SARDARI & ORS.versusSUSHIL KUMAR & ORS.

                                       [2008] 3 S.C.R. 929


        r                             SARDARI & ORS.                               A
>                                              v
                                   SUSHIL KUMAR & ORS.
                               (Civil Appeal No. 1733 of 2008)
                                       MARCH 4, 2008
                                                                                   B
                         [S.B. SINHA AND V.S. SIRPURAKAR, JJ.]
        ·~

                       Motor Vehicles Act, 1939 - Motor accident - Death
                 caused - Driver of the offending vehicle admittedly not holding
                 licence - Compensation - Liability to pay - Held: Liability to    c
                 pay the compensation is not on the insurance company since
                 the driver of the offending vehicle was not holding licence -
                 However, driver and owner of the vehicle are liable.
                       Appellants filed application seeking compensation
                 under Motor Vehicles Act, 1939, for death caused in an D
                 accident with a tractor. Insurance Company contended
                 that it was not liable to pay the compensation as the driver
                 of the tractor did not hold a licence. The driver in his
                 examination/cross-examination admitted that he did not
                 hold a licene. Motor Vehicle Accident Claims Tribunal E
                 denied the grant of compensation. High Court held that
                 the claimants were liable to compensation from the owner
                 and driver of the vehicle and not from the insurance
                 Company. Hence the present appeal.
    J
                      Dismissing the appeal, the Court                             F
            ,.
                      HELD: 1.1 Although, in terms of a contract of
                 insurance, which is in the realm of private law domain
                 having regard to the object for which Sections 147 and
                 149 of the Motor Vehicles Act had been enacted, the social G
                 justice doctrine as envisaged in the preamble of the
                 Constitution of India has been given due importance. The
                 Act, however, itself provides for the cases where the
                 insurance Company can avoid its liability. Avoidance of
                                              929                                  H
    930       SUPREME COURT REPORTS              [2008] 3 S.C.R.


A such liability would largely depend upon violation of the        'f
  conditions of contract of insurance. Where the breach of
  conditions of contract is ex-facie apparent from the
  records, the Court will not fasten the liability on the
  Insurance Company. In certain situations, however, the
B Court while fastening the liability on the owner of the
  vehicle may direct the Insurance Company to pay to the
                                                                   ~-
  claimants the awarded amount with liberty to it to recover
  the same from the owner. [Para 6] [~32-E, F, G; 933-A]
          1.2 The concurrent finding of fact in the present case
c is that the driver never held a license. The owner of the
    vehicle has a statutory obligation to see that the driver of
    the vehicle whom he authorized to drive the same holds
    a valid license. [Para 7] [933-A, B]
        United India Insurance Co. Ltd. vs. Gian Chand and Ors.
D
  1997 (7) SCC 558; National Insurance Co. Ltd. vs. Swaran
  Singh and Ors. 2004 (3) SCC 297; National Insurance Co.
  Ltd. vs. Kusum Rai and Ors. 2006 (4) SCC 250; New India
  Assurance Co. Ltd. vs. Prabhu Lal JT 2007 (13) SC 246;
  Premkumari and Ors. vs. Prahlad Dev and Ors. 2008 (1)
E SCALE 531 - relied on.

         Oriental Insurance Co. Limited vs. Prithvi Raj 2008 (1)
    SCALE 727; lshwar Chandra and Ors. vs. The Oriental
    Insurance Co. Ltd. and Ors. 2007 (4) SCALE 292 - referred
                                                                        L.
F   to.
         CIVILAPPELLATE JURISDICTION: Civil Appeal No. 1733        '
    of 2008.
       From the final Judgment and order dated 10/4/2003 of
  the High Court of Punjab and Haryana at Chandigarh in F.A.0.
G
  No. 737/1986.
          Shalu Sharma for the Appellants.
        M.K. Dua, Kishore Rawat and Shivaji M. Jadhav for the
    Respondents.
H
                  SARDARI & ORS. v. SUSHIL KUMAR & ORS.                    931
                              [S.B. SINHA, J.]

