Holding

The insurer is liable to pay the compensation award, and must deposit the balance amount, with the right to recover it from the vehicle’s owner and driver.

Summary

The heirs of Genda Bai, who died after being struck by a goods carriage vehicle, claimed compensation under the Motor Vehicles Act, 1988. Oriental Insurance Co. denied liability, contending that the driver, Umesh Gupta, did not hold a valid licence to drive a goods vehicle, thereby breaching the insurance contract. The Motor Accident Claims Tribunal awarded Rs. 3,00,000 plus other amounts, and the High Court ordered the insurer to pay half the award. On appeal, the Supreme Court examined the definitions of "driving licence", "goods carriage vehicle" and "transport vehicle" under the Act and held that the driver indeed lacked a valid licence for a goods vehicle, making the breach apparent. Nevertheless, invoking Article 142, the Court directed the insurer to deposit the balance amount, granting it the right to recover the sum from the vehicle’s owner and driver. The appeal was allowed.

Issues considered

Whether an insurer is liable to pay compensation when the driver of the insured vehicle does not possess a valid licence for the class of vehicle involved.
Interpretation of the Motor Vehicles Act, 1988 provisions relating to licences, goods carriage vehicles and transport vehicles in the context of insurance contracts.
Whether the Supreme Court may, under Article 142 of the Constitution, direct the insurer to deposit the balance award while allowing recovery from the owner/driver.

Legislation cited

Constitution of Indias. Article 142
Motor Vehicles Act, 1988s. 10, s. 14, s. 2(10), s. 2(14), s. 2(21), s. 3, s. 9

Subjects

Motor Vehicles Actinsurance liabilitydriving licencegoods carriage vehiclecompensationArticle 142breach of contractmotor accident claims

Judgment

[2009) 2 S.C.R. 695

-.·-t
ORIENTAL INSURANCE CO. LTD. A
v.
ANGAD KOL AND ORS.
Criminal Appeal No. 1102 of 2009
FEBRUARY 18, 2009
B
[S.8. SINHA AND V.S. SIRPURKAR, JJ.]

t Motor Vehicles Act, 1988 -Fatal accident- By goods
carriage vehicle- Compensation. claim-Insurance Company
denying its liability contending that the driver of the vehicle
was not holding valid licence-Held: Insurance company not c
liable to pay the compensation- It is proved that the offending
vehicle was goods carriage vehicle and the driver did not
possess valid licence for the same- Direction to insurance
company to pay the claim amount, with liberty to recover the
same from owner and driver of offending vehicle- Constitution D
•· of India, 1950- Article 142.
In a claim seeking compensation for death caused
by a motor accident, the plea of the appellant-insurance
company was that, it was not liable to pay the
compensation as the driver of the offending vehicle was E
not holding a valid driving licence, as the offending vehicle
;. was a goods carriage vehicle.
y
Allowing the appeal, the Court
HELD : 1.1 It is proved that the driver of the offending F
vehicle did not hold a valid and effective driving licence
for driving a goods vehicle. Breach of conditions of the
insurance is, therefore, apparent on the face of the
records. It has been proved that the offending vehicle was
a goods vehicle. The Regional Transport Officer, in his G
~ deposition, stated so. [Paras -17 and 18] [ 704-C-D]
National Insurance Co. Ltd. v. Annappa lrappa Nesaria,
(2008) 3 SCC 464; New India Assurance Co. Ltd. v. Prabhu
695 H
696 SUPREME COURT REPORTS [2009] 2 S.C.R.

