Case: New India Assurance Company Limited Vs. Mandar Madhav Tambe and Others

B.A. MASODKAR, J. ( 1 ) THIS appeal is filed by original opponent No. 3, that is to say, the New India Assurance Co. Ltd. , which arises out of the compensation proceedings initiated under section 110-A of the Motor Vehicles Act, 1939 (hereinafter referred to as the Act ). By the impugned order, the Insurance Company has been held liable to pay the amount of compensation along with other opponents jointly and severally. ( 2 ) FOR the purpose of the present appeal, certain findings as are relevant and are recorded by the trial Court are not in dispute, in that the occurrence or the accident took place on July 4, 1979. The vehicle was driven by opponent No. 2, Jaysing Baburao Jadhav. The evidence of the clerk from the Regional Transport Officers office at Kolhapur, by name Ramchandra Babdu Mane, goes to show that the said Jaysing, the driver of the vehicle, was not holding any regular licence to drive on the date of the accident. However, he was given a regular licence as and from July 9, 1979, which was valid upto July 8, 1984. Prior to that, Jaysing Jadhav also had obtained a learners licence for driving such vehicles on July 22, 1977 that expired on November 21, 1977. Thereafter, again Jaysing Jadhav took the learners licence on July 7, 1979 and afterwards he was given a regular licence on July 9, 1979, Both these licences were issued after the event, that is to say, after July 4, 1979. The earlier licence of 1977 was learners licence which has prior to the event. Admittedly, Jaysing Jadhav was not disqualified under the provisions of the Act for being licensed as such. ( 3 ) ON the basis of these undisputed facts, which are found by the trial Court the appellant-Insurance Company contends that the defence available to it, under section 96 (2) (b) (ii) of the Act has been made out and that no award could have been made against the Insurance Company, there being a breach of the condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification. For substantiating this defence, reliance is placed on the policy, which is produced at Exh. 159, and particularly on the column in the schedule describing the Driver along with the General Exception at Clause 3 (b) as set out in the policy. ( 4 ) IT would be useful to extract both these parts of the policy so as to appreciate the competing submission made in the present appeal : driver :---Any of the following : any person. The Insured may also drive a motor Car/cycle not belonging to him and not hired to him under a hire purchase. Provided that the person driving holds a valid driving licence at the time of the accident or had held a permanent driving licence (other than a learners licence) and is not disqualified from holding such a licence. general EXCEPTIONS the Company shall not be liable under this Policy in respect of--- (1 ). . . . . . . . . . . . . . . . . . . . . . . . (2 ). . . . . . . . . . . . . . . . . . . . . . . . (3) any accident loss damage and /or liability caused sustained or incurred whilst any Motor Cycle is--- (a ). . . . . . . . . . . . (b) being driven by any person other than a Driver. ( 5 ) ON the basis of the above extracted portions from the policy, Mr. Trivedi, learned Counsel for the Insurance Company, contends that this is a policy that sets out a condition that excludes driving by any person who is not duly licensed and thus the defence is made out. In the submission of the learned Counsel, the term duly licensed would cover the entire proviso available in the descriptive part appended to the term driver, for Mr. Trivedi contends that by the words. a valid driving licence at the time of the accident, available in the first part of the proviso in the schedule in the policy what is intended is that the person driving must be duly licensed at the time of the accident. In the present case, opponent No. 2 was not licensed at that time and as such, the latter part of the proviso in the schedule in the policy would not be relevant. Even if that were to be otherwise, the same too is satisfied because, at the most, the evidence shows that the driver had once held a learners licence that is specifically excepted by the policy. If it be the admitted position that the driver was not having any permanent driving licence and he had once held only a learners licence, then, according to Mr. Trivedi, the defence permissible to the Insurance Company by reason of section 96 (2) (b) (ii) of the Act has been fully and satisfactorily made out. Reliance is placed on the judgments reported in the cases of (Ambujam v. Hindustan Ideal Insurance Co.) 1981 A. C. J. 173; (Brij Lal Khera v. Raksha Devi) 1972 A. C. J. 69; and (Chanchalben v. Shailesh Kumar Pandurao Thakore) 1974 A. C. J. 393; to contend that the term duly licensed would mean a person holding a regular licence and that too at the date of the accident. The