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IN THE SUPREME COURT OF INDIA  CIVIL APPELLATE JURISDICTION  

 CIVIL APPEAL NO    2103     OF 2018   

(Arising out of SLP (C ) No 22630 of 2015)  

SINGH RAM                ..Appellant   

VERSUS  

NIRMALA AND ORS           ..Respondents    

J U D G M E N T   

Dr D Y CHANDRACHUD, J  

1 Delay condoned.  

2 In a claim for compensation under Section 166 of the Motor Vehicles Act  

1988, the Motor Accident Claims Tribunal (‘the Tribunal’), Yamunanagar at  

Jagadhri found that the insured did not hold a valid driving licence at the time  

of the accident.  The Tribunal absolved the insurer for that reason.  The insurer  

was, however, directed to pay the compensation awarded to the claimant and  

to recover it from the owner of the offending motor cycle. The High Court dealt  

with three appeals: one filed by the claimant seeking enhancement of  

compensation, a second by the insurance company and the third by the owner  

REPORTABLE

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cum driver of the offending vehicle. The High Court held that in view of the  

decision of this Court  in National Insurance Co. Ltd. v Swaran Singh1,  the  

Tribunal was correct in directing the insurer to pay the compensation and to  

recover it from the owner-cum-driver of the offending vehicle.  The present  

appeal has been filed by the owner and driver.  The only point which has been  

urged in support of the appeal is that the Tribunal and the High Court erred in  

fastening the liability on him by granting a right of recovery to the insurer.    

3 The accident took place on 22 March 2010.  The deceased  Sunil Kumar  

was riding a motor cycle bearing Registration No HR-04B-4673.  The Tribunal  

found that the accident was caused as a result of the rash and negligent act of  

the appellant.  This finding of fact has not been disturbed by the High Court.  

The deceased was employed as a sweeper in Haryana Roadways and was  

engaged on a salary of Rs 11,928 per month.  The Tribunal allowed future  

prospects of 50%, the deceased being just short of 36 years of age. After  

deducting an amount representing one-fourth of the earnings for personal  

expenses, the Tribunal applied a multiplier of 15.  The total compensation was  

computed at Rs 24,15,420 to which the Tribunal added an amount of Rs 20,000  

under conventional heads.  However, the Tribunal held that the financial  

assistance which the heirs of the deceased would receive over a period of 12  

years from the employee (amounting to Rs 16,16,112) would have to be  

deducted from the compensation.  After making the deduction, the Tribunal  

                                                           1 (2004) 3 SCC 297

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awarded an amount of Rs. 8,19,500 together with interest at 7.5 per cent per  

annum from the date of the claim petition.  The High Court has enhanced the  

compensation to Rs 16,04,912.    

4 Special Leave Petition (C ) No 7737 of 2015 filed by the claimant, which  

was connected to this appeal,  has been dismissed on 8 February 2018.  

5 In the present appeal  by the owner cum driver of the offending motor  

cycle, the submission  is that in view of the decision of a Bench of three learned  

Judges of this Court in Swaran Singh (supra), the insurer ought not to have  

been absolved. Hence the direction to the insurer to pay and recover the  

compensation from the appellant should, it has been urged,  be modified to  

fasten a joint and several liability on the insurer.  

6 Before we advert to the decision in Swaran Singh (supra) a brief  

reference to the facts as they emerge from the decision of the Tribunal is  

necessary.  Initially before the Tribunal the appellant produced a driving licence  

issued by the Motor Vehicles Department, Agra (Exh.R-1).  The driving licence  

was found to be fake.  The statement of the Senior Assistant in the office of the  

RTO, Agra was that Exh.R-1 had not been issued by the office. The Tribunal  

noted that the witness had proved the report (Exh.R-2) issued by the  

department and concluded that the licence was fake.  Faced with this situation,  

the appellant attempted to prove that he held a valid driving licence issued by

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the licencing authority at Jagadhri to drive a motor cycle.  The Tribunal rejected  

the application filed by the appellant for producing additional evidence.  The  

Tribunal noted that even otherwise, the licence which was issued by the  

licencing authority, Jagadhri for a tractor and car was valid only until 29 August  

2009.  The accident took place on 22 March 2010.  The licence was renewed  

on 28 November 2011 more than two years after it had expired.  On these facts,  

the Tribunal observed that on the date of the accident, the appellant was not  

holding a valid and effective driving licence nor was there any evidence to  

indicate that the licence was sought to be renewed as required in law, within 30  

days of its expiry. The Tribunal also observed that the appellant did not hold a  

valid licence to drive a motor cycle.  On these grounds, the insurer was  

absolved.  The High Court has confirmed the direction of the Tribunal to pay  

and recover.   

