SINGH RAM versus NIRMALA AND ORS.
[2018] 3 S.C.R. 36, Supreme Court of India, 2018
Outcome: Dismissed (Dismissed)
Segment: Facts
A
B
C
D
E
F
G
H
36
SUPREME COURT REPORTS
[2018] 3 S.C.R.
SINGH RAM
v.
NIRMALA AND ORS.
(Civil Appeal No. 2103 of 2018)
MARCH 06, 2018
[DIPAK MISRA, CJI, A. M. KHANWILKAR AND
DR. D.Y. CHANDRACHUD, JJ.]
Motor Vehicles Act 1988 –  s. 166 – Compensation – Liability
to pay when license fake – On facts, insured did not hold a valid
driving licence at the time of the incident – Liability to pay
compensation fastened on owner-cum-driver of the offending vehicle
by courts below – Insurance company directed to pay and recover
from the owner – Interference with – Held: Not called for – Owner
did not depose in evidence – He produced a licence which was
found to be fake – Another licence he sought to produce had already
expired before the accident and was not renewed within the
prescribed period – Owner evidently failed to take reasonable care
to find out as to whether the driving license produced by the driver,
fake one or otherwise, fulfilled the requirements of law or not – He
could not have been unmindful of facts within his knowledge –
Thus, the direction by the courts below that the insurance company
to pay and recover from owner cannot be faulted.
In the instant case, the insured did not hold a valid driving
licence at the time of the accident. As a result, the courts below
absolved the insurer. However, the insurer was directed to pay
the compensation awarded to the claimant and to recover it from
the owner cum driver of the offending motor cycle. Hence, the
present appeal.
Dismissing the appeal, the Court
HELD : It is necessary to note that the owner did not
depose in evidence and stayed away from the witness box. He
produced a licence which was found to be fake. Another licence
which he sought to produce had already expired before the
accident and was not renewed within the prescribed period. It
was renewed well after two years had expired. The appellant as
owner had evidently failed to take reasonable care to find out as
  [2018]  3 S.C.R. 36
36
A
B
C
D
E
F
G
H
37
to whether the driving license produced by the driver, fake one
or otherwise, fulfilled the requirements of law or not (proposition
(vii) of Swaran Singh) since he could not have been unmindful of
facts which were within his knowledge. In the circumstances, the
direction by the tribunal, confirmed by the High Court, directing
the insurance company to pay and recover from owner cannot be
faulted. [Paras 8, 9] [41-A-C]
National Insurance Co. Ltd. v. Swaran Singh [2004] 1
SCR 180 : (2004) 3 SCC 297 – relied on.
Case Law Reference
[2004] 1 SCR 180
  relied on
Para 8
CIVIL APPELLATE JURISDICTION :  Civil Appeal No. 2103
of 2018.
From the Judgment and Order dated 28.03.2014 by the High Court
of Punjab and Haryana at Chandigarh in F.A.O. No. 3790 of 2012
(O & M).
R. K. Kapoor, Rajat Kapoor, Ms. Rekha Giri, Anis Ahmed Khan,
Balbir Singh Gupta, Advs for the Appellant.
Shish Pal Laler, Sonit Sinhmar, Devesh Kumar Tripathi, Advs for
the Respondents.
The Judgment of the Court was delivered by
DR. D.Y. CHANDRACHUD, J. 1. Delay condoned.
2. In a claim for compensation under Section 166 of the Motor
Vehicles Act 1988, the Motor Accident Claims Tribunal (‘the Tribunal’),
Yamunanagar at Jagadhri found that the insured did not hold a valid
driving licence at the time of the accident.  The Tribunal absolved the
insurer for that reason.  The insurer was, however, directed to pay the
compensation awarded to the claimant and to recover it from the owner
of the offending motor
cycle. The High Court dealt with three appeals:
one filed by the claimant seeking enhancement of compensation, a second
by the insurance company and the third by the owner cum driver of the
offending vehicle. The High Court held that in view of the decision of
this Court  in National Insurance Co. Ltd. v Swaran Singh1, the
Tribunal was correct in directing the insurer to pay the compensation
1(2004) 3 SCC 297
SINGH RAM v. NIRMALA AND ORS
A
B
C
D
E
F
G
H
38
SUPREME COURT REPORTS
[2018] 3 S.C.R.
and to recover it from the owner-cum-driver of the offending vehicle.
The present appeal has been filed by the owner and driver.  The only
point which has been urged in support of the appeal is that the Tribunal
and the High Court erred in fastening the liability on him by granting a
right of recovery to the insurer.
3. The accident took place on 22 March 2010.  The deceased
Sunil Kumar was riding a motor cycle bearing Registration No HR-
04B-4673.  The Tribunal found that the accident was caused as a result
of the rash and negligent act of the appellant.  This finding of fact has
not been disturbed by the High Court. The deceased was employed as a
sweeper in Haryana Roadways and was engaged on a salary of Rs
11,928 per month.  The Tribunal allowed future prospects of 50%, the
deceased being just short of 36 years of age.After deducting an amount
representing one-fourth of the earnings for personal expenses, the
Tribunal applied a multiplier of 15.  The total compensation was computed
at Rs 24,15,420 to which the Tribunal added an amount of Rs 20,000
under conventional heads.  However, the Tribunal held that the financial
assistance which the heirs of the deceased would receive over a period
of 12 years from the employee (amounting to Rs 16,16,112) would have
to be deducted from the compensation.  After making the deduction, the
Tribunal awarded an amount of Rs. 8,19,500 together with interest at
7.5 per cent per annum
from the date of the claim petition.  The High
Court has enhanced the compensation to Rs 16,04,912.
