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CASE NO.: Appeal (civil)  5539 of 2007

PETITIONER: NEW INDIA ASSURANCE CO. LTD

RESPONDENT: PRABHU LAL

DATE OF JUDGMENT: 30/11/2007

BENCH: C.K. THAKKER & TARUN CHATTERJEE

JUDGMENT: J U D G M E N T

CIVIL APPEAL NO. 5539 OF 2007           ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 7370 OF 2004 WITH C.A. NO. 5540 OF 2007 @ SLP(C) NO. 17794 OF 2004 C.A. NO. 5541 OF 2007 @ SLP(C) NO.  7618 OF 2005

C.K. THAKKER, J.

1.              Leave granted. 2.              In all these appeals, a common  question of law has been raised by the parties.  It is, therefore, appropriate if we deal with  and decide all the appeals by a common  judgment. In all the three appeals, the claim  of the claimant has been upheld finally by the  National Consumer Disputes Redressal  Commission, New Delhi (’National Commission’  for short) which has been challenged by the  Insurance Company in this Court. 3.              To appreciate the controversy, it  would be appropriate if we narrate the facts in  the first case i.e. New India Assurance Co.  Ltd. v. Prabhu Lal. 4.              A complaint was filed by the  complainant Prabhu Lal under Section 12 of the  Consumer Protection Act, 1986 before the  District Consumer Disputes Redressal Forum,  Kota (Rajasthan) (’District Forum’ for short)  claiming compensation from the respondent  Insurance Company as also from Tata Finance  Limited, Jaipur. The case of the complainant  was that he purchased a vehicle\027Tata 709 with  Registration No. RJ-20G-2828 from Tata Finance  Limited, Jaipur. The insurance was taken from  New India Assurance Company effective from  October 17, 1997 to October 16, 1998. Premium  amount of Rs.8235/- was duly paid. It was the  case of the complainant that on April 17, 1998,  the vehicle of the complainant was being driven  by Mohd. Julfikar to Indore for getting Chilly.  At about 4.30 a.m. in the early morning, the  driver of Roadways Bus No. MP 13-C-3935 drove  the bus with very high speed in rash and  negligent manner which resulted in an accident  at Yashwant Nagar. Due to said accident, Ram  Narain\027brother of the complainant who was

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sitting with Mohd. Julfikar, sustained  injuries. Mohd. Julfikar immediately ran away  leaving the vehicle but as Ram Narain received  serious injuries, he could not come out of the  vehicle. The complainant lodged First  Information Report (FIR) No. 131 of 1998 with  the Manpur Police Station, Yashwant Nagar,  District Indore under Sections 279 and 337 of  the Indian Penal Code (IPC) against driver Kalu  of M.P. Roadways Bus. Vehicle of the  complainant was then inspected by Tatas,  estimate was prepared and claim was submitted  in the prescribed form by the complainant to  the Insurance Company on June 12, 1998. The  amount of the claim was, however, not paid to  the complainant. The complainant, therefore,  moved the District Forum praying for an award  of Rs.4,70,000/- towards the claim of vehicle,  Rs.15,000/- towards mental agony, Rs.5,000/-  towards driving charges of the vehicle from  Indore to Kota and Rs.25,000/- for survey fee. 5.              The Insurance Company filed its reply  refuting the claim of the complainant.  According to the Company, it had not committed  any deficiency in rendering ’service’. It was  also the case of the Company that it had  fulfilled all contractual obligations as to  claim. The Company informed the complainant  about its decision on December 21, 1999 stating  that the claim was not allowable and the amount  was not payable. The Insurance Company,  therefore, prayed for the dismissal of the  complaint. 6.              According to the District Forum, the  main question was whether the Insurance Company  was deficient in rendering service and wrongly  disallowed insurance claim of the complainant.  The Forum considered the question and heard the  parties. According the complainant, at the time  of accident, vehicle was driven by Mohd.  Julfikar who was having a licence to drive  Light Motor Vehicle (LMV) as also Heavy Motor  Vehicle (HMV). In spite of it, the Insurance  Company disallowed the insurance claim of the  complainant on the ground that the driver was  not having valid driving licence to drive the  vehicle in question. It was also the contention  of the complainant that certain documents  produced by the Insurance Company were not  genuine. The complainant was not an educated  man and he knew only how to sign. If the  officials of Insurance Company had obtained  signatures of the complainant on certain  documents without reading over to him and  making him properly understood, the complainant  should not suffer. According to the  complainant, Insurance Company wrongly presumed  and proceeded on the basis that the vehicle was  driven by Ram Narain at the time of accident,  who was having a valid driving licence to drive  only Light Motor Vehicle and negatived the  claim. It was, therefore, prayed that an award  be passed in favour of the complainant. 7.              The case of the Insurance Company, on  the other hand, was that the vehicle in

