded, they argued that the liability should lie with the insurer. The appellant insurance company also submitted a separate written statement, claiming that the driver of the vehicle did not possess a valid and effective driving license at the 3 time of the accident. Moreover, the vehicle was allegedly being used without a valid permit or fitness certificate. The insurer contended that such breaches of policy conditions absolved it of any liability for compensation. After considering the evidence presented by both sides, the Tribunal issued an award on 28.06.2018. It held the driver, owner, and the appellant insurer jointly and severally liable to pay a compensation amounting to Rs. 1,49,100/-, along with interest at the rate of 7.5% per annum, calculated from the date of filing of the claim petition, i.e., 01.08.2017. Dissatisfied with the award passed by the Tribunal, particularly with the direction to pay compensation despite the alleged breaches of insurance policy conditions, the appellant insurance company has preferred the present appeal challenging the final award dated 28.06.2018. 3. Learned Counsel for the appellants submits that the impugned award passed by the learned Tribunal is contrary to the facts, legal provisions, and circumstances of the case. It is contended that the findings arrived at by the Tribunal are perverse and do not align with the evidence on record, both oral and documentary, which has resulted in a miscarriage of justice. It is argued that the learned Tribunal committed a grave error by ignoring the critical fact that the driver of the offending vehicle did not possess a valid and effective driving license at the time of the accident. This fact was crucial and had a direct bearing on the liability of the appellant insurance company. The failure to properly consider this aspect constitutes a serious oversight. Learned counsel for the appellant further submits that sufficient oral and documentary evidence was placed on record to prove that the driver was not validly licensed. 4 Despite this, the Tribunal failed to appreciate and evaluate the said evidence in its correct perspective, thereby erroneously fastening the liability on the insurer. It is also submitted that the Tribunal ignored the legal position under the Motor Vehicles Act, which expressly prohibits the issuance of a learning license for driving transport vehicles. As such, even if the driver held a learner's license, the same was not valid for the category of vehicle involved in the accident, making the insurer not liable for compensation due to breach of policy conditions. Learned counsel for the appellant further contended that the learned Tribunal committed an error in law by giving a negative finding in respect of Issue No. 2, which dealt with the eligibility and validity of the license of driver. Such a finding is unsustainable and liable to be set aside. Learned counsel for appellant submits that the Tribunal erred in law by imposing joint and several liability upon the present appellant without appreciating the breach of insurance policy conditions by the owner of the offending vehicle. It is argued that the insurer should have been exonerated from liability in light of the proven breach. In light of the above submissions, the learned counsel for the appellant prays that this Court may be pleased to allow the instant appeal and exonerate the appellant insurance company from the liability imposed by the Tribunal, in the interest of justice. He placed reliance upon the judgment of this Court in the matter of The Oriental Insurance Company Limited Vs. Shatish Kumar & Ors., passed in MAC No. 368/2011 on 21.09.2012. 4. Learned Counsel for respondent No. 2 & 3 submits that the appeal preferred by the appellant insurance company is devoid of merit and 5 deserves to be dismissed. It is contended that the findings recorded by the learned Tribunal are well-reasoned, based on proper appreciation of evidence on record, and do not suffer from any illegality or perversity. The award passed is in consonance with law and the facts as established through evidence. It is argued that the vehicle involved in the accident was duly insured with the appellant insurance company on the date of the accident. Further, the driver of the vehicle was in possession of a valid and effective driving license. The contention of the appellant that the license was not valid is baseless and has not been substantiated with conclusive evidence. In fact, the Tribunal had rightly found that the insurance company failed to prove any willful breach of policy conditions by the owner or driver. Learned counsel for respondent No. 2 and 3 further contends that even if, for the sake of argument, there was any minor technical defect or irregularity in the driver’s license, the same would not absolve the insurer from its statutory liability towards third-party claimants. It is also submitted that the Tribunal has rightly considered the oral and documentary evidence and has rejected the contention of appellant regarding the driver’s license after due evaluation. The burden of proof regarding the invalidity of the license and breach of policy condition rested on the insurance company, which it failed to discharge. Therefore, the finding on Issue No. 2 does not warrant interference. 