In BELI RAM vs RAJINDER KUMAR & ANR., the sole question of law for consideration before the Supreme Court in the appeals was whether in case of a valid driving licence, if the licence has expired, the insured is absolved of its liability.
The driver of a commercial vehicle met with an accident resulting in 20% permanent disability. The first respondent herein filed a petition under the Workmen’s Compensation Act, 1923 impleading the appellant and second respondent herein – the insurance company which had insured the vehicle. These proceedings resulted in an award by the Commissioner on 8.12.2004 granting Rs. 94,464/- for the injuries suffered and Rs.67,313/- towards medical expenses of the first respondent. The amounts awarded were to carry interest @ 9 per cent per annum from the date of filing of the application till the date of payment. The compensation amount was mulled on to the second respondent as insurer, while the interest was directed to be paid by the appellant herein.
Appeal was filed under various heads one of which was that the first respondent was driving the vehicle as the driver of the appellant herein for almost three years without the licence being renewed. Based on the lapsed policy, the High Court absolved the insurance company of any liability and fastened the same upon the appellant herein on account of there being a material breach of the insurance policy.
Appeals filed against the order of the High Court was rejected and the appellants approached the Supreme Court with the question mentioned at the beginning of this page. The appellant referred to the judgment in Nirmala Kothari v. United India wherein the question of law examined was as to what is the extent of care/diligence expected of the employer/insured while employing a driver. The legal position regarding the liability of the insurance company when the driver of the offending vehicle possessed an invalid/fake driver’s licence was adverted to for answering this question, by referring to earlier judicial pronouncements and it was held in the said judgment that while hiring a driver the employer is expected to verify if the driver has a driving licence. If the driver produces a licence which on the face of it looks genuine, the employer is not expected to further investigate into the authenticity of the licence unless there is cause to believe otherwise. If the employer finds the driver to be competent to drive the vehicle and has satisfied himself that the driver has a driving licence there would be no breach of Section 149(2)(a)(ii) and the insurance company would be liable under the policy. It would be unreasonable to place such a high onus on the insured to make enquiries with RTOs all over the country to ascertain the veracity of the driving licence. However, if the insurance company is able to prove that the owner/insured was aware or had notice that the licence was fake or invalid and still permitted the person to drive, the insurance company would no longer continue to be liable.
Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards the insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by a duly licenced driver or one who was not disqualified to drive at the relevant time.
National Insurance Co. Ltd. v. Swaran Singh and Ors., examined the meaning of the expression “duly licensed”, as used in Section 149(2)(a)(ii) of the Motor Vehicles Act, 1988 (hereinafter referred to as the ‘MV Act’). Section 3 the words used are 'effective licence', it has been differently worded in Section 149(2) i.e. 'duly licensed'. If a person does not hold an effective licence as on the date of the accident, he may be liable for prosecution in terms of Section 141 of the Act but Section 149 pertains to insurance as regard third party risks. A provision of a statute which is penal in nature vis-a-vis a provision which is beneficent to a third party must be interpreted differently. It is also well known that the provisions contained in different expressions are ordinarily construed differently. The words “effective licence” used in Section 3, therefore, in our opinion cannot be imported for sub-section (2) of Section 149 of the Motor Vehicles Act. We must also notice that the words 'duly licensed' used in sub-section (2) of Section 149 are used in past tense.
The submission of the appellant, thus, was that the appellant as insured had taken adequate care by verifying the licence of the driver/first respondent at the time of employment and the liability could have been mulled on the appellant only if he was aware or had notice that the licence was fake or invalid and still permitted the person to drive. This was stated not to be the factual position in the present case as the issuance of the licence has not been doubted, but rather that it was not subsequently renewed which was pleaded to be the responsibility of the first respondent.
Referring to judgments in Delhi High Court in Tata AIG General Insurance Co. Ltd. vs Akansha & Ors., Allahabad High Court in The Oriental Insurance Co. Ltd. v. Manoj Kumar & Ors., Himachal Pradesh High Court in National Insurance Co. Ltd. v. Hem Raj & Ors., we are of the view that once the basic care of verifying the driving licence has to be taken by the employer, though a detailed enquiry may not be necessary, the owner of the vehicle would know the validity of the driving licence as is set out in the licence itself. It cannot be said that thereafter he can wash his hands off the responsibility of not checking up whether the driver has renewed the licence. It is not a case where a licence has not been renewed for a short period of time, say a month, as was considered in the case of Swaran Singh5 where the benefit was given to a third party by burdening the insurance company. The licence in the instant case, has not been renewed for a period of three years and that too in respect of commercial vehicle like a truck. The appellant showed gross negligence in verifying the same.
Comments
Post a Comment