IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. FAO (MVA) No. 25/2005 Reserved on:18.7.2008 Decided on:9.9.2008 The Oriental Insurance Company Limited. …Appellant. Versus Vidya Devi and others. …Respondents Coram The Hon’ble Mr. Justice Rajiv Sharma, J. Whether approved for reporting ?1. yes. For the Appellant : Mr. G.C. Gupta, Sr. Advocate with Mr. Deepak Gupta, Advocate. For the Respondents : Mr. Malay Kaushal, Advocate vice Mr. Ramakant Sharma, Advocate for respondents No. 1 to 5. Mr. M.S. Thakur, Advocate with Mr. Inderjit Singh Narwal, Advocate for respondent No.6. Rajiv Sharma, J. This FAO has been filed against the award dated 30.9.2004 passed by the Motor Accident Claims Tribunal, Solan in MAC petition No. 33-S/2 of 2004. The brief facts necessary for the adjudication of this appeal are that on 21.2.2004 the deceased had gone to Parwanoo. Around 12.30 P.M. when he was crossing a road at Parwanoo Chowk, Maruti Van No. HP-01- 1 Whether the reporters of Local Papers may be allowed to see the judgment? yes. 2 1280 appeared from Kalka side at a very fast speed. It hit the deceased. The deceased sustained fracture of ribs. The fractured ribs hurt the lungs, heart and spleen which resulted in the death of the deceased. The claimants filed the claim petition seeking compensation of Rs. 5,00,000/-. The owner resisted the claim and alleged that accident took place because of deceased own negligence. The appellant-company also resisted the petition by filing reply. It was alleged by the insurance company that respondent No.6 hereinafter referred to as the owner and driver did not possess valid and effective driving licence. The learned Motor Accident Claims Tribunal on the basis of the evidence led by the parties awarded a sum of Rs. 1,35,000/- as compensation together with costs of the petition and interest @ 9% per annum from the date of petition till the date of deposit of the aforesaid amount. The owner/driver and the appellant-insurance company were held liable to satisfy the award jointly and severally vide award dated 30.9.2004. Mr. G.C. Gupta, Sr. Advocate had strenuously argued that the findings recorded by the learned Motor Accidents Claim that the driver was holding a valid driving licence is contrary to law. He also contended that the driving licence Ex.RA-1 was valid only for light motor vehicle and the licence did not bear any endorsement to drive the transport vehicle. Mr. Malay Kaushal, Advocate and Mr. M.S. Thakur, Advocate appearing on behalf of the respondents have supported the award dated 30.9.2004. I have heard the learned counsel for the parties and perused the record carefully. The driving licence Ex.RA/1 was admittedly issued for driving motorcycle/scooter and LMV only. It was valid from 26.6.1997 to 15.11.2022. The Motor Accident Claims Tribunal on the basis of National 3 Insurance Company Limited versus Swaran Singh and others, 2004 ACJ -1 came to a conclusion that the maruti van even though registered as a taxi, falls in the definition of LMV. The Motor Accident Claims Tribunal further opined that despite the fact that the driving licence of the respondent/owner/driver was not endorsed for the transport vehicle, the insurer was liable to satisfy the award because the breach of condition of the policy regarding possessing of a valid and effective licence is not shown to have been the main or the contributory cause of occurrence of the accident. The fundamental question raised by Mr. G.C. Gupta, Sr. Advocate has been considered by their Lordships of the Hon’ble Supreme Court in National Insurance Company Limited versus Kusum Rai and others, (2006) 4 SCC 250. Their Lordships have held as under: “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. We have noticed hereinbefore that the Tribunal has not gone into the said question. It proceeded on the basis that the case was covered by Kamla (supra). The correctness of the said decision came up for consideration before this Court in National Insurance Co. Ltd. v. Swaran Singh and Others [(2004) 3 SCC 297] wherein this Court clearly held: "The owner of a motor vehicle in terms of Section 5 of the Act has a responsibility to see that no 4 vehicle is driven except by a person who does not satisfy the provisions of Section 3 or 4 of the Act. In a case, therefore, where the driver of the vehicle, admittedly, did not hold any licence and the same was allowed consciously to be driven by the owner of the vehicle by such person, the insurer is entitled to succeed in its defence and avoid liability. The matter, however, may be different where a disputed question of fact arises as to whether the driver had a valid licence or where the owner of the vehicle committed a breach of the terms of the contract of insurance as also the provisions of the Act by consciously allowing any person to drive a vehicle who did not have a valid driving licence. In a given case, the driver of the vehicle may not have any hand in it at all e.g. a case where an accident takes place owing to a mechanical fault or vis major. (See Jitendra Kumar)" In Swaran Singh (supra), to which one of us was a party, this Court noticed an earlier decision of this Court, namely, Malla Prakasarao v. Malla Janaki and Others [(2004) 3 SCC 343] wherein one of the members of the Bench, V.N. Khare, J. (as the learned Chief Justice then was) was a member. In that case, it was held: "1. It is not disputed that the driving licence of the driver of the vehicle had expired on 20-11-1982 and the driver did not apply for renewal within 30 days of the expiry of the said licence, as required under Section 11 of the Motor Vehicles Act, 1939. It is also not disputed that the driver of the vehicle did not have driving licence when the accident took place. According to the terms of the contract, the Insurance Company has no liability to pay any compensation where an accident takes place by a vehicle, driven by a driver without a driving licence. In that view of the matter, we do not find any merit in the appeal." 