7 In Swaran Singh (supra), this Court held that the holder of a driving  

licence has a period of thirty days on its expiry, to renew it:   

“45. Thus, a person whose licence is ordinarily renewed in  

terms of the Motor Vehicles Act and the Rules framed  

thereunder, despite the fact that during the interregnum  

period, namely, when the accident took place and the date  

of expiry of the licence, he did not have a valid licence, he  

could during the prescribed period apply for renewal thereof  

and could obtain the same automatically without undergoing  

any further test or without having been declared unqualified  

therefor. Proviso appended to Section 14 in unequivocal  

terms states that the licence remains valid for a period of  

thirty days from the day of its expiry.  

46. Section 15 of the Act does not empower the authorities  

to reject an application for renewal only on the ground that  

there is a break in validity or tenure of the driving licence has

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lapsed, as in the meantime the provisions for disqualification  

of the driver contained in Sections 19, 20, 21, 22, 23 and 24  

will not be attracted, would indisputably confer a right upon  

the person to get his driving licence renewed. In that view of  

the matter, he cannot be said to be delicensed and the same  

shall remain valid for a period of thirty days after its expiry.”  

The following conclusion has been recorded in summation in the judgment::  

“(iii) The breach of policy condition e.g. disqualification of  

the driver or invalid driving licence of the driver, as contained  

in sub-section (2)(a)(ii) of Section 149, has to be proved to  

have been committed by the insured for avoiding liability by  

the insurer. 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 licensed driver or  

one who was not disqualified to drive at the relevant time.  

(iv) Insurance companies, however, with a view to avoid  

their liability must not only establish the available defence(s)  

raised in the said proceedings but must also establish  

“breach” on the part of the owner of the vehicle; the burden  

of proof wherefor would be on them.  

(v) The court cannot lay down any criteria as to how the  

said burden would be discharged, inasmuch as the same  

would depend upon the facts and circumstances of each  

case.  

(vi) Even where the insurer is able to prove breach on the  

part of the insured concerning the policy condition regarding  

holding of a valid licence by the driver or his qualification to  

drive during the relevant period, the insurer would not be  

allowed to avoid its liability towards the insured unless the  

said breach or breaches on the condition of driving licence  

is/are so fundamental as are found to have contributed to  

the cause of the accident. The Tribunals in interpreting the  

policy conditions would apply “the rule of main purpose” and  

the concept of “fundamental breach” to allow defences  

available to the insurer under Section 149(2) of the Act.  

(vii) The question, as to whether the owner has taken  

reasonable care to find out as to whether the driving licence  

produced by the driver (a fake one or otherwise), does not

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fulfil the requirements of law or not will have to be  

determined in each case”.  

8 In the present case it is necessary to note, as observed by the Tribunal,  

that the owner did not depose in evidence and stayed away from the witness  

box.   He produced a licence which was found to be fake. Another licence which  

he sought to produce had already expired before the accident and was not  

renewed within the prescribed period.  It was renewed well after two years had  

expired.  The appellant as owner had evidently failed to take reasonable care  

(proposition (vii) of Swaran Singh) since he could not have been unmindful of  

facts which were within his knowledge.   

9 In the circumstances, the direction by the Tribunal, confirmed by the High  

Court, to pay and recover cannot be faulted.  The appeal is, accordingly,  

dismissed. There shall be no order as to costs.   

 ...........................................CJI  

               [DIPAK MISRA]        

                                                    ...........................................J                  [A M KHANWILKAR]        

                                                    ...........................................J                  [Dr D Y CHANDRACHUD]  New Delhi;  March 06, 2018