Citation Codes

Equivalent Citations

citation codes

Case Number

M.F.A No. 2127/1996

Advocates

Sri K. Appa Rao, Advocate for Appellant
Sri O. Mahesh, Advocate for R-2, Sri Somanath Reddy, Advocate for R-3

Judges

B.S Sreenivasa Rao, J.

Acts

Rule 3 of Central Motor Vehicles Rules 1999.6.
Section 3(1) of the Motor Vehicles Act
SECTION 3 MOTOR VEHICLES ACT

See more information ...

Smart Summary

Judgment Summary — B.S. Sreenivasa Rao, J.

Factual and Procedural Background

This is an appeal by the owner of a goods vehicle against the judgment and award dated 19.1.1996 in MVC No. 142/92 by the 1st Additional District Judge and Member, Motor Accident Claims Tribunal (MACT), Gulbarga. The Tribunal had awarded compensation of Rs. 63,000 with interest at 6% per annum from the date of petition till realization to the father of the deceased/dependent in a motor vehicle accident.

The owner (appellant) challenged the Tribunal's allocation of liability, contending that the insurer (respondent-2) should have been made liable because the vehicle was insured on the date of the accident. The Tribunal had found against the insurer on the basis that the driver did not possess an effective licence to drive the class of vehicle involved and therefore the insurer was not liable; the liability was fastened only on the owner. The present writ/appeal challenges that finding.

Legal Issues Presented

Whether liability for the compensation awarded by the Tribunal should have been fastened on the insurance company (respondent-2) because the vehicle was insured on the date of the accident.
Whether, on the material before the Tribunal (Ex. R2 and Ex. R3), the driver held an effective driving licence entitling him to drive the class of vehicle involved (and, if not, whether that disentitles the insurer from indemnity under the terms of the policy and Section 3 of the Motor Vehicles Act).

Arguments of the Parties

Appellant's Arguments

The vehicle was insured on the date of the accident (Ex. R1) and therefore the insurance company should share liability for the compensation awarded by the Tribunal.
Ex. R3 (copy of the driving licence) shows the driver was authorised to drive a "light motor vehicle," and the policy language permits "any person including insured provided that the person driving holds an effective driving licence at the time of the accident"; therefore the insurer should be liable.
The appellant relied on Sohanlal Passi v. P. Sesh Reddy (1996 ACJ 1044) to argue the insurer could be held liable where the insured had engaged a licensed driver and there was no wilful violation of the policy condition by the owner.
The appellant also invoked the proviso regarding persons holding a learner's licence (and Central Motor Vehicles Rules) as supportive of the insurer's liability, arguing that policy terms could bring the insurer within cover.

Insurance Company's Arguments (Respondent-2)

The insurance company accepted that the vehicle was insured during the accident period but denied liability on the basis of a breach of policy conditions concerning the class of persons authorised to drive.
The insurer relied on evidence (RW-1, Assistant Divisional Manager) that Ex. R3 shows the driver was authorised to drive a light motor vehicle (non-transport), whereas Ex. R2/vehicle particulars indicated the vehicle was a "goods vehicle" (i.e., a transport vehicle). Therefore the driver did not possess a licence effective for driving the vehicle involved at the time of the accident.
On that basis, the insurer contended it was not liable to indemnify the owner because the driver lacked the necessary class endorsement in his driving licence and the policy condition was not satisfied.
The insurer relied on Section 3 of the Motor Vehicles Act and precedent authority (United India Insurance Co. Ltd. v. K. Subramaniam and Oriental Insurance Co. Ltd. v. Ashok) to support the proposition that absence of a licence authorising the driver to drive the class of vehicle disentitles the insurer from liability.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Sohanlal Passi v. P. Sesh Reddy, 1996 ACJ 1044	Holds that where an insured engaged a duly licensed driver and an unlicensed person (conductor/cleaner) was allowed by that driver to drive and caused the accident, the insurer was not exonerated because the owner/insured had not wilfully violated the policy condition.	The court distinguished this authority from the present facts: in Sohanlal the owner had engaged a licensed driver and was not guilty of wilful breach; in the present case the driver's licence did not authorise driving the vehicle class involved, so the factual matrix was different and the precedent did not compel insurer liability.
United India Insurance Co. Ltd. v. K. Subramaniam, 1991 ACJ 625	Establishes that if at the date of the accident the driver did not have a licence authorising him to drive the class of vehicle involved (e.g., endorsement added only after the accident), the insurer is not liable to indemnify.	The court relied on the principle and the facts of Ex. R3/Ex. R2 to conclude the driver did not have a valid licence to drive the goods/transport vehicle at the time of the accident, supporting the Tribunal's finding that the insurer was not liable.
Oriental Insurance Company Ltd. v. Ashok, II 1995 CPJ 208 NC	Holds that where the driver did not have a valid licence authorising him to drive the vehicle at the relevant time, the insurance company is not liable to indemnify the insured.	The court cited this authority in support of the insurer's contention that absence of an effective licence for the specific class of vehicle absolves the insurer from liability; the Tribunal's conclusion that the insurer was not liable was upheld on similar reasoning.