5. I have heard learned counsel for the parties and also perused the documents annexed along with the record. 6. The primary ground of challenge raised by the insurance company in the present appeal relates to the liability fastened upon it by the Tribunal. It is contended that the driver of the offending vehicle did not 6 possess a valid and effective driving license, and the Tribunal erred in holding otherwise. Upon careful examination of the record and the respective submissions of learned counsel for the parties, it is evident that the driver of the offending vehicle was holding only a learner's license on the date and time of the accident. This fact is admitted and has not been disputed by the respondents. Further, it is also undisputed that the vehicle in question was a transport vehicle. 7. In light of this, Section 7 of the Motor Vehicles Act, 1988 becomes relevant, which categorically states that a person holding a learner’s license is not entitled to drive a transport vehicle. Therefore, the driver, though holding a learner’s license, was not legally permitted to operate the said class of vehicle at the time of the accident. Section 7 of the Motor Vehicle Act, 1988 is quoted below for ready reference : “7. Restrictions on the granting of learner’s licences for certain vehicles. - (1) No person shall be granted a learner’s licence to drive a transport vehicle unless he has held a driving licence to drive a light motor vehicle for at least one year. Provided that nothing contained in this sub-section shall apply to an e- cart or e-rickshaw. (2)No person under the age of eighteen years shall be granted a learner’s licence to drive a motor cycle without gear except with the consent in writing of the person having the care of the person desiring the learners licence.” 8. Section 181 of the Motor Vehicles Act, 1988 prohibits any person from driving a motor vehicle without a valid driving license, and as such, the act of the driver amounted to clear contravention of this provision. Section 181 is quoted below for ready reference : 7 “181. Driving vehicles in contravention of section 3 or section 4. - Whoever drives a motor vehicle in contravention of section 3 or section 4 shall be punishable with imprisonment for a term which may extend to three months, or with fine [of five thousand rupees], or with both.” 9.
Decision
In view of the above, Section 3 of the Motor Vehicle Act, 1988 relates to the present case, hence, the same is quoted below : “3. Necessity for driving licence. - (1) No person shall drive a motor vehicle in any public place unless he holds an effective driving licence issued to him authorising him to drive the vehicle; and no person shall so drive a transport vehicle other than a motorcab or motor cycle hired for his own use or rented under any scheme made under sub-section (2) of section 75 unless his driving licence specifically entitles him so to do. (2)The conditions subject to which sub- section (1) shall not apply to a person receiving instructions in driving a motor vehicle shall be such as may be prescribed by the Central Government.” 10. When this legal infirmity was brought to the notice of the respondent- owner and driver, they failed to provide any valid explanation or produce any evidence to demonstrate that the driver held a proper driving license or that the vehicle was not a transport vehicle. Consequently, the finding of the Tribunal that the driver possessed a valid and effective license is erroneous and liable to be set aside. 11. So far as vehicle being driven by the person having learning licence is concerned As per Rule 3(b) of the Central Motor Vehicles Rules, 1989, person driving the vehicle under Learner's Licence should be accompanied by instructor holding valid and effective driving licence, 8 but in the case, there is no averment of the driver or owner in this regard. The vehicle driven by the person with Learner's Licence should be affixed with letter 'L' on front side as well as on the rear side, which was not there. In the present matter, the accident occurred from a transport vehicle in which the driver having learner's Licence was driving the vehicle as such, the transport vehicle cannot be driven by a person who is not having effective driving licence and is only having learner's licence. Even though the transport vehicle was in unladen condition, it cannot be driven by a person who is not having authority and effective driving licence. 12. In the matter of National Insurance Company Limited Vs. Swaran Singh and Others, reported in AIR 2004 SC 1531, it has been held by the Hon’ble Supreme Court that if the driver is not having valid licence, insurance company cannot be held liable to pay compensation. Relevant paragraph of the aforesaid judgment is quoted below for ready reference : “2. In view of the fact that these petitions involve pure questions of law, it is not necessary to advert to the individual facts pertaining to each matter. 