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question, at the time of accident, was driven  by Ram Narain, brother of the complainant.  Admittedly, Ram Narain was possessing licence  to drive Light Motor Vehicle and not Heavy  Motor Vehicle. He, therefore, could not have  driven Transport Vehicle in absence of  necessary endorsement as required and the  Insurance Company could not be held liable. In  this connection, Insurance Company relied on  the permit issued by Transport Authority, the  Form submitted by the complainant, licence  issued and other documents. The Insurance  Company also relied upon FIR filed at Police  Station, Manpur, wherein it was stated that the  vehicle was driven by Ram Narain. Moreover,  when the officers of the Insurance Company  approached the complainant, they were informed  by the complainant that the vehicle was driven  by Ram Narain. As an after thought, only with a  view to get the amount of compensation, it was  asserted and a case had been put forward before  the Consumer Forum that the vehicle was driven  by Mohd. Julfikar. It was contended that the  complainant realized belatedly that if true  facts would be placed before the Forum, in view  of legal position, he would not be able to get  any amount from the Insurance Company. It was,  therefore, asserted that Mohd. Julfikar was  driving the vehicle but it was not true. The  Insurance Company, hence, submitted that there  was no deficiency in rendering service by the  Company and the claim was liable to be  dismissed. 8.              The Tata Finance Limited, Jaipur in  its reply stated that the complainant had  purchased the vehicle on the basis of Hire  Purchase Agreement and the amount was to be  paid in instalments. At the time of incident,  Rs.3,65,026/- were due and payable to the  Company. Until the full amount was paid, the  Financer was to remain owner of the vehicle. It  was also stated that though Tata Finance  Company requested the Insurance Company several  times to make payment of the balance hire  purchase amount, it was not done. 9.              The District Forum, after considering  the rival contentions of the parties and  referring to the case law on the point,  particularly a decision of this Court in Ashok  Gangadhar Maratha v. Oriental Insurance Co.  Ltd., (1999) 6 SCC 620, held that the  complainant was not entitled to compensation.  According to the District Forum, in Ashok  Gangadhar, this Court held that if the driver  was having effective driving licence to ply  Light Motor Vehicle (LMV), he could not have  plied Heavy Motor Vehicle (HMV) or Transport  Vehicle. The District Forum observed that from  the evidence on record, it was proved that at  the time of accident, Ram Narain was plying the  vehicle in question and not Mohd. Julfikar as  asserted. Ram Narain was having valid and  effective driving licence to ply Light Motor  Vehicle and as such he could not have plied the  transport vehicle. The claim was, therefore,

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not tenable and accordingly the complaint was  dismissed. 10.             Being aggrieved by the order passed by  the District Forum, the claimant approached the  Consumer Disputes Redressal Commission of  Rajasthan, Jaipur (’State Commission’ for  short). The State Commission held that the  principle laid down in Ashok Gangadhar would  apply.  But according to the State Commission,  the District Forum was not right in dismissing  the claim observing that the said decision was  against the complainant. In fact, the point was  decided in favour of the complainant and the  complainant-claimant would be entitled to the  benefit of the judgment and the Insurance  Company must be held liable. Accordingly, the  appeal was allowed. The order passed by the  District Forum was set aside and the Insurance  Company was ordered to pay the amount mentioned  in the operative part of the judgment along  with interest at the rate of 15% p.a. 11.             Aggrieved Insurance Company approached  National Forum against the order passed by the  State Commission but the National Commission  also dismissed the Revision and confirmed the  order passed by the State Commission. It is  this order which is challenged in this Court. 12.             On April 23, 2004, notice was issued  by the Court. It appears that meanwhile in  other matters, a similar question came up  before this Court and hence all the matters  were ordered to be placed for hearing together. 13.             We have heard learned counsel for the  parties. 14.             The learned counsel for the appellant- Insurance Company contended that the State  Forum as well as National Forum had committed  an error of law in holding the appellant- Insurance Company liable and directing it to  pay compensation. It was submitted that there  was no deficiency on the part of the appellant- Company in rendering service to the complainant  and hence Consumer Forum had no jurisdiction to  entertain, deal with and decide the dispute. It  was also submitted that it was clearly  established from the relevant documents on  record that at the time of accident, Ram Narain  was plying the vehicle and not Mohd. Julfikar.  Admittedly, Ram Narain was having valid driving  licence to ply Light Motor Vehicle. The vehicle  in question was a transport vehicle and hence  it could not have been plied by Ram Narain. In  absence of valid licence to drive the said  vehicle, the complainant could not claim  compensation from the Insurance Company and no  direction could be issued to the Company to pay  compensation to the complainant. The District  Forum was, therefore, fully justified in  dismissing complaint of the respondent-  complainant and both, State Commission as well  as National Commission \027 were in error in  granting the prayer of the complainant and the  orders passed by them are liable to be set  aside. It was also submitted by the learned  counsel that State Commission as also National

