IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMAN & THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON THURSDAY, THE 10TH SEPTEMBER 2009 / 19TH BHADRA 1931 MACA.No. 2181 of 2007() ----------------------- OPMV.797/2002 of MOTOR ACCIDENT CLAIMS TRIBUNAL, VADAKARA .................... APPELLANT(S): APPELLANT/3RD RESPONDENT: --------------------------------------- THE ORIENTAL INSURANCE COMPANY LIMITED, VADAKARA NOW REPRESENTED BY ITS ASSISTANT MANAGER, REGIONAL OFFICE, METRO PALACE, KOCHI-18. BY ADV. SRI.MATHEWS JACOB, SENIOR ADVOCATE SRI.P.JACOB MATHEW RESPONDENT(S): RESPONDENTS 1 AND 2: ----------------------------------- 1. SHAJEE, S/O. KANARAN, ODICHALIL HOUSE, CHANGAROTH AMSOM, KADIYANGADU P.O., PIN-673 525. 2. PRADEEPAN, S/O. GOVIINDAN NAIR, PARACHALIL, PONMALAPARA, PERAMBRA ESTATE, MUTHUKAD P.O., PIN-673 528. (NO RELIEFS ARE CLAIMED AGAINST THE PETITIONER AND HENCE HE IS NOT MADE PARTY IN THIS APPEAL). ADV. SRI.AVM.SALAHUDIN FOR R1,2 THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD ON 10/09/2009, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: CR P.R.RAMAN & P.R. RAMACHANDRA MENON, JJ. -------------------------------------------------- MACA NO. 2181 OF 2007 ----------------------------------- Dated this the 10th day of September, 2009 J U D G M E N T P.R.RAMACHANDRA MENON, J Whether the Tribunal was right in mulcting the liability on the Insurer (appellant) with regard to the payment of compensation in a road traffic accident, notwithstanding the proven violation of the policy condition regarding the absence of a valid and effective driving licence to drive a 'transport vehicle', is the point raised in the appeal. 2. The accident was on 03.09.2000. The jeep in which the claimant was travelling collided with another jeep bearing No. KL/11 A 8454 insured by the appellant, causing injuries, which led to the claim. The owner of the latter jeep filed written statement contending that the vehicle was being driven by the driver with valid and effective driving licence; that the vehicle was duly insured and that the compensation, if at all payable, was liable to be satisfied by the insurer. 3. The appellant/Insurer contended that the accident happened only because of the negligence on the part of the driver of the other vehicle MACANO.2181/2007 2 in which the injured was travelling; that the driver of the vehicle insured by the appellant did not have a valid and effective driving licence, that the insured - owner of the jeep - had entrusted the same to the driver, knowing that the latter did not have a valid and effective driving licence and hence that no liability could have been fastened on the shoulders of the insurer in view of the violation of the statutory/policy conditions. 4. On conclusion of the trial, the Tribunal passed an award for a total sum of Rs.2,19,126/- and after repelling the contention taken by the insurer, directed the Insurance Company to satisfy the same without even reserving the right of recovery, which hence is sought to be challenged in this appeal. 5. Learned Senior counsel appearing for the appellant submits that the finding of the Tribunal in paragraph 9 of the Award that the driver was liable to be deemed as having had a valid and effective licence at the time of the accident is not correct or sustainable. It has been observed by the Tribunal that Ext.B2 extract of the licence would show that the driver had a licence to drive a 'Light Motor Vehicle' for the period from 26.04.1994 to 27.05.2012 and a 'badge' from 31.11.1995 to 12.11.1998 to drive a 'Transport Vehicle'. It is also observed that the 'badge' was renewed only thereafter, from 04.09.2000 to 03.09.2003, whereas the accident occurred MACANO.2181/2007 3 on 03.09.2000. After referring the the factual position as above, the Tribunal observed that, it cannot be presumed or expected that the owner has to verify the driving licence or badge of the driver every day before entrusting the vehicle to him and so, if the driver was having a valid driving licence/badge at the time he was initially entrusted to drive the vehicle, then, merely for the reason that there was no subsequent renewal of the same during the time of the accident, it can't be inferred that the owner had entrusted the vehicle with the driver knowing fully well that the driver had no valid licence or badge. Accordingly, no right of recovery was reserved in favour of the insurer. 6. Coming to the legal position, currency of driving licence is specified under Section 14 and 'Renewal' is prescribed under Section 15 of the Motor Vehicles Act, 1988. For the purpose of convenience of reference, Section 15(1) is extracted below: S.