3. Suffice, however, is to point out that the vehicles insured with the petitioner were involved in accidents resulting in filing of claim applications by the respective legal representatives of the deceased(s) or the injured person(s), as the case may be. 4. Defences raised by the petitioner Company in the claim petitions purported to be in terms of Section 149(2)(a)(ii) of the Motor Vehicles Act, 1988 (hereinafter referred to as “the Act”) were: (a) the driving licence produced by the driver or owner of the vehicle was a fake one; (b) the driver did not have any licence 9 xxx xxx xxx whatsoever; (c) a licence, although was granted to the driver concerned but on expiry thereof, the same had not been renewed; (d) the licence granted to the drivers being for one class or description of vehicle but the vehicle involved in the accident was of different class or description; and (e) the vehicle in question was driven by a person having a learner's licence. xxx 39. The question as to whether an insurer can avoid its liability in the event it raises a defence as envisaged in sub-section (2) of Section 149 of the Act corresponding to sub-section (2) of Section 96 of the Motor Vehicles Act, 1939 had been the subject- matter of decisions in a large number of cases. 40. It is beyond any doubt or dispute that under Section 149(2) of the Act, an insurer, to whom notice of the bringing of any proceeding for compensation has been given, can defend the action on any of the grounds mentioned therein. 41. However, clause (a) opens with the words “that there has been a breach of a specified condition of the policy”, implying that the insurer's defence of the action would depend upon the terms of the policy. The said sub-clause contains three conditions of disjunctive character, namely, the insurer can get away from the liability when (a) a named person drives the vehicle; (b) it was being driven by a person who did not have a duly granted licence; and (c) driver is a person disqualified for holding or obtaining a driving licence. 42. We may also take note of the fact that whereas in Section 3 the words used are “effective licence”, it has been differently worded in Section 149(2) i.e. “duly licensed”. If a person does not hold an effective licence as on the date of the accident, he may be liable for prosecution in terms of Section 141 of the Act but 10 Section 149 pertains to insurance as regards third-party risks. 43. A provision of a statute which is penal in nature vis-à-vis a provision which is beneficent to a third party must be interpreted differently. It is also well known that the provisions contained in different expressions are ordinarily construed differently. 44. The words “effective licence” used in Section 3, therefore, in our opinion, cannot be imported for sub-section (2) of Section 149 of the Motor Vehicles Act. We must also notice that the words “duly licensed” used in sub-section (2) of Section 149 are used in the past tense. 45. Thus, a person whose licence is ordinarily renewed in terms of the Motor Vehicles Act and the Rules framed thereunder, despite the fact that during the interregnum period, namely, when the accident took place and the date of expiry of the licence, he did not have a valid licence, he could during the prescribed period apply for renewal thereof and could obtain the same automatically without undergoing any further test or without having been declared unqualified therefor. Proviso appended to Section 14 in unequivocal terms states that the licence remains valid for a period of thirty days from the day of its expiry. xxx 69. The proposition of law is no longer res integra that the person who alleges breach must prove the same. The insurance company is, thus, required to establish the said breach by cogent evidence. In the event the insurance company fails to prove that there has been breach of conditions of policy on the part of the insured, the insurance company cannot be absolved of its liability. (See Sohan Lal Passi [(1996) 5 SCC 21 : 1996 SCC (Cri) 871] .) 