Case: New India Assurance Co. Ltd Vs. Mandar Madhav Tambe & Ors

BHARUCHA S.P. & KIRPAL B.N. (J) 1. This is an appeal by special leave against the judgment of the Bombay High Court upholding the liability of the appellant Insurance Company to pay the amount of the appellant Insurance Company to pay the amount of compensation awarded to respondent No.1 who had suffered some injuries as a result of an accident. 2. On 4th July, 1979, an accident occurred involving two scooters. One scooter No.(MTM 6327)was being driven by respondent No.1 (the claimant )and the other (BYZ 5348) was being driven by respondent No.3. As a result of this accident respondent No.1 suffered some injuries and he filed an application before the Motor Accident Claims Tribunal for compensation. 3. The appellant contested the said application. It was contended on its behalf that on 22nd July, 1977, respondent No.3 had obtained a learners licence, which enabled him to drive for the purpose of learning to drive. The validity of this learners licence had expired on 21st November, 1977. When the accident took place on 4th July, 1979, respondent No. 3 was neither holding a driving licence as contemplated by the Motor Vehicles Act, 1939, nor was he holding a learners licence. It appears that soon after the accident respondent No. 3 obtained a fresh learners licence on 7th July, 1979 and thereafter, on 9th July, 1979, obtained a driving licence. 4. The Motor Accident Claims Tribunal, vide its award dated 2nd June, 1984, came the conclusion that the accident had occurred due to the negligence of respondent No.3. It found that respondent No.1 was entitled to compensation of Rs. 2, 60, 000/-. An award was accordingly passed directing respondents 1 to 3 therein, including the appellant Insruance company , to jointly or separately pay the said amount together with interest at the rate of 6% per a nnum.The appellant filed an appeal against the said award. The main contention which was not duly licensed to drive a scooter, and therefore, in view of the provisions of the Motor Vesicles Act and clause which had been inserted in the Insurance Policy, the insurance company was absolved of all liability. This exclusion clause in the policy which the appellant company relied upon, is follows: "Provided that the person driving holds a valid driving licence at the time of the accident or had held a permanent driving licence (other than a learners licence) and is not disqualified from holding such a licence." * 5. The High Court came to the conclusion that the Act did not contemplate the grant of a permanent driving licence. It then proceeded to hole that the term `duly licensed in section 96(2)(b)(ii) of the Act would include the holder of a learners licence if he had once held such a licence then the aforesaid exclusion clause would not be Applicable. While granting leave to appeal this Court made it cleat that the leave was being granted on the condition that the appellant herein here in would pay the amount awarded to the claimant, irrespective of the result of the case. 6. On behalf of the appellant it has been contended by Mr. Suri that at the time when the accident of occurred respondent No.3 did not hold any licence. This being so the aforesaid provisions in the insurance policy and also Section 96(2)(b)(ii) of the Act absolved the appellant of any liability.7. Learned counsel for the respondent relied upon the observations of the judgment under appeal and also on a similar view taken in the decision of the High Court of Himachal Pradesh In United Insurance Company Lty. Vs. Tilak Ram &Ors. 1985 ACJ 481 and submitted observations of the judgment under appeal and also on a similar view taken in the decision of the High Court of Himachal Pradesh in United India insurance Company Ltd. vs. Tilak Ram and others 1985 ACJ 481 and submitted that inasmuch as respondent no.3. had held a learners licence at one point of time the insurance company was liable to pay the amount of compensation which sad been award.The two questions which arise for consideration in this appeal are, firstly. whether the appellant company is entitled to invoke the provisions of Section 96(2)(b)(ii) of t he said Act, secondly whither the above quoted exclusion clause in the insurance policy absolves the appellant company of any liability in the present case.8. In order to appreciate the first contention, it is necessary to refer to appreciate the first contention, it is necessary to appreciate the first to the relevant provisions of the said Act. Section 96(2)(b)(ii), on which reliance is placed by the appellant, reads as under: "(2) No sum shall be payable by an insurer u nder sub-section (I) in respect of any judgment unless before or after the commencement of the proceedings in which the judgment is court of the bringing if the proceedings, or in respect so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely: (a)---------------- (b) That there has been breach of a specified condition of the policy, being one of the following conditions, namely: (1)---------------------------- (ii) a condition exclusing driving by a named person or persons or by a person who is not duly licenced or by any person who had been driving licence during the period of disqualification: of" * 9. This clause, inter alia, uses the expression "d riving licence" which therm has been defined in Section 2(5A) of the Act as follows: "Driving Licence" means the document issued by a competent authority under Chapter II authorising the person specified therein to drive a motor vehicle or a motor vehicle of any specified class or description." * 10. Section 3 inter alia provides that no person shall drive motor vehicle unless him. Section 7 provides for the grant of a driving licence and sub-section (6) thereof states that no driving licence shall be issued to any applicant unless he passes, to the satisfaction of the licensing authority, the test of competence to drive as specified in the 3rd Schedule. It is clear, therefore, that a valued driving licence as contemplated by the said Act would be one id issued in accordance with the provisions of chapter II of the Motor Vehicles Act, 1939, after a driving testhes been held. A person who holds only a learner s licence is one who has not taken the driving test successfully. Chapter II of the Acts does not made any mention of a learners licence, except in Section 21(2)(c) which enables the State Government to frame rules, inter alia, for