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Commission, misunderstood Ashok Gangadhar. It  is no doubt true that in Ashok Gangadhar, the  claim of the complainant was upheld by this  Court. But it was because the relevant  documentary evidence was not placed before the  Authorities. This Court, therefore, held that  since material documents were not produced by  the Company, the complainant should not suffer  and in absence of such evidence, the Insurance  Company cannot be absolved of liability. But  the ratio laid down in Ashok Gangadhar supports  the case of the Insurance Company that if  necessary documents are on record and they go  to show that the licence issued in favour of  the driver to ply a particular type of vehicle,  he could not have plied other vehicle and the  Insurance Company could not be held liable if  there was breach of that condition. In the case  on hand, all the documents were on record,  contention was raised by the Insurance Company  from the very beginning that the vehicle was a  transport vehicle, which driven by Ram Narain  who was holding licence to ply only Light Motor  Vehicle.  Hence, he could not have plied the  vehicle in question, a finding was recorded in  favour of the Insurance Company by the District  Forum which had not been disturbed by the State  Commission or by the National Commission and  hence the complaint ought to have been  dismissed. 15.             The learned counsel for the respondent  submitted that it was the case of the  complainant before District Forum that the  vehicle was driven by Mohd. Julfikar who  possessed valid licence to ply the vehicle but  as soon as the accidence took place, he fled  away since he was scared that passengers in the  bus might not spare him and he might be beaten.  As Ram Narain sustained several injuries, he  could not go away. Unfortunately, the District  Forum dismissed the complaint which  necessitated challenging the decision and the  complainant succeeded before the State Forum  and National Forum. As to Ashok Gangadhar, the  counsel submitted that the said decision helps  the complainant and both the Commissions were  right in following it and in directing the  Insurance Company to pay compensation to the  complainant. He, therefore, submitted that the  appeal deserves to be dismissed. 16.             Before we deal with contentions raised  by the parties on merits, it would be  appropriate to examine the relevant provisions  of the Motor Vehicles Act, 1988 (hereinafter  referred to as ’the Act’). By the Act of 1988,  the Motor Vehicles Act, 1939 (old Act) had been  repealed. The new Act has been enacted with a  view ’to consolidate and amend the law relating  to motor vehicles’. Section 2 is a ’legislative  dictionary’ and defines various terms. Relevant  clauses of the said section are Clauses (10),  (14), (21), (28) and (47) which define ’driving  licence’, ’goods carriage’, ’light motor  vehicle’, ’motor vehicle’ and ’transport  vehicle’ respectively. They read as under:

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2. Definitions.- In this Act, unless  the context otherwise requires,-- (10) "driving licence" means the  licence issued by a competent  authority under Chapter II authorising  the person specified therein to drive,  otherwise than as a learner, a motor  vehicle or a motor vehicle of any  specified class or description;  (14) "goods carriage" means any motor  vehicle constructed or adapted for use  solely for the carriage of goods, or  any motor vehicle not so constructed  or adapted when used for the carriage  of goods; (21) "light motor vehicle" means a  transport vehicle or omnibus the gross  vehicle weight of either of which or a  motor car or tractor or road-roller  the unladen weight of any of which,  does not exceed 7,500 kilograms;  (28) "motor vehicle" or "vehicle"  means any mechanically propelled  vehicle adapted for use upon roads  whether the power of 1 Subs. & ins. by  Act. 580 propulsion is transmitted  thereto from an external or internal  source and includes a chassis to which  a body has not been attached and a  trailer; but does not include a  vehicle running upon fixed rails or a  vehicle of a special type adapted for  use only in a factory or in any other  enclosed premises or a vehicle having  less than four wheels fitted with  engine capacity of not exceeding  thirty-five cubic centimetres; (47) "transport vehicle" means a  public service vehicle, a goods  carriage, an educational institution  bus or a private service vehicle;  17.             Section 3(1) of the Act requires  holding of driving licence which is material  and reads thus; 3. Necessity for driving licence.\027 (1) No person shall drive a motor  vehicle in any public place unless he  holds an effective driving licence  issued to him authorising him to drive  the vehicle; and no person shall so  drive a transport vehicle other than a  motor cab hired for his own use or  rented under any scheme made under  sub- section (2) of section 75 unless  his driving licence specifically  entitles him so to do.   (emphasis supplied) 18.             Section 5 declares that no owner or  person in charge of a motor vehicle shall cause  or permit any person which does not satisfy the  provisions of Section 3 to drive the vehicle.  Section 10 deals with form and contents of  licences. It enacts that every driving licence  (except a driving licence issued under Section  18 which provides for driving motor vehicles

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belonged to the Central Government) shall be in  such form and shall contain such information as  may be prescribed by the Central Government. It  also states that a driving licence shall be  expressed as entitling the driver to drive a  motor vehicle of one or more of the types of  motor vehicles specified in sub-section (2).  Section 15 provides for ’renewal of driving  licences’. Section 27 empowers the Central  Government to make rules in respect of matters  enumerated therein. Section 66 prohibits an  owner of motor vehicle to use or to permit the  use of motor vehicle as a transport vehicle in  any public place save in accordance with the  conditions of permit granted by an appropriate  authority. Whereas Section 147 deals with  requirements of policies and limits of  liability, Section 149 imposes duty on insurers  to satisfy judgments and awards against persons  insured in respect of third party risks. 19.             The Central Government has framed  rules known as the Central Motor Vehicles  Rules, 1989 (hereinafter referred to as ’the  Rules’). 20.             Rule 16 of the Rules prescribes the  form in which driving licence is issued. The  form provides that the holder of a licence can  drive any vehicle of the description mentioned  therein.  Where authorization is granted to  drive transport vehicle, it is expressly so  provided by making an endorsement to that  effect.  21.             Now, it is the case of the Insurance  Company that the vehicle of the complainant  which met with an accident was a ’transport  vehicle’.  It was submitted that the insured  vehicle was a ’goods carriage’ and was thus a  ’transport vehicle’.  The vehicle was driven by  Ram Narain, who was authorized to drive Light  Motor Vehicle and not a transport vehicle.   Since the driver had no licence to drive  transport vehicle in absence of necessary  endorsement in his licence to that effect, he  could not have driven Tata 709 and when that  vehicle met with an accident, Insurance Company  could not be made liable to pay compensation. 22.             Now, let us consider both these  points.  As far as vehicle is concerned, it is  clear from the record that it was Tata 709,  registration No.RJ-20G-2828.  The permit in  respect of the said vehicle is on record issued  by the Transport Authority, Kota.  From the  registration, it is clear that it was  registered as a truck, a goods carrier and was  described as public carrier.  Load carrying  capacity was shown to be 4100.00 Kgs.  The  permit was valid up to November 11, 2002. 23.             The District Forum held that the  documents clearly mentioned that the vehicle  was a ’goods carriage’ as defined in Section  2(14) covered by the category of ’transport  vehicle’ under Section 2(47) of the Act.  The  State Commission held that since the gross  weight of the vehicle was only 6800 Kgs and did  not exceed permissible limits (7500 Kgs) nor it