      t           The Judgment of the Court was delivered by                      A
                  S.B. SINHA, J. Leave granted.
                   1. Jagiru was a tonga driver. While, he was driving his tonga
             on 10.2.1985, he met with an accident, as it collided with a tractor
             bearing Registration No. HYC 173. In the said accident, he B
             received injuries and ultimately expired on 15.2.1985. At the
      ·<!-
             time of his death, he was aged 40 years.
                   An application for payment of compensation by the
             appellants was filed in terms of Section 110-A of Motor Vehicles
             Act, 1939 (for short "the Act"). Respondent Insurance Company        c
             inter alia raised a contention therein that the driver of the said
             tractor did not hold a valid and effective license.
                   2. Before the Motor Vehicle Accident Claims Tribunal (The
             Tribunal), the driver of the said Tractor, Sushil Kumar was
                                                                                D
             examined. He categorically stated that he did not know how to
             drive a tractor and he never even tried to learn driving of the
             tractor. He admitted that he had not been possessing any valid
             driving license to drive a tractor. It was accepted by him that he
             had even never applied therefor. He also, in answer to a question
             put to him in cross-examination, admitted that he did not hold a E
             driving license.
                   The learned Tribunal answered the relevant issue in the
             following terms;
..J
                  "15. It is admitted by respondent No. 1 that he was not F
      ~
                  holding any driving licence to drive the tractor at the time
                  of alleged accident and in fact he never possessed any
                  driving licence. Since the respondent No. 1 was not holding
                  any driving licence to drive the tractor, so, in view of the
                  conditions contained in the copy of policy Ex. R1, the G
                  respondent No. 3 is not liable to pay any compensation.
                  Accordingly, this issue is decided in favour of the
                  respondent No. 3 against the petitioners."
                  3. In that view of the matter, the application for grant of
                                                                                  H
    932       SUPREME COURT REPORTS                    [2008] 3 S.C.R.


A compensation was dismissed. An appeal preferred
  thereagainst by the appellants has also been dismissed by the
  High Cou1t The High Court, however, was of the opinion that
  the finding of the Tribunal that no accident took place due to
  rash and negligent driving of Sushil Kumar, was not correct
a holding that the appellants were entitled to compensation of Rs.
  63,000/- from the respondent Nos. 1 and 2.
          4. Appellants are, thus, before us.
          Nobody has appeared on behalf ot the appellants.
C        5. The question, as regards the purport and object for which
    the Act had been enacted and as also the statutory obligations
    on the part of the owner of the vehicle to get the same
    compulsorily insured came up for consideration in a large
    number of cases.
D
         This Court, time and again made a distinction between a
  case where third party is involved vis-a-vis where the owner of
  the vehicle was involved in the accident. The matter relating to
  grant of license is dealt with in the Act. There are provisions in
E terms whereof despite expiry of the period of license, the same
  can be renewed. There are also provisions providing for grant
  of a fresh license. In certain situation, the authorities are also
  entitled to refuse to renew the license.
          6. Although, in terms of a contract of insurance, which is in
F the realm of private law domain having regard to the object for
  which Section 147 and 149 of the Act had been enacted, the
  social justice doctrine as envisaged in the preamble of the
  Constitution of India has been given due importance. The Act,
  however, itself provides for the cases where the insurance
G Company can avoid its liability. Avoidance of such liability would
  largely depend upon violation of the conditions of contract of
  insurance. Where the breach of conditions of contr~ct is ex-
  facie apparent from the records, the Court will not fasten the
  liability on the Insurance Company. In certain situations, however,
H the Court while fastening the liability on the owner of the vehicle
                     SARDARI & ORS. v. SUSHIL KUMAR & ORS.                    933
                                 [S.B. SINHA, J.]

