Delhi High Court
D.T.C. vs Jagdish Kataria & Ors. on 5 March, 2012
Author: G.P. Mittal
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 29th February, 2012
Pronounced on: 5th March, 2012
+ MAC.APP. 565/2008
D.T.C. ..... Appellant
Through: Mr. S.P.Gupta, Advocate
versus
JAGDISH KATARIA & ORS. ..... Respondents
Through: Mr. Pradeep Gaur with
Mr.Amit Gaur and
Mr.Shashank Sharma,
Advocates for R-2.
+ MAC.APP. 609/2008
D.T.C. ..... Appellant
Through: Mr.S.P.Gupta, Advocate
versus
LAKHAN LAL & ORS. ..... Respondents
Through: Mr.V.C.Jha with Ms.Sonia
Sharma, Advocates.
+ MAC.APP. 610/2008
D.T.C. ..... Appellant
Through: Mr.S.P.Gupta, Advocate
versus
ABHISHEK GUPTA & ORS. ..... Respondents
Through: Mr.Manoj R.Sinha, Advocate.
+ MAC.APP. 75/2009
D.T.C. ..... Appellant
Through: Mr.S.P.Gupta, Advocate
MAC APP 565/2008 Etc. Page 1 of 20
versus
THE NATIONAL INSURANCE CO.LTD. & ORS.
..... Respondents
Through: Mr. Pradeep Gaur with
Mr.Amit Gaur and
Mr.Shashank Sharma,
Advocates for R-1.
+ MAC.APP. 97/2009
DTC ..... Appellant
Through: Mr.S.P.Gupta, Advocate
versus
VIDYA DEVI & ORS. ..... Respondents
Through: Mr.Pradeep Gaur with Mr.Amit
Gaur and Mr.Shashank Sharma,
Advocates for R-2.
+ MAC.APP. 258/2009
DTC ..... Appellant
Through: Mr.S.P.Gupta, Advocate
versus
PAWAN KUMAR GAHLOT & ORS. ..... Respondents
Through: Mr.Pradeep Gaur with Mr.Amit
Gaur and Mr.Shashank Sharma,
Advocates for R-2.
+ MAC.APP. 378/2009
D.T.C. ..... Appellant
Through: Mr.S.P.Gupta, Advocate
versus
SUMANTRA DEVI & ORS ..... Respondent
Through: Mr.V.C.Jha and Ms.Sonia
Sharma, Advocates for R-8.
MAC APP 565/2008 Etc. Page 2 of 20
+ MAC.APP. 474/2009
DELHI TRANSPORT CORPORATION ..... Appellant
Through: Mr.S.P.Gupta, Advocate
versus
KRISHAN LAL AND CO. ..... Respondent
Through: Ms.Neerja Sachdeva, Advocate
for R-4.
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
JUDGMENT
G. P. MITTAL, J.
1. In these eight Appeals common question of law is involved;
"Whether the insured shall be guilty of breach of condition of
policy read with section 149(2)(a)(ii) of the Motor Vehicles
Act, if the driving licence of the driver had expired more than
thirty days before the accident and it could not be renewed from
the date of expiry under Section 15 of the Act".
2. The Motor Accident Claims Tribunal (the Claims Tribunal)
while awarding compensation in favour of the Claimants
permitted the Insurer to recover the compensation from the
Appellant Delhi Transport Corporation, a Public Sector
Transport Undertaking (hereinafter referred to as „DTC‟) as its
drivers did not possess a valid and effective driving licence on
the date of the accident.
3. It is an admitted case of the parties that the driving licence was
not renewed within a period of 30 days of its expiry so as to
relate back to the date of expiry.
4. It is urged on behalf of the DTC that as per provision of Section
149 (2) (a) (ii) of the Motor Vehicle Act, 1988 (the Act), the
requirement is that the driver should have held a valid driving
licence and should not be disqualified from holding such a
driving licence. Thus, it is contended that if the driving licence
has expired on the date of the accident and is renewed within a
period of five years from the date of its expiry, the driver
holding such driving licence shall be considered "duly
licensed" unless he is disqualified from holding such a driving
licence.
5. It is argued that under Section 146 of the Act, a person except
as a passenger is debarred from using a motor vehicle in any
public place, unless there is in force in relation to the use of the
vehicle, by that person or any other person, a policy of
insurance complying with the requirement of Chapter XI.
