IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA FAO(MVA) No.284 of 2005 alongwith FAO (MVA) No.285 of 2005. Judgment Reserved on: 8.12.2008. Decided on: 23rd Dec.2008. National Insurance Company (in both cases) …..Appellant. VERSUS 1.Smt.Situ Devi and others in FAO 284/05 2.Sh.Babu Ram and others in FAO 285/05 ..Respondents. Coram The Hon’ble Mr. Justice Deepak Gupta, Judge. Whether approved for reporting?1 Yes For the Appellant: Mr.Bhupinder Pathania, vice Mr.Deepak Bhasin, Advocate. For the Respondents: Mr.Sanjeev Kuthiala, counsel for the claimants. Mr.Vivek Thakur, counsel for owner of Jeep. Deepak Gupta,Judge The aforesaid two appeals are being disposed of by one judgment since they arise out of the same accident and identical questions of fact and law are involved in the cases. Briefly stated the facts of the case are that on 16.3.1998 one Roop Lal was driving scooter No.PB-04-A-8085. Chaman Lal was sitting on the pillion of the scooter. When the 1 Whether the reporters of the local papers may be allowed to see the Judgment? Yes …2… scooter reached near Sard Nala (Barmana), a Jeep bearing No.HP- 02-3847 came from the opposite side. A collision took place between the two vehicles. Roop Lal suffered injuries in the accident. He was thereafter shifted to the A.C.C. Hospital at Barmana and then to PGI Chandigarh but unfortunately he succumbed to his injuries on 28.3.1998. Claim Petition No.147/98 was filed by the dependents i.e. widow, two minor children and mother of Roop Lal, out of which FAO No.284 of 2005 arises and Claim Petition No.146 of 1998 out of which FAO No.285 of 2005 arises was filed by Babu Ram owner of the scooter claiming damages caused to his scooter. The Jeep (Taxi) bearing No.HP-02-3847 was insured with the National Insurance Company. The learned Tribunal awarded Rs.4,68,000/- to the heirs of Roop Lal and awarded Rs.17,685/- in favour of Sh.Babu Ram owner of the scooter. Aggrieved by the said awards the Insurance Company has filed these two appeals. It is not necessary to give detailed facts of the cases since the only point raised by the Insurance Company in these appeals is that it could not have been held liable to satisfy the award since the driver of the taxi Sh.Pawan Kumar did not possess valid and effective driving licence on the date of accident. The undisputed facts are that the driving licence of Sh.Pawan Kumar Ext.RW-2/A had expired on 27.5.1997. The accident took place on 16.3.1998. The driving licence was got renewed on 18.4.1998 after the accident had taken place. The learned Tribunal held the Insurance Company liable to pay the amount on the ground that the driver already had a driving licence …3… and was not disentitled from getting the same renewed and therefore the fact that his license had not been renewed on the date of the accident would not be sufficient to absolve the Insurance Company of its liability to satisfy the award. Before considering the rival contentions of the parties, it would be pertinent to refer to the provisions of the Insurance Policy Ex.RW-2/B and the relevant provisions of the Motor Vehicles Act. The relevant portion of the Policy relating to the person(s) permitted to drive the insured vehicle, reads as follows: “Any person including insured provided that a person driving holds an effective driving licence at the time of the accident and is not disqualified from holding or obtaining such a licence.” Section 149(2) of the Motor Vehicles Act provides that the Insurance Company is entitled to defend the action on the grounds specified therein. The relevant portion of the Act permits the Company to defend the cause on proof of the following grounds: (a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely: XXX XXXX XXX XXX XXX XXX (ii) a 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; or” …4… Section 2(10) of the Motor Vehicles Act defines driving license as follows: “2(10) “driving licence” means the licence issued by a competent authority under Chapter II authorizing the person specified therein to drive, otherwise than as a learner, a motor vehicle or a motor vehicle or any specified class or description.” According to Section 3 of the Motor Vehicles Act, no person is entitled to drive a motor vehicle unless he holds an effective driving license authorizing him to drive such a class of vehicles. Section 9 of the Motor Vehicles Act provides that any person who is not disqualified for holding or obtaining a driving license may apply and obtain a driving license. Section 9(3), in so far it is relevant, reads as follows: “9(3) If the applicant passes such test as may be prescribed by the Central Government, he shall be issued the driving licence: Provided that no such test shall be necessary where the applicant produces proof to show that--- (a)(i) the applicant has previously