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was carrying goods at the time of accident, it  was a Light Motor Vehicle.  For coming to that  conclusion, the State Commission relied upon  Ashok Gangadhar.  24.             In our considered view, the State  Commission was wrong in reversing the finding  recorded by the District Forum.  So far as  Ashok Gangadhar is concerned, we will deal with  the said decision little later but from the  documentary evidence on record and  particularly, from the permit issued by the  Transport Authority, it is amply clear that the  vehicle was a ’goods carrier’ [Section 2(14)].   If it is so, obviously, it was a ’transport  vehicle’ falling under clause (47) of Section 2  of the Act.  The District Forum was, therefore,  right in considering the question of liability  of the Insurance Company on the basis that Tata  709 which met with an accident was ’transport  vehicle’.  25.             The second question is as to who was  driving the vehicle which collided with M.P.  Roadways Bus on April 17, 1998.  In this  connection, it may be stated that it was the  case of the complainant that the vehicle (Tata  709) was driven by Mohd. Julfikar to Indore.  Because of rash and negligent driving by Kalu,  driver of other vehicle i.e. M.P. Roadways bus,  there was an accident and Ram Narain, brother  of the complainant, sustained serious injuries.  Mohd. Julfikar was having valid licence to  drive Light Motor Vehicle (LMV) as well as  Heavy Motor Vehicle (HMV) and hence the  complainant was entitled to compensation from  the Insurance Company. 26.             The contention of the Insurance  Company, on the other hand, was that it  conducted an inquiry which revealed that at the  time of accident it was not Mohd. Julfikar who  was driving the vehicle, but it was Ram Narain  who was driving it. Ram Narain was having  licence to drive Light Motor Vehicle only and  since the vehicle in question was a transport  vehicle, he could not have driven the said  vehicle in absence of an endorsement as  required by law and hence the complainant was  not entitled to any amount from the Insurance  Company and the Insurance Company could not be  held liable. 27.             The District Forum, as observed  earlier, considered the assertion of the  complainant and the defence of the Insurance  Company as to who was driving Tata 709 and on  the basis of overall evidence adduced before  it, held that it was Ram Narain who was driving  the vehicle that met with an accident. The said  Ram Narain was not having licence to drive  transport vehicle and as such, Insurance  Company was not liable. The District Forum  noted that in the FIR lodged in respect of the  accident, Ram Narain was shown to be the driver  of the vehicle. Not only that but the evidence  adduced before the District Forum also went to  show that at the time of accident, Ram Narain  was the driver of the insured vehicle. The

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argument of the complainant that the officials  of the Insurance Company obtained his  signatures on some documents without reading  them over and making the claimant to understand  the contents thereof was negatived. The  assertion of the complainant that he was  ’illiterate’ and was knowing only how to put  his signature was also not believed by the  District Forum. The said finding of fact has  not been set aside either by the State  Commission or by the National Commission. Even  otherwise, from the evidence on record, we are  satisfied that it was Ram Narain who was  driving the vehicle at the time of accident. We  have, therefore, to proceed to consider whether  the complainant was entitled to claim  compensation from the Insurance Company in such  an eventuality. 28.             The argument of the Insurance Company  is that at the time of accident, Ram Narain had  no valid and effective licence to drive Tata  709. Indisputably, Ram Narain was having a  licence to drive Light Motor Vehicle. The  learned counsel for the Insurance Company,  referring to various provisions of the Act  submitted that if a person is having licence to  drive Light Motor Vehicle, he cannot drive a  transport vehicle unless his driving licence  specifically entitles him so to do (Section 3).  Clauses (14), (21), (28) and (47) of Section 2  make it clear that if a vehicle is ’Light Motor  Vehicle’, but falls under the category of  Transport Vehicle, the driving licence has to  be duly endorsed under Section 3 of the Act. If  it is not done, a person holding driving  licence to ply Light Motor Vehicle cannot ply  transport vehicle. It is not in dispute that in  the instant case, Ram Narain was having licence  to drive Light Motor Vehicle.  The licence was  not endorsed as required and hence, he could  not have driven Tata 709 in absence of  requisite endorsement and Insurance Company  could not be held liable. 29.             We find considerable force in the  submission of the learned counsel for the  Insurance Company. We also find that the  District Forum considered the question in its  proper perspective and held that the vehicle  driven by Ram Narain was covered by the  category of transport vehicle under Clause (47)  of Section 2 of the Act. Section 3, therefore,  required the driver to have an endorsement  which would entitle him to ply such vehicle. It  is not even the case of the complainant that  there was such endorsement and Ram Narain was  allowed to ply transport vehicle. On the  contrary, the case of the complainant was that  it was Mohd. Julfikar who was driving the  vehicle. To us, therefore, the District Forum  was right in holding that Ram Narain could not  have driven the vehicle in question. 30.             The learned counsel for the  complainant, however, heavily relied upon Ashok  Gangadhar. In that case, the appellant was the  owner of a truck, Light Motor Vehicle, which