facts being as they are, in the present case, opponent No. 2 was not duly licensed and that would be enough to discharge the Insurance Company from its liability. ( 6 ) AS against this, M/s. Abhyankar and Naik, the learned Counsel for respondents Nos. 1 and 2, contended that the term duly licensed cannot be read respectively so as to include and indicate a holder of regular licence or a permanent licence, as the policy styles the same. Licence, if permissible under the Act or by reason of its Rules, would be within the term duly licensed. Even a holder of learners licence thus would be duly licensed. In other words, the contention is that opponent No. 2 having held a learners licence in 1977 and further there being no evidence with regard to any disqualification for holding or obtaining a driving licence which, in fact, was given to him within three days of the accident, he was a Driver within the meaning of the policy and that the defence has not been made out. Reliance is placed on the decision in (Ishwar Devi v. Reoti Raman) 1978, A. C. J. 340, and (United India Insurance Co. Ltd. v. Tilak Ram) 1985 A. C. J. 481. ( 7 ) THIS debated question, therefore will have to be resolved by firstly finding out as to what is the contemplation of the term duly licensed as employed by section 96 (2) (b) (ii) of the Act. The decision available in the Tilak Rams case (supra), rendered by the Himachal Pradesh High Court, takes the view that the term duly licensed is not to be limited to any particular category of licence and would take in any licence of the type which enables one to drive, including the one granted as learners licence. ( 8 ) NOW, the provisions concerning licensing are available in Chapter II of the Act and that requires every person, by section 3, to possess a driving licence for the purposes of driving. Section 7 of the Act deals with the grant of such driving licences. Such licences can be granted to any person who is not disqualified under section 4 of the Act, provided the other conditions of the sections are satisfied. Section 8 of the Act describes the form and contents of driving licence and makes a reference to Form D as set out in the first schedule. Form D in the first schedule in terms shows that the licence is a periodic grant and it has to specify the period during which the licence is valid. There does not appear to be any permanent grant of a driving licence contemplated by Form D in the first schedule. Such a licence is liable to be renewed and when renewed, there too the period is to be mentioned as is shown in the form itself. It is common ground, therefore, that the statute does not use nor does it permit issuance of a permanent driving licence. What it contemplates is a licence for a stated period. There is no category even contemplated by the main sections of the learners or non-learners licence. It is only by reason of the Rules that the learners licence is contemplated, but the authority to grant such a licence is referable to the provisions of section 7 of the Act. For all purposes, thus, the learners licence is a periodic licence which permits the driver, subject to special conditions, to drive a motor vehicle. ( 9 ) IF this be the position with regard to the learners licence, we do not think that it will be appropriate to treat the holder of a learners licence as not duly licensed for the purpose of sub-clause (ii) of Clause (b) of sub-section (2) of section 96 of the Act on which reliance is placed. It will be in keeping with the purposes of that section to give the words duly licensed their ordinary and normal meaning, particularly when the law itself has not excluded the licence of a learner from the category of licences. We are inclined thus to hold that the term duly licensed would include a holder of a learners licence. No good reason exists to limit the phrase to the holder of regular licence. ( 10 ) IN this, we are in respectful agreement with the view expressed in the Tilak Rams case (supra) by the Himachal Pradesh High Court. The other decisions cited at the Bar are distinguishable on their own facts. It is ample to observe that we are mainly concerned with the terms of the policy at Exh. 159 so as to find out whether it successfully excludes driving by a person as is contemplated by the provisions of section 96 (2) (b) (ii) of the Act. In other words, if the driving is permitted by a person who once held that licence and was not disqualified, there would be no exclusion as is contemplated by the provisions of that clause. ( 11 ) HAVING settled this position, we have to turn to the proviso in the policy for finding out exclusion and on which Mr. Trivedi heavily relies. This proviso, added below the column concerning as to who could be the driver of a vehicle, is of qualifying character. It is not in the nature of general exception. In other words, it is, in fact, a definitive provision. Provisos of such kind