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 it expiry: Provided 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: xxxxxx xxxxx xxxxx xxxxxx” From the above, it is very much clear that unless an application for renewal is filed within a period of 30 days after the expiry, the same cannot MACANO.2181/2007 4 be renewed with effect from the 'date of expiry' and it can be renewed only with effect from 'the date of renewal'. 7. Coming to the admitted factual position herein, true, the driver was having a licence to drive only a non-transport vehicle, which was valid upto 27.05.2012. With regard to the 'badge' to drive a 'transport vehicle' (admittedly, the vehicle involved is a taxi), badge is being issued only for a period of three years and as observed by the Tribunal the 'badge' issued to the driver was valid from 31.11.1995 to 12.11.1998 and thereafter, the same was renewed only from 04.09.2000 to 03.09.2003. This shows that, on the date of the accident i.e., on 03.09.2000, the driver of the vehicle was not having a valid and effective 'badge' to drive a transport vehicle and as such, there is considerable force in the contention of the Insurance Company as to the 'breach' involved. 8. Coming to the nature of pleadings raised by the insurer, it is very much evident that the insurer has contended in paragraph 3 of the written statement, that the vehicle was being driven without valid licence and 'badge' and that the same was entrusted by the owner, with the driver, knowing fully well that the latter had no valid licence/'badge' and therefore, there is clear violation of the relevant terms and conditions of the policy of insurance and the provisions of the Motor Vehicles Act and Rules. In these MACANO.2181/2007 5 circumstances, it is contended that the Company should be exonerated from liability. 9. The liability of the insurer to satisfy the Award passed by the Tribunal is subject to the statutory grounds of defence as prescribed under Section 149 (2) of the Motor Vehicles Act, where driving by any person who is not 'duly licenced' is very much a valid ground. The term 'duly licenced' has to be read and understood so as to constitute an “effective driving licence”, particularly in view of the mandate under Section 3 of the Motor Vehicles Act, which speaks about the necessity of driving licence making it further clear that no person shall drive a 'transport vehicle' (other than a motor car or motor cycle hired for his own use) unless his driving licence specifically entitled him so to do. The factual position discussed herein clearly shows that the vehicle involved in the instant case was a 'transport vehicle'; the the 'badge' of the driver to drive the 'transport vehicle' was valid only from 31.11.1995 to 12.11.1998; that the same was renewed only from 04.09.2000 to 03.09.2003 and as such, there was no valid and effective driving licence as on the date of the accident which occurred on 03.09.2000. 10. The issue whether the renewal of expired licence sometime after the date of accident is enough, to hold that the driver was not 'duly MACANO.2181/2007 6 licenced' as on the date of the accident, so as to sustain the contention of the insurer to absolve them from the liability had come up for consideration before this Court earlier. After considering the various aspects, a Full Bench of this Court had held in Oriental Insurance Company Ltd. Vs. Poulose [2004 (1) KLT 8] (FB) held that the driver was liable to be considered as 'duly licenced', since he was not disqualified for holding or obtaining driving licence during the period of disqualification. But it has to be borne in mind that, at the time of passing the said verdict, the very same issue had already been dealt with by the Apex Court and as per the judgment rendered in Malla Prakasa Rao Vs. Malla Janaki [2004 (3) SCC 343], it was held that, such a person who got his licence renewed only subsequent to the accident and whose case did not come within the purview of Section 15 of the Motor Vehicles Act could not be held as 'duly licenced' and as such, the insurer was very much entitled to have their defence sustained on establishing the breach. Obviously, the above verdict passed by the Apex Court was not brought to the notice of the Full Bench of this Court while passing the judgment in Oriental Insurance Company Ltd. Vs. Poulose [2004(1) KLT 8] (FB). But since the verdict passed by the Apex Court is the 'law of the land' by virtue of Article 141 of the Constitution of India, we are bound to follow the same. The law in this MACANO.2181/2007 7 regard has been reiterated by the Apex Court in Ishwar Chandra and others Vs. Oriental Insurance Company Ltd. and others [2007 (10) SCC 650]; in National Insurance Company Ltd. Vs. Vidhyadhar Mahariwala and others [2008 (12) SCC 701] and also in Ram babu Tiwari Vs. United India Insurance Company and others [2008 ACJ 2654]. As it stands, the finding rendered by the Tribunal to the contrary, holding that “once a licence, always a licence” is thoroughly wrong and misconceived and it is hereby set aside. It is found that the driver was not having valid and effective driving licence on the date of the accident; i.e., on 03.09.2000 and that there was clear violation of the statutory/policy conditions. 