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was insured with the respondent Insurance  Company. The vehicle met with an accident and a  claim was lodged by the complainant before the  Consumer Commission. It was contended by the  Insurance Company that the truck was a goods  carriage or a transport vehicle and since the  driver of the truck was holding a driving  licence issued in Form No.6 to drive light  motor vehicle only, he was not authorized to  drive transport vehicle as there was no  endorsement on his driving licence authorizing  him to drive such transport vehicle. The  aggrieved complainant approached this Court.  Allowing the appeal and setting aside the order  passed by the Commission, this Court held that  the driver of the vehicle was holding a valid  driving licence for driving a Light Motor  Vehicle and there was no material on record to  show that he was disqualified from holding an  effective valid licence at the time of  accident. In view of those facts, the Court  held that the policy did not insist on the  driver to have a licence to drive a transport  vehicle by obtaining a specific endorsement.  Considering the definition of ’Light Motor  Vehicle’ as given in Clause (21) of Section 2  of the Act, this Court held that such Light  Motor Vehicle (LMV) cannot always mean a light  goods carriage. A Light Motor Vehicle (LMV) can  be a non-transport vehicle as well. The Court  proceeded to observe that since there was  neither a pleading nor a permit produced on  record, the vehicle remained as a Light Motor  Vehicle. And though it can be said to have been  designed to use as a transport vehicle or a  goods carriage, it could not be held on account  of statutory prohibition contained in Section  66 of the Act to be a transport vehicle. It  was, therefore, held that the Commission was  not right in rejecting the claim of the  claimant.  Accordingly this Court set aside the  order passed by the Commission and directed the  Insurance Company to pay compensation to the  complainant. 31.             It is no doubt true that in Ashok  Gangadhar, in spite of the fact that the driver  was holding valid driving licence to ply Light  Motor Vehicle (LMV), this Court upheld the  claim and ordered the Insurance Company to pay  compensation. But, in our considered opinion,  the learned counsel for the Insurance Company  is right in submitting that it was because of  the fact that there was neither pleading nor  proof as regards the permit issued by the  Transport Authority. In absence of pleading and  proof, this Court held that, it could not be  said that the driver had no valid licence to  ply the vehicle which met with an accident and  he could not be deprived of the compensation.  This is clear if one reads paragraph 11 of the  judgment, which reads thus: "11. To reiterate, since a vehicle  cannot be used as transport vehicle on  a public road unless there is a permit  issued by the Regional Transport

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Authority for that purpose, and since  in the instant case there is neither a  pleading to that effect by any party  nor is there any permit on record, the  vehicle in question would remain a  light motor vehicle. The respondent  also does not say that any permit was  granted to the appellant for plying  the vehicle as a transport vehicle  under Section 66 of the Act, Moreover,  on the date of accident, the vehicle  was not carrying any goods, and though  it could be said to have been designed  to be used as a transport vehicle or  goods-carrier, it cannot be so held on  account of the statutory prohibition  contained in Section 66 of the Act".                                   (emphasis supplied)  32.             In our judgment, Ashok Gangadhar did  not lay down that the driver holding licence to  drive a Light Motor Vehicle need not have an  endorsement to drive transport vehicle and yet  he can drive such vehicle. It was on the  peculiar facts of the case, as the Insurance  Company neither pleaded nor proved that the  vehicle was transport vehicle by placing on  record the permit issued by the Transport  Authority that the Insurance Company was held  liable. 33.             In the present case, all the facts  were before the District Forum. It considered  the assertion of the complainant and defence of  the Insurance Company in the light of the  relevant documentary evidence and held that it  was established that the vehicle which met with  an accident was a ’transport vehicle’. Ram  Narain was having a licence to drive Light  Motor Vehicle only and there was no endorsement  as required by Section 3 of the Act read with  Rule 16 of the Rules and Form No.6. In view of  necessary documents on record, the Insurance  Company was right in submitting that Ashok  Gangadhar does not apply to the case on hand  and the Insurance Company was not liable. 34.             The matter can be looked from another  angle also. Section 14 referred to above,  provides for currency of licence to drive motor  vehicles. Sub-section (2) thereof expressly  enacts that a driving licence issued or renewed  under the Act shall, "in the case of a licence  to drive a transport vehicle, be effective for  a period of three years". It also states that  "in the case of any other licence, if the  person obtaining the licence, either originally  or on renewal thereof, had not attained the age  of fifty years on the date of issue or, as the  case may be, renewal thereof, be effective for  a period of twenty years from the date of such  issue or renewal". It is thus clear that if a  licence is issued or renewed in respect of a  transport vehicle, it can be done only for a  period of three years. But, in case of any  other vehicle, such issuance or renewal can be  for twenty years provided the person in whose  favour licence issued or renewed had not

