LexRAM BABU versus UNITED INDIAN INSURANCE CO. LTD. & ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
[2008] 11 S.C.R. 725
RAM BABU TIWAR1
A
v.
UNITED' INDIAN INSURANCE CO.· LTD. & ORS.
(Civil Appeal No. 4749 of 2008)
AUGUST 1, 2008
B
(S.B. SINHA AND CYRIAC JOSEPH~ JJ.]
Motor Vehicles Act, 1988; Ss. 15, 147 and 159:
Motor vehicle accident - Death of two persons - Com-
pensation - Contract of insurance - Breach of condition - Li- c
ability of insurer~ Held: On the date of accident, the driver of
the vehicle did not hold any licence - Breach of the contract
of-insurance established - Hence, High Court rightly held that
insurer not liable to indemnify the insured -·Contract...;.. Breach .
o(condition.
·
D
.,.
Driving Licence - Renewal - Effective date in the con-
text of insurance claim.
Relatives of claimant were travelling in a truck, which
met with an accident. One of the relatives died on the spot E
and the other was admitted to a hospital where he sue-
cumbed to the injuries. Dependants of the deceased per--
sons filed a petition claiming compensation. The Tribu-
nal passed an award holding the respondent-Insurance
company liable to indemnify the insured. The appeal pre-
F
~-
ferred thereagainst by the Insurer was allowed by the High
Court holding that since the driver of the vehicle was not
holding a valid licence on the date of the accident, the·
insurer could not be held liable to indemnify the insured.
Hence the. present appeal.
G
Appellant contended that although the driver of the
tractor did not hold any licence for certain period, but
having regard to the provisions contained in S~ction 15
of the Motor Vehicles Act, 1988 and in particular the sec-
725
H
726
SUPREME COURT REPORTS
[2008] 11 S.C.R.
~
A ond proviso appended to sub-section (4) thereof, it must
be held that the renewal of licenc'>~ would take effect from
a retrospective date; and that in any view of the matter in
view of the decision of this Court in National Insurance Co.
Ltd. v. Swaran Singh & Ors., tha respondent cannot escape
B its liability so far as a third party is concerned in view of
Sections 147 and 149 of the Act.
+<
Dismissing the appeals, the Court
HELD: 1.1Section147 of tha i'J1otorVehiclesActman-
c dates obtaining of compulsory insurance in relation to a
third party by the own~rs of the motor vehicles. Section
149 of the Act imposes a duty on the insurer to satisfy the
judgments and awards agains~ the· insured in respect of
third party risks. Sub-section (2) o:f Section 149 however
postulates that insurance company would have a right to
D defend the action, inter alia, on a or0und that there has
been a breech of specified condition of the policy as speci-
fied in various sub-clauses; clause {ii) ~hereof. (Para - 10)
,,..
[731-G-HJ
E
1.2 The question as to wheth!~r the owner of a ve-
hicle had taken care to inform himself as to whether the
driver entrusted to drive the vehicle was having a licence
or not is essentially a question of fact. However, in the
instant case, it stands admitted that as on the date of ac-
cident the driver did not hold any licence. Furthermore, it
F
is beyond dispute that he had a licence only for one year
and for about 3 years thereafter, he failed and neglected
~
to renew his licence. His licence was renewed only on
and from 7.2.1996. (Para - 13) [734-C-DJ
1.3 It is beyond any doubt or dispute that only in the
G event an application for renewal of licence is filed within
a period 30 days from the date of expiry thereof, the same
would be renewed automatically which means that even
if an accident had taken place within the aforementioned
period, the driver may be held to be possessing a valid
H licence. The proviso appended to sub-section (1) of Sec-
_.,.,.
. .,.
RAM BABU TIWARI v. UNITED INDIAN INSURANCE
727
CO. LTD. & ORS
tion 15, however, clearly states that the driving licence
shall be renewed with effect from the date of its renewal
in the event the application for renewal of a licence is made
more than 30 days after the date of its expiry. It is, there-
fore, evident that as, on renewal of the licence on such
terms, the driver of the vehicle cannot be said to be hold-
ing a valid licence, the insurer would not be liable to in-
demnify the insured. {Para - 18) [735-E-G]
1.4 The second proviso appended to sub-section (4)
of Section 15 is of no assistance to the appellant. It merely
enables the licensing authority to take a further test of
competent driving and passing thereof to its satisfaction
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