11. Incidentally, reference was also made to the decision of the Apex Court in Swaran Singh's Case [2004 (1) KLT 781] from the part of the respondents, contending that there was no evidence to hold that the accident was because of the absence of driving licence so as to absolve the Insurance Company from the liability. It is true that, a reference has been made by the Apex Court in this regard in Swaran Singh's Case [2004 (1) KLT 781]. Hon'ble Mr. Khare J, who was a party to this judgment in Swaran Singh's case, later in Mallaprakash Rao Vs. Malla Janaki and others [2004 (3) SCC 343] speaking for the Court, held that absence MACANO.2181/2007 8 of valid driving licence on the date of accident is very much a statutory defence available to the insurer to avoid the liability under Section 149 (2) of the Motor Vehicles Act. Further, the scope of the decision in Swaran Singh's Case was subsequently considered by the Apex court on several occasions; in National Insurance Company Ltd. Vs. Kusum Rai [2006 (2) KLT 300], Oriental Insurance Company Ltd. Vs. Meena variel [2007 (5) SCC 428], Prem Kumar and others Vs. Prahlad Dev and others [2008 (3) SCC 193], holding that, if the violation of policy condition in driving the vehicle without being possessed of a valid licence is established, it is enough to absolve the insurer from the liability. When the scope of the decision in Swaran Singh's Case has been thus understood as explained by the Apex Court as above, we find that the Tribunal erred in its conclusions. 12. Coming to the question, whether the Insurance Company is entitled to be totally absolved from the liability or whether the Insurance Company has to satisfy the liability initially and then have it recovered from the owner of the vehicle (Insured), the earlier line of decisions rendered by the Apex Court clearly stipulated that, the course open to the insurer is initially to satisfy the liability towards the 'third party' and later to have it recovered from the insured. But the recent line of decisions stands more to MACANO.2181/2007 9 absolve the insurer from the liability in toto, in view of the absence of liability to indemnify the insured. Recently, the issue had come up for consideration before the Hon’ble Supreme Court and as per the decision in National Insurance Company Ltd. Vs. Parvath Neni [2009 (3) KLT 995], it has been referred to the larger Bench. 13. With regard to the subject matter involved in National Insurance Company Ltd. Vs. Parvath Neni [2009 (3) KLT 995] (SC), it was a case of 'want of policy coverage' and not a case of 'violation of statutory/policy condition'. In the former instance, it is as good as non existence of any policy (as in the case of gratutory passenger in a goods carriage) whereas, in the latter case involving breach of the statutory/policy conditions, the policy is very much in existence, though the duty to indemnify the insured is negated because of the breach/violation on the part of the insured. The rights and liberties of the 'third parties' who are not concerned with the terms of the contract between the insured and the insurer are entitled to get the benefit of insurance contemplated and provided under the statute, when there is valid policy coverage. As such, the remedy of the insurer in the instant case is only to have the due amount recovered from the insured, after satisfying the liability towards the 'third party'/claimant. We find support, by virtue of a similar view taken by MACANO.2181/2007 10 another Division Bench of this Court in Rajendran M.R. Vs. Laila Ramakrishnan [2009 (3) KHC 538]. 14. In the above facts and circumstances, the impugned award is set aside, to the extent it casts liability on the insurer and the same is hereby modified, making it clear that, the insurer shall satisfy the award, with liberty to have it recovered from the first respondent/insured thereafter. The appeal is allowed as above. No cost. P.R.RAMAN, JUDGE P.R.RAMACHANDRA MENON, JUDGE dnc