IMPORTANT POINT - Owner of the vehicle is liable if the driver does not possess a valid driving licence.

JUDGMENT

Dr. Arijit Pasayat, J. —

1. Leave granted.

2. Challenge in this appeal is to the order passed by the National Consumer Disputes Redressal Commission, New Delhi, (in short the ‘National Commission’).

3. Background facts in a nutshell are as follows:

Respondent was the owner of a vehicle- a Maruti van which was the subject matter of insurance with the present appellant for a period from 27.1.2003 to 26.1.2004. The Vehicle in question met with an accident on 12.6.2003 and was badly damaged. The estimate of the cost of repair was prepared by Automobiles Satya of Bilaspur. According to him the estimated expenditure on total repair of the vehicle was Rs.2,00,000/-. Intimation of the same was given by the complainant to the present appellant and claim was made. The same was rejected on the ground that the driver of the vehicle did not possess a valid driving licence and the vehicle which was a private vehicle was insured for personal use, but was being used as a taxi for carrying marriage parties. a marriage party was being transported in the vehicle after charging rent of Rs.2100/- when the accident occurred. The driver did not possess a valid licence and, therefore, the vehicle was being plied against the terms of the insurance policy. The District Consumer Disputes Redressal Forum Sarguja, Ambikapur Chhattisgarh, rejected the claim petition. An appeal was preferred before the State Consumer Dispute Redressal Commission, Rajpur (in short the ‘State Commission’). By order dated 17.10.2005, the appeal was allowed. It was held that it would be proper to declare the claim of complainant as “Non-standard” consequent to the violation and breach. Therefore, the present appellant was directed to pay Rs.90,000/- i.e. 75% of Rs.1,20,000/- i.e. the amount assessed by the surveyor of the insurance company along with 9% interest. The only reason given by the State Commission was that even if the vehicle was being used as a taxi, there was no fundamental breach of the terms of the policy. A revision petition was filed before the National Commission which came to be dismissed by the impugned order. The National Commission held that even though the vehicle was being used as a commercial vehicle and the driver did not have a valid driving licence, there was no fundamental breach of the terms of the policy.

According to the appellant the insured vehicle was being used as a commercial vehicle, and the driver of the vehicle is required to hold an appropriate licence. If the driver who was driving the vehicle at a relevant point of time did not possess any licence to drive a commercial vehicle, there is a breach of the conditions of the policy and such plea was available to be raised as a defence.

4. This Court in National Insurance Co. Ltd. v. Swaran Singh1 [2004(3) SCC 297] clearly laid down that the liability of the Insurance Company vis-‘-vis the owner would depend upon several factors. The owner would be liable for payment of compensation in a case where the driver was not having a licence at all. It was the obligation on the part of the owner to take adequate care to see that the driver had an appropriate licence to drive the vehicle. The question as regards the liability of the owner vis-‘-vis the driver being not possessed of a valid licence was considered in Swaran Singh’s case stating:

“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. The various types of vehicles described for which a driver may obtain a licence for one or more of them are: (a) motorcycle without gear, (b) motorcycle with gear, (c) invalid carriage, (d) light motor vehicle, (e) transport vehicle, (f) road roller, and (g) motor vehicle of other specified description. The definition clause in Sectio