FAO No.3656 of 2008 -: 1 :- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH FAO No.3656 of 2008 (O&M) Date of decision: December 10, 2009. Oriental Insaurance Co. Ltd. ...Petitioner(s) v. Rama Devi & Ors. ...Respondent(s) CORAM:HON'BLE MR. JUSTICE RAKESH KUMAR GARG Present: Shri D.P. Gupta, Advocate, for the appellant. Shri Sanjeev Patyal, Advocate, for respondent No.1. Shri Rahul Chhatwal, Advocate for respondents No.2 & 3. Rakesh Kumar Garg, J. This judgment shall dispose of FAO Nos.3656 and 3657 of 2008 as common questions of law on same facts arising out of the same accident has arisen in both these appeals. These appeals have been filed by the insurer challenging the impugned award whereby the appellant has been held liable jointly and severally to pay compensation to the claimants as assessed by the Tribunal. As per the averments, on 2.6.2007, one Vijay Kumar (deceased) and injured/claimant Rama Devi were going from their house to Una on Nangal-Una road on motorcycle bearing registration No.HP-19-2596. When they reached near Shivalik Avenue Chowk, Naya Nangal, one Mahindra Utility Jeep bearing registration No.CH-03-J-7461 which was FAO No.3656 of 2008 -: 2 :- coming from opposite direction and was being driven by Subhash Chand (respondent No.3) at a very high speed and in a rash and negligent manner, hit from wrong side against the motorcycle, as a result of which Vijay Kumar and his wife Rama Devi fell down on pucca road and thereafter driver of the jeep along with the vehicle fled from the spot. Vijay Kumar and his wife received multiple serious and grievous injuries. Vijay Kumar succumbed to his injuries on 7.6.2007. Rama Devi became permanently disabled due to the injuries sustained by her in the accident. Hence, these claim petitions. Upon notice, respondents No.2 and 3 filed joint written statement denying the accident. In a separate written statement, the appellant raised various preliminary objections including the ground that driver Subhash Chand was not holding a valid and effective driving licence at the time of the alleged accident. On merits all the material averments of the claim petition were denied with a prayer to dismiss the same. On appreciation of the evidence, the Tribunal vide impugned awards held that the accident in question occurred due to the rash and negligent driving of respondent Subhash Chand. It was further held that the claimants were entitled to the compensation and the appellant along with driver and owner of the offending vehicle were liable to pay jointly as well as severally, compensation to the claimants. It was also held by the Tribunal that the accident in question occurred due to the rash and negligent driving of respondent Subhash Chand. Feeling aggrieved from the aforesaid findings, the insurance company has filed the present appeals on the ground that the Tribunal has erred at law while fastening the liability to pay compensation upon the FAO No.3656 of 2008 -: 3 :- insurer as it was proved on record that the driver of the offending vehicle was not having a valid and effective driving licence at the time of accident. Elaborating his argument, learned counsel for the appellant has argued that it was proved on record that the driver of the offending vehicle was having a driving licence for a light motor vehicle (non-transport) whereas the vehicle being driven by the driver was a light motor vehicle (transport). Thus, there was a clear breach of policy condition by the owner of the vehicle and as per settled law, a driving licence specifically granted for a non-transport vehicle cannot be considered valid for a transport vehicle and, therefore, judgment of the Tribunal is liable to be set aside. In support of his case, the learned counsel has also relied upon a judgment of the Hon'ble Supreme Court in the case of Oriental Insurance Co. Ltd. v. Angad Kol and others, 2009 ACJ 1411, On the other hand, learned counsel for the respondent No.2 and 3 while raising rival contentions has not disputed that the offending vehicle is light motor vehicle (transport) and the respondent No.3 was authorized to drive LMV (NT), however, he argued that if the driver of the vehicle is possessing light motor vehicle licence, he is authorized to drive a light goods carriage vehicle as well. In support of his case, learned counsel for the respondents has relied upon judgment of the Hon'ble Supreme Court in Ashok Gangadhar Maratha v. Oriental