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attained the age of 50 years. In the present  case, the licence was renewed on November 17,  1995 upto November 16, 2015 i.e. for a period  of twenty years. From this fact also, it is  clear that the licence was in respect of ’a  motor vehicle other than the transport  vehicle’. 35.             The learned counsel for the Insurance  Company also referred to a decision of this  Court in National Insurance Company vs. Kusum  Rai & Ors., (2006) 4 SCC 250, wherein this  Court held that if the vehicle is a taxi which  is being driven by a driver holding licence for  driving Light Motor Vehicle only without there  being any endorsement for driving transport  vehicle, the Insurance Company cannot be  ordered to pay compensation. 36.             We may also refer to a decision of the  High Court of Himachal Pradesh in New India  Assurance Co. Ltd., Shimla v. Suraj Prakash &  Ors., AIR 2000 HP 91. There the vehicle  involved in an accident was taxi, a public  service vehicle. But the licence issued in  favour of the driver was to ply light motor  vehicle and there was no endorsement to drive  transport vehicle. It was, therefore, held by  the High Court that the Insurance Company  cannot be saddled with the liability to pay  compensation to the claimant. There too, the  claimant placed reliance on Ashok Gangadhar.  The Court, however, distinguished it observing  that "there was neither any evidence therein  nor was there any claim for insurer that the  vehicle concerned therein was having a permit  for goods carriage or that it had a permit or  authorization for plying the vehicle as a  transport vehicle". In our considered view, the  High Court was right in taking the above view.  37.             The learned counsel for the  complainant invited our attention to certain  decisions of this Court. In Skandia Insurance  Co. Ltd. Vs.Kokilaben Chandravadan & Ors.,  (1987) 2 SCC 654, it was held that if a truck  driver leaves the truck with engine in motion  after handing over the truck to cleaner who was  not a duly licensed person who drives the truck  which causes an accident, it cannot be  contended by the Insurance Company that it  would not be liable to pay compensation to a  third party who sustains injury because of the  accident. 38.             The ratio laid down in Skandia  Insurance Co. Ltd., in our considered opinion,  does not apply to the case on hand as it was in  respect of ’third party’ that the Court held  that the Insurance Company must pay  compensation. This is clear from paragraph 13  of the judgment in which the Court stated: "13. In order to divine (sic derive)  the intention of the legislature in  the course of interpretation of the  relevant provisions there can scarcely  be a better test than that of probing  into the motive and philosophy of the  relevant provisions keeping in mind

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the goals to be achieved by enacting  the same. Ordinarily it is not the  concern of the legislature whether the  owner of the vehicle insures his  vehicle or not. If the vehicle is not  insured any legal liability arising on  account of third party risk will have  to be borne by the owner of the  vehicle. Why then has the legislature  insisted on a person using a motor  vehicle in a public place to insure  against third party risk by enacting  Section 94. Surely the obligation has  not been imposed in order to promote  the business of the insurers engaged  in the business of automobile  insurance. The provision has been  inserted in order to protect the  members of the Community travelling in  vehicles or using the roads from the  risk attendant upon the user of motor  vehicles on the roads. The law may  provide for compensation to victims of  the accidents who sustain injuries in  the course of an automobile accident  or compensation to the dependents of  the victims in the case of a fatal  accident. However, such protection  would remain a protection on paper  unless there is a guarantee that the  compensation awarded by the Courts  would be recoverable from the persons  held liable for the consequences of  the accident. A Court can only pass an  award or a decree. It cannot ensure  that such an award or decree results  in the amount awarded being actually  recovered, from the person held liable  who may not have the resources. The  exercise undertaken by the law Courts  would then be an exercise in futility.  And the outcome of the legal  proceedings which by the very nature  of things involve the time cost and  money cost invested from the scarce  resources of the Community would make  a mockery of the injured victim, or  the dependents of the deceased victim  of the accident, who themselves are  obliged to incur not inconsiderable  expenditure of time, money and energy  in litigation. To overcome this ugly  situation the legislature has made it  obligatory that no motor vehicle shall  be used unless a third party insurance  is in force. To use the vehicle  without the requisite third party  insurance being in force is a penal  offence (Section 94 of the Motor  Vehicles Act). The legislature was  also faced with another problem. The  insurance policy might provide for  liability walled in by conditions  which may be specified in the contract  of policy. In order to make the

