Case: New India Assurance Co. Ltd Vs. Suresh Chandra Aggarwal

On 31st May, 1991 the claimant, the sole respondent in this appeal, obtained from the appellant, a comprehensive insurance policy in respect of his Maruti Saloon 800 car. The policy was valid from 31st May, 1991 to 30th May, 1992. Unfortunately, on 29th February, 1992, the insured vehicle met with an accident resulting in the death of the driver and extensive damage to the car. On 3rd March, 1992, the claimant lodged a claim of Rs.1,00,000/- with the appellant for total loss of the vehicle.3. The appellant appointed a surveyor to assess the damage caused to the car. On the recommendation of the surveyor, the driving licence of the deceased driver was got verified from the office of the Regional Transport Authority (Licensing), Bhopal. The certificate issued by the said authority showed that the driving licence of the deceased driver was valid from 26th October, 1988 to 25th October, 1991 and then from 23rd March, 1992 to 22nd March, 1995. On receipt of the said verification report, the appellant repudiated the claim of the claimant on the ground that the driver of the vehicle was not holding an effective driving licence at the time of accident as his licence was valid only up to 25th October, 1991, which had been renewed by the licensing authority only with effect from 23rd March, 1992 whereas the accident took place on 29th February, 1992.4. Being aggrieved by the said decision of the appellant, the claimant filed a complaint before the District Forum, Betul claiming a compensation of Rs.1,00,000/-. The claim was contested by the appellant on the ground that there was a breach of one of the conditions in the insurance policy inasmuch as the accidental vehicle was being driven by a person who, at the time of accident, did not hold an effective driving licence. The District Forum, upon consideration of the rival contentions of the parties, accepted the complaint and directed the appellant to pay Rs.1,00,000/- to the claimant as compensation for damage to the car, besides costs.5. Aggrieved by the order passed by the District Forum, the appellant as well as the claimant preferred appeals to the State Commission. The stand of the appellant was that they were not liable to pay any compensation because the vehicle was being driven by a person who did not have an effective licence at the time of accident whereas the grievance of the claimant was with regard to the inadequacy of the compensation awarded. The State Commission found that although the licence of the deceased driver was valid up to 25th October, 1991 but the same had been renewed subsequently and, therefore, since he had not been disqualified to hold such a licence, the claim of the claimant could not be rejected on the ground that the licence had not been renewed on time. The compensation awarded was also held to be adequate. Accordingly, both the appeals were dismissed.6. Not being satisfied with the approach of the State Commission, the appellant preferred a Revision Petition before the National Commission. Following the decision of this Court in Ashok Gangadhar Maratha Vs. Oriental Insurance Co. Ltd. ((1999) 6 SCC 620 ) the National Commission, as noted above, dismissed the Revision Petition. It is this order which is under challenge in this

Court's reasoning:
16. In the instant case, as noted above, as per the certificate issued by the licensing authority, the driving licence of the deceased driver had expired on 25th October, 1991 i.e. four months prior to the date of accident on 29th February, 1992 and it was renewed with effect from 23rd March, 1992. It is not the case of the claimant that the driver had applied for renewal of the licence within 30 days of the date of its expiry. On the contrary, it is the specific case of the appellant that the driving licence was renewed only with effect from 23rd March, 1992. From a plain reading of Section 15 of the Act, it is clear that if an application for renewal of licence is made within 30 days of the date of its expiry, the licence continues to be effective and valid without a break as the renewal dates back to the date of its expiry. Whereas, when an application for renewal is filed after more than 30 days after the date of its expiry, proviso to(1) of Section 15 of the Act, gets attracted and the licence is renewed only with effect from the date of its renewal, meaning thereby that in the interregnum between the date of expiry of the licence and the date of its renewal, there is no effective licence in existence. The provision is clear and admits of no ambiguity. However, the stand of the claimant before the District and State Fora as also before us was that since the deceased driver was holding a valid licence and had not been disqualified from holding an effective licence, the stipulation in thecondition was not infringed. In our view, the argument is stated to be rejected. Admittedly, having failed to apply for renewal of the driving licence within 30 days from the date of its expiry in terms of Section 15 of the Act, the licence could not be renewed with effect from the date of its expiry and therefore, between the period from 26th October, 1991 to 22nd March, 1992, the deceased driver had no valid and effective driving licence as contemplated under Section 3 of the Act. We are convinced that during this period, he did not hold at all an effective driving licence, as required in the terms and conditions governing the policy on the date of accident i.e. 29th February, 1992.17. As a matter of fact, in view of the clear mandate of Section 3 of the Act, the deceased driver was not even permitted to drive the insured vehicle in a public place. Furthermore, the claimant not only committed breach of the terms of the policy, he also violated the provisions of Section 5 of the Act by entrusting the vehicle to a person who did not hold a valid licence on the date of the accident. Although it was not pleaded by learned counsel for the appellant, but we fail to understand as to how the licence was and could be renewed w.e.f. 23rd March, 1992 after the death of theon 29th February, 1992. In our opinion, therefore, the appellant was not liable to indemnify the claimant for the loss suffered by him in the accident of the insured vehicle.18. We are fortified in our view by the decision of this Court in the case of Jarnail Singh (supra). In that case also, the driving licence of the driver, who drove the vehicle which got involved in the accident, had expired on 16th May, 1994. The accident took place more than five months thereafter i.e. on 20th October, 1994 and the driving licence was renewed only with effect from 28th October, 1996. On these facts, it was held that proviso to(1) of Section 15 applied; the driver had no licence to drive the vehicle on the date of accident; the condition in the policy identical to the one in the present case was violated and therefore, the Insurance Company was not liable to pay any amount to the insured.19. We are also of the opinion that Section 19 of the Act does not come to the aid of the claimant. Having found that between the period 26th October, 1991 and 22nd March, 1992, the driver of the insured vehicle had no valid licence, the latter part of thespecial condition did not come into play.20. We also find force in the contention of learned counsel for the appellant that the ratio of the decision of this Court in Ashok Gangadhars case (supra), relied upon by the National Commission, does not apply to the case at hand. In that case, the appellant was the owner of a Light Motor Vehicle, which was insured with the Insurance Company. The vehicle met with an accident and a claim was lodged by the complainant before the Consumer Commission. It was contended by the Insurance Company that the truck was a "goods carriage" or a "transport vehicle" and since the driver of the truck was holding a driving licence to drive only "Light Motor Vehicle", he was not authorized to drive transport vehicle without an endorsement on his driving licence authorizing him to drive such transport vehicle. The claim of the insured having been rejected by the Insurance Company which was upheld by the National Commission, the complainant approached this Court. Allowing the appeal, it was held that the driver of the vehicle was holding a valid driving licence for driving a Light Motor Vehicle and there was no material on record to show that he was disqualified from holding an effective and valid driving licence at the time of accident. On those facts, the Court held that the policy, which was not even placed on record, did not insist on the driver to have a licence to drive a transport vehicle by obtaining a specific endorsement and therefore, the Insurance Company was not justified in rejecting the claim by the insured. It was observed that the Insurance Company had neither pleaded nor proved that the vehicle was a transport vehicle. The permit issued by the transport authority had not been placed on record. In the present case, it stands proved that the driver did not have an effective and valid driving licence on the date of accident.