Insurance Co. Ltd., AIR 1999 SC 3181 and National Insurance Company v. Annappa Irappa Nesaria, 2008(1) RCR (Civil) 848. Facts of this case are not in dispute. It is apparent from Ex.R3 the copy of registration certificate that the vehicle in question is LMV T, i.e., light motor vehicle transport. The driving licence of the respondent FAO No.3656 of 2008 -: 4 :- No.3 shows that he was authorized to drive light motor vehicle, but non transport. Motor Vehicles Act, 1988 (hereinafter called as `the Act') was enacted to consolidate and amend the law relating to motor vehicles. "Goods carriage" has been defined in Section 2(14) to mean any motor vehicle constructed or adapted for use solely for the carriage of goods, or any motor vehicle not so constructed or adapted when used for the carriage of goods. The said Act also defines `heavy goods vehicle', `heavy passenger motor vehicle', `medium goods vehicle' and `medium passenger motor vehicle' as well as a `light motor vehicle' in Section 2(21) of the Act to mean: " `light motor vehicle' means a transport vehicle or omnibus the gross vehicle weight of either of which or a motor car or tractor or road-roller the unladen weight of any of which, does not exceed 7500 kilograms." In Ashok Gangdhar Maratha's case, vehicle in question was a 'light motor vehicle' weighing less than 6000 kilograms and the driver of the aforesaid vehicle was holding a driving licence to drive 'light motor vehicle' only. The accident had taken place on 26.11.1991 and the vehicle was completely damaged. The insurer refused to honour its commitment of indemnifying the own damage cover under the insurance policy. While accepting the claim of the owner, the State Consumer Commission negatived the plea of the insurer that the vehicle was not being driven by a person having an effective driving licence. Appeal filed by the insurer was accepted by the National Commission holding that the driver of the FAO No.3656 of 2008 -: 5 :- aforesaid vehicle, who was holding a driving licence for light motor vehicle only, was not authorized to drive a transport vehicle and, thus, the insured had committed breach of the terms of the policy and violated the provisions of Motor Vehicles Act, 1988 in entrusting a transport vehicle to a person who was not holding a valid driving licence to drive a transport vehicle and as a consequence thereof, the insurer was not liable to indemnify the insured in respect of the own damage claim. It is also not in dispute that legal representatives of the driver had filed a petition under the Motor Vehicles Act for compensation which was resisted by the insurer on the ground that the driver of the vehicle did not possess a valid driving licence to drive the vehicle and the aforesaid plea of the insurer was rejected by the Claims Tribunal and compensation was allowed to the legal representatives of the driver and no appeal was preferred by the insurer in that case. On the basis of the aforesaid facts and keeping in view the provisions and the fact that it was the case of the insurer itself that in the case of a light motor vehicle which is a non-transport vehicle, there was no statutory requirement to have specific authorization on the licence of the driver under Form VI of the Rules. The Apex Court observed as under:- “10. Definition of "light motor vehicle" as given in clause (21) of Section 2 of the Act can apply only to a "light goods vehicle" or a "light transport vehicle". A "light motor vehicle" otherwise has to be covered by the definition of "motor vehicle" or "vehicle" as given in clause (28) of Section 2 of the Act. A light motor vehicle cannot always mean a light goods carriage. Light motor vehicle can be non- FAO No.3656 of 2008 -: 6 :- transport vehicle as well. 11. To reiterate, since a vehicle cannot be used as transport vehicle on a public road unless there is a permit issued by the Regional Transport Authority for that purpose, and since in the instant case there is neither a pleading to that effect by any party nor is there any permit on record, the vehicle in question would remain a light motor vehicle. The respondent also does not say that any permit was granted to the appellant for plying the vehicle as a transport vehicle under Section 66 of the Act. Moreover, on the date of accident, the vehicle was not carrying any goods, and thought it could be said to have been designed to be used as a transport vehicle or goods-carrier, it