are intended to lay down the conditions or qualifications which will operate on the subject already mentioned. Any person who would satisfy either of the conditions of the proviso would be the Driver in terms of this policy. Being a part of the policy and which is to be read in the light and context of the provisions of section 96 (2) (b) (ii) of the Act, effort should be to find out as to whether the exclusion of a driver who had held a licence and was thus duly licensed and was not disqualified has or has not been excluded. ( 12 ) NOW, as far as the first part of the proviso is concerned, undoubtedly, it does not admit any debate that the exclusion is clearly set out and is also made out, in that a person who was holding no valid driving licence at the time of the accident would not be in the contemplation of the policy to be a driver. In such a case, exclusion would be complete. Had the matter stood at this first part along with the general exceptions extracted above, then the answer would be clear that Jaysing Jadhav could not be the driver for the purpose of the policy. But the proviso does not halt there. It adds an independent clause after employing the disjunction or. If the clause after the disjunction or is taken note of, it permits a person who had held a permanent driving licence and who was not disqualified to be a driver of the vehicle. In other words, a person once duly licensed and not disqualified is not excluded from being a driver of the vehicle. ( 13 ) UNDOUBTEDLY, Mr. Trivedi relied on the words of this part so as to contend that such a person must be the holder of a permanent driving licence other than a learners licence, but as we have seen, the category of licences does admit the holder of a permanent driving licence and statutes like the provisions of section 96 (2) (b) (ii) of the Act use the phrase duly licensed that includes even the holder of a learners licence. The intention of the latter clause in the provise of the policy, with which we are concerned, is obvious, in that if the person had held a licence or as such was duly licensed and is not disqualified from holding such a licence, then he could be the driver of the vehicle. If this intention is discernible in the second part of the proviso, then on the facts available in the present case, it can be said that the driver of the vehicle had held a learners licence and was not disqualified from holding such a licence. Such a driver was consequently not excluded by the terms of the policy. What appears to us obvious from the terms of the latter clause of the proviso is that the emphasis is on the holder of the licence who is not disqualified to hold such a licence. This intent is inferable because the first part of the proviso deals with the holder of the licence as such which would include the holder of a learners licence. The second part can be read reasonably so as to include those classes of cases where the licence was not actually in force and was not held but was once held and there was no disqualification from holding such a licence. No doubt, there is much force in the submissions of Mr. Trivedi that this part of the proviso refers to a permanent driving licence and excludes a learners licence for the purpose of capacity along with the want of disqualification. But, as we have indicated, to so read the clauses would be reading something which is not in existence in law, in that a permanent driving licence and to exclude the licensing process as not covered by the learners licence. Furthermore, if for the first part the learners licence could be the part of the licensing, we fail to see how it would not form part of the latter clause. In the light of the provisions of section 96 (2) (b) (ii) of the Act, it is consistent to read the disjunctive part as intending and operating upon the disqualification of drivers who had once been duly licensed. The driving of a vehicle by such a person, we think, who has duly licensed and who was not disqualified is not at any rate clearly excepted by Clause (3) (b) of the General Exceptions available in the policy. ( 14 ) AS we have indicated above, Jaysing Jadhav did hold a licence in 1977 and immediately after the accident within a few days was given a regular income. There is no evidence of his disqualification to hold such a licence. Therefore, he would be in the permissive category of the drivers and as such not excepted by the conditions of the policy. At any rate, we feel by use of the words a permanent driving licence (other than a learners licence) and is not disqualified from holding such a licence, an ambiguity is introduced by the latter part of the proviso, the advantage of which cannot be taken by the Insurance Company while setting up the statutory defence under section 96 (2) (b) (ii) of the Act. The burden to establish the limited defence in law is on the Insurance Company and it has to satisfactorily and