6. It is contended that the Insurer cannot include any condition in
an Insurance Policy denying the benefit provided under the Act,
but the policy can grant more benefits than the ones provided
under the Act.
7. Learned counsel for the Appellant DTC places reliance on a
Division Bench judgment of the Karnataka High Court in
K.G.Srinivasamurthy v. Habib Khathun & Ors., II (2002) ACC
510 (DB) and a judgment of this Court in Ami Chand & Anr. v.
Jai Prakash & Ors., FAO 488/1999 decided on 12.10.2011.
8. Before adverting to the case law cited by the Appellant, I would
extract the provisions of Section 149 (2) (a) (ii) of the Act and
the relevant Clause in the Insurance Policies placed and proved
on record before the Claims Tribunal. I may mention that the
condition entitling person/persons to drive is same in all the said
Appeals; the relevant Clause therefore shall be extracted from
MAC APP.565/2008.
9. Section 149 (2) (a) (ii) of the Motor Vehicles Act, 1988 reads as
under:-
"149. Duty of insurers to satisfy judgments and awards
against persons insured in respect of third party risks-
(1) ....................
(2) No sum shall be payable by an insurer under sub-
section (1) in respect of any judgment or award unless,
before the commencement of the proceedings in which
the judgment of award is given the insurer had notice
through the Court or, as the case may be, the Claims
Tribunal of the bringing of the proceedings, or in respect
of such judgment or award 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) that there has been a breach of a specified condition
of the policy, being one of the following conditions,
namely:-
(i) a condition excluding the use of the vehicle-
(a) .............
(b)...............
(c) ...............
(d) ...............
(ii) a condition excluding driving by a named person or
persons or by any person who is not duly licensed, or by
any person who has been disqualified for holding or
obtaining a driving licence during the period of
disqualification; or.."
10. Condition in the Insurance Policies reads as under:-
"Persons or Classes of Persons entitled to drive:-
Any person including insured Provided that a person
driving hold an effective driving licence at the time of the
accident and is not disqualified from holding or
obtaining such a licence."
11. It would appropriate to notice the provisions contained in
Section 14 and 15 of the Act. Section 14 talks about the
currency of driving licence to drive motor vehicles. Its proviso
says that every driving licence notwithstanding its expiry under
Sub-section (2) would continue to be effective for a period of 30
days from the date of expiry.
12. Section 15 of the Act provides different fees for an application
for renewal of driving licence if made previous to or within 30
days of the expiry of the licence or when the same is made after
the expiry of the earlier said period of 30 days. Second proviso
appended to sub-Section (4) to Section 15 provides that if the
application is made after a period of five years after the driving
licence is ceased to be effective, the licencing authority may
refuse to renew the driving licence, unless the applicant
undergoes and passes the test of competence to drive. In other
words, the Licencing Authority is under obligation to renew the
licence, if an applicant makes an application for its renewal
within a period of five years from the date when it ceased to be
effective.
13. It is the contention of the learned counsel for the Appellant
DTC that renewal of a driving licence within a period of five
years and 30 days after its expiry is automatic, once the
application for renewal is made by the applicant. Thus, the
learned counsel argues that any person who has got his licence
renewed within a period of five years from the time when the
driving licence ceased to be effective, it shall be presumed that
the person was duly licensed within the meaning of Section 149
(2) (a) (ii) of the Act.
14. First of all, I would advert to the judgments relied upon by the
leaned counsel for the Appellant DTC.
15. In K.G.Srinivasamurthy v. Habib Khathun & Ors., II (2002)
ACC 510 (DB), the Division Bench of Karnataka High Court
referred to Division Bench judgment of Madras High Court in
Oriental Insurance Company Ltd. v. Indirani & Ors., 1995 ACJ
703; National Insurance Company Ltd. v. Thulasi, (1994) 1 LW
567 and Oriental Insurance Co. Ltd. v. Mohammed Sab Ali Sab
Kaladagi, II (1999) ACC 70 and held as under:-
"54..... The only contention raised by learned Counsel
for the appellant is that the Insurance Company is not
liable in this case to pay the compensation inasmuch as
the driver of the vehicle, involved in the accident, did not
have an effective licence on the date of accident.
