Case Note & Summary
The present first appeals arose from a motor accident claim arising out of a collision between a bus and a truck on 15 June 1996. Claimants, passengers in the bus, filed petitions under Section 166 of the Motor Vehicles Act, 1988, seeking compensation for injuries sustained. The bus was owned by Salvador Rodrigues and insured with The New India Assurance Co. Ltd., the appellant. The insurer contested liability on the ground that the bus driver, Alvino Antony Rodrigues, did not hold a valid driving licence. It contended that the licence was issued when the driver was 17 years and 5 months old, below the statutory minimum age of 18 years under Section 4(3) of the Act, and that the endorsement for a transport vehicle was granted when he was under 20 years, violating Section 4(2). The insurer also alleged the licence was fake and had expired without renewal. The Motor Accidents Claims Tribunal rejected the insurer's defence, holding that the insurer failed to prove the driver's underage status and that the licence was invalid. Aggrieved, the insurer filed appeals before the High Court of Bombay at Goa. The High Court examined the evidence, including the birth certificate and depositions of transport department officials, and concluded that the driver was indeed a minor on the date of issuance of the driving licence, making the licence illegal and fake. However, placing reliance on the Supreme Court decision in National Insurance Co. Ltd. v. Parvathneni, the court held that insurers cannot avoid liability to third-party victims even in cases of fake licences. The statutory liability to third parties prevails, and the insurer is obliged to pay the compensation. To balance the equities, the insurer was granted a right to recover the paid amount from the owner and driver of the offending vehicle, who were responsible for the breach of policy conditions. Accordingly, the appeals were partly allowed, and the impugned judgment and award were modified to direct the insurer to pay the claimants and then recover from the owner and driver.
Headnote
A) Motor Vehicles - Driving Licence - Validity - Motor Vehicles Act, 1988, Section 4(3) - The driving licence was issued when the driver was 17 years 5 months and 14 days old, below the minimum age of 18 years prescribed under Section 4(3) of the Act. The court held that such a licence is void ab initio and cannot be validated by any subsequent renewal or endorsement, rendering it ineffective. (Paras 14-23) B) Motor Vehicles - Insurance - Third Party Liability - Motor Vehicles Act, 1988 - Following National Insurance Co. Ltd. v. Parvathneni & Anr., (2009) 8 SCC 785, the court held that the insurer cannot avoid liability to third-party claimants even if the driving licence is fake. The insurer must pay the compensation awarded and then may recover the amount from the owner and driver who were in breach of policy conditions. (Paras 24-25)
Issue of Consideration
Whether the insurer is liable to pay compensation to third-party claimants when the driver of the offending vehicle possessed a fake or invalid driving licence.
Final Decision
The appeals were partly allowed. The High Court modified the impugned judgment and award of the Tribunal by directing the insurer to pay the compensation to the claimants and thereafter recover the same from the owner and driver of the bus jointly and severally. The finding that the driver did not hold a valid driving licence was upheld.
Law Points
- Even if a driving licence is fake or invalid
- the insurer cannot avoid liability to third-party claimants under the Motor Vehicles Act
- 1988
- the insurer must pay and then recover from the owner and driver.