A Lal, (2008) 1 SCC 696; Ashok Gangadha_r Maratha v. Oriental
....,
Insurance, 1999 (6) SCC 620 -referred to
1.2 'Interest of justice would be subserved if, in
exercise of jurisdiction under Article 142 of the
Cons.titution, the insurance company is directed to
B deposit the balance amount before the Tribunal with
liberty to the claimants to withdraw the same. Appellant is
given righf to recover the said amount from the owner . ~-
and the drivef. of the vehicle. [Para 19] [604-F]
C
"·
CASE LAW REFERENCE
(2008) 3 SCC 464 Referred to Para 16
(2008) 1 SCC 696 ' Referred to. Para 17
I
(1999) 6 SCC 620 Referred to Para 17 ,~-
I , '
D I f.
CIVIL: APPEALLAE JURISQ.ICTION : Civil Appeal No.
1102 pt 2009
From the Judgement and Order dated 21.09.2007 of the
High Court of Judicature at Jabalpur in Misc. Appeal No. 1593
E of 2007. '. ;'
I

Santosh Paul,' K.K. Bhatt, Arvind Gupla, Sriharash N.
Bundela, M.J. Paul for the Petitioner. \ ·
"
Raj .Kumar Gupta, Sunil Kumar Gupta, Dhar?m Bir Raj
F Vuhra for the Respondent. ,
The Judgem~nt of the Court Was deli~erJd by
S.B. SINHA, J.
1. Leave .. granted. •
..
.
,l_ •
.~ '.:• '

G ;i ....... ,,,,,,.r-(.>
2. This appeal is directed against}~:·Tudgment and order 1'. I
dated 21.9.2007 passed by a Division ·Bench of the High Court
of Madhya Pradesh at Jabalpur in Misc. Application No':21/09/ ·
2007 whereby and whereunder the pppeal~· preferred by the
H claima?ts/respondents from an ·award dated 29.1.~607 passed
ORIENTAL INSURANCE CO. LTD. V. 697
ANGAD KOL AND ORS. [S.S. SINHA, J.]

....--t
by the llnd Additional Motor Accident Claims Tribunal (Fast Track A
Court), Kanti (hereinafter referred to as 'the Tribunal') in M.V.C.
No.350 of 2004, was allowed. A cross objection filed by the·
appellant herein has also been dismissed by the said judgment.
3. Heirs and legal representatives of Genda Bai, who died
in an accident which took place on 31.10.2004, filed a claim B
application before the Tribunal, contending in that on the fateful
day, when she had been standing near a turning known as 'Hardi
turning', a mini door Auto bearing registration No. MP-20G-9937
dashed against her as a result whereof she suffered injuries.
She was taken to the District Hospital where she succumbed c
thereto on the next day.
The deceased was aged about 45 years at the time of her
death. She allegedly used to earn about Rs.5,000/- per month
by preparing 'Donnapattals'.
. D
~ 4. Indisputably, the vehicle was a goods carriage vehicle
which was owned by Respondent No. 7, Narendra, and was
being driven by Respondent No.6, Umesh. Before the Tribunal,
a contention was raised that the driver of the vehicle did not
possess a valid and effective driving licence. Overruling the said E
contention, an award of Rs.1,83,000/- was made.
5. Claimants, as noticed hereinbefore, preferred an appeal
.. .. thereagainst.
.,... '
Appellant also filed a cross-objection .
Inter alia, on the premise that the contribution to the family F.
by the deceased would have been about Rs.2,500/- per month
and on deduction of conventional 1/3rct amount from her income,
the. annual loss of dependency was calculated at Rs.20,000/-
per"annum. The ,High Court applied the multiplier of 15 and, .
thus, awarded •a sum of Rs.3,00,000/- towards loss of
G .,,
dependenqf" A sum of Rs.40,000/-was furthermore awarded '!

under·the heads of loss of estate, funeral expenses, loss of
expectancy of life including a sum of Rs.10,000/- to the hus'band
.. '\ \
for loss of consortium.

6. Mr. Santosh Paul, learned counsel appearing on behalf H

I

_;;
698 SUPREME COURT REPORTS [2009] 2 S.C.R.