5 A Division Bench of this Court in New India Assurance Company Limited versus Suraj Parkash and others, 2001 ACJ 85 has held that when the driver had only driving licence to drive scooter, motor cycle, car, jeep, LTV only, but had no endorsement to drive a public service vehicle, the insurance company is exempted from its liability. Their Lordships have held as under: “The learned counsel for the appellant insurance company contended that the Tribunal committed an error in holding that the insurance company failed to prove that the vehicle in question is covered within the definition of the words ‘public service vehicle’, in spite of the fact that the Maruti van in question was registered and got insured also only as a taxi, in which case it would be beyond controversy that the Maruti van would answer the definition of ‘public service vehicle’. From the records and the reply filed by the insurance company, we find particularly in para 3 of the reply that an objection has been taken that the insurance company is not liable in view of the fact that the driver of vehicle, Maruti van HPY 251 did not possess any valid licence to drive the taxi, as a paid driver and as such no liability can be fastened on the insurer. Exh. R-3, policy of insurance (the schedule) filed disclosed that the insurance was in respect of the vehicle in question which stood registered as a taxi. If that be the factual position it would answer the description of ‘public service vehicle’ as defined in section 2 (35) to mean any motor vehicle used or adapted to be used for the carriage of passengers for hire or reward and includes a maxicab, a motorcab, contract carriage and stage carriage. Section 3 (1) of the Motor Vehicles Act, 1988 stipulated that no person shall drive a vehicle in any public place unless he holds an effective driving licence 6 issued to him to drive the vehicle and that no person shall so drive a transport vehicle (other than a motorcab or motor cycle hired for his own use or rented under any scheme made under section 75 (2) of the Act) unless his driving licence specifically entitled him so to do. Section 2 (47) defines transport vehicle to mean a public service vehicle, a goods carriage, an education institution’s bus or a private service vehicle. Therefore, the vehicle in question answers the description of public service vehicle even on the materials closed on record. The conclusion of the Tribunal below to the contra is indicative of non-application of mind to a valid and relevant piece of material on record. Inasmuch as Exh. R-1 driving licence does not contain any specific endorsement to drive a transport vehicle, the driver who drove the vehicle at the time of accident must be held to be not possessed of a valid and effective driving licence. The mandatory requirement of section 3 (1) having not been satisfied by the driver, in not holding a licence to drive with a specific endorsement to drive the transport vehicle (public service vehicle) such a conclusion has become inevitable on the facts of the case.” Mr. M.S. Thakur appearing on behalf of respondent No.6 has placed strong reliance on National Insurance Company Limited versus Annappa Irappa Nesaria alias Nesargi and others, (2008) 3 SCC 464. His contention was that on the basis of the ratio laid down by their Lordships light motor vehicle would cover both light passenger carriage vehicle and light goods carriage vehicle. He has also relied upon definition of ‘light motor vehicle’ under section 2 (21) of the Motor Vehicles Act, 1988. He also contended that though the vehicle in question was registered as a taxi, but it was plied in a private capacity since he was carrying his ailing uncle in the van. The judgment cited by Mr. M.S. 7 Thakur is distinguishable on the facts. This judgment will not apply to the kinds of carriage/vehicles covered prior to 28.3.2001. In the present case, the accident has taken place on 21.2.2004. Their Lordships of the Hon’ble Supreme Court after taking into consideration the definition of the ‘light motor vehicle’ as contained in section 2 (21) of the Motor Vehicles Act, 1988 have held 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 authorised to drive a light goods vehicle as well. 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.” In the present case, the driver had been issued a driving licence to drive light motor vehicle, scooter and motorcycle and the same cannot be held valid to drive transport vehicle. There was a fundamental breach of terms of policy and the insurance company is not liable to indemnify the owner. Consequently, in view of the definitive law laid down by the Hon’ble Supreme Court in National Insurance Company Limited versus Kusum Rai and others, (2006) 4 SCC 250 and a Division Bench of this Court in New India Assurance Company Limited versus Suraj Parkash and others, 2001 ACJ 85 (supra), the findings recorded by the learned Motor Accident Claims Tribunal that the driver was holding a valid licence is liable to be interfered with. 8 In view of the aforesaid reasoning, the appeal is allowed. The award dated 30.9.2004 is modified to the extent that the appellant- insurance company is not liable to indemnify the owner since there was a fundamental breach of terms of policy as discussed hereinabove. There shall be no order as to costs. 9.9. 2008 (Rajiv Sharma ), J. *awasthi*