Reaffirming the Endorsement Requirement for Drivers of Hazardous Goods Vehicles

1. Introduction

The case of M/S CHATHA SERVICE STATION v. LALMATI DEVI (2025 INSC 468) addressed the critical question of whether an insurance company could validly deny indemnification—or, more precisely, be permitted to “pay and then recover” from the owner—where the driver lacked the special license endorsement required to operate a vehicle carrying dangerous or hazardous goods. Heard by the Supreme Court of India, the matter revolved around two separate but related claims arising from a fatal motor vehicle accident involving an oil tanker. The accident led to the tragic deaths of a bicyclist and a pedestrian, and the pivotal legal issue focused on the absence of a proper endorsement under Rule 9 of the Central Motor Vehicles Rules, 1989, which mandates specialist training for driving hazardous goods vehicles.

In this commentary, we will explore the background of the case, analyze the Court’s reasoning, examine the precedents discussed, and highlight the Judgment’s significant implications for future jurisprudence concerning mandatory endorsements and vehicle insurance liability.

2. Summary of the Judgment

The Supreme Court upheld the High Court’s decision that the driver of the oil tanker was required to hold a valid endorsement for driving a vehicle carrying dangerous or hazardous goods. The appellant-owner (M/S Chatha Service Station) had contested the Motor Accidents Claims Tribunal’s ruling, subsequently affirmed by the High Court, which directed that although the insurance company would pay the awarded compensation to the claimants, it was entitled to recover the sum from the owner of the tanker because the driver did not possess the necessary hazardous goods endorsement.

The Court carefully reviewed:

The factual circumstances and eyewitness testimonies.
The relevant statutory framework under the Motor Vehicles Act, 1988 and the Central Motor Vehicles Rules, 1989.
The driver’s claim that he held a certificate of training, which was produced for the first time at the appellate stage.

Concluding that the absence of the required endorsement was not a mere technical defect, the Court dismissed the appeals and affirmed the “pay and recover” directive.

3. Analysis

3.1 Precedents Cited

Several High Court decisions were cited to argue that lacking a specific endorsement to drive vehicles carrying hazardous goods may not automatically constitute a fundamental breach of policy if it does not directly cause the accident. These included:

National Insurance Co. Ltd. v. K. Ramasamy (2006 SCC OnLine Mad 963): The driver’s negligence was deemed unrelated to the absence of an endorsement.
United India Insurance Co. Ltd. v. A. Verlaxmi (2013 SCC OnLine Chh 272): The Chhattisgarh High Court viewed the endorsement as not critically affecting a driver’s operational proficiency.
National Insurance Company v. Harbans Kaur (Punjab and Haryana High Court): Held that training/endorsement does not address the broader professional skill of driving.

However, the Supreme Court distinguished these rulings, noting that Rule 9 of the Central Motor Vehicles Rules, 1989 clearly prescribes a special training and an endorsement requirement precisely because transporting hazardous goods necessitates an elevated level of skill and awareness.

3.2 Legal Reasoning

Central to the Court’s reasoning was the interpretation of Section 10(2) of the Motor Vehicles Act, 1988, which categorizes various “classes” and “descriptions” of vehicles. The Court underscored that vehicles carrying hazardous goods form a distinct category demanding special qualifications. Rule 9 of the Central Motor Vehicles Rules, 1989 specifically requires drivers to:

Undergo a specialized training program of three days addressing defensive driving and advanced driving skills.
Learn how to respond to emergencies involving hazardous cargo, including spillage handling, firefighting, and first aid.
Obtain an endorsement on their driving license confirming completion of the prescribed training and eligibility.

Because the tanker in this case was confirmed to be carrying oil at the time of the accident, the fact that the driver only possessed a general license for a transport vehicle did not suffice. The Court emphasized that hazards associated with transporting fuel or other dangerous materials require heightened driving capabilities and particular safety knowledge.

Furthermore, the Court rejected a training certificate produced at the appellate stage, deeming it procedurally improper under Order 41 Rule 27 of the Code of Civil Procedure. No convincing reason was offered for failing to present the certificate before the Tribunal, and the certificate itself bore indicia that cast doubt on its validity (e.g., lack of a formal serial number or institutional seals).

3.3 Impact

This Judgment significantly clarifies that:

Where a vehicle is carrying hazardous goods, a driver lacking the mandatory Rule 9 endorsement is not simply engaged in a technical breach; it is deemed a fundamental breach of the policy conditions.
Courts and Tribunals must consider whether the absence of an endorsement had a causal connection to the accident. In many instances, operating a specialized vehicle without the required license endorsement will be a substantial factor if negligence is alleged.
The “pay and recover” mechanism remains a potent remedy forclaimants, ensuring they receive compensation without delay, while giving the insurer the right to recoup costs from a non-compliant owner or driver.

Future claimants, insurance providers, and vehicle owners should take note of this ruling. It serves as a clear message that compliance with these specialized endorsement requirements is imperative, and noncompliance can prove costly.

4. Complex Concepts Simplified

Endorsement Under Rule 9: This is an additional qualification on the existing driving license. It is not enough for a driver to hold a general transport vehicle license; they must also complete specialized training in transporting “dangerous or hazardous goods.” Only then can the license bear an endorsement confirming that the holder is permitted to drive such vehicles.

“Pay and Recover” Principle: When the insurer is initially ordered to compensate the accident victims (or their families), it can later recoup the amount from the insured (owner of the vehicle) if the insurer proves that a fundamental breach of policy occurred—here, the lack of driver endorsement.

Order 41 Rule 27 (C.P.C.): This procedural rule governs the admissibility of new evidence at the appellate stage. The party seeking to introduce additional evidence must show a valid reason, typically that it could not have been produced earlier despite due diligence or that the court specifically requested it for clarifying an issue.

5. Conclusion

The Supreme Court’s decision in M/S CHATHA SERVICE STATION v. LALMATI DEVI (2025 INSC 468) reinforces the non-negotiable requirement of an endorsement for driving vehicles carrying dangerous or hazardous goods. By ruling that the insurer may “pay and recover” from the owner of the offending vehicle, the Court underscores that any breach of the statutory endorsement requirements will be regarded as fundamental, potentially releasing insurers from their direct liability to indemnify.

In the broader legal context, this case stands as a definitive precedent emphasizing that legislative and regulatory directives around hazardous materials transport are not mere formalities. They form a critical part of ensuring public safety on roads where goods of a dangerous or hazardous nature are transported. Owners, drivers, and insurance companies must now rigorously ensure that all relevant endorsements and statutory obligations are satisfied to avoid adverse legal and financial repercussions.