held a driving licence to drive such class of vehicle and that the period between the date of expiry of that licence and the date of the application does not exceed five years, or” Section 14 of the Motor Vehicles Act deals with the currency of license to drive motor vehicles. It provides different time periods for which different licenses for different classes of vehicles shall be valid. In the present case, the license issued was valid only …5… up to 27.5.1997 and admittedly the accident took place on 16.3.1998. The proviso to this Section reads as follows: “Provided that every driving licence shall, notwithstanding its expiry under this sub-section, continue to be effective for a period of thirty days from such expiry.” Section 15 of the Motor Vehicles Act provides for renewal of driving licenses. Section 15(1), insofar as it is relevant to the present case, reads as follows: “15(1) Any licensing authority may, on application made to it, renew a driving licence issued under the provisions of this Act with effect from the date of its expiry: Povided that in any case where the application for the renewal of a licence is made more than thirty days after the date of its expiry, the driving licence shall be renewed with effect from the date of its renewal.” Section 19 provides for the various circumstances under which the licensing authority can disqualify the license holder. It is in the light of the aforesaid statutory provisions that the contentions of the parties have to be considered. Mr. Bhupinder Pathania, learned counsel appearing on behalf if the Insurance Company, contends that if the renewal is not done within 30 days then thereafter the license holder holds no driving license and it cannot be said that he either holds an effective driving license or that he is duly licensed to drive the vehicle. He submits that, in fact, the driver holds no license at all after the expiry …6… of 30 days and the renewal of license after 30 days can be effective only from the date the license is renewed. On the other hand counsel for the respondents submit that even though the driving licence may have expired on the date of the accident the Insurance Company is liable in view of the provisions of Sections 14 and 15 of the Motor Vehicles Act. According to them once the licence is renewed it shall relate back to the date of expiry. The observations of the Apex Court in National Insurance Co. Ltd. versus Swaran Singh and others (2004) 3 Supreme Court Cases 297 on this issue are very relevant. In para- 4, the Apex Court has clearly stated that one of the questions raised before it was of cases where although license was granted to the driver concerned but on expiry thereof the same had not been renewed. The relevant observations of the Apex Court relatable to the present case are in paras-41, 45 and 46. The same read as follows: “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. XXXX XXXX XXXXX XXXXX …7… 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 therefore. 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. 46. Section 15 of the Act does not empower the authorities to reject an application for renewal only on the ground that there is a break in validity or tenure of the driving licence has lapsed, as in the meantime the provisions for disqualification of the driver contained in Sections 19, 20, 21, 22, 23 and 24 will not be attracted, would indisputably confer a right upon the person to get his driving licence renewed. In that view of the matter, he cannot be said to be delicensed and the same shall remain valid for a period of thirty days after its expiry.” From a perusal of the bare provisions of the Motor Vehicles Act as well as the judgments of the various Courts and especially the observations of the Apex Court in Swaran Singh’s case (supra), it is clear that the Insurance Company can defend an action on the ground that the petitioner was not duly licensed on the date of the accident. Can a person whose license has expired and not renewed within thirty days of its expiry, as provided under Sections 14 and 15 of the Motor Vehicles Act, be considered to be …8… duly licensed on the date of the accident? In my humble opinion, the answer to this question has to be in the negative. The Apex Court in Swaran Singh’s case (supra) in paras-45 & 46 quoted above has clearly laid down that the license remains valid only for a period of thirty days from the date of its expiry. The question as to what happens if the license is not renewed within thirty days has not been answered in this judgment. From the bare reading of Sections 14 & 15 of the Act as well as the interpretation given by the Hon’ble Supreme Court there can be no manner of doubt that after thirty days of the expiry of the licence there is no valid driving license. The driver has neither an