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protection real, the legislature has  also provided that the judgment  obtained shall not be defeated by the  incorporation of exclusion clauses  other than those authorised by Section  96 and by providing that except and  save to the extent permitted by  Section 96 it will be the obligation  of the Insurance Company to satisfy  the judgment obtained against the  persons insured against third party  risks. (vide Section 96). In other  words, the legislature has insisted  and made it incumbent on the user of a  motor vehicle to be armed with an  insurance policy covering third party  risks which is in conformity with the  provisions enacted by the legislature.  It is so provided in order to ensure  that the injured victims of automobile  accidents or the dependents of the  victims of fatal accidents are really  compensated in terms of money and not  in terms of promise. Such a benign  provision enacted by the legislature  having regard to the fact that in the  modern age the use of motor vehicles  notwithstanding the attendant hazards,  has become an inescapable fact of  life, has to be interpreted in a  meaningful manner which serves rather  than defeats the purpose of the  legislation. The provision has  therefore to be interpreted in the  twilight of the aforesaid  perspective".

39.             Similar is the reasoning and  conclusion in B.V.Nagaraju Vs. M/s. Oriental  Insurance Co. Ltd., (1996) 4 SCC 647. In that  case, there was breach of condition as to carry  passengers in a goods vehicle more than the  number permitted in terms of insurance policy.  The Court there held that the breach of the  said provision could not be said to be such a  fundamental character so as to afford ground to  the insurer to deny indemnification unless  there were some factors which contributed to  the causing of the accident. The Court held  that exclusionary permission in the insurance  policy must be retained so as to serve the main  purpose of the policy which was to indemnify  the damage caused to the vehicle. 40.             In Jitendra Kumar Vs. Oriental  Insurance Co. Ltd. & Anr, (2003) 6 SCC 420, the  Court held that if the vehicle was damaged due  to accidental fire, the fact that the driver  was not holding valid driving licence at the  time of incident would not empower the  Insurance Company to repudiate the claim and it  could not be put forward as a ground to deny  the liability of the Insurance Company that the  driver did not have valid licence at the time  of accident in question. 41.             Finally, a reference was made to

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National Insurance Co. Ltd. Vs. Swaran Singh &  Ors, (2004) 3 SCC 297. That case also related  to third party victims of motor vehicle  accidents and to us the ratio in Swaran Singh  does not carry the case of the claimant  further. 42.             For the aforesaid reasons, in our  opinion, the conclusion arrived at by the  District Forum cannot be said to be faulty and  it was right in holding that on the basis of  the evidence adduced by the Insurance Company,  the complainant was not entitled to claim any  compensation from the Insurance Company and  Insurance Company cannot be held liable. The  decision could not have been interfered with by  the State Commission or by the National  Commission and hence the orders of the State  Commission and National Commission are liable  to be set aside by restoring the order passed  by the District Forum. we do accordingly. 43.             The appeal is, therefore, allowed. The  orders passed by the State Commission and  National Commission are set aside and the order  passed by the District Forum is restored. 44.             In the matter of Nasir Ahmed (SLP No.  7618 of 2005), the vehicle was a luxury taxi\027 passenger carrying commercial vehicle. There  also the driving licence issued in favour of  the driver was to ply Light Motor Vehicle (LMV)  and hence the driver could not have driven the  vehicle in question. In that case too, the  licence was renewed for a period of twenty  years i.e. from February 5, 2000 to February 4,  2020. Again, there was no endorsement as  required by Section 3 of the Act. A specific  plea was taken by the Insurance Company but the  Authorities held the Insurance Company liable  which could not have been done. The reasoning  and conclusion arrived at by us in the matter  of Prabhu Lal (SLP No. 7370 of 2004) would  apply to the case of Nasir Ahmed. That appeal  is, therefore, allowed. 45.             In Chandra Prakash Saxena (SLP No.  17794 of 2004), the vehicle involved in  accident was a Jeep Commander made by Mahindra  & Mahindra, a passenger carrying commercial  vehicle, and in view of the fact that the  driver was holding licence to drive Light Motor  Vehicle (LMV), he could not have plied the  vehicle in question. For the reasons recorded  hereinabove in the main matter of Prabhu Lal  i.e. SLP(C) No. 7370 of 2004, the Insurance  Company could not have been held liable and  that appeal also deserves to be allowed. 46.             For the foregoing reasons, all the  three appeals are allowed and the orders passed  against the Insurance Company are set aside  holding that the Insurance Company cannot be  held liable.  There shall, however, be no order  as to costs.