Court's Reasoning and Analysis

The court proceeded by examining the limited factual record placed before the Tribunal and the evidence relied upon by the insurer (notably RW-1 and documentary exhibits Ex. R2 and Ex. R3). The analytical steps, as reflected in the opinion, were:

The central factual dispute relevant to insurer liability was whether the driver held an effective driving licence authorising him to drive the class of vehicle involved in the accident.
The Tribunal had recorded RW-1's evidence that Ex. R3 (driving licence) authorised the driver to drive a light motor vehicle (non-transport), whereas Ex. R2 indicated that vehicle No. KA.33/272 was a goods vehicle (a transport vehicle). The Tribunal read these documents as showing the driver lacked the specific entitlement required by the policy and by Section 3 of the Motor Vehicles Act.
The owner/appellant's argument that policy language (Ex. R1) permitting "any person including insured provided that the person driving holds an effective driving licence" brought the insurer within cover was considered but rejected because, on the Tribunal's factual finding, the driver did not hold an effective licence for the class of vehicle that caused the accident.
The court distinguished Sohanlal Passi v. P. Sesh Reddy because that case involved an insured who had engaged a duly licensed driver and the loss was caused by an unlicensed third person driving without the owner's knowledge — facts materially different from the present case where the driver himself lacked the required class endorsement.
The court accepted the insurer's reliance on United India Insurance Co. Ltd. v. K. Subramaniam and Oriental Insurance Co. Ltd. v. Ashok, and on Section 3 of the Motor Vehicles Act, asauthority for the legal proposition that driving without an effective licence to drive the specific class of vehicle disentitles the insurer from indemnifying the owner.
The court also noted that the driver was not examined and that the owner had not taken the contention before the Tribunal that the driver had a valid licence entitling him to drive that vehicle; the Tribunal's factual conclusions on licence entitlement were therefore not displaced on appeal.
On this basis the appellate court concluded that the Tribunal correctly negatived the appellant's contention that liability should have been fastened on the insurance company and that the insurer was not liable under the terms of the policy and statutory law.

Holding and Implications

APPEAL DISMISSED.

Direct consequence: The Tribunal's award of compensation (Rs. 63,000 with interest at 6% p.a. to the father of the deceased) and its allocation of liability solely on the owner (and not on the insurance company) is upheld. The court rejected the appellant's contention that the insurer should have been fastened with liability on the ground that the driver lacked an effective licence for the class of vehicle involved at the time of the accident.

Broader implications: The opinion applies established principles (as reflected in the cited precedents and Section 3 of the Motor Vehicles Act) that absence of a valid driving licence authorising the driver to drive the specific class of vehicle disentitles an insurer from indemnity under the policy. The decision does not purport to set a new legal precedent beyond applying those principles to the facts of this record.

Note: This summary is prepared strictly from the content of the provided opinion. No facts or inferences beyond the text of the opinion have been introduced.

Show full summary ...

Prakash v. Hanumanthraya & Others

B.S Sreenivasa Rao, J.:—

This appeal is filed by the appellant/owner of the goods vehicle which involved in the accident against the judgment and award dated 19.1.1996 passed in MVC. No. 142/92 by the 1st Additional District Judge and Member, MACT, Gulbarga awarding compensation of Rs. 63,000/- with interest at 6% p.a from the date of petition till the date of realisation to the father of the deceased/dependent in motor vehicle accident.