the issue of temporary licences to persons receiving instruction in driving. It is in view of this that in the Bombay Motor Vehicles Rules a permission (Rule 16) has been made, the relevant portion of which is as under: "16.Learners driving licence-(i) . Sub-Section (I) of Section 3 shall not apply to any person driving a motors vehicle in a public place during the course of receiving instruction or gaining experience in driving with the object of presenting himself for the test required by sub-section (6) of Section 7 so long as - (i) the driver is the holder of a learners driving licence in Eorn L Lt. to those rules entitling him to drive the veh icle. (ii) + + + + (iii) there is besides the driver in the vehicle as instructor a person duly licenced to drive the vehicle and sitting in such a position as to be able readily to stop the vehicle." * 11. From the aforesaid it is clear that what was obtained by respondent No.3 from the authorities under the Act was not a licence within the meaning of Section 2(5A) of the said Act. He had obtained a learners licence allowed him to be on the road subject to his fulfilling the conditions contained therein. One of the important conditions was that if he was driving a motor vehicle then there must be besides him in the vehicle as an instructor a person duly licenced to drive the vehicle and sitting insuch a position as to be able readily to stop the vehicle." It is clear from this that two learners by themselves cannot be in one car which is which is being driven by one of them. If the learner having a learners licence under the rules is to drive a car then he must have sitting besides in a person who is duly licensed. This clearly shows that a "driving licence" as defined in the Act is different from a learners licence issued under Rule 96. In other words, a person would be regarded as being duly licensed only if he has obtained a licence under Chapter II of the Motor Vehicles Act and a person who has obtained a temporary licence which enables him to leant driving cannot be regarded as having been duly licensed. The decision of the single judge of the Himachal Pradesh High Court in United India insurance Companys case (supra) to which he hes taken a contrary view must be held to have been incorrectly decided.Apart from the fact that a learner having such a licence would not be regarded as duly licensed, the aforesaid clause in the insurance policy makes it abundantly cleat that the insurance company, in the event of an accident, would be liable only if the vehicle was being by a person holding a valid driving licence or a permanent driving licence "other than a learners licence". This clause specifically provides that even if respondent No.3 had held a current learners licence at the time of the accident, the appellant would not be liable. In the present case it is case it is clear that the respondent No.3 did not have a permanent learners licence before the date of the accident and he had held only a learners licence and it leaped nearly two years before the accident. The High Court observed that the Act did not contemplate a "permanent diving licence" because a driving licence is valid only for a certain period after which it has to be renewed. This may be so, but the use of the words "perm anent driving licence" licence" in the insurance policy was to emphasis that a temporary or a learners licence holder would not be covered by the insurance policy. The intention and meaning of the policy clearly is that the person driving the Vehicle at the time of the accident must be one who holds a `driving licence within the meaning of Section 2(5A) of the Act. 12.

Decision reasoning: 1[ds]From the aforesaid it is clear that what was obtained by respondent No.3 from the authorities under the Act was not a licence within the meaning of Section 2(5A) of the said Act. He had obtained a learners licence allowed him to be on the road subject to his fulfilling the conditions contained therein. One of the important conditions was that if he was driving a motor vehicle then there must be besides him in the vehicle as an instructor a person duly licenced to drive the vehicle and sitting insuch a position as to be able readily to stop the vehicle." It is clear from this that two learners by themselves cannot be in one car which is which is being driven by one of them. If the learner having a learners licence under the rules is to drive a car then he must have sitting besides in a person who is duly licensed. This clearly shows that a "driving licence" as defined in the Act is different from a learners licence issued under Rule 96. In other words, a person would be regarded as being duly licensed only if he has obtained a licence under Chapter II of the Motor Vehicles Act and a person who has obtained a temporary licence which enables him to leant driving cannot be regarded as having been duly licensed. The decision of the single judge of the Himachal Pradesh High Court in United India insurance Companys case (supra) to which he hes taken a contrary view must be held to have been incorrectly decided.Apart from the fact that a learner having such a licence would not be regarded as duly licensed, the aforesaid clause in the insurance policy makes it abundantly cleat that the insurance company, in the event of an accident, would be liable only if the vehicle was being by a person holding a valid driving licence or a permanent driving licence "other than a learners licence". This clause specifically provides that even if respondent No.3 had held a current learners licence at the time of the accident, the appellant would not be liable. In the present case it is case it is clear that the respondent No.3 did not have a permanent learners licence before the date of the accident and he had held only a learners licence and it leaped nearly two years before the accident. The High Court observed that the Act did not contemplate a "permanent diving licence" because a driving licence is valid only for a certain period after which it has to be renewed. This may be so, but the use of the words "perm anent driving licence" licence" in the insurance policy was to emphasis that a temporary or a learners licence holder would not be covered by the insurance policy. The intention and meaning of the policy clearly is that the person driving the Vehicle at the time of the accident must be one who holds a `driving licence within the meaning of Section 2(5A) of the Act.