IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. FAO No. 162 of 2010 Date of Decision: 28.7.2011. The New India Assurance Co. Ltd. ….Appellant. Versus. Usha Devi & Ors. …Respondents. Coram: The Hon’ble Mr. Justice Deepak Gupta, Judge. Whether approved for Reporting? Yes. For the Appellant: Mr. Praneet Gupta, Advocate. For the Respondents: Mr. Tara Singh Chauhan, Advocate for respondents No. 1 to 7. None for respondent No.8. Mr. Vikram Thakur, Advocate for respondents No. 9 & 10. Deepak Gupta, J. (Oral) 1. This appeal by the insurance company is directed against the award passed by the learned Motor Accident Claims Tribunal, Una in M.A.C. Petition No. 32 of 2008 decided on 20.3.2010. 2. The first question which arises for consideration is, whether the driver held a valid driving licence entitling him to drive a transport vehicle or not at the relevant time. The second 2 question is, whether the insurance company can be held liable to satisfy the award, even if the driver was not holding a valid driving licence. 3. As far as the first question is concerned, the admitted facts are that the vehicle involved in the accident was a transport vehicle. This is also apparent from the registration certificate of the vehicle Ext. R-4 that the vehicle is a light goods vehicle which is obviously a transport vehicle. The accident in question out of which these proceedings arise took place on 8th June, 2006. The driving licence of the driver Shri Desh Raj has been proved on record as Ext. R-3 which shows that it was issued in the year 2002 and Shri Desh Raj was authorised in terms of this licence to drive a light motor vehicle. The endorsement to drive a transport vehicle was incorporated in the licence w.e.f. 14th June, 2007, i.e. one year after the accident had taken place. Thus it is apparent that at the time when the accident took place, there was no endorsement on the licence entitling the driver to drive a transport vehicle. 4. The question whether a person holding a licence to drive a Light Motor Vehicle is entitled or not entitled to drive a transport vehicle has been the subject matter of a number of decisions. 3 5. A Full Bench of this Court dealt with a similar question and disposed of the reference in view of the judgments of the Apex Court rendered in National Insurance Co. Ltd. V. Kusum Rai and others, (2006) 4 SCC 250 & National Insurance Company Ltd. V. Annappa Irappa Nesria and others, (2008) 3 SCC 464. 6. It is contended by Mr. Praneet Gupta, Advocate that the present case is squarely covered by the judgment rendered in Annappa Irappa’s case. On the other hand the contention of learned counsel for the respondents is that the case is squarely covered by Kusum Rai’s case. 7. In Kusum Rai’s case (supra) the Apex Court was dealing with the question as to whether the Insurance Company could be held liable in a case where the driver driving the taxi, a commercial vehicle, did not hold a driving licence entitling him to drive a commercial vehicle. In para 11, the Apex Court held as follows: “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.” 4 8. Thereafter, the Apex Court in New India Assurance Company Ltd. Vs. Prabhu Lal, (2008) 1 SCC 696, also took a similar view. However, it would be pertinent to mention that, that this case arose out of proceedings under the Consumer Protection Act. The Apex Court in that case held as follows: “33. In our considered view, the State Commission was wrong in reversing the finding recorded by the District Forum. So far as Ashok Gangadhar is concerned, we will deal with the said decision little later but from the documentary evidence on record and particularly, from the permit issued by the Transport Authority, it is amply clear that the vehicle was a 'goods carrier' [Section 2(14)]. If it is so, obviously, it was a 'transport vehicle' falling under clause (47) of Section 2 of the Act. The District Forum was, therefore, right in considering the question of liability of the Insurance Company on the basis that Tata 709 which met with an accident was 'transport vehicle'. 38. We find considerable force in the submission of the learned counsel for the Insurance Company. We also find that the District Forum considered the question in its proper perspective and held that the vehicle driven by Ram Narain was covered by the category of transport vehicle under Clause (47) of Section 2 of the Act. Section 3, therefore, required the driver to have an endorsement which would entitle him to ply such vehicle. It is not even the case of the complainant that there was such endorsement and Ram Narain was allowed to ply transport vehicle. On the contrary, the case of the complainant was that it was Mohd. Julfikar who was driving the vehicle. To us, therefore, the District Forum was right in holding that Ram Narain could not have driven the vehicle in question. 41. In our judgment, Ashok Gangadhar did not lay down that the driver holding licence to drive a Light Motor Vehicle need not have an endorsement to drive transport vehicle and yet he can drive such vehicle. It was on the peculiar facts of the case, as the Insurance Company neither pleaded nor proved that the vehicle was transport vehicle by placing on record the permit issued by the Transport Authority that the Insurance Company was held liable.” 