NEW INDIA ASSURANCE CO. LTD.versusSURESH CHANDRA AGGARWAL

                         [2009] 10 S.C.R. 885

    ;
                    NEW INDIA ASSURANCE CO. LTD.                         A
                                     v.
                     SURESH CHANDRA AGGARWAL
                       (Civil Appeal No. 44 of 2003)
                               JULY 10, 2009
                                                                         B
             [D.K. JAIN AND B. SUDERSHAN REDDY, JJ.]

    "
            Motor Vehicles Act, 1988:

              ss. 3,5 and 15(1), proviso - Renewal of driving licence - c
        Effective date - HELD : If a licence is renewed within 30 days
        of its expiry, renewal dates back to the date of its expiry- But,
        when an application for renewal of a licence is fifed after more
        than 30 days of its expiry, the proviso to s. 15(1) is attracted
        and the licence is renewed only with effect from the date of D
        its renewal and in the interregnum there is no effective licence
        - In the instant case, proviso to s.15(1) is attracted and there
        was no valid and effective licence on date of accident -
        Besides, the driver having died in accident, his driving licence
        could not have been renewed thereafter - Special condition
                                                                          E
        of insurance policy having been violated, the insurer was not
        liable to indemnify the claimant for the loss suffered due to
        damage of insured vehicle - Judgment of National
        Commission allowing the claim set aside - Consumer
        Protection Act, 1986 - Insurance of motor car.
                                                                         F
            A comprehensive insurance policy in respect of a
        motor car of the complainant was valid from 31st May,
        1991 to 30th May, 1992. The said vehicle met with an
        accident on 29th February, 1992 resulting in death of the
        driver and extensive damage to the car. The claimant             G
        lodged a complaint for Rs.1 lac with the appellant-insurer,
1       which repudiated the claim on the ground that special
        condition no. 5 of the insurance policy was violated as
        the driver did not have a valid and effective driving licence
                                    885                                  H
    886      SUPREME COURT REPORTS           [2009] 10 S.C.R.


A on the date of the accident as his licence was valid only      ..
  up to 25th October, 1991. The claimant filed a complaint
  before the District Consumer Disputes Redressal Forum
  contending that the licence was valid from October 26,
  1988 to October 25, 1991 and then from 23rd March 1992
B to 22nd March, 1995. The District Forum allowed the
  claim. The appeal of the insurer was dismissed by the
  State Commission and its revision was also dismissed by
  the National Commission. Aggrieved, the insurer filed the
  appeal.
c         Allowing the appeal, the Court

       HELD: 1.1. From a plain reading of s.15 of the Motor
  Vehicles Act, 1988, it is clear that if an application for
  renewal of a driving licence is made within 30 days of the
D 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 of its expiry, the
  proviso to sub-section (1) of s. 15 of the Act gets
E attracted and the licence is renewed only with effect from
  the date of its renewal and, thus, 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. In the
F instant case, as per the certificate issued by the licensing
  authority, the driving licence of the deceased driver had
  expired on 25th October, 1991 and it was renewed with
  effect from 23rd March, 1992. Thus, it stands proved that
  the driver did not hold an effective and valid driving
G licence, as required in the terms and conditions
  governing the policy, on the date of accident i.e. 29th
  February, 1992. [Para 16] [893-C-H; 894-A]

        1.2. Furthermore, the claimant not only committed
    breach of the terms of the policy, he also violated
H
       NEW INDIA ASSURANCE CO. LTD. v. SURESH               887
                 CHANDRA AGGARWAL

    provisions of s. 5 of the Act by entrusting the vehicle to A
    a person who did not hold a valid licence on the date of
    the accident. It is also significant to note, although it was
    not pleaded by the appellant, that the licence could not
    have been renewed w .e.f. 23rd March, 1992 after the
    death of the licence-holder on 29th February, 1992. B
    Therefore, the appellant was not liable to indemnify the
    claimant for the loss suffered by him in the accident of
'   the insured vehicle. The decision of the National
    Commission cannot be sustained and is set aside.
    [Para 17 and 21] [894-B-D; 895-G]                             c
        National Insurance Co. Ltd. vs. Jamail Singh & Ors. JT
    2001 (Suppl.2) SC 218, relied on.

        New India Assurance Company Ltd. vs. Prabhu Lal
'   (2008) 1 SCC 696, referred to.                      D
         Ashok Gangadhar Maratha vs. Oriental Insurance Co.
    Ltd. (1999) 6 sec 620, held inapplicable.