beyond ambiguity establish that there had been a breach of the specified condition of the policy which imposes the condition excluding driving by the persons of the kind mentioned by section 96 (2) (b) (ii) of the Act. Here we find, by reason of the latter part, that person who once held a licence and are not disqualified are permitted to be the drivers. If they are so permitted, the exclusion contemplated by sub-clause (ii) cannot be easily read. If there be ambiguity, the defence of the kind taken by the Insurance Company would not be upheld. ( 15 ) GENERALLY stated, such clause of the policy should receive the interpretation consistent with the intent of the parties to the contract and also to further the objects of the statute. This should particularly be so when contracts are in printed form and issued in usual course. If we were to go by the terms of section 96 (2) (b) (ii) of the Act, the exclusion could be of the persons who are not duly licensed or of the persons who had been disqualified, as is mentioned therein. To be within it, the terms of the policy should be specific. The terms of the present proviso are differently worded; and, possibly, do admit a position that the drivers who were once licensed and are not disqualified are not specifically excluded. We would prefer to interpret such a term in the policy document in the light of the purposes of the statute which makes a provision for indemnifying causes involving third parties in accidents and for satisfaction of claims arising therefrom in favour of the party affected rather than to absolve the insurance indemnity.

Decision:
1[ds]( 9 ) IF this be the position with regard to the learners licence, we do not think that it will be appropriate to treat the holder of a learners licence as not duly licensed for the purpose ofe (ii) of Clause (b) ofn (2) of section 96 of the Act on which reliance is placed. It will be in keeping with the purposes of that section to give the words duly licensed their ordinary and normal meaning, particularly when the law itself has not excluded the licence of a learner from the category of licences. We are inclined thus to hold that the term duly licensed would include a holder of a learners licence. No good reason exists to limit the phrase to the holder of regular licence( 10 ) IN this, we are in respectful agreement with the view expressed in the Tilak Rams case (supra) by the Himachal Pradesh High Court. The other decisions cited at the Bar are distinguishable on their own facts. It is ample to observe that we are mainly concerned with the terms of the policy at Exh. 159 so as to find out whether it successfully excludes driving by a person as is contemplated by the provisions of section 96 (2) (b) (ii) of the Act. In other words, if the driving is permitted by a person who once held that licence and was not disqualified, there would be no exclusion as is contemplated by the provisions of that clause.( 11 ) HAVING settled this position, we have to turn to the proviso in the policy for finding out exclusion and on which Mr. Trivedi heavily relies. This proviso, added below the column concerning as to who could be the driver of a vehicle, is of qualifying character. It is not in the nature of general exception. In other words, it is, in fact, a definitive provision. Provisos of such kind are intended to lay down the conditions or qualifications which will operate on the subject already mentioned. Any person who would satisfy either of the conditions of the proviso would be the Driver in terms of this policy. Being a part of the policy and which is to be read in the light and context of the provisions of section 96 (2) (b) (ii) of the Act, effort should be to find out as to whether the exclusion of a driver who had held a licence and was thus duly licensed and was not disqualified has or has not been excluded.( 12 ) NOW, as far as the first part of the proviso is concerned, undoubtedly, it does not admit any debate that the exclusion is clearly set out and is also made out, in that a person who was holding no valid driving licence at the time of the accident would not be in the contemplation of the policy to be a driver. In such a case, exclusion would be complete. Had the matter stood at this first part along with the general exceptions extracted above, then the answer would be clear that Jaysing Jadhav could not be the driver for the purpose of the policy. But the proviso does not halt there. It adds an independent clause after employing the disjunction or. If the clause after the disjunction or is taken note of, it permits a person who had held a permanent driving licence and who was not disqualified to be a driver of the vehicle. In other words, a person once duly licensed and not disqualified is not excluded from being a driver of the vehicle( 13 ) UNDOUBTEDLY, Mr. Trivedi relied on the words of this part so as to contend that such a person must