cannot be so held on account of the statutory prohibition contained in Section 66 of the Act. Xxxx xxxxx xxxxx xxxxx 14. Now the vehicle in the present case weighed 5,920 kilograms and the driver had the driving licence to drive a light motor vehicle. It is not that, therefore, the insurance policy covered a transport vehicle which meant a goods carriage. The whole case of the insurer has been built on a wrong premise. It is itself the case of the insurer that in the case of a light motor vehicle which is a FAO No.3656 of 2008 -: 7 :- non-transport vehicle, there was no statutory requirement to have specific authorisation on the licence of the driver under Form 6 under the Rules. It has, therefore, to be held that Jadhav was holding effective valid licence on the date of accident to drive light motor vehicle bearing Registration No. KA-28-567.” In National Insurance Company Ltd. v. Annappa Irappa Nesaria and Ors. 2008(1) RCR (Civil) 848, the vehicle involved in the accident was a matador van which had a 'Goods Carriage' permit granted in terms of Form No.7 of the Motor Vehicles Act. The said vehicle met with an accident on 9.12.1999 causing death of one Gangawwa. A contention was raised on behalf of the insurer that the driver of the said vehicle did not possess an effective licence to drive a transport vehicle. However, the Tribunal rejected the aforesaid contention of the insurer. In appeal before the High Court, the arguments of the insurer was rejected in view of the fact that claimants were third parties and even on the ground that there is a violation of the terms and conditions of the policy, the insurance company could not be permitted to contend that it has no liability. Before the Hon'ble Supreme Court, argument was raised on behalf of the insurer that a light motor vehicle cannot be a transport vehicle within the meaning of the provisions of the Act. Reliance was placed upon various Forms prescribed in terms of the Rules. The aforesaid contention of the insurer was contested by the respondents on the ground that keeping in view the definition of the “light motor vehicle” as contained in Section 2(21) of the Act, a “light goods carriage” would come within the purview thereof. It was also further FAO No.3656 of 2008 -: 8 :- contended that a “light goods carriage” having not been defined in the Act, the definition of the “light motor vehicles” clearly indicates that it takes within its umbrage both a transport vehicle and a non-transport vehicle. The Apex Court after noticing various provisions of the Act and the Rules framed thereunder, observed as under:- "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 authorized to drive a light goods vehicle as well. 17. 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.” Thus, the aforesaid judgments are of no help to the respondent as the same were passed keeping in view the provisions/Rules prior to 28.3.2001 and the facts of these cases. No doubt the definition of the `light motor vehicle' brings within its umbrage both `transport vehicle' or `omnibus', but a distinction between an effective licence granted for transport vehicle and passenger motor vehicle exists as per the provisions of the Motor Vehicles Act, 1988 which can be seen from the following provisions of the Act. `Driving licence' has been defined in Section 2(10) to mean the licence issued by a competent authority under Chapter II authorizing the FAO No.3656 of 2008 -: 9 :- person specified therein to drive, otherwise than as a learner, a motor vehicle or a motor vehicle of any specified class or description. Section 3 provides for the necessity of driving licence, stating: "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 authorizing him to drive the vehicle; and no person shall so drive a transport vehicle other than a motor car or moter 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." Section 9 provides for grant of driving licence. Section 10 prescribes the form and contents of licences to drive which is to the following effect : "10. Form and contents of licences to drive.