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2025 Supreme(All) 2550

IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH 
RAJNISH KUMAR, J.
National Insurance Co. Ltd. Thro. Its Assistant Manager - Appellant 
Versus
Shiv Gopal S/O Late Fateh Bahadur And Another – Respondents
First Appeal From Order No. 758 of 2011
Decided On : 19-02-2025

Advocates Appeared:
For the Appellant : S.C. Gulati.
For the Respondent: Aditya Prakash Sharma, Herpal Singh Chadha, Inderpreet Singh Chadha, Raj Kumar Pandey, Vivek Pandey.

The insurance company is not liable for compensation if the driver lacked a valid driving licence at the time of the accident.

Headnote:(A) Employee's Compensation Act, 1923 - Section 3/4 - Motor Vehicles Act, 1988 - Section 3 - Liability of insurance company - Compensation of Rs. 2,16,910/- awarded to claimant-respondent for death of employee during employment - Insurance company denied liability due to lack of proof of valid driving licence - Court held that insurance company cannot be held liable as driver lacked effective licence at the time of accident. (Paras 9, 20, 21, 27)

(B) Employment - Proof of employment - Claimant proved deceased was employed as driver by respondent, despite owner's denial - Court affirmed that employment was established through FIR. (Paras 4, 10)

Facts of the case:
The claimant-respondent filed for compensation after the death of his son, Sarvesh Kumar, who was a driver and died while in employment. The insurance company contested liability, citing lack of proof of employment and valid driving licence.

Findings of Court:
The court found that the deceased was indeed employed as a driver and that the insurance company was not liable for the compensation due to the absence of a valid driving licence.

Issues: The main issues were whether the insurance company could be held liable without proof of the driver’s valid licence and whether the deceased was an employee of the vehicle owner.

Ratio Decidendi: The court determined that without a valid driving licence, the insurance company cannot be held liable under the policy, affirming the statutory obligation of the vehicle owner to ensure the driver holds a valid licence.

Result: Appeal allowed; compensation to be paid by the vehicle owner with interest from the date of the accident.

Table of Content
1. details of the case and parties involved. (Para 2 , 7 , 8)
2. arguments presented by the parties regarding employment and liability. (Para 3 , 4 , 5)
3. court's consideration of the case and evidence. (Para 6 , 9 , 10)
4. discussion on the validity of the driver's license and insurance policy conditions. (Para 12 , 14 , 15)
5. court's observations on statutory obligations and insurance liability. (Para 17 , 19 , 20)
6. discussion on interest on compensation and employer's liability. (Para 21 , 22 , 23)
7. clarification on the date from which interest is due. (Para 24 , 25 , 26)
8. final decision on compensation and interest. (Para 27 , 28)

JUDGMENT :

(Rajnish Kumar, J.)

1. Heard Ms. Pooja Arora, Advocate holding brief of Shri S.C. Gulati, learned counsel for the appellant, Shri Sunny Sharma, Advocate holding brief of Shri Aditya Prakash Sharma, learned counsel for the claimant-respondent no. 1 and Shri Shubham Singh, Advocate holding brief of Shri Raj Kumar Pandey, learned counsel for the respondent no. 2/the owner of vehicle.

2. This First Appeal From Order under Section 30 of the Employee's Compensation Act, 1923 has been filed against the judgment and award dated 30.05.2011 passed by Additional District Magistrate Trans Gomti and Commissioner, Employee's Compensation, Lucknow in W.C. Case No. 18 of 1999; Shiv Gopal and others vs. Dharmendra Awasthi and others , awarding a compensation of 2,16,910/- along with interest @ 6 percent per annum as interest to the claimant-respondent no. 1 w.e.f. the date of impleadment of Insurance Company i.e. 11.08.2006.

3. Learned counsel for the appellant submits that the owner has denied that the deceased driver was in his employment. The P.W.2 has also proved that the deceased was driving the vehicle. He further submits that the necessary documents such as Registration Certificate of Tempo, Permit, Fitness, and driving licence were not brought on record, but the learned Compensation Commissioner without considering it and on the ground that it does not make any difference because it should have been seen at the time of insurance, allowed the claim and the appellant has been held liable to satisfy the award, which could not have been done. He relies on Sardari and others vs. Sushil Kumar and others ; 2008 ACJ 1307, United India Insurance Company Limited vs. Sujata Arora and others ; 2013 (3) T.A.C. 29 (S.C.) and Fazlu Rahman Ansari vs. National Insurance Company Limited and others ; (2019) 13 SCC 806 . No other ground has been urged or pressed.

4. Learned counsel for the claimant-respondent no.1 submits that the deceased was in employment of the respondent no.2, which is apparent from the fact that the First Information Report was lodged by the owner admitting that the deceased was in his employment as driver, therefore, the contention of learned counsel for the appellant in this regard is misconceived and not tenable. In regard to the Registration Certificate etc., which were not brought on record, learned counsel for the claimant-respondent no.1 submits that they were not required because once the vehicle was insured it is liability of the Insurance Company to pay the compensation. Thus, the substantial question of law, on which the appeal has been admitted, does not arise in this appeal. The appeal is misconceived and liable to be dismissed. He relies on North East Karnataka Road Transport Corporation vs. Sujatha ; (2019) 11 SCC 514 .

5. Learned counsel for the respondent no. 2 i.e. owner of the vehicle submits that Sarvesh Kumar was not the driver of the respondent and since the vehicle was insured by the appellant-insurance company, therefore the compensation determined by Commissioner, Employees Compensation, Lucknow is to be paid by the appellant-insurance company and the substantial question of law on which this appeal has been admitted does not arise in this appeal.

6. I have considered the submissions of learned counsel for the parties and perused the records.

7. The case wa

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