NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
order dated 13.7.06 in Appeal No.1527/01 of the State Commission,
New India Assurance Co. Ltd.
Registered Office –
Mumbai – 400 001.
Regional Office –
S-329 Greater Kailash I
HON’BLE MR. JUSTICE ASHOK BHAN, PRESIDENT
HON’BLE MR. B.K. TAIMNI, MEMBER
For the Petitioner : Mr.Jos Chiramel and Mr.Prashant
For the Respondent : Mr.Bipin K. Dwivedi, Advocate
The insurance company, being aggrieved by the order dated 13.7.2006 passed by State Consumer Disputes Redressal Commission, Delhi (hereinafter referred to as ‘the State Commission’ for short) in Appeal No.A-1527/2001 has filed this Revision Petition. The State Commission, by the impugned order, has awarded a sum of Rs.1,65,000/- in favour of the respondent and against the insurance company along with interest at the rate of 9% per annum with effect from 24.11.1995 till its realization. A sum of Rs.5,000/- as damages and Rs.5,000/- as costs has also been awarded.
petitioner issued an insurance policy bearing No.3131070067349 in favour of the respondent in respect of a Maruti Esteem car bearing Engine No.0502392 and Chassis
No.302378 for a sum of Rs.4,25,000/- for the period
from 28.12.1994 to 27.12.1995. The
respondent intimated the insurance company that the vehicle in question had met
with an accident on 20.11.1995 by way of collision with Truck No.DL 1GA 5158 at Kashmere Gate,
Delhi regarding which FIR No.836/1995 dated 21.11.1995 was registered at Police
Station Kashmere Gate, Delhi. The vehicle was got repaired at Chanakya Puri Service Station,
of intimation of loss, the petitioner appointed Shri Dinesh Kapoor as surveyor who
submitted his report dated 26.7.1996 assessing the loss, on repair basis, at
Rs.1,85,294.58 against the estimate submitted for the respondent for a sum of
Rs.3,81,780.97 subject to deposit of salvage of the damaged parts valued at
Rs.18,000/-. He reported that, at the
time of the accident, the respondent was holding driving licence
No.N 600-0113-4125 issued by the State of Illnois, USA on 5.2.1995 which was valid up to
5.1.1999. It was also reported that the
driving licence obtained by the respondent was not an
international driving licence and the same was not
The petitioner, in the
circumstances, deputed Shri Rajinder
Kumar Mittal as investigator to make enquiries in the
office of the RTO,
The respondent, thereafter, filed a complaint before the District Forum claiming compensation of Rs.2,25,000/- with interest at the rate of 18% per annum with effect from 9.2.1996 and Rs.1 lakh towards damages. The petitioner filed its reply denying its liability to pay the compensation. The District Forum, thereafter, by order dated 19.3.2001 awarded a compensation of Rs.2,25,000/- with interest at the rate of 9% per annum with effect from 24.11.1995 till realization. In addition, the petitioner was ordered to pay Rs.5,000/- towards damages and Rs.5,000/- towards costs to the respondent.
The petitioner, being aggrieved by the order of the District Forum, filed an Appeal before the State Commission. The State Commission, by the impugned order, upheld the order of the District Forum. However, with regard to the quantum of compensation, the State Commission reduced the claim to the amount as assessed by the surveyor and reduced the amount of compensation to Rs.1,65,000/-. Rate of interest at 9% per annum from 24.11.1995 till realization and the costs and damages imposed by the District Forum were maintained.
Commission has held that the respondent was not holding valid driving licence issued under the Motor Vehicles Act, 1988
(hereinafter referred to as ‘the MV Act’ for brief) but he was entitled to the
compensation as the respondent had, for the earlier period, a driving licence in India / and even at the time of accident he was
holding a valid driving licence issued by the State
of Illnois. It
was observed that only because the respondent had gone to
“In our view, if any consumer is holding a valid driving licence at the time of taking the insurance policy and takes off for a few months from the country or the city and obtains another driving licence as per rule of law of the land such a licence obtained by him should be treated as continuation of the driving licence already obtained by him in India and shall be held as the holder of valid driving licence. Any other view on this aspect is preposterous and far-fetched. By holding the person incompetent, incapable of driving the vehicle because of his non-possession of a licence of a foreign country in addition to Indian driving licence and is far beyond the imagination of this Commission.”
Counsel for the parties have been heard.
Section 3 of the MV Act
provides that no person shall drive a motor vehicle in any public place unless
he holds a driving licence authorizing him to drive
the vehicle. Under Section 2(10) of the
MV Act, “driving licence” means the licence issued by a competent authority under Chapter-II of
the MV Act, i.e., any Licencing Authority of
India. There is no provision in the MV
Act for recognizing the driving licence issued abroad
as valid in
Commission has grossly erred in holding that the driving licence
obtained by the respondent in the State of
The driving licence
issued to the respondent by the State of
The State Commission failed to appreciate that the respondent was not holding valid and effective driving licence to drive the insured car as per the terms and conditions of the policy in question wherein it is clearly stipulated that the insurance company would not be liable to pay compensation unless the person driving the vehicle had a valid driving licence. The relevant condition in the policy is reproduced as under :
“Provided that the person driving holds a valid driving licence at the time of the accident and has not been disqualified from holding effective driving licence when all the required endorsements thereon as per the Motor Vehicles Act and the rules made thereunder for the time being in force to drive the category of motor vehicle insured against.”
The respondent was not holding a valid driving licence at the time of the accident which violated the mandatory provisions of Section 3 of the MV Act.
Learned counsel appearing for the respondent relied upon certain judgements of the Supreme Court, one of them being National Insurance Co. Ltd. Vs. Swarn Singh – (2004) 3 SCC 297 to contend that even in the absence of the driving licence, compensation can be awarded. In that case, the third party rights were involved. But this is a case of self-damage, the principle laid down in Swaran Singh’s case would not apply. In Swaran Singh’s case, the Supreme Court had relied upon the provisions of Section 149 of the MV Act and it was held that compensation can be awarded to a third party in an accident even in the absence of a valid driving licence. The Supreme Court in a later case National Insurance Co. Ltd. Vs. Laxmi Narain Dhut – (2007) 3 SCC 700 has taken a view that the principle laid down in the case of Swaran Singh regarding third party would not be applicable to the own damage case. It was held that Swaran Singh (supra) was rendered in the background of Section 149 of the MV Act which has no application to cases where no third party rights are involved. In Para-36 of the said judgement, the relevant observations have been made which read as under :
“The inevitable conclusion therefore is that the decision in Swaran Singh’s case (supra) has no application to own damage cases. The effect of fake license has to be considered in the light of what has been stated by this Court in New India Assurance Co. Ltd., Shimla v. Kamla & Ors. Once the license is a fake one the renewal cannot take away the effect of fake license.”
In conclusion also, it was held that (Para-38) :
“1. The decision in Swaran Singh’s case has no application to cases other than third party risks.
2. Where originally the license was a fake one, renewal cannot cure the inherent fatality.
3. In case of third party risks the insurer has to indemnify the amount and if so advised to recover the same from the insured.
4. The concept of purposive interpretation has no application to case relatable to Section 149 of the Act.”
Similar is the view expressed by the Supreme Court in Oriental Insurance Co. Ltd. Vs. Prithvi Raj – (2008) 2 SCC 338.
Since in the present case the respondent was not holding a valid driving licence issued under the MV Act, the insurance company would not be liable to compensate the respondent. The State Commission as well as the District Forum erred in holding to the contrary.
Accordingly, the orders of the State Commission as well as that of the District Forum are set aside. The Revision Petition is allowed accordingly. Parties to bear their own costs.
(ASHOK BHAN J.)