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                                                       REPORTABLE

                IN THE SUPREME COURT OF INDIA

                 CIVIL APPELLATE JURISDICTION

                 CIVIL APPEAL NO.              OF 2008                  (Arising out of SLP (C) No.10694 of 2006)

National Insurance Co. Ltd.                       ... Appellant

                                 Versus

Kaushalaya Devi & Ors.                            ... Respondents

                                 WITH

                 CIVIL APPEAL NO.             OF 2008                  (Arising out of SLP (C) No.9910 of 2006)

                           JUDGMENT

S.B. Sinha, J.

1.    Leave granted.

2.    Kishan Lal (deceased) was traveling in a truck bearing registration

No.HP-11-1448 on 16.3.2000. He was aged about 27 years. He was

unmarried. The said truck met with an accident.

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        First respondent being the mother of the deceased filed an

application for payment of compensation under Section 166 of the Motor

Vehicles Act, 1988 (The Act). Appellant was served with a notice. One

of the objections taken by it was that the driver of the truck did not

possess any valid or effective driving licence and that the deceased was

travelling as an unauthorized passenger on the truck which was a goods

carriage.

3.       The Tribunal awarded a sum of Rs.1,18,000/- by way of

compensation. An appeal was preferred thereagainst before the High

Court.

        By reason of the impugned judgment, whereas the contention of

the appellant-insurance company was upheld, having regard to the fact

that the amount awarded in favour of the first respondent had already

been deposited, it was directed to be released in favour of the claimant

with liberty to the insurance company to recover the said amount along

with interest from the owner by filing an appropriate application for

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execution before the Tribunal without being required to file a separate

suit.

4.      Both the insurance company as also the owner of the truck are,

thus, before us.

5.      Shri S.L. Gupta, learned counsel appearing on behalf of the

insurance company, would submit that as the deceased was travelling as

a gratuitous passenger and as the driver of the vehicle was not possessing

an effective driving licence, the High Court should not have passed the

impugned order.

6.      Mr. Garg, learned counsel appearing on behalf of the owner of the

vehicle, on the other hand, would contend that the deceased was a

vegetable vendor and he had been travelling in the truck for collecting

the empty boxes and, thus, he was not a gratuitous passenger. In any

event, it was urged, as the insurance company has already deposited the

amount of compensation, the right to recover the amount from the owner

of the vehicle need not have been granted.

7.      The Tribunal, having regard to the rival contentions of the parties,

framed the following issues :

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            "1.   Whether deceased Shri Krishan Lal had                    died due to the rash and negligent driving                    of Shri Shyam Lal, driver of truck                    No.HP-11-1448, as alleged? ...OPP.              2.    If issue No.1 supra is proved, to what                    amount of compensation the petitioner is                    entitled to and from which of the                    respondents? ..OPP              3.    Whether the truck driver did not have                    valid driving licence on the date of                    accident, as alleged, if so, its effect?                    OPR.3.              4.    Whether the documents i.e. route permit,                    R.C. and fitness certificate of the truck,                    in question, were not valid on the date of                    accident as alleged? ...OPR.3              5.    Relief."

8.    It was opined by the Tribunal that the driver of the truck was

driving the vehicle rashly and negligently. It was furthermore held that

the truck in question was insured with the appellant insurance company,

but it had not been proved that the driver was not having any valid

driving licence.

     With regard to the contention that the deceased was a gratuitous

passenger in a goods vehicle, it was held :

            "The evidence, on record, which has been led              by the petitioner would go to show that the

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           deceased was traveling in the truck, in question,             for bringing empty vegetable boxes. Further,             even if it is taken that the deceased was             traveling in the truck as unauthorized person,             even then, under the existing law, the insurance             company cannot avoid the liability in question.             Therefore, the plea raised by the learned             Advocate for the insurance company does not             have any force."

9.    The High Court, however, held that the driving licence of the

Driver Shyam Lal was not valid, stating :

           "Since I am of the opinion that the endorsement             permitting Shyam Lal to drive heavy goods             vehicle was ante dated and was not existing on             the date of accident it is clear that the owner             could not have handed over the vehicle to a             person who held a valid driving lience. On             16.3.2000 Shyam Lal only held a licence to             drive a light transport vehicle and the owner             could not have checked or verified the licence             for driving a heavy goods vehicle. In fact in             this case the owner has not even stepped into             the witness box to say anything in this regard.             Therefore, I hold that the insurance company             was wrongly held liable to pay compensation."

     As regards to the question as to whether the deceased was an

unauthorized passenger, it accepted the plea of the insurance company.

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10.   The provisions relating to the necessity of having a licence to drive

a vehicle is contained in Sections 3, 4 and 10 of the Act. As various

aspects of the said provisions, vis-‘-vis, the liability of the insurance

company to reimburse the owner in respect of a claim of a third party as

provided in Section 149 thereof have been dealt with in several

decisions, it is not necessary for us to reiterate the same once over again.