-- (1) Every learner's licence and driving licence, except a driving licence issued under section 18, shall be in such form and shall contain such information as may be prescribed by the Central Government. (2) A learner's licence or, as the case may be, driving licence shall also be expressed as entitling the holder to drive a motor vehicle of one or more FAO No.3656 of 2008 -: 10 :- of the following classes, namely:- (a) to (c) ... (d) light motor vehicle; (e) transport vehicle; (i) road Roller; (j) motor vehicle of a specified description." The distinction between a `light motor vehicle' and a `transport vehicle' is, therefore, evident. A transport vehicle may be a light motor vehicle but for the purpose of driving the same, a distinct licence is required to be obtained. The distinction between a `transport vehicle' and a non- transport can also be noticed from Section 14 of the Act. Sub-section (2) of Section 14 provides for duration of a period of three years in case of an effective licence to drive a `transport vehicle' whereas in case of any other licence, it may remain effective for a period of 20 years. The Apex Court, in Angand Kol's case (supra), after considering the aforesaid various provisions of the Motor Vehicles Act, 1988 and the Rules framed thereunder has held that Section 3 of the Act requires the driver to have a specific endorsement which would entitle him to ply such vehicle. The effect of the different terms of licences granted in terms of the provisions of Section 2(14) and 2(47) was also noticed by the Apex Court in New India Assurance Co. Ltd. v. Prabhu Lal [(2008) 1 SCC 696], wherein it was observed as under: "21. Now, it is the case of the Insurance Company that the vehicle of the complainant which met with FAO No.3656 of 2008 -: 11 :- an accident was a "transport vehicle". It was submitted that the insured vehicle was a "goods carriage" and was thus a "transport vehicle". The vehicle was driven by Ram Narain, who was authorised to drive light motor vehicle and not a transport vehicle. Since the driver had no licence to drive transport vehicle in absence of necessary endorsement in his licence to that effect, he could not have driven Tata 709 and when that vehicle met with an accident, the Insurance Company could not be made liable to pay compensation. XXX XXX XXX 28.The argument of the Insurance Company is that at the time of accident, Ram Narain had no valid and effective licence to drive Tata 709. Indisputably, Ram Narain was having a licence to drive light motor vehicle. The learned counsel for the Insurance Company, referring to various provisions of the Act submitted that if a person is having licence to drive light motor vehicle, he cannot drive a transport vehicle unless his driving licence specifically entitles him so to do (Section 3). Clauses (14), (21), (28) and (47) of Section 2 make it clear that if a vehicle is "light motor vehicle", but falls under the category of transport vehicle, the driving licence has to be duly FAO No.3656 of 2008 -: 12 :- endorsed under Section 3 of the Act. If it is not done, a person holding driving licence to ply light motor vehicle cannot ply transport vehicle. It is not in dispute that in the instant case, Ram Narain was having licence to drive light motor vehicle. The licence was not endorsed as required and hence, he could not have driven Tata 709 in absence of requisite endorsement and the Insurance Company could not be held liable. 29. 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." FAO No.3656 of 2008 -: 13 :- In New India Assurance Co. Ltd. v. Prabhu Lal, [2008]1 SCC 696, the Apex Court distinguished its earlier judgment in Ashok Gangadhar Maratha v. Oriental Insurance [(1999) (6) SCC 620], stating : "In our judgment, Ashok Gangadhar's case, 2000 ACJ 319 (SC) 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." From the discussions made hereinbefore, it is, thus, evident that it is proved that respondent No.3 did not hold a valid and effective driving licence for driving a transport vehicle. Breach of conditions of the insurance policy is, therefore, apparent on the face of the records. Therefore, findings of the Tribunal that the respondents being owner, driver and insurer of the offending vehicle respectively shall be liable to pay the amount of compensation jointly and severally to the claimants, cannot be sustained in this regard. However, keeping in view the judgment of the Hon'ble Supreme Courtin the case of National Insurance Co. Ltd. v. Swaran Singh, 2004 ACJ 1 (SC), the findings of the Tribunal are modified to the extent and held that appellant shall be entitled to recover the amount of compensation from respondents No.2 and 3. These appeals are allowed to the extent as indicated above. December 12, 2009. [ Rakesh Kumar Garg ] kadyan Judge