effective driving license nor can he be said to be duly licensed. It would run counter to the very provisions of the Motor Vehicles Act if it is held that though the license had expired and had not been renewed even within the time allowed in law, the driver is duly licensed. A driver, who permits his license to expire and does not get it renewed till after the accident, cannot claim that it should be deemed that the license is renewed retrospectively. The proviso to Section 15 of the Motor Vehicles Act clearly provides that if the license is not renewed within thirty days of its expiry, the driving license shall be renewed with effect from the date of its renewal. This renewal can never be retrospective. Therefore, it has to be held that if the driving license is not renewed within thirty days it will only be a valid driving license from the date of its renewal. The driver cannot be deemed to be duly licensed on the date of accident if thirty days have already …9… expired from the date of expiry of his license and the same has not been renewed within thirty days. The other contention of Mr.Vivek Thakur is that the Insurance Company must not only prove that the driver was not duly licensed but must also prove that he was disqualified from holding such a license. This contention cannot be accepted. The policy condition in the present case is very clear. According to it, the person must hold a valid driving license and should also not be disqualified from holding or obtaining such a driving license. If either of the conditions is not satisfied the Insurance Company can defend the action on the ground that there is violation of the terms of the policy and the provisions of the Motor Vehicles Act. The Apex Court in Swaran Singh’s case (supra) has clearly held that Clause (a) of Section 149(2) is disjunctive in nature. The Insurance Company can avoid its liability either by showing that a named person was driving the vehicle or that it was being driven by a person who did not have a duly granted license or that the driver is a person disqualified for holding or obtaining a driving license. Reading both the policy and the Motor Vehicles Act conjointly the only reasonable interpretation is that the Insurance Company could avoid its liability if it could prove any of these three conditions. One can imagine of a situation where even though a person may have a valid license, he, in fact, is disqualified from holding the same. For example, a 16 years old person by misrepresenting his age or filing forged documents obtains the driving license by showing that his age is 18 years. In this case …10… even though the driver had a valid driving license, the Insurance Company can avoid its liability if it shows that the driver in fact was not qualified to obtain such a license. Similarly, even after license has been acquired a person may acquire a disability which would disentitle him to hold such a license. He may suffer physical impairment to such an extent that he is not legally permitted to hold a driving license. Therefore, a disqualification acquired during the validity of the driving license is also sufficient to bring the exclusion clause into operation. In view of the above discussion, it is abundantly clear that the arguments raised by the Insurance Company have to be accepted. In order to enforce the award against the Insurance Company the Court must be satisfied that the driver was duly licensed on the date of accident. Even if he is duly licensed, it is open to the Insurance Company to establish by leading appropriate evidence that he was either disqualified from obtaining such license or that he has been disqualified for retaining such a license due to physical or legal disability. To hold otherwise would amount to giving premium to persons who do not follow the Rule of Law. The next submission made is that since the Motor Vehicles Act is a beneficial piece of legislation it must be construed in favour of the claimants. There can be no doubt that in case two interpretations are possible the one which is in favour of the claimants should be given. However, it would be too much to hold that violence should be done to the clear and plain language of the statute. The Court can protect the rights of the claimants by asking …11… the Insurance Company to deposit the amount and recover it from the insured. However, there can be no sympathy with the owner or driver who violates the law. Sympathy can only be with the victims of the accident. It is their rights which have to be protected and not the rights of the owners of vehicles. If the contention of the learned counsel is accepted then people will feel free to drive vehicles without any license. The last contention raised on behalf of respondent No.3 is that since the driver had at one time held a valid driving