The driver of a vehicle carrying hazardous goods must possess a mandatory license endorsement per statutory rules. Failure to hold such an endorsement is a material breach, allowing the insurance company to pay the third-party compensation while retaining the right to recover the amount from the vehicle owner.

Headnote:(A) Motor Vehicles Act, 1988 - Central Motor Vehicles Rules, 1989 - Rule 9(3) - Liability of Insurance Company - Requirement of specific endorsement on driving license for operating vehicles carrying hazardous or dangerous goods - Absence of such endorsement constitutes a material breach of statutory requirements - The argument that the driver's efficiency is not affected by the absence of endorsement is rejected as it disregards the comprehensive training prescribed under statutory rules - Statutory requirements regarding hazardous goods cannot be brushed aside as venial breaches (Paras 9, 10, 11).

(B) Appeal - Liability of Insurer - Where a policy breach is established regarding the mandatory qualification of the driver for hazardous cargo, the insurer’s obligation to third-party claimants remains; however, the insurer is entitled to recover the paid amount from the owner of the vehicle under the 'pay and recover' principle (Paras 12, 13, 15).

Facts of the case:
A fatal accident occurred involving a motorized two-wheeler and a vehicle designed for carrying hazardous goods. The claimant sought compensation following the death of the road user. The insurer contested the liability, arguing that the driver of the offending vehicle lacked the mandatory license endorsement required for handling hazardous goods. The lower tribunal held the insurer fully liable, reasoning that the absence of the endorsement did not impact the driver's technical ability. The insurer challenged this finding in appeal.

Findings of Court:
The court observed that Rule 9 of the Statutory Rules explicitly mandates specific educational and training requirements for drivers of vehicles carrying hazardous goods, evidenced by an official endorsement. The court clarified that the lack of this certification is a significant statutory lapse rather than a mere technicality, entitling the insurer to recover the compensation amount paid to the claimant from the owner of the vehicle.

Issues: The primary questions were whether the absence of a mandatory license endorsement for driving a vehicle intended for hazardous goods absolves the insurer of its primary liability, and whether the 'pay and recover' principle should be applied.

Ratio Decidendi: The statutory requirement for an endorsement for hazardous goods transport is designed to ensure specific safety proficiencies; failure to comply with this requirement constitutes a breach of policy conditions. While the insurer remains liable to the third-party claimant to satisfy the award, it holds the right to recover the entire amount from the insured owner of the vehicle due to the established breach.

Result: Appeal allowed in part; the insurer is directed to satisfy the award and is granted the right to recover the amount from the owner.

Judgment on