A of the appellant, would submit that the driving licence having - ...
been granted to the respondent No.6, Umesh, in the year 2003
for a period of 20 years, evidently it was not meant for driving a
goods carriage vehicle. -
7. Mr. Raj Kumar Gupta, learned counsel appearing on
B behalf of the respondent, however, would submit that as the
appellant already deposited 50% of the awarded amount, this
Court may direct it to pay the balance awarded amount with a
right to recover the same from the owner and/or the driver of the
vehicle.
c 8. Motor Vehicles Act, 1988 (hereinafter called as 'the Act')
was enacted to consolidate and amend the law relating to motor
vehicles. 'Driving licence' has been defined in Section 2(10) to
mean the licence issued by a competent authority under Chapter
II authorizing the person specified therein to drive, otherwise ).
D than as a le~rner, a motor vehicle or a motor vehicle of any
specified class or description. "Goods carriage" has been -·
defined in Section 2(14) to mean any motor vehicle constructed
or adapted for use solely for the carriage of goods, or any motor
vehicle not so constructed or adapted when used for the
E carriage of goods. The said Act also defines 'heavy goods
vehicle', 'heavy passenger motor vehicle', 'medium goods
vehicle' and 'medium passenger motor vehicle' as well as a
. 1
Q·

'light motor vehicle' in Section 2(21) of the Act to mean : .. . ;_,
..,-
" 'light motor vehicle' means a transport vehicle or omnibus
F the gross vehicle weight of either of which or a motor car
or tractor or road-roller the unladen weight of any of which,
does not exceed 7500 kilograms." .
9. Although the definition of the 'light motor vehicle' brings
.. ·G
within its umbrage both 'transport vehicle' or 'omnibus',
indisputably, as would be noticed infra, a distinction between
an effective licence granted for transport vehicle and passenger ~
motor vehicle exists.
Section 3 provides for the necessity of driveling licence,
H stating :
ORIENTAL INSURANCE CO. LTD. V. 699
ANGAD KOL AND ORS. [S.B. SINHA, J.]

"3. Necessity for driving Iicence.-(1) No person shall A
drive a motor vehicle in any public place unless he holds
an effective driving licence issued to him authorizing him
to drive the vehicle; and no person shall so drive a transport
vehicle other than a motor car or moter cycle hired for his
own use or rented under any scheme made under sub- 8
section (2) of Section 75 unless his driving licence
specifically entitles him so to do.

'
,: (2) ... "
Section 9 provides for grant of driving licence. Section 1O
prescribes the form and contents of licences to drive which.is to C
the following effect :
"10. Form and contents of licences to drive.-(1) Every
learner's licence and driving licence, except a driving
licence issued under section 18, shall be in such form and
0
shall contain such information as may be prescribed by
the Central Government.
(2) A learner's licence or, as the case may be, driving
licence shall also be expressed as entitling the holder to
drive a motor vehicle of one or more of the following E
classes, namely:-
(a) to (c) ...
(d) light motor vehicle;
(e) transport vehicle; F
(i) road Roller;
mmotor vehicle of a specified description."
10. The distinction between a 'light motor vehicle' and a
'transport vehicle' is, therefore, evident. A transport vehicle may G
be a light motor vehicle but for the purpose of driving the same,
a distinct licence is required to be obtained. The distinqtion
between a 'transport vehicle' and a 'passenger vehicle' can also
be noticed from Section 14 of the Act. Sub-section (2) of Section
14 provides for duration of a period of three years in case of an H
700 SUPREME COURT REPORTS [2009] 2 S.C.R.

A effective licence to drive a 'transport vehicle' whereas in case
of any other licence, it may remain effective for a period of 20
years.
11. The driver and the owner of the vehicle did not examine
themselves. The driving licence was not produced. The
B application form praying for grant of driving licence was also
not produced. ·
The insurance company examined Shri R.K. Hila, an officer
of the Regional Transport Authority. The contents of his '
deposition, as has been noticed by the learned Tribunal in
C paragraph 7 of the award, is as under:
"The onus of issue No.2 is on Opposite Party No.3. But
they could not establish their allegation that the vehicle
was driver contrary to the conditions of the insurance
contract. The witness No.1 of the Opposite Party Sri R. K.
D .>
Hela of the Regional Transport Authority has stated that
the Opposite Party No.1 had licence to driver Light Motor
Vehicle for the period 30.07.2003 to 29.07.2023 and the
vehicle involved is a Light Goods Vehicle. It is contended
that the holder of the licence had to obtain an endorsement
E to drive goods vehicles but it has not been established
whether the vehicle involved in the accident is a goods
vehicle and whether the holder of the licence was entitled
to drive a goods carriage vehicle. It has also not been
established that the vehicle involved was a goods carriage
F vehicle. The Opposite Party No.3 could not establish that
the vehicle was driven contrary to the terms and conditions
of the insurance. As a result the Opposite Party No.3 has
not been able to establish that the driver of the vehicle
; ' whieh caused the accidentdid not have an effective and
·., G valid licence. Hence issue No.2 is decided against the
Respondent No. 3."
12. Indisputably, the Regional Transport Officer, Jabalpur,
in a letter addressed to Shri S.K. Yadav in response to his
application dated 21.2.2005 furnished the particulars of driving
H - licence No.MP70/0/6436/03 as under:
ORIENTAL INSURANCE CO. LTD. V. 701
ANGAD KOL AND ORS. [S.B. SINHA, J.]