license, therefore, there is no breach of policy on the part of the insured. Reliance is placed upon the judgment of the Apex Court in Skandia Insurance Co. Ltd. versus Kokilaben Chandravadan, 1987 ACJ 411 (SC); Sohan Lal Passi versus P. Sesh Reddy, 1996 ACJ 1044 (SC); and Swaran Singh’s case (supra). No doubt, the law is well settled that the Insurance Company must prove that the insured is guilty of breach of policy. How and in what manner the breach is to be proved is a matter to be decided on the facts and circumstances of each case. The Apex Court in Swaran Singh’s case (supra) while holding that the breach has to be proved by the Insurance Company also held as follows: “(iv) The insurance companies are, 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 said burden would be discharged, inasmuch as …12… the same would depend upon the facts and circumstances of each case. XXXX XXXX XXXX XXXX (vii) If a vehicle at the time of accident was driven by a person having a learner’s licence, the insurance companies would be liable to satisfy the decree.” When an employer employees a driver, it is his duty to check that the driver is duly licensed to drive the vehicle. Section-5 of the Motor Vehicles Act provides that no owner or person incharge of a motor vehicle shall cause or permit any person to drive the vehicle if he does not fulfill the requirements of Section 3 and 4 of the Motor Vehicles Act. The owner must show that he has verified the license. He must also take reasonable care to see that his employee gets his license renewed within time. In my opinion, it is no defence for the owner to plead that he forgot that the driving license of his employee had to be renewed. A person when he hands his motor vehicle to a driver owes some responsibility to society at large. Lives of innocent people are put to risk in case the vehicle is handed over to a person not duly licensed. Therefore, there must be some evidence to show that the owner had either checked the driving license or had given instructions to his driver to get his driving license renewed on expiry thereof. In the present case, no such evidence has been led. In view of the above discussion, I am clearly of the view that there was a breach of the terms of the policy and the Insurance Company could not have been held liable to satisfy the …13… claim. This Court has taken the same view in FAO NO.355 of 1998 titled National Insurance Company vs. Amar Chand and others decided on 24.6.2005. It stands proved that the vehicle in question was originally owned by Sh.Lekh Ram who had transferred it to Sh.Pawan Kumar. However, in the registration certificate the vehicle continued to be in the name of Sh.Lekh Ram whereas Pawan Kumar was driving the vehicle. Therefore, it is only respondents Lekh Ram and Pawan Kumar who shall be jointly and severally liable to pay the compensation. It has been urged on behalf of the respondents that Lekh Ram had transferred the vehicle in question before the accident to Pawan Kumar. Even if that is accepted to be correct then also Lekh Ram cannot be absolved of the liability since he still continues to be shown as the registered owner of the vehicle. This matter has been dealt with by this Court in detail in Shiv Lal vs. Kahnu Ram and others, 2006 ACJ 2465, wherein after discussing a number of judgments it has been held as follows: “The law, therefore, is now clear that both the defacto owner as well as the owner shown as such in the registration certificate are liable so far as third parties are concerned……” It is thus clear that both of them are responsible. It has been urged by Sh.Sanjeev Kuthiala, learned counsel for the claimants that since the Insurance Company has deposited the awarded amount, the same may be paid to the claimants and the Insurance Company may be given the right to …14… recover the same from the insured. Once there is a clear cut breach of the policy it is not possible to direct the Insurance Company to pay the amount. In this case there is one more reason. The violation is by Sh.Pawan Kumar who was both owner-cum-driver of the vehicle. When the owner himself violates the conditions of the policy the Insurance Company, in my opinion, cannot be directed to pay or deposit the amount. However, I do feel that the amount, if any, released to the claimants may not be recovered from them by the Insurance Company. The claimants may recover the entire awarded amount after adjusting the amount if any released to them from respondents Lekh Ram and Pawan Kumar. The Insurance Company shall have the right to recover the amount already paid to the claimants along with interest from the respondents Lekh Ram and Pawan Kumar. In view of the above discussion, the appeals are allowed in the aforesaid terms with no order as to costs. ( Deepak Gupta ) December 23, 2008 Judge. PV