Accident had occurred on 28.9.1992. The licence which
had expired on 26.6.1992. That was renewed only on
26.10.1992. In between the two dates, the accident had
occurred. Hence, it is contended by the learned Counsel
for the appellant that the exclusion clause in the policy
will come into play.
In that case the relevant clause in the insurance policy
read as follows:
"Provided that a person driving holds an effective
driving licence at the time of the accident and is not
disqualified from holding or obtaining such a licence."
x x x x x x x x x x x
The clause can be divided into three parts. The first part
refers to a person holding an effective driving licence at
the time of the accident. The second part refers to the
disqualification of such person from holding it. Even
after obtaining a licence, a person may get disqualified
under the provisions of the Act from holding it and such a
person will be governed by the second part. The third
part refers to persons who are disqualified from
obtaining such a licence. The first part cannot go
together with the third part. In other words, if a person is
having an effective driving licence he cannot be said to
be disqualified from obtaining such a licence. It means if
there is an effective valid licence, it could be contended
by the insurance company that he is subsequently
disqualified from holding it, but it is not open to the
company to contend that he was disqualified from
obtaining that licence.
x x x x x x x x x x x
(3) A similar question arose in case of National
Insurance Co. Ltd. v. Thulasi (1994) 1 LW 567. The
clause in the insurance policy in that case was worded
exactly in similar language. While considering that
clause the Bench to which one of us (Srinivasan, J.) was
a party referred to Section 96(2) (b) (ii) of the Motor
Vehicles Act and said:
"There are two limbs to the section and the disjunctive
'or' is used. The first part deals with a case where the
driver is not duly licensed. If a person had no licence at
all prior to and at the time of the accident he will be
covered by the first part. If the first part applies to a
case, the second part will not apply. The second part will
necessarily apply only to cases in which the driver had a
licence sometime or other and at the time of the accident
it is not subsisting. The latter part of the section cannot
be interpreted as meaning that even if the driver had no
licence at any time, he must be shown to be disqualified
to hold or obtain a licence for the purpose of excluding
the liability of the insurer."
x x x x x x x x x x x
56. In Oriental Insurance Co. Ltd. v. Mohammed Sab Ali
Sab Kaladagi, II (1999) ACC 70, the period of driving
licence had expired on 9.6.1988 and it was renewed on
3.11.1992 and in the meanwhile the accident had
occurred on 13.10.1992 and the question was as to
whether the insurer will be liable if the driving licence of
the driver of the offending vehicle had not been renewed
on the date of the accident, learned single Judge of this
Court held as follows:
(5) The wording used as 'or' assumes much
importance in this case. According to the
construction of this section, the Insurance Company
can succeed only if the person was not duly
licensed or he was disqualified from holding or
obtaining the driving licence during the period of
disqualification. According to the construction of
the language either of the conditions has to be duly
fulfilled. But in the policy issued the word 'and' is
used as conjunction. By the use of word 'and' it
goes to show that the Insurance Company has to
prove that the driver was not only not duly licensed
but was also disqualified for holding the licence.
The word 'or' and the word 'and' used in the policy
assumes much importance. There cannot be
compromise between the word 'or' and 'and'. The
plain language as it is read has to be understood.
In this direction, Mr. B.S. Patil, learned Counsel
for the respondents relied upon the observation as
how the construction of the statute be understood.
On page 96 of the Interpretation of Statutes by
Maxwell it is stated as follows:
"To suppress the mischief and advance the
remedy.- It is said to be the duty of the Judge to
make such construction of a statute as shall
suppress the mischief and advance the remedy."
x x x x x x x x x x x
60. We are in respectful agreement with the above said
decisions. It is clear that mere fact that the driver of the
offending vehicle had not got his driving licence renewed
on the date of the accident and got it renewed
subsequently would not amount to breach of condition of
the policy as it cannot be said that there was violation of
the condition of the exclusion clause."
16. Thus, the Karnataka High Court took the view that where the
driver of an offending vehicle had got renewed his driving
licence subsequently even beyond the period of 30 days, it
could not be said that there was violation of condition of the
exclusion Clause.
17. This Court in Ami Chand & Anr. v. Jai Prakash & Ors., FAO
488/1999 decided on 12.10.2011 took the similar view as was
taken by the Karnataka High Court.
18. At this juncture, I would like to refer to the use of different
terminology for a valid driving licence in Section 3 and Section
149 (2) (a) (ii) of the Act.