                        Case Law Reference:
                                                                   E
        JT 2001 (Suppl.2) SC 218 relied on             Para 7
        (2008) 1 sec 696           referred to         Para 7
        (1999) 6 sec 620           held inapplicable Para 6
         CIVIL APPELLATE JURISDICTION: Civil Appeal No. 44
                                                                   F
    of 2003.

        From the Judgment & Order dated 3.4.2002 of the National
    Consumer Disputes Redressal Commission at New Delhi in
    Revision Petition No. 333 of 1998.                             G
•       Kiran Suri, Pankaj Bala Verma and S.J. Amith for the
    Appellants.

        Vivek Vishnoi, Mukesh Verma, S.K. Sharma, Rajneesh
                                                                   H
    888        SUPREME COURT REPORTS                  [2009] 10 S.C.R.


A Kumar and Yash Pal Dhingra for the Respondent.

           The Judgment of the Court was delivered by

        D.K. JAIN, J. 1. This appeal, by special leave, is directed
  against order dated 3rd April, 2002, passed by the National
B Consumer Disputes Redressal Commission at New Delhi (for
  short "the National Commission"), whereby the Revision Petition
  filed by the appellant-The New India Assurance Company Ltd.,
  has been dismissed and order passed by the District Consumer
  Redressal Forum, Betul (for short "the District Forum"), directing
c payment of compensation to the respondent (hereinafter
  referred to as "the claimant") as affirmed by the Madhya
  Pradesh State Consumer Disputes Redressal Commission at
  Bhopal (for short "the State Commission") has been upheld.

D          2. Briefly stated, the material facts giving rise to the appeal
    are:

       On 31st May, 1991 the claimant, the sole respondent in
  this appeal, obtained from the appellant, a comprehensive
  insurance policy in respect of his Maruti Saloon 800 car. The
E policy was valid from 31st May, 1991 to 30th May, 1992.
  Unfortunately, on 29th February, 1992, the insured vehicle met
  with an accident resulting in the death of the driver and
  extensive damage to the car. On 3rd March, 1992, the claimant
  lodged a claim of Rs.1,00,000/- with the appellant for total loss
F of the vehicle.

        3. The appellant appointed a surveyor to assess the
  damage caused to the car. On the recommendation of the
  surveyor, the driving licence of the deceased driver was got
G verified from the office of the Regional Transport Authority
  (Licensing), Bhopal. The certificate issued by the said authority
  showed that the driving licence of the deceased driver was valid
                                                                             .
  from 26th October, 1988 to 25th October, 1991 and then from
  23rd March, 1992 to 22nd March, 1995. On receipt of the said
H
  verification report, the appellant repudiated the claim of the
       NEW INDIA ASSURANCE CO. LTD. v. SURESH                     889
          CHANDRA AGGARWAL [D.K. JAIN, J.]

.   claimant on the ground that the driver of the vehicle was not         A
    holding an effective driving licence at the time of accident as
    his licence was valid only up to 25th October, 1991, which had
    been renewed by the licensing authority only with effect from
    23rd March, 1992 whereas the accident took place on 29th
    February, 1992.                                                       B

         4. Being aggrieved by the said decision of the appellant,
    the claimant filed a complaint before the District Forum, Betul
    claiming a compensation of Rs.1,00,000/-. The claim was
    contested by the appellant on the ground that there was a
    breach of one of the conditions in the insurance policy inasmuch      C
    as the accidental vehicle was being driyen by a person who,
    at the time of accident, did not hold an effective driving licence.
    The District Forum, upon consideration of the rival contentions
    of the parties, accepted the complaint and directed the
    appellant to pay Rs.1,00,000/- to the claimant as compensation        D
    for damage to the car, besides costs.

          5. Aggrieved by the order passed by the District Forum,
    the 9ppellant as well as the claimant preferred appeals to the
     State Commission. The stand of the appellant was that they           E
    were not liable to pay any compensation because the vehicle
    was being driven by a person who did not have an effective
    licence at the time of accident whereas the grievance of the
    claimant was with regard to the inadequacy of the
    compensation awarded. The State Commission found that                 F
    although the licence of the deceased driver was valid up to 25th
    October, 1991 but the same had been renewed subsequently
    and, therefore, since he had not been disqualified to hold such
    a licence, the claim of the claimant could not be rejected on
    the ground that the licence had not been renewed on time. The         G
    compensation awarded was also held to be adequate.
    Accordingly, both the appeals were dismissed.

        6. Not being satisfied with the approach of the State
    Commission, the appellant preferred a Revision Petition before
    the National Commission. Following the decision of this Court         H
    890        SUPREME COURT REPORTS               (2009) 10 S.C.R.