.-:-· "As per this office record the particulars of driving licence A
No.MP70/0/6436/03 are as under:
1. Name of Licence holder Shri Umesh Gupta
2. Son of Shri M.L. Gupta

,,.
•,:
~

"
M P20/016436/03 B

3. Address Karmata, Jabalpur
4. Date of issue 30.7.2003
5. Date of expiry 29.7.2023 c
6. Date of last renewal 8.4.2013
7. . Valid for 8.4.2013
8. Class of vehicle M/Cycle + LMV only
·• . D
9. Paid Employee
-1\1 Endorsement if any."

.'.,./!·::_,~~~·l~
r
··
13. The Central Government had framed Rules known as
'Central :Motor Vehicle Rules'. Form 4 prescribed therein E
,_ : provides for qifferent columns for grant of a licence of light motor
·\\vehicle, medium goods vehicle or heavy goods vehicle. Rule
·-· 14 prescribes for filing of an application in Form 4 for a licence
to drive a mo'tor vehicle. An amendment was carried out on or
~ about 28.3.2001 being JSR No.221 (E) in terms whereof, inter
• alia, licence whtph is to be granted in Form 6 requires a specific F
· · authorization to drive a 'transport vehicle'.
14. The licence was granted to Respondent No.6, Umesh,
in 2003, i.e., after the said amendment came Into force. The
accident, as noticed hereinbefore, took place on 31 .1 O.2004. G
15. Licence having been granted for a period of 20 years,
a presumption, therefore, arises that it was meant for the
purpose of a vehicle other than a transport vehicle. ··