70. Apart from the above, we do not intend to lay down anything further i.e. degree of xxx xxx xxx 11 proof which would satisfy the aforementioned requirement inasmuch as the same would indisputably depend upon the facts and circumstances of each case. It will also depend upon the terms of contract of insurance. Each case may pose a different problem which must be resolved having regard to a large number of factors governing the case including conduct of parties as regards duty to inform, correct disclosure, suppression, fraud on the insurer etc. It will also depend upon the fact as to who is the owner of the vehicle and the circumstances in which the vehicle was being driven by a person having no valid and effective licence. No hard-and-fast rule can, therefor, be laid down. If in a given case there exists sufficient material to draw an adverse inference against either the insurer or the insured, the Tribunal may do so. The parties alleging breach must be held to have succeeded in establishing the breach of conditions of the contract of insurance, on the part of the insurer by discharging its burden of proof. The Tribunal, there cannot be any doubt, must arrive at a finding on the basis of the materials available on records. xxx 92. It may be true as has been contended on behalf of the petitioner that a fake or forged licence is as good as no licence but the question herein, as noticed hereinbefore, is whether the insurer must prove that the owner was guilty of the wilful breach of the conditions of the insurance policy or the contract of insurance. In Lehru case [(2003) 3 SCC 338 : 2003 SCC (Cri) 614] the matter has been considered in some detail. We are in general agreement with the approach of the Bench but we intend to point out that the observations made therein must be understood to have been made in the light of the requirements of the law in terms xxx xxx xxx 12 xxx xxx xxx whereof the insurer is to establish wilful breach on the part of the insured and not for the purpose of its disentitlement from raising any defence or for the owners to be absolved from any liability whatsoever. We would be dealing in some detail with this aspect of the matter a little later. xxx 99. So far as the purported conflict in the judgments of Kamla [(2001) 4 SCC 342 : 2001 SCC (Cri) 701] and Lehru [(2003) 3 SCC 338 : 2003 SCC (Cri) 614] is concerned, we may wish to point out that the defence to the effect that the licence held by the person driving the vehicle was a fake one, would be available to the insurance companies, but whether despite the same, the plea of default on the part of the owner has been established or not would be a question which will have to be determined in each case. 100. This Court, however, in Lehru [(2003) 3 SCC 338 : 2003 SCC (Cri) 614] must not be read to mean that an owner of a vehicle can under no circumstances have any duty to make any enquiry in this respect. The same, however, would again be a question which would arise for consideration in each individual case. xxx xxx 110. The summary of our findings to the various issues as raised in these petitions is as follows: xxx (ii) An insurer is entitled to raise a defence in a claim petition filed under Section 163- A or Section 166 of the Motor Vehicles Act, 1988, inter alia, in terms of Section 149(2) (a)(ii) of the said Act. (iii) The breach of policy condition e.g. disqualification of the driver or invalid driving licence of the driver, as contained in sub-section (2)(a)(ii) of Section 149, has to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid xxx xxx xxx xxx xxx 13 driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards the insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by a duly licensed driver or one who was not disqualified to drive at the relevant time. (iv) Insurance companies, however, with a view to avoid their liability must not only establish the available defence(s) raised in the said proceedings but must also establish “breach” on the part of the owner of the vehicle; the burden of proof wherefor would be on them. (v) The court cannot lay down any criteria as to how the said burden would be discharged, inasmuch as the same would depend upon the facts and circumstances of each case. xxx (vii) The question, as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case. xxx xxx xxx 13. In Pepsu Road Transport Corporation v. National Insurance Company, reported in (2013) 10 SCC 217, the Insurance Company contested its liability on the ground that the driver of the vehicle involved in the accident did not possess a valid license. Paragraph 2 of the said judgment is quoted below for reference: : “2. The widow and two minor sons of late Gurjinder Singh Modi are the claimants before the Motor Accidents Claims Tribunal, Chandigarh in MACT No. 63/481 filed in the year 2002. The allegation was 14 that Gurjinder Singh Modi died out of a motor accident on 4-10-2001 on account of the negligent driving of Bus No. PB 11 K 8512 of Pepsu Road Transport Corporation (for short “PRTC”), Patiala, the appellant herein. Rs 30,00,000 was claimed as compensation. Negligence was proved. The Tribunal awarded Rs 11,03,404 as compensation. However, the Insurance Company was absolved of its liability since the licence issued to the driver was found to be fake. The Insurance Company took the Local Commissioner to the licensing authority, Darjeeling, West Bengal and, on verification of the available records, it was reported that no such licence as possessed by the driver has been issued by the said licensing authority at Darjeeling. Thus, aggrieved, the owner of the vehicle viz. PRTC, Patiala has come up in appeal.” 