2. Heard the learned Counsel for the appellant owner of the vehicle and the learned Counsel for respondent-2.Insurance Company.

3. The main ground urged by the learned Counsel for the appellant is that the liability should have also been fastened against the insurance company/respondent-2 as the vehicle was insured on the date of the accident. The contention of the learned Counsel for the appellant is that from the copy of the driving licence Ex. R3 issued to respondent-1, it is clear that the driver was authorising to drive the light motor vehicle and when on the date of the accident the vehicle was covered with the insurance policy, the 2nd respondent/Insurance company should have also been fastened with the liability.

4. During the course of the order, the Tribunal has observed, regarding the liability to the compensation it is in the evidence of RW-1 the official of the Insurance Company has stated that the driver was holding driving licence to drive light motor vehicles, the vehicle KA. 33/272 as per Ex. R2 is a heavy motor vehicle, the driver was not competent to drive the vehicle in terms of the insurance policy. Hence the insurance company is not liable to pay the compensation and the liability has not fastened on the Insurance Company.

5. The learned Counsel for the appellant has strongly urged that Ex. R-1 copy of the insurance policy which states that the vehicle No. KA. 33/272 is a goods carrying vehicle and the persons or classes of persons are entitled to drive or any person including insured provided that the person driving holds an effective driving licence at the time of the accident and is not disqualified from holding or obtaining such a licence. Provided also that the person holding an effective learner's licence may also drive the vehicle when not used for the transport of goods at the time of the accident and that such a person satisfies the requirements of Rule 3 of Central Motor Vehicles Rules 1999.

6. It has been urged by the learned Counsel for the appellant that in Sohanlal Passi v. P. Sesh Reddy . 1996 ACJ 1044. wherein it has been held that bus driver allowed the conductor/cleaner who was not duly licenced person to drive the bus and he caused the accident - contention that the accident occurred when an unlicenced person was driving the vehicle, there has been breach of a specific condition in the policy and the insurance company cannot be held liable to indemnify the owner. Insured had engaged a licensed driver and had placed the vehicle in his charge and there was no allegation that the insured was guilty of violating the condition that the vehicle shall not be driven by a person not duly licenced - Whether the insured had wilfully violated the condition of the policy and the Insurance company is exonerated from liability. Held - No.

7. The facts of this case can be distinguished from the facts of the present case. The owner engaged a duly licenced person as driver and placed the bus in his charge - Driver allowed the conductor/cleaner who was not duly licensed to drive the vehicle and he caused the accident resulting in the death of a scooterist. Hence, the insurance company was made liable to indemnify the owner who had insured the bus with the insurance company and there was no violation of the policy by the owner of the vehicle.

8. In the present case on hand, the owner of the vehicle and the driver filed written objections resisting the claim and also the insurance company has filed the objections to the effect that the vehicle No. KA. 33/272 was insured with the insurance company during the period of the accident, but the insurance company has denied the liability in view of the breach of condition in-the policy viz., the persons or classes of persons entitled to drive as the vehicle at the material time was given by a person holding licence to drive light motor vehicle only whereas the vehicle involved is a light goods vehicle. The person driving the vehicle ought to have possessed a licence to drive light goods vehicle. Hence the learned Counsel for the insurance company contended that as per the conditions of the policy the driver who was driving licence to drive the vehicle and the insurance, company is not liable. In order to establish this contention, the insurance company examined RW-1 - Assistant Divisional Manager, United Insurance Company who has clearly stated in the evidence that Ex. R3 driving licence issued to the driver from the Assistant Regional Transport Officer, Yadgir and he has also stated that the driver was having light motor vehicle (non-transport) driving licence. He was not authorised to drive light motor vehicle (transport). As the driver did not hold valid driving licence at the time of accident, insurance company is not liable to indemnify the owner.