A in Ashok Gangadhar Maratha Vs. Oriental Insurance Co. Ltd. 1,
  the National Commission, as noted above, dismissed the
  Revision Petition. It is this order which is under challenge in this
  appeal.

          7. Ms. Kiran Suri, learned counsel appearing on behalf of
8
    the appellant, submitted that all the three Fora committed a
     manifest error of law in holding that there was deficiency in
    service by the appellant and it was liable to pay compensation
    to the claimant. It was argued that the National Commission has
C    failed to appreciate that on the date of accident, the vehicle in
    question was being driven by a person who was not holding
    an effective driving licence. Merely because the driving licence,
    which had expired on 25th October, 1991 i.e., four months prior
    to the date of accident, was renewed subsequently with effect
    from 23rd March, 1992, it could not be said that on the date of
D   accident, the driver was holding an effective driving licence as
    stipulated in special condition No.5 of the cover note issued
    on 31st May, 1991. It was also contended that the ratio of the
    decision of this Court in the case of Ashok Gangadhar(supra),
    relied upon by the National Commission, was not applicable
E   on the facts of the present case. It was pointed out that the
    issue arising in this appeal is no longer res-integra and stands
    concluded in favour of the appellant by the decision of this Court
    in National Insurance Co. Ltd. Vs. Jarnail Singh & Ors. 2 • In
    support of the proposition that the issue involved in the case
F   of Ashok Gangadhar (supra) was entirely different and as a
    matter of fact the decision in that case was rendered on its own
    peculiar facts, the learned counsel placed reliance on the
    decision of this Court in New India Assurance Company Ltd.
    Vs. Prabhu La/3. Learned counsel pleaded that since the
G   claimant had failed to comply with a specific condition
    incorporated in the policy, the appellant was within its rights to
    reject his claim and therefore the question of any deficiency in
                                                                         ..
    1.   (1999) 6 sec 620.
    2.   JT 2001 (Suppl.2) SC 218.
H   3.   (2008J 1 sec 696.
                   NEW INDIA ASSURANCE CO. LTD. v. SURESH                      891
                      CHANDRA AGGARWAL [D.K. JAIN, J.]

                service by the appellant did not arise.                                A

                      8. Learned counsel appearing on behalf of the respondent,
                on the other hand, supporting the impugned order, submitted
                that in view of the fact that the complainant "had held" and "had
                not been disqualified from holding a licence" by the licensing
                                                                                       B
                authority under Section 19 of the Act, there was no breach of
                special condition No. 5 in the cover note as alleged by the
          ...   appellant. Learned counsel pleaded for dismissal of the appeal.

                    9. Before we deal with the rival contentions, it would be
                appropriate to briefly refer to the relevant provisions of the Motor   c
                Vehicles Act, 1988 (for short "the Act").

                     10. Section 3(1) of the Act inter alia stipulates that no
                person shall drive a motor vehicle in any public place unless
      ~
                he holds an effective driving licence issued to him authorizing        D
                him to drive the vehicle.

                     11. Section 5 declares that no owner or person in charge
                of a motor vehicle shall cause or permit any person who does
                not satisfy the provisions of Section 3 of the Act, to drive the
                vehicle.                                                               E

                      12. Section 15 which provides for renewal of driving
                licence, insofar as it is relevant for our purpose, reads as
                follows:
                                                                                       F
                    15. Renewal of driving licences.-(1) Any licensing
                    authority may, on application made to it, renew a driving
                    licence issued under the provisions of this Act with effect
                    from the date of its expiry:

                    Provided fhat in any case where the application for the G
                    renewal of a licence is made more than thirty days after
    ·"'             the date of its expiry, the driving licence shall be renewed
                    with effect from the date of its renewal:



-               The Section empowers a licensing authority to renew a driving          H
    892          SUPREME COURT REPORTS                (2009] 10 S.C.R.


A licence issued under the provisions of the Act with effect from            '
  the date of its expiry. However, proviso to the said provision
  clearly provides that where an application for renewal of a
  licence is made more than 30 days after the date of its expiry,
  the driving licence shall be renewed with effect from the date
B of its renewal.
          13. Section 19, relied upon by learned counsel for the
    claimant, authorizes the licensing authority to disqualify any
    person from holding a driving licence or revoke such a licence
    if the licensing authority is satisfied that the holder of the driving
c   licence is indulging in any of the acts, detailed in sub-section
    (1) of Section 19 of the Act. Indubitably, no such order had been
    passed against the driver of the vehicle involved in the accident.