14. In Pepsu Road Transport Corporation (Supra), the responsibility of the owner while employing a driver to avail the benefit of insurance was stated thus : “10. In a claim for compensation, it is certainly open to the insurer under Section 149(2)(a)(ii) to take a defence that the driver of the vehicle involved in the accident was not duly licensed. Once such a defence is taken, the onus is on the insurer. But even after it is proved that the licence possessed by the driver was a fake one, whether there is liability on the insurer is the moot question. As far as the owner of the vehicle is concerned, when he hires a driver, he has to check whether the driver has a valid driving licence. Thereafter he has to satisfy himself as to the competence of the driver. If satisfied in that regard also, it can be said that the owner had taken reasonable care in employing a person who is qualified and competent to drive the vehicle. The owner 15 cannot be expected to go beyond that, to the extent of verifying the genuineness of the driving licence with the licensing authority before hiring the services of the driver. However, the situation would be different if at the time of insurance of the vehicle or thereafter the insurance company requires the owner of the vehicle to have the licence duly verified from the licensing authority or if the attention of the owner of the vehicle is otherwise invited to the allegation that the licence issued to the driver employed by him is a fake one and yet the owner does not take appropriate action for verification of the matter regarding the genuineness of the licence from the licensing authority. That is what is explained in Swaran Singh case [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297 : 2004 SCC (Cri) 733] . If despite such information with the owner that the licence possessed by his driver is fake, no action is taken by the insured for appropriate verification, then the insured will be at fault and, in such circumstances, the Insurance Company is not liable for the compensation.” 15. After perusal of the pleadings, evidence, and contentions raised by the parties, and considering the legal provisions under the Motor Vehicles Act, 1988 as well as the authoritative pronouncements of the Hon’ble Supreme Court in National Insurance Co. Ltd. (Supra) and Pepsu Road Transport Corporation (Supra), it stands established and undisputed from the record that the driver of the offending vehicle bearing Registration No. CG-04-HU-3762, which is a transport vehicle, was holding only a learner’s licence at the time of the accident dated 04.03.2017. As per Section 7(1) of the Motor Vehicles Act, a person holding a learner’s licence is not entitled to drive a transport vehicle. 16 Accordingly, the driver was legally disqualified from operating the vehicle involved in the accident. Further, the vehicle was being used as a transport vehicle without proper authorisation, and no valid permit or fitness certificate was proved on record. 16. In the present matter, the insurance company has discharged its burden by placing cogent oral and documentary evidence on record to establish that the driver did not possess a valid and effective licence to drive the vehicle in question. The owner failed to prove that due care was exercised in verifying the eligibility of the driver. As such, there exists a proven breach of policy conditions as contemplated under Section 149(2)(a)(ii) of the Act. 17. In light of the above facts, the Tribunal has clearly erred in fastening liability upon the insurance company despite the proven breach. Therefore, the finding of the Tribunal that the driver was holding a valid and effective driving licence is perverse and unsustainable and is accordingly set aside. Consequently, the liability of the insurance company to indemnify the insured is also set aside. However, in view of the law laid down Swaran Singh (supra), where the Hon’ble Supreme Court has directed that even where a breach is proved, the insurer must pay compensation in the first instance and recover it from the insured. The insurance company is directed to pay the awarded compensation of 1,49,100/- along with interest at the rate of 7.5% per ₹ annum from the date of filing of the claim petition (01.08.2017) in the first instance, and shall be entitled to recover the same from the driver and owner of the offending vehicle in accordance with law 18. The appeal filed by the appellant-insurance company is allowed to the above extent and direction of the Claims Tribunal fastening joint and 17 several liability upon the insurance company along with the driver and owner is set aside. The driver and owner of the vehicle are held jointly and severally liable to pay the compensation awarded. 19. The award of the Claims Tribunal dated 28.06.2018 is modified accordingly. Appeal is Allowed in Part. Shayna Sd/- (Amitendra Kishore Prasad) JUDGE 18 Head-Note Person having Learner's Licence to drive Light Motor Vehicle (L.M.V.) is restricted to drive Heavy Motor Vehicles as such, it is breach of Insurance Policy.