19. Section 3 prohibits a person to drive a motor vehicle in any
public place unless he holds "an effective driving licence issued
to him authorizing him to drive the vehicle." On the other hand,
Section 149 (2) (a) (ii) lays down that the Insurance Company is
permitted to defend an award given by the Claims Tribunal if
there has been a breach to satisfy condition of policy and one of
such condition is "a condition excluding driving by a named
person or persons or by any person who is not duly licensed".
20. The use of the words „duly licensed‟ used in Section 149, in my
view would mean to convey that the driver of the offending
vehicle should not only have a licence which is valid on the
date of accident, but also should be for the class of vehicle
which the driver was driving. The counsel for the Appellants
relied on Swaran Singh‟s case (supra) to point out that the word
„duly licensed‟ has been used in the past tense, and therefore the
driving licence, even though had expired the driver would still
be duly licenced, until a period of 5 years from the date of
expiry, this argument is liable to be rejected. The Supreme
Court in Swaran Singh's case (supra), meant that the word
„duly licensed‟ would also include the period of one month after
the expiry of driving licence of a driver, which has been
unequivocally specified under Section 14 of the Act. Therefore,
it was in that context did the Supreme Court conclude that the
word „duly licensed‟ is used in the past tense.
21. A similar condition in the Insurance Policy was analyzed by the
Supreme Court in National Insurance Company Limited v.
Jarnail Singh & Ors., (2007) 15 SCC 28, and in New India
Assurance Company Ltd. v. Suresh Chandra Aggarwal, (2009)
15 SCC 761. In both these reports of the Supreme Court, it was
held that, if the driving licence is renewed after a period of 30
days of the expiry of the driving licence, it would be effective
only from the date of its renewal and the driver of the vehicle
shall be deemed to be without a driving licence in the
interregnum and the Insured would be guilty of breach of the
condition of policy as envisaged under Section 149 (2) (a) (ii) of
the Act.
22. In Jarnail Singh & Ors. (supra) the accident took place on
20.10.1994. The driving licence had expired on 18.05.1994 and
it was renewed w.e.f. 28.10.1996. After referring to Section 15
(1) of the Act that since the Insurance Policy stipulated the
condition that the vehicle would not be driven by a person
without a valid driving licence, the Insured would be guilty of
the violation of the condition of the policy.
23. In Suresh Chandra Aggarwal (supra) it was held that since the
driver did not have an effective and valid driving licence on the
date of the accident, the Insurance Company could avoid the
liability to pay the compensation. Para 15 to 23 of the report
are extracted hereunder:-
"15. Having noted the relevant Statutory provisions, we
may now advert to the facts at hand. As noticed above,
the stand of the appellant is that the claim preferred by
the claimant could not be processed and had to be
repudiated because special condition No. 5 of the
insurance policy had been violated inasmuch as the
driver of the insured vehicle did not have an effective
driving licence at the time of the accident.
16. Special condition No. 5 reads as follows:
"5. Persons or classes of persons entitled to drive-
(a) The insured,
(b) Any other person who is driving on the
insured's order or with his permission:
Provided that the person driving holds or had held
and has not been disqualified from holding an
effective driving licence with all the required
endorsements thereon as per the Motor Vehicles
Act and the Rules made thereunder for the time
being in force to drive the category of Motor
Vehicle insured hereunder." (emphasis supplied)
It is manifest that the said condition contemplates that
apart from the insured, any other person, authorised by
the insured, could also drive the vehicle provided the
person driving the vehicle "holds or had held and has not
been disqualified" from holding an effective driving
licence.
17. 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 25.10.
1991 i.e. four months prior to the date of accident on
29.02.1992 and it was renewed with effect from
23.03.1992. 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 23.03.1992.
18. 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, the proviso to Sub-
section (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.
19. 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 the afore-extracted condition was not
infringed. In our view, the argument is stated to be
rejected.
20. 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 26.10.1991 to
22.03.1992, 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. 29.02.1992.
21. 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.
22. 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. 23.03.1992 after
the death of the licence-holder on 29.02.1992. 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.
23. We are fortified in our view by the decision of this
Court in 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 16.05.1994.
The accident took place more than five months thereafter
i.e. on 20.10.1994 and the driving licence was renewed
only with effect from 28.10.1996. On these facts, it was
held that proviso to Sub-section (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."