       14. Having noted the relevant Statutory provisions, we may
D 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 beer. violated
  inasmuch as the driver of the insured vehicle did not have an
E effective driving licence at the time of the accident. Special
  condition No. 5 reads as follows:

          "5. Persons or classes of persons entitled to drive

           (a)    The insured
F
           (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
G         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."

H         15. It is manifest that the said condition contemplates that
                                                                                     -
                   NEW INDIA ASSURANCE CO. LTD. v. SURESH                    893
                      CHANDRA AGGARWAL [D.K. JAIN, J.]

          .>    apart from the insured, any other person, authorised by the         A
                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.

                       16. In the instant case, as noted above, as per the
                                                                                    B
                 certificate issued by the licensing authority, the driving licence
                 of the deceased driver had expired on 25th October, 1991 i.e.
                 four months prior to the date of accident on 29th February,
                 1992 and it was renewed with effect from 23rd March, 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.   c
                 On the contrary, it is the specific case of the appellant that the
                 driving licence was renewed only with effect from 23rd March,
                 1992. 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 D
                 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, proviso to sub-section (1) of Section 15 of the Act, gets
                attracted and the licence is renewed only with effect from the E
                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. However, the stand of the
                claimant before the District and State Fora as also before us F
                was that since the deceased driverwas 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. Admittedly,
                having failed to apply for renewal of the driving licence within G
                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 26th
                October, 1991 to 22nd March, 1992, the deceased driver had
                no valid and effective driving licence as contemplated under
                                                                                    H
    894      SUPREME COURT REPORTS                [2009] 10 S.C.R.


A 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. 29th February, 1992.

       17. As a matter of fact, in view of the clear mandate of
8
  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
C hold a valid licence on the date of the accident. 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. 23rd March, 1992 after the death of the licence-holder
  on 29th February, 1992. In our opinion, therefore, the appellant
D was not liable to indemnify the claimant for the loss suffered
  by him in the accident of the insured vehicle.

        18. We are fortified in our view by the decision of this Court
  in the case of Jarnai/ Singh (supra). In that case also, the
E driving licence of the driver, who drove the vehicle which got
  involved in the accident, had expired on 16th May, 1994. The
  accident took place more than five months thereafter i.e. on
  20th October, 1994 and the driving licence was renewed only
  with effect from 28th October, 1996. On these facts, it was held
F 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.

G       19. We are also of the opinion that Section 19 of the Act
  does not come to the aid of the claimant. Having found that
  between the period 26th October, 1991 and 22nd March, 1992,
  the driver of the insured vehicle had no valid licence, the latter
  part of the afore-extracted special condition did not come into
H play.
    NEW INDIA ASSURANCE CO. LTD. v. SURESH                   895
       CHANDRA AGGARWAL [D.K. JAIN, J.]

       20. We also find force in the contention of learned counsel   A
 for the appellant that the ratio of the decision of this Court in
 Ashok Gangadhar's case (supra), relied upon by the National
 Commission, does not apply to the case at hand. In that case,
the appellant was the owner of a Light Motor Vehicle, which was
 insured with the Insurance Company. The vehicle met with an         B
 accident and a claim was lodged by the complainant before
the Consumer Commission. It was contended by the Insurance
Company that the truck was a "goods carriage" or a "transport
vehicle" and since the driver of the truck was holding a driving
 licence to drive only "Light Motor Vehicle", he was not             c
authorized to drive transport vehicle without an endorsement on
his driving licence authorizing him to drive such transport
vehicle. The claim of the insured having been rejected by the
Insurance Company which was upheld by the National
Commission, the complainant approached this Court. Allowing          D
the appeal, it was held that the driver of the vehicle was holding
a valid driving licence for driving a Light Motor Vehicle and
there was no material on record to show that he was
disqualified from holding an effective and valid driving licence
at the time of accident. On those facts, the Court held that the
policy, which was not even placed on record, did not insist on       E
the driver to have a licence to drive a transport vehicle by
obtaining a specific endorsement and therefore, the Insurance
Company was not justified in rejecting the claim by the insured.
It was observed that the Insurance Company had neither
pleaded nor proved that the vehicle was a transport vehicle. The     F
permit issued by the transport authority had not been placed
on record. In the present case, it stands proved that the driver
did not have an effective and valid driving licence on the date
of accident.
                                                                     G
     21. For the aforesaid reasons, in our opinion, the decision
of the National Commission cannot be sustained. Accordingly,
the appeal is allowed and the impugned order is set aside.
There will, however, be no order as to costs.

R.P.                                           Appeal allowed.       H