be the holder of a permanent driving licence other than a learners licence, but as we have seen, the category of licences does admit the holder of a permanent driving licence and statutes like the provisions of section 96 (2) (b) (ii) of the Act use the phrase duly licensed that includes even the holder of a learners licence. The intention of the latter clause in the provise of the policy, with which we are concerned, is obvious, in that if the person had held a licence or as such was duly licensed and is not disqualified from holding such a licence, then he could be the driver of the vehicle. If this intention is discernible in the second part of the proviso, then on the facts available in the present case, it can be said that the driver of the vehicle had held a learners licence and was not disqualified from holding such a licence. Such a driver was consequently not excluded by the terms of the policy. What appears to us obvious from the terms of the latter clause of the proviso is that the emphasis is on the holder of the licence who is not disqualified to hold such a licence. This intent is inferable because the first part of the proviso deals with the holder of the licence as such which would include the holder of a learners licence. The second part can be read reasonably so as to include those classes of cases where the licence was not actually in force and was not held but was once held and there was no disqualification from holding such a licence. No doubt, there is much force in the submissions of Mr. Trivedi that this part of the proviso refers to a permanent driving licence and excludes a learners licence for the purpose of capacity along with the want of disqualification. But, as we have indicated, to so read the clauses would be reading something which is not in existence in law, in that a permanent driving licence and to exclude the licensing process as not covered by the learners licence. Furthermore, if for the first part the learners licence could be the part of the licensing, we fail to see how it would not form part of the latter clause. In the light of the provisions of section 96 (2) (b) (ii) of the Act, it is consistent to read the disjunctive part as intending and operating upon the disqualification of drivers who had once been duly licensed. The driving of a vehicle by such a person, we think, who has duly licensed and who was not disqualified is not at any rate clearly excepted by Clause (3) (b) of the General Exceptions available in the policy.( 14 ) AS we have indicated above, Jaysing Jadhav did hold a licence in 1977 and immediately after the accident within a few days was given a regular income. There is no evidence of his disqualification to hold such a licence. Therefore, he would be in the permissive category of the drivers and as such not excepted by the conditions of the policy. At any rate, we feel by use of the words a permanent driving licence (other than a learners licence) and is not disqualified from holding such a licence, an ambiguity is introduced by the latter part of the proviso, the advantage of which cannot be taken by the Insurance Company while setting up the statutory defence under section 96 (2) (b) (ii) of the Act. The burden to establish the limited defence in law is on the Insurance Company and it has to satisfactorily and beyond ambiguity establish that there had been a breach of the specified condition of the policy which imposes the condition excluding driving by the persons of the kind mentioned by section 96 (2) (b) (ii) of the Act. Here we find, by reason of the latter part, that person who once held a licence and are not disqualified are permitted to be the drivers. If they are so permitted, the exclusion contemplated bye (ii) cannot be easily read. If there be ambiguity, the defence of the kind taken by the Insurance Company would not be upheld.( 15 ) GENERALLY stated, such clause of the policy should receive the interpretation consistent with the intent of the parties to the contract and also to further the objects of the statute. This should particularly be so when contracts are in printed form and issued in usual course. If we were to go by the terms of section 96 (2) (b) (ii) of the Act, the exclusion could be of the persons who are not duly licensed or of the persons who had been disqualified, as is mentioned therein. To be within it, the terms of the policy should be specific. The terms of the present proviso are differently worded; and, possibly, do admit a position that the drivers who were once licensed and are not disqualified are not specifically excluded. We would prefer to interpret such a term in the policy document in the light of the purposes of the statute which makes a provision for indemnifying causes involving third parties in accidents and for satisfaction of claims arising therefrom in favour of the party affected rather than to absolve the insurance indemnity.