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Gopal Krishna Behera (Advocate Orissa High Court Cuttack.)     04 June 2009

Compensation - No Valid Driving Licence.

Whether an Insuraance Company can be held responsible for making compensation in case it is proved that the vehicle insured was driven by a person having no valid driving licence. Please discuss case law also.

Cordial invitation for discussion among brothers & sisters from the legal fraternity, students and the person interested on the subject matter.

                    Thanks a lot..



Learning

 39 Replies

M ShivaKumar (Deputy Manager)     04 June 2009

Hi,

No, insruance company will not be liable, In such case the responsbiltiy of compensation shall lie with the owner of the vehicle, since all motor vehicle insurance are issued with the discalimer that the vehicle should be driven by person with valid DL.

At this moment i do not have any case law.

Regards,

ShivaKumar.M

 

 

 

CS Pooja (Company Secretary)     04 June 2009

I agree with Mr. Shiv Kumar...

The Insurance co.'s  liabilty doesnt cover the illegal use of  the asset...

N.K.Assumi (Advocate)     04 June 2009

Consider this: Vehicle was stolen and driven by theft without a valid driving licence and while getting away with the vehicle the car crushed a man to death. In this circumstances can the insurer escape from the liability against the third party as the vehicle was driven by a person not having a driving licence?

CS Pooja (Company Secretary)     04 June 2009

I opine..Yes.

I guess all the owner can claim is compensation for "theft".

The moment the car was stolen, the owner goes off from the scene.

And, then, the thief crushes a man to death…. In this case, the Insurer’s liability doesn’t arise as the thief was not the insured for third party liability that might arise.

Hence, insurer’s liability won’t arise.

 

1 Like

Swami Sadashiva Brahmendra Sar (Nil)     05 June 2009

Dear friends ! reply to the question depends on conditions of insurance contract. Normally  an insurance contract stipulates a condition that insurer will not be liable if accident takes place while vehicle being driven by a person not holding a valid DL. If no such condition was stipulated, insurer will be liable.

N.K.Assumi (Advocate)     05 June 2009

I think it is worth noting the classic obseration of the Apex Court in the case of kokilaben chandravadan case 1987-(001) SCALE- 0648-SC: " It needs to be emphasised that it is not the contracts of insurance which is being interpreted..It is the statutory provisions defining the conditions of exemption which is being interpreted. These must, therefore, be interpreted in the spirit in which the same have been enacted accompanied by an anxiety to ensure that the protection is not nullified by the backward looking interpretation which serves to defeat the provisions rather than to fulfill its life-aim. To do otherwise would amount to nullifying the benovelent provisions by reading it with a non benevolent eye and with a mind not tuned to the purpose and philosophy of  the legislation without being informed of the true goals sought to be achieved. What the legislature has given, the court can not deprived by way of an exercise in interpretion when the view which renders the provisions potent is equally plausible as the one which renders the provisions impotent. In fact, it appears that the former view is more plausible apart from that it is more desirable.

In the above case, the driver of the vehicle having valid licence left the vehicle with the ignition key in the ignition lock, as a result the cleaner of the truck meddled with the truck and accident occured.After surveying the various High Courts rulings, SC held that exclusion clause does not exonerate the insurer.

1 Like

Swami Sadashiva Brahmendra Sar (Nil)     05 June 2009

Dear assumi sir, here the main point would be as to whether the owner had permited a person to drive the vehicle, who had no valid DL ?

yogita (student)     06 June 2009

Insurance co is liable to pay the compensation to the victims if the fault of the vehicle in Q is proved. But as per MVAct 149 insurer can recover from the owner if it has happended with the knowledge of the owner i.e. driver w/o license driving with the knowledge of the owner.

It is a social legislation, so the care must be taken that it is not misused by both the victims or insurers. It is unfortunate such a fantastic legislation has been extremely abused to make some quick money.

Y V Vishweshwar Rao (Advocate )     06 June 2009

 I Agree with Mr Assumi ! - When the owner has take all care and not handed over  the vehicle  to one who has no DL,  and the things were not in  his control , but some thing happens  with out his  knowledge & intention ,the owner can not be find  with fault .  

Mukul Aggarwal (legal)     13 June 2009

 There are no. of judgment of Apex court which says that insurance company is libale to compensate and pay the money if the driver of vehicle did not have the licence but insurance comapny has a right to recover the paid amount with interest from the owner of the vehicle...

 

kindly read any book on Motor Vehicle Act..

Mukul Aggarwal (legal)     13 June 2009

 There are no. of judgment of Apex court which says that insurance company is libale to compensate and pay the money if the driver of vehicle did not have the licence but insurance comapny has a right to recover the paid amount with interest from the owner of the vehicle...

 

kindly read any book on Motor Vehicle Act..

Shree. ( Advocate.)     13 June 2009

Dear All, 

Supreme Court Of India on Vehicle Diving licence

1.   The question of licence only comes into play, when there is an accident Jitendra Kumar Vs. Oriental Insurance Company (2003) 6 SCC 420.
 
2.    The driverholding a learner’s licence: - Even if the driver the vehicle was driven by a person having a learner licence the Insurance Company will be liable to satisfy the award.