         r
                 may direct the Insurance Comp<\ny to pay to the claimants the A
                 awarded amount with liberty to it to recover the same from the
                 owner.
                       7. The concurrent finding offact herein is that Sushil Kumar
                 never held a license. The owner of the vehicle has a statutory
                 obligation to see that the driver of the vehicle whom he authorized B
         't
                 to drive the same holds a valid license. Here again, a visible
'
                 distinction may be noticed, viz. where the license is fake and a
                 case where the license has expired, although initially when the
                 driver was appointed, he had a valid license.
                      The question came up for consideration before this Court
                                                                                     c
                 in United India Insurance Co. Ltd. Vs. Gian Chand and Others
                 [(1997) 7 sec 558], wherein it was held;
                      "12. Under the circumstances, when the insured had
                      handed over the vehicle for being driven by an unlicensed D
                      driver, the Insurance Company would get exonerated from
                      its liability to meet the claims of the third party who might
                      have suffered on account of vehicular accident caused by
                      such unlicensed driver.... "
                      A three Judges' Bench of this Court in National Insurance E
                 Co. Ltd. Vs. Swaran Singh and Others [(2004) 3 SCC 297],
                 upon going through the provisions of the Act as also the
                 precedents operating in the field, laid down the following dicta;
    .J                "84. We have analysed the relevant provisions of the said F
                      Act in terms whereof a motor vehicle must be driven by a
             "        person having a driving licence. The owner of a motor
                      vehicle in terms of Section 5 of the Act has a responsibility
                      to see that no vehicle is driven except by a person who
                      does not satisfy the provisions of Section 3 or 4 of the Act.
                                                                                    G
                      In a case, therefore, where the driver of the vehicle,
                      admittedly, did not hold any licence and the same was
                      allowed consciously to be driven by the owner of the vehicle
                      by such person, the insurer is entitled to succeed in its
                      defence and avoid liability. The matter, however, may be
                                                                                    H
    934       SUPREME COURT REPORTS                    [2008] 3 S.C.R.


A         different where a disputed question of fact arises as to        1
          whether the driver had a valid licence or where the owner
          of the vehicle committed a breach of the terms of the
          contract of insurance as also the provisions of the Act by
          consciously allowing any person to drive a vehicle who
B         did not have a valid driving licence. In a given case, the
          driver of the vehicle may not have any hand in it at all e.g.
          a case where an accident takes place owing to a                 ~   ,
          mechanical fault or vis major. (See Jitendra Kumar 22 .)"
       In National Insurance Co. Ltd. Vs. Kusum Rai and Others
C [(2006) 4 SCC 250], a Bench of this Court (wherein one of us
  was a member) held;
          11. It has not been disputed before us that the vehicle was
          being used as a taxi. It was, therefore, a commercial
          vehicle. The driver of th~ said vehicle, thus, was required
D
          to hold an appropriate licence therefor. Ram Lal who            (
          allegedly was driving the said vehicle at the relevant time,
          as noticed hereinbefore, was holder of a licence to drive
          a light motor vehicle only. He did not possess any licence
          to drive a commercial vehicle. Evidently, therefore, there
E         was a breach of condition of the contract of insurance.
          The appellant, therefore, could raise the said defence.
          14. This Court in Swaran Singh clearly laid down that the
          liability of the Insurance Company vis-vis the owner would
F         depend upon several factors. The owner would be liable
          for payment of compensation in a case where the driver
          was not having a licence at all. It was the obligation on the   r
          part of the owner to take adequate care to see that the
          driver had an appropriate licence to drive the vehicle.
G        The question as regards the liability of the owner vis-a-vis
    the driver being not in possession of valid license has also been
    considered in para 89 in Swaran Singh_(supra).
        8. Yet again in New India Assurance Co. Ltd. Vs. Prabhu
H Lal [JT 2007 (13) SC 246], the Court stated the law in the
             SARDARI & ORS. v. SUSHIL KUMAR & ORS.                   935
                         [S.B. SINHA, J.]