24. Thus the Supreme Court held that the person holding an expired
licence would be guilty for the offence of driving the vehicle
without licence and the insurer for committing the breach of the
policy. It was held that the Insurance Company would not be
liable to pay any amount.
25. In view of the authoritative pronouncement of the Supreme
Court in Suresh Chandra Aggarwal (supra), where the terms of
the policy as extracted in Para 16 of the report were much
wider, still the driver was held to be not holding a valid driving
licence as the licence had expired and had not been renewed
within a period of 30 days of its expiry; it was held to be breach
of a condition of policy, entitling Insurance Company to avoid
the policy. The report in K.G. Srinivasamuthy (Supra) of
Karantaka High Court and a judgment of this Court in Ami
Chand (Supra) and the argument that the driving licence could
be renewed without taking any test within a period of five years
of the time it has ceased to be effective, are of no help to the
DTC.
26. Since these Appeals relate to the Claim in respect of injury to
third party, the Insurance Company was asked to pay the
compensation on account of its statutory liability with a right to
recover the same from the Insured i.e. DTC.
27. It goes without saying that the onus is on the Insurer to establish
that there is willful breach of the terms of policy. I would refer
to each of the eight cases except the condition of policy which
has been extracted earlier in Para 8 of the judgment.
MAC APP.565/2008
1. Date of Accident 29.07.2005
2. Date of Expiry of the driving Licence 03.11.1999
3. Date of renewal of the driving licence 17.08.2005
MAC.APP. 609/2008
1. Date of Accident 20.11.2003
2. Date of Expiry of the driving Licence 11.02.2002
3. Date of renewal of the driving licence 28.11.2003
MAC.APP. 610/2008
1. Date of Accident 20.01.2005
2. Date of Expiry of the driving Licence 04.11.2004
3. Date of renewal of the driving licence 06.02.2005
MAC.APP. 75/2009
1. Date of Accident 03.03.2004
2. Date of Expiry of the driving Licence 19.09.2002
3. Date of renewal of the driving licence 22.03.2004
MAC.APP. 97/2009
1. Date of Accident 30.08.2001
2. Date of Expiry of the driving Licence 30.04.2001
3. Date of renewal of the driving licence 01.07.2002
MAC.APP. 258/2009
1. Date of Accident 02.02.2003
2. Date of Expiry of the driving Licence 24.05.2002
3. Date of renewal of the driving licence 17.03.2003
MAC.APP. 378/2009
1. Date of Accident 31.05.2002
2. Date of issue of driving Licence 14.09.2004*
3. Date of Expiry of the driving licence 13.09.2007
* The driver Randhir Singh (R2W1) in his examination-in-
chief admitted that on the date of the accident his licence had
expired and he got it renewed on 14.09.2004.
MAC.APP. 474/2009
1. Date of Accident 02.07.2005
2. Date of Expiry of the driving Licence 14.04.2005
3. Date of renewal of the driving licence 13.07.2005
28. The DTC does not dispute that it was aware that the driving
licence of its driver had expired. The DTC is a Public Sector
Transport Company and is expected to take a test and see the
driving licence of the driver at the time he is employed or is
engaged to drive its bus. The case of expired driving licence is
different from a case of fake driving licence because owner of
the vehicle may not be able to distinguish between a fake and a
genuine driving licence. Once, it was established that the driver
held an expired driving licence it was for the Appellant DTC to
explain the circumstances under which it permitted the driver to
drive the vehicle, which has not been done. Therefore, the DTC
shall be presumed to be guilty of the willful breach of the
condition of the policy read with Section 149 (2) (a) (ii) of the
Act.
29. The Claims Tribunal by impugned judgment directed the
Insurance Company to satisfy the claim of the third party with a
right to recover the same from the DTC.
30. Since the Insurance Company was entitled to defend the action
in case of the driver of the vehicle was not duly licensed, the
Insurance Company was rightly granted an option to recover the
compensation paid from the DTC, the insured of the vehicle in
the respective Appeals by the impugned order.
31. The conclusion reached by the Claims Tribunal cannot be
faulted.
32. No other contention has been raised by the Appellant.
33. The Appeals are devoid of any merit. The same are accordingly
dismissed. No costs.
(G.P. MITTAL)
JUDGE
MARCH 05, 2012/vk