16. Had the driving licence had been granted for transport H
702 SUPREME COURT REPORTS (2009] 2 S.C.R.

A vehicle, the tenure thereof could not have exceeded to three ·-·;
years.
In National Insurance Co. Ltd. v. Annappa lrappa Nesaria
[(2008) 3 SCC 464], this Court noticed the aforementioned
development in the mcitter of grc;lnt of licence to a transport vehicle~
B stating that the same became effective from 28.3.2001 in the
following terms :
"20. From what has been noticec;I hereinbefore, it is evident •
that "transpqrt vehiQle" has now been substituted for
c "rneoiurn gogds vehicle" and "heavy goods vehicle". The
li9ht motor vehicle continued, at the relevant point of time
to cover l)oth "light passenger carriage vehicle" and "light
goodg, carriage vehicle". A driver who had a valid licence
to drive a light motor vehicle, therefore, was authorised to
drive a light goods vehicle as well.
D
21. The amendments carried. out in the Rules having a
prospective opert:ition, the licence held by the driver of the.
vehicle in question cannot be said to be invalid in law."
17. The effect of the different terms of licences granted in
E terms of the provisions of Section 2(14) and 2(47) tia~ ~IS,o been
noticed by this Court in New India Assyran9e Cq. Ltd. v. Prabhu
Lal ((2008) 1 SCC 696], stated :
"30. Now, it iS, tMe c~S,e 9f the Insurance Cornpany that the
F vehicle of the complainant which met with an accident
was a ''transport vehicle". lt.wa$ submitted that the insured
veh!gle was a "goods carriage" and was thus a "transport
vehi9le". The vehicle was driven by Ram Narain, who was
a4thorised to drive light motor vehicle and not a transport
vehicle. Since the driver had no li.cence to drive transport
G
vehicle in C1bsence of necessary endorsement in his licence
· tq that effect, he coultj not have drivem Tata 709 ::1nd when
that vehigle nwt with an accident, the Insurance Company
could npt be maoe liable to pay compensation.
H xxx xxx xxx
ORIENTAL INSURANCE CO. LTD. V. 703
ANGAD KOL AND ORS. [S.B. SINHA, J.]
31. The argument of the Insurance Company is that at the A
-:~
_time of accident, Ram Narain had no valid and effective
licence to drive Tata 709. Indisputably, Ram Narain was
having a licence to drive light motor vehicle. The learned
counsel for the Insurance Company, referring to various
provisions of the Act submitted that if a person is having B
licence to drive light motor _vehicle, he cannot drive a
transport vehicle unless his driving licence specifically
) entitles him so to do (Section 3). Clauses (14), (21), (28)
-1.. and (47) of Section 2 make it clear that if a vehicle is "light
motor vehicle", but falls under the category of transport c
vehicle, the driving licence has to be duly endorsed under
Section 3 of the Act. If it is not done, a person holding
driving licence to ply light motor vehicle cannot ply transport
Vehicle. It is not in dispute that in the instant case, Ram
Narain was having licence to drive light motor vehicle. The D
(,
licence was not endorsed as required and hence, he could
;. not have driven Tata 709 in absence of requisite
endorsement and the Insurance Company could not be
held liable.
38. We find considerable force in the submission of the E
learned counsel forthe Insurance Company. We also find
that
.. the District Forum considered the question in its proper
perspective and held that the vehicle driven by Ram Narain
..
.,, was covered by the category of transport vehicle under
Clause (47) of Section 2 of the Act. Section 3, therefore, F
required the driver to have an endorsement which would
entitle him to ply such vehicle. It is not even the case of the
complainant that there was such endorsement and Ram
Narain was allowed to ply transport vehicle. On the contrary,
the case of the complainant was that it was Mohd. Julfikar G
... who was driving the vehicle. To us, therefore, the District
Forum was right in holding that Ram Narain could not
' have driven the vehicle in question." ·
The Court distinguished its earlier judgn;ent in Ashok
H
704 SUPREME COURT REPORTS [2009] 2 S.C.R.

A Gangadhar Maratha V. Oriental Insurance [(1999) (6) sec
620], stating : ,. )
"41. In our judgment, Ashok Gangadhar did not lay down
that the driver holding licence to drive a light motor vehicle
need not have an endorsement to drive transport vehicle
B and yet he can drive such vehicle. It was on the peculiar
facts of the case, as the Insurance Company neither
pleaded nor proved that the vehicle was transport vehicle
by placing on record the permit issued by the Transport t
~
Authority that the Insurance Company was held liable."
c
However, in this case, the finding of fact arrived at that the
vehicle in question was not proved to be a goods vehicle is not
correct. The Regional Transport Officer, in his deposition, stated.
that the vehicle in question was a goods vehicle.
D 18. From the discussions made hereinbefore, it is, thus,
, evident that it is proved that respondent No.6 did not hold a >
valid and effective driving licence for driving a goods vehicle.
Breach of conditions of the insurance is, therefore, apparent on
the face of the records.
E 19. By an order dated 10. 7 .2008, the insurance company
was directed to deposit 50% of the awarded amount. In this
view of the matter, we are of the opinion that interest of justice
would be subserved if we, in exercise of our jurisdiction Article ~
142 of the Constitution while directing the insurance company
F to deposit the balance amount before the Tribunal with liberty to
"
the claimants to withdraw the same give right to the appellant to
recover the said amount from the owner and the driver of the
vehicle being Respondent Nos.6 and 7.
20. In view of the aforementioned findings, the appeal is
G
allowed with no order as to costs.
>
.i
K.K.T. Appeal allowed.