    t
        following terms:-                                                  A
             "33. In the present case, all the facts were before the District
             Forum. It considered the assertion of the complainant and
             defence of the Insurance Company in the light of the
             relevant documentary evidence and held that it was
             established that the vehicle which met with an accident B
    ~
             was a 'transport vehicle'. Ram Narain was having a licence
             to drive Light Motor Vehicle only and there was no
             endorsement as required by Section 3 of the Act read
             with Rule 16 of the Rules and Form No. 6. In view of
             necessary documents on record, the Insurance Company c
             was right in submitting that Ashok Gangadhar does not
             apply to the case on hand and the lnsurance Compc;iny
             was not liable."
              However, Swaran Singh (supra) has been distinguished
                                                                           D
        by this Court in some cases holding that where the owner of the
        vehicle himself is involved, insurance company will not be liable.
             In Premkumari & Ors. Vs. Prahlad Dev & Ors. [(2008) 1
        SCALE 531), a Bench of this Court following Kusum Rai (supra),
        opined;                                                        E
              "10. In the case of National Insurance Co. Ltd. v. Kusum
              Rai and Ors. (2006) 4 sec 250, the vehicle was being
              used as a taxi. It was, therefore, a commercial vehicle.
J            The driver of the said vehicle was required to hold an
              appropriate licence therefor. Ram Lal, who allegedly was F
             driving the said vehicle at the relevant time, was holder of
    "
              a licence to drive light motor vehicle only. He did not
              possess any licence to drive a commercial vehicle.
             Therefore, there was a breach of condition of the contract
              of insurance. In such circumstances, the Court observed G
              that the appellant-National Insurance Co. Ltd., therefore,
              could raise the said defence while considering the stand
              of the Insurance Company. This Court, pointing out the law
            · laid down in Swaran Singh (supra) concluded that the
              owner of the vehicle cannot contend that he has no liability H
    936       SUPREME COURT REPORTS                  [2008] 3 S.C.R.


A         to verify the fact as to whether the driver of the vehicle
          possessed a valid licence or not. However, taking note of
          the fact that the owner has not appeared, the victim was
          aged only 12 years, the claimants are from a poor
          background and to avoid another round of litigation
B         applying the decision in Oriental Insurance Co. Ltd. v.
          Nanjappan (2004) 13 SCC 224 and finding that though
          the appellant-Insurance Company was not liable to pay .
          the claimed amount as the driver was not possessing a
          valid licence and the High Court committed an error in
c         holding otherwise, in the peculiar facts and circumstances
          of the case and in exe~cise of jurisdiction under Article
          136 of the Constitution declined to interfere with the
          impugned judgment therein and permitted the appellant-
          Insurance Company to recover the amount from the owner
          of the vehicle."
D
         In Oriental Insurance Co. Limited Vs. Prithvi Raj [2008        (
    (1) SCALE 727], however, noticing Swaran Singh (supra), it
    was opined;
          "10. In the instant case, the State Commission has
E         categorically found that the evidence on record clearly
          established that the licensing authority had not issued any
          license, as was claimed by the Driver and the respondent.
          The evidence of Shri A.V.V. Rajan, Junior Assistant of the
          Office of the Jt. Commissioner & Secretary, RTA,
F         Hyderabad who produced the official records clearly
          established that no driving license was issued to Shri
          Ravinder Kumar or Ravinder Singh in order to enable and
          legally permit him to drive a motor vehicle. There was no
          cross examination of the said witness. The National
G         Commission also found that there was no defect in the
          finding recorded by the State Commission in this regard."
          In lshwar Chandra & Ors. Vs. The Oriental Insurance Co.
    Ltd. & Ors. [2007 (4) SCALE 292], this Court held;
H         "9. From a bare perusal of the said provision, it would
                                                                            t-
         SARDARI & ORS. v. SUSHIL KUMAR & ORS.                    937
                     [S.B. SINHA, J.]

          appear that the licence is renewed in terms of the said Act A ·
          and the rules framed thereunder. The proviso appended
          to Section 15(1) of the Act in no uncertain terms states
          that whereas the original licence granted despite expiry
          remains valid for a period of 30 days from the date of
          expiry, if any application for renewal thereof is filed B ·
          thereafter, the same would be renewed from the date of
          its renewal. The accident took place 28.04.1995. As on
          the said date, the renewal application had not been filed,
          the driver, did not have a valid licence on the date when
          the vehicle met with the accident."                         c ''
           9. For the reasons aforementioned, there is no merit in
     this appeal which is accordingly dismissed. However, in the facts
     and circumstances of this case, there shall be no order as to
     costs.
                                                                         D
     K.K.T.                                      Appeal dismissed .




.,