No Driving licence :- The person driving the vehicle without licence is liable for prosecution under section 181 of the Motor Vehicles Act, 1988 and if the licence has lapsed the law it self gives a grace of 30 days for renewal it will treated that the driver was having a driving licence. 
       Vehicle driven at the time of accident was of a different class:-  If the driver has been given a licence to drive a particular type of a vehicle i.e. light motor vehicle he can drive all types of light motor vehicle. National Insurance Company Vs. Swaran Singh AIR 2004 SCW 663  
     

A fake driving licence cannot be transformed as a genuine licence even if it has been renewed. New India Assurance Company vs. Kamla 2001 AIR SCW 1340: , National Insurance Company Vs. Laxmi Narain Dhut 2007 AIRSCW 2279 :   


4.      The burden of proof that the driver of the vehicle meeting with accident did not have a proper licence lies with the Insurance Company challenging the same.  and the same has to be established on the facts of the case Ishwar Chandra & others Vs The Oriental Insurance Company& others 2007 AIR SCW 1889
 
5.      It becomes immaterial as to whether the driver was having a valid  Driving Licence or not if the deceased was the driver of the vehicle in question and was a workman Oriental Insurance Company vs. Smt. Manjeet Kaur Devi  2000 (4) PLJR 225


6.   Liability of the Insurance Company cannot be taken away even though the vehicle was not driven by a proper licensed persons as the liability will be of the owner and the owner is insured by the Insurance Company thus both liable. SOHAN LAL PASSI VS. P. SESH REDDY (1996) 5 SCC 21:
 
7.      Merely showing that the driver did not have a driving licence is not sufficient for the Insurance Company to discard its liability . United India Insurance Company Vs. Lehru (2003) 3 SCC 338.
 
8.      Vehicle damaged due to accidental fire , the Insurance Company repudiated the claim on the ground that the driver did not have a valid driving licence at the time of the incidence. Section 149(2) of the Motor Vehicles Act, 1988 doesnot empower the Insurance Company to repudiate the claim .Jitendra Kumar Vs. Oriental Insurance Company (2003) 6 SCC 420
 
9.  In the finding of fact it is found that the that the insured had given the vehicle for driving to an unlicensed driver, the Insurance Company gets exonerated of its liabilities United India Insurance Company vs. Gain Chand & others (1997) 7 SCC 558: AIR 1997 SC 3824
10 Light Motor Vehicle Diving licence issued under form 6, is effective and valid licence to drive such vehicle. .Ashok Gangadhar Maratha Vs. Oriental Insurance Company (1999) 6 SCC 620
11.  Production of a photocopy of a driving licence doesnot prove that the driver had a valid driving licence United India Insurance Co. Ltd. Vs. Anbari and others 2000 ACJ 469
 
12.  A person having a valid driving licence to drive a particular category of vehicle (Tractor) does not become disabled to drive that vehicle merely because a trailer is added to it. This is in case of a tractor. Nagasetty Vs. United India Insurance Company AIR 2001 SC 3364


13.  The word effective in the expression “Effective Driving Licence” in section 3 of Motor Vehicles Act, 1988 means a valid licence both as regards the period and type of vehicle Ashok Gangadhar Maratha Vs. Oriental Insurance Company (1999) 6 SCC 620 :


14.  The licence if expired but not renewed within the stipulated period and the accident has occurred after the lapse of driving licence  and the driver not having a driving licence at the time of accident the Insurance Company is not liable to pay the claim Malla Prakashroa vs. Malla Janaki and Others (2004) 3 SCC 343  
 
15.  Driver of a commercial Vehicle not holding the licence to drive commercial vehicle i.e valid licence Insurance Company not liable to pay the claimed amount  National Insurance Company Vs. Kusum Rai  (2006) 4 SCC 250
 
16.  if the owner of the vehicle has satisfied himself that the driver had a licence and was driving competently there is no breach of section 149 (2) (a) (ii) of the Motor Vehicle''s Act, 1988 and the Insurance Company liable to pay the compensation. Lal Chand Vs. Oriental Insurance Company 2006 AIR SCW 4832 : (2006) 7 SCC 318

2 Like

Uday (Lawyer)     30 June 2009

Mr.Shree seems to be an encyclopedia of Motor Accident cases. Thanks

Pankaj Rai (Lawyer)     08 July 2009

Dear  I  am giving you some important ciatations.

1-Oriental Insurance Co. Ltd. v/sAngad Kol & Oth.,2009INSC 361(18February,2009)

2-Malla Prakash v/s Malla Janki & Oth.1(2006) A.C.C. 300(S.C.)

3-National Insurance Co. Ltd v/s Mrs. Kanti Devi & Oth. 2005 AICC 531(S.C.)

4-Lokesh Kumar Garg v/s Ramawtaar Sharma & Oth.ACC2007(1)All. H.C. DB 727

5-New India Insurance Co. Ltd v/s Mohsina & Oth.2007 ICC674

6-Oriental Insurance Co. Ltd. v/s Shiva Maal & Oth. 2009 Madras High court Full Bench.


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