9. The contention of the learned Counsel for the appellant/owner that to invoke the aid, the proyiso that even the persons holding learner's licence to drive the vehicle at the time of the accident, if satisfied, the insurance company should be made liable, does not come into play in view of the terms and conditions of the policy that the driver was driving the vehicle and it was a goods vehicle for which the licence was effective at the time of the accident. It is to be noted that the driver is not examined in the case. It is also not the contention taken in the objection filed by the driver and the owner. At the time of the accident, the driver had valid driving licence and the vehicle was insured and hence the insurance company is liable to pay the compensation. No such statement has been made in the objections filed by the owner before the Tribunal. The main question will be whether in view of the clause in the policy, the insurance company is not liable to indemnify the owner of the vehicle as the driver was not having effective driving licence at the time of causing the accident.

10. The learned Counsel for the 2nd respondent has relied on the decision in United India Insurance Co. Ltd. v. K. Subramaniam . 1991 ACJ 625. wherein it has been held that the defence available to insurance company Accident by a tempo, a three-wheeler goods vehicle, driven by a driver who was holding, licence to drive a light motor vehicle - Driver's licence was endorsed after the date of accident authorising him to drive a transport vehicle as paid employee - Whether the driver had a valid licence on he date of accident to drive the tempo and the insurance company liable - Held in the negative. During the course of the judgment it has been observed that Section 3(1) of the Motor Vehicles Act states that no person shall drive a motor vehicle in any public place unless he holds an effective driving licence issued to himself authorising him to drive the vehicle; and no person shall so drive a motor vehicle as a paid employee or shall so drive a transport vehicle, unless his driving licence specifically entitles him so to do. In the present case on hand, the driving licence has been produced in the case which has been marked as Ex. R3. It has been specifically mentioned that the driver was authorised to drive light motor vehicle (non-transport) and Ex. R2 is the extract from the RTO Office which shows that the class of vehicle as ‘goods vehicle’. That means to say, as per the driving licence produced and relied as per Ex. R3 it is seen, the driver was not having valid driving licence to drive the vehicle particularly a light motor vehicle which is a transport vehicle at the time of the accident.

11. The learned Counsel for the 2nd respondent has contented that as per Section 3 of the Motor Vehicles Act, no person shall drive a motor vehicle in any public place unless he holds an effective driving licence issued to himself authorising him to drive the vehicle and no person shall so drive a vehicle as a paid employee or shall so drive a transport vehicle, unless his driving licence specifically entitles him so to do. In the present case on hand, as per Section 3, it is made clear, on the date of the accident, the driver had no effective driving licence to drive the vehicle which made that accident. He was permitted to drive light motor vehicle (non-transport) whereas the vehicle is a goods vehicle and which has been insured as per Ex. R1 - the insurance policy with the insurance company. The learned Counsel for the insurance company has also relied on the decision in Oriental Insurance Company Ltd. v. Ashok . II 1995 CPJ 208 NC. wherein it has been held that the complainant insured his vehicle with the Insurance Company - Met with an accident - Claim lodged - Claim rejected as the driver was not having valid licence - State Commission allowed the complaint - Hence appeal - Whether the Insurance Company is liable to indemnify the complainant. It has been held in the negative. In the present case on hand, the specific contention of the learned Counsel for the insurance Company is that the driver was not having an effective valid driving licence at the time of causing the accident and hence in view of the terms and conditions of the policy, the insurance company is not liable and which has been proved by the insurance company. The Tribunal has also upheld the contention of the insurance company and has fastened the liability only on the owner of the vehicle.

12. In view of my above discussion, the contention of the learned Counsel for the appellant on the liability should have been fastened against the insurance company cannot be accepted. It is not much contended about the amount of compensation awarded. The only ground which has been seriously urged is that the liability should have been fastened against the insurance company which has been negatived by the Tribunal basing its conclusion on the terms and conditions of the policy and also the driving licence issued to the driver which clearly shows that the driver had no effective valid driving licence to drive the light motor vehicle (non-transport).

13. Accordingly, the appeal fails and the same is dismissed.

Prakash v. Hanumanthraya & Others

Judgment Summary — B.S. Sreenivasa Rao, J.

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant's Arguments

Insurance Company's Arguments (Respondent-2)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Prakash v. Hanumanthraya & Others

Comments