4. Special Leave Petition (C ) No 7737 of 2015 filed by the
claimant,which was connectedto this appeal,has been dismissed on 8
February 2018.
5. In the present appeal  by the owner cum driver of the offending
motor cycle,the submission  is that in view of the decision of a Bench of
three learned Judges of this Court in Swaran Singh (supra), the insurer
ought not to have been absolved.Hence the direction to the insurer to
pay and recover the compensation from the appellant should, it has been
urged,  be modified to fasten a joint and several liability on the insurer.
6. Before we advert to the decision in Swaran Singh(supra) a
brief reference to the facts as they emerge from the decision of the
Tribunal is necessary.  Initially before the Tribunal the appellant produced
a driving licence issued by the Motor Vehicles Department, Agra (Exh.R-
1).  The driving licence was found to be fake.  The statement of the
Senior Assistant in the office of the RTO, Agra was that Exh.R-1 had
A
B
C
D
E
F
G
H
39
not been issued by the office. The Tribunal noted that the witness had
proved the report (Exh.R-2) issued by the department and concluded
that the licence was fake.  Faced with this situation, the appellant attempted
to prove that he held a valid driving licence issued by the licencing authority
at Jagadhri to drive a motor cycle.  The Tribunal rejected the application
filed by the appellant for producing additional evidence.  The Tribunal
noted that even otherwise, the licence which was issued by the licencing
authority, Jagadhri for a tractor and car was valid only until 29 August
2009.  The accident took place on 22 March 2010.  The licence was
renewed on 28 November 2011 more than two years after it had expired.
On these facts, the Tribunal observed that on the date of the accident,
the appellant was not holding a valid and effective driving licence nor
was there any evidence to indicate that the licence was sought to be
renewed as required in law, within 30 days of its expiry. The Tribunal
also observed that the appellant did not hold a valid licence to drive a
motor cycle.  On these grounds, the insurer was absolved.  The High
Court has confirmed the direction of the Tribunal to pay and recover.
7. In Swaran Singh (supra), this Court held that the holder of a
driving licence has a period of thirty days on its expiry, to renew it:
“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 therefor. 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.”
SINGH RAM v. NIRMALA AND ORS.
[DR. D.Y. CHANDRACHUD. J.]
A
B
C
D
E
F
G
H
40
SUPREME COURT REPORTS
[2018] 3 S.C.R.
The following conclusion has been recorded in summation in the
judgment::
“(iii) The breach of policy condition e.g. disqualification of the
driver or invalid driving licence of the driver, as contained in sub-
section (2)(a)(ii) of Section 149, has to be proved to have been
committed by the insured for avoiding liability by the insurer. Mere
absence, fake or invalid driving licence or disqualification of the
driver for driving at the relevant time, are not in themselves
defences available to the insurer against either the insured or the
third parties. To avoid its liability towards the insured, the insurer
has to prove that the insured was guilty of negligence and failed
to exercise reasonable care in the matter of fulfilling the condition
of the policy regarding use of vehicles by a duly licensed driver or
one who was not disqualified to drive at the relevant time.
 (iv) Insurance companies, 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 the said
burden would be discharged, inasmuch as the same would depend
upon the facts and circumstances of each case.
 (vi) Even where the insurer is able to prove breach on the part of
the insured concerning the policy condition
regarding holding of a
valid licence by the driver or his qualification to drive during the
relevant period, the insurer would not be allowed to avoid its liability
towards the insured unless the said breach or breaches on the
condition of driving licence is/are so fundamental as are found to
have contributed to the cause of the accident. The Tribunals in
interpreting the policy conditions would apply “the rule of main
purpose” and the concept of “fundamental breach” to allow
defences available to the insurer under Section 149(2) of the Act.
 (vii) The question, as to whether the owner has taken reasonable
care to find out as to whether the driving licence produced by the
driver (a fake one or otherwise), does not fulfil the requirements
of law or not will have to be determined in each case”.
A
B
C
D
E
F
G
H
41
8. In the present case it is necessary to note, as observed by the
Tribunal, that the owner did not depose in evidence and stayed away
from the witness box.  He produced a licence which was found to be
fake. Another licence which he sought to produce had already expired
before the accident and was not renewed within the prescribed period.
It was renewed well after two years had expired.  The appellant as
owner had evidently failed to take reasonable care (proposition (vii) of
Swaran Singh) since he could not have been unmindful of facts which
were within his knowledge.
9. In the circumstances, the direction by the Tribunal, confirmed
by the High Court, to pay and recover cannot be faulted.  The appeal is,
accordingly, dismissed. There shall be no order as to costs.
 Nidhi Jain                                                                                           Appeal dismissed.
SINGH RAM v. NIRMALA AND ORS.
[DR. D.Y. CHANDRACHUD. J.]