Case Note & Summary
The appeal was filed by the Oriental Insurance Company Limited challenging the judgment and award dated 30.06.2012 passed by the Additional Senior Civil Judge and MACT-XIII, Madhugiri, in MVC No.20/2010, whereby compensation of Rs.3,03,777/- with interest at 6% p.a. was awarded to the claimant, a minor represented by his mother, for injuries sustained in a motor vehicle accident. The Insurance Company contended that the driver of the offending vehicle, respondent No.2, did not possess a valid driving licence at the time of the accident, and thus the insurer should not be liable. The Tribunal had fastened liability on the insurer. The High Court examined the evidence, including the driving licence produced, which was a learner's licence valid from 23.12.2008 to 22.03.2009, but the accident occurred on 23.12.2009, after its expiry. No valid driving licence was produced. The Court held that the driver was not duly licensed, and the owner failed to verify the licence validity, constituting a breach of policy condition under Section 149(2)(a)(ii) of the Motor Vehicles Act, 1988. Consequently, the Insurance Company is not liable to pay compensation. However, applying the principle of 'pay and recover' as laid down in various Supreme Court judgments, the Court directed the Insurance Company to pay the award amount to the claimant and recover the same from the owner of the vehicle. The appeal was allowed in part, modifying the award to the extent of liability.
Headnote
A) Motor Vehicles Act - Insurance - Liability of Insurer - Section 149(2)(a)(ii) Motor Vehicles Act, 1988 - Breach of Policy Condition - The Insurance Company contended that the driver of the offending vehicle did not have a valid driving licence at the time of the accident, which constituted a breach of the policy condition. The Tribunal had fastened liability on the insurer. On appeal, the High Court examined the evidence and found that the driver possessed only a learner's licence which had expired, and no valid licence was produced. The Court held that the owner failed to verify the licence validity, and thus the Insurance Company is not liable to pay compensation. However, applying the principle of 'pay and recover', the insurer was directed to pay the award amount and recover from the owner. (Paras 4-10) B) Motor Vehicles Act - Driving Licence - Learner's Licence - Expired Licence - The driver had a learner's licence valid from 23.12.2008 to 22.03.2009, but the accident occurred on 23.12.2009, after the licence had expired. No evidence of a valid driving licence was produced. The Court held that the driver was not duly licensed, and the owner was negligent in not ensuring a valid licence. (Paras 5-7) C) Motor Vehicles Act - Compensation - Quantum - Not in Issue - The Insurance Company did not challenge the quantum of compensation awarded by the Tribunal. The appeal was only against the fastening of liability. The Court did not interfere with the quantum. (Para 3)
Issue of Consideration
Whether the Insurance Company is liable to pay compensation when the driver of the offending vehicle did not possess a valid driving licence at the time of the accident.
Final Decision
Appeal allowed in part. The judgment and award of the Tribunal is modified. The Insurance Company is directed to pay the compensation amount of Rs.3,03,777/- with interest at 6% p.a. to the claimant and recover the same from the owner of the vehicle (respondent No.2) in accordance with law.
Law Points
- Insurance company not liable if driver had no valid driving licence
- owner must verify licence validity
- breach of policy condition absolves insurer
- pay and recover principle applicable