9. If the matter had ended here the case could have been decided very easily but the Apex court in National Insurance Company Ltd. V. Annappa Irappa Nesria and others, (2008) 3 SCC 464 has not only considered these points but also considered the effect of the amendment made in the Motor Vehicles Act. 5 After considering the entire law the Apex Court held as follows: “20. From what has been noticed hereinbefore, it is evident that 'transport vehicle' has now been substituted for 'medium goods vehicle' and 'heavy goods vehicle'. The light motor vehicle continued, at the relevant point of time, to cover both, 'light passenger carriage vehicle' and 'light goods carriage vehicle'. A driver who had a valid licence to drive a light motor vehicle, therefore, was authorised to drive a light goods vehicle as well. 21. The amendments carried out in the Rules having a prospective operation, the licence held by the driver of the vehicle in question cannot be said to be invalid in law.” 10. The Apex Court therefore held that w.e.f. 28.3.2001 the endorsement to drive a transport vehicle is necessary but prior to that date such endorsement was not necessary since a light motor vehicle in its definition as it existed prior to said date included a light transport vehicle. It is thus obvious that the endorsement is required only after 28.3.2001. 11. In Oriental Insurance Co. Ltd. vs. Angad Kol and others, 2009 ACJ 1411, the Apex Court again held that when a driver is given a licence to drive a Light Motor Vehicle (LMV) it would include in its ambit both transport and non-transport vehicles. The Apex Court further went on to hold that for the licence to be effective it should be expressly stated or it should be clearly implied that the licence is valid to drive a transport or non-transport vehicle. In that case, the licence had been issued for LMV only and was valid for 20 years. The Apex Court held that this means that the licence had been issued for a non-transport vehicle 6 since a licence for a transport vehicle could only be issued for only three years at a time. It, therefore, went on to hold that the driver did not hold a valid and effective driving licence to drive a transport vehicle. 12. Therefore, following the decision of the Apex Court in National Insurance Company Ltd. V. Annappa Irappa Nesria and others, (2008) 3 SCC 464 it is held that the Insurance Company is not liable to indemnify the insured and is not liable to pay the amount of compensation since the accident in the present case occurred after 29.3.2001. 13. It is indeed surprising that the learned Tribunal has noticed the judgment in Nesaria’s Case (Supra), wherein the Apex Court clearly held that the amended provision would only have prospective effect. Despite noticing the said judgment, the learned Tribunal erred in holding that the Apex Court had held the insurance company liable. In that case, the accident had taken place prior to 2001 and it was in that context that the insurance company was held liable. 14. The second question raised before me is, whether the insurance company should be asked to satisfy the award and recover the amounts from the insured. 7 15. Mr. Tara Singh Chauhan, learned counsel for the claimants has placed reliance on the judgment of the Apex Court in Kusum Lata and others Vs. Satbir and others, AIR 2011 Supreme Court 1234, relevant portion of which reads as follows:- “ x x x x x x x x x x x x x x x x x x xx x x x x x x x x x x x x x x x 13. In respect of the dispute about licence, the Tribunal has held and, in our view rightly, that the Insurance Company has to pay and then may recover it from the owner of the vehicle. This Court is affirming that direction in view of the principles laid down by a three-Judge Bench of this Court in the case of National Insurance Company Limited v. Swaran Singh and others, reported in (2004) 3 SCC 297 (AIR 2004 SC 1531). 14. The appeal is, therefore, allowed. The judgments of the Tribunal and the High Court are set aside. The Insurance Company is to pay the aforesaid amount in the form of a bank draft in the name of appellant No.1 with interest as aforesaid within a period of six weeks from date and deposit the same in the Tribunal. This direction should be strictly complied with by the Insurance Company. x x x x x x x x x x x x x x x x x x x x x” 16. On the other hand Mr. Praneet Gupta, learned counsel for the appellant has relied upon a judgment delivered by this Court itself in The Oriental Insurance Co. Ltd. Vs. Smt. Meera and others, Latest HLJ 2010 (HP) 156 wherein this Court held that this Court cannot direct the insurance company to satisfy the award once it has not been held liable. The reasoning given by this Court was based on the judgment of the apex Court in Civil Appeal arising out of SLP (C) No. 10694. 17. In the aforesaid case the Apex Court had set aside the similar directions of this Court directing the insurance company to satisfy the award on the ground that the Apex Court had given directions in various 8 cases in exercise of its powers under Article 142 of the Constitution and such powers are not vested in the High Court. 18. Now, the Apex Court in Kusum Lata & Ors. Vs. Satbir and Ors., AIR 2011 Supreme Court 1234 has clearly held that in a case where there is violation of the driving licence, then the insurance company can be asked to satisfy the award with liberty reserved to it to recover the amount from the owner of the vehicle. Following the ratio of the Apex Court, the insurance company is directed to satisfy the award but it shall be at liberty to recover the same from the owner. It is clarified that the insurance company will not have to file a separate suit or proceedings to recover the amount and can recover the amount from the owner by filing execution proceedings before the learned Tribunal. 19. In view of the aforesaid discussion, the appeal stands disposed of. No costs. (Deepak Gupta), Judge 28th July, 2011. (Krn Guleria)