Suffice it to notice some of the precedents operating in the field..

     In National Insurance Co. Ltd. v. Swaran Singh & Ors. [(2004) 3

SCC 297], this Court held :

            "88. Section 10 of the Act provides for forms              and contents of licences to drive. The licence              has to be granted in the prescribed form. Thus,              a licence to drive a light motor vehicle would              entitle the holder there to drive the vehicle              falling within that class or description.

            89. Section 3 of the Act casts an obligation on a              driver to hold an effective driving licence for              the type of vehicle which he intends to drive.              Section 10 of the Act enables the Central              Government to prescribe forms of driving              licences for various categories of vehicles              mentioned in sub-section (2) of the said              section."

     It was furthermore, observed :

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            "90. We have construed and determined the              scope of sub-clause ( ii ) of sub-section (2) of              Section 149 of the Act. Minor breaches of              licence conditions, such as want of medical              fitness certificate, requirement about age of the              driver and the like not found to have been the              direct cause of the accident, would be treated as              minor breaches of inconsequential deviation in              the matter of use of vehicles. Such minor and              inconsequential deviations with regard to              licensing conditions would not constitute              sufficient ground to deny the benefit of              coverage of insurance to the third parties.

            91. On all pleas of breach of licensing              conditions taken by the insurer, it would be              open to the Tribunal to adjudicate the claim and              decide inter se liability of insurer and insured;              although where such adjudication is likely to              entail undue delay in decision of the claim of              the victim, the Tribunal in its discretion may              relegate the insurer to seek its remedy of              reimbursement from the insured in the civil              court."

     The decision in Swaran Singh, however, was held to be not

applicable in relation to the owner or a passenger of a vehicle which is

insured.

11.   In National Insurance Co. Ltd. v. Laxmi Narain Dhut [2007 (4)

SCALE 36], this Court referring to Swaran Singh (supra) and discussing

the law on the subject, held :

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           "In view of the above analysis the following             situations emerge:

           1. The decision in Swaran Singh’s case (supra)             has no application to cases other than third             party risks.

           2. Where originally the licence 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 cases relatable to Section 149             of the Act.

           The High Courts/Commissions shall now             consider the mater afresh in the light of the             position in law as delineated above.

{See also Oriental Insurance Company Ltd. v. Meena Variyal & Ors. [2007 (5) SCALE 269]; Oriental Insurance Company Ltd. v. Brij Mohan & Ors. [2007 (7) SCALE 753]; and Oriental Insurance Co. Ltd. v. Prithvi Raj [2008 (1) SCALE 727]}.

12.   In view of the findings arrived at by the High Court, it must be

held that the owner alone was liable to pay compensation to the first

respondent herein for causing death of her son by rash and negligent

driving on the part of the driver of the truck. The High Court’s judgment

must be sustained on this ground.

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13.   The deceased was not the owner of any goods which were being

carried in the truck. Admitted position is that he had been traveling in

the truck for the purpose of collecting the empty boxes. He was a

vegetable dealer. He was not traveling in the truck as owner of the goods

viz. the vegetables. He was traveling in the truck for a purpose other

than the one for which he was entitled to travel in a public carriage goods

vehicle.

     This aspect of the matter is squarely covered by the decision of

this Court in Brij Mohan (supra) wherein the Bench cited with approval

the decision in New India Assurance Co. Ltd. v. Asha Rani & Ors.

[(2003) 2 SCC 223] wherein it was stated :

            "26. In view of the changes in the relevant              provisions in the 1988 Act vis-a-vis the 1939              Act, we are of the opinion that the meaning of              the words "any person" must also be attributed              having regard to the context in which they have              been used i.e. "a third party". Keeping in view              the provisions of the 1988 Act, we are of the              opinion that as the provisions thereof do not              enjoin any statutory liability on the owner of a              vehicle to get his vehicle insured for any              passenger travelling in a goods vehicle, the              insurers would not be liable therefor."

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     {See also Prem Kumar & Ors. v. Prahlad Dev & Ors. [2008 (1)

SCALE 531] and Oriental Insurance Co. Ltd. v. Prithvi Raj [2008 (1)

SCALE 727]}.

14.   For the reasons aforementioned, Civil Appeal arising out of SLP

(C) No. 10694 is allowed and Civil Appeal arising out of SLP (C) No.

9910 of 2006 is dismissed. If the amount deposited by the insurance

company has since been withdrawn by the first respondent, it would be

open to the insurance company to recover the same in the manner

specified by the High Court. But if the same has not been withdrawn the

deposited amount may be refunded to the insurance company and the

proceedings for realization of the amount may be initiated against the

owner of the vehicle.     In the facts and circumstances of the case,

however, there shall be no order as to costs.

                                               .............................J.

                                               (S.B. Sinha)

                                               .............................J.                                                 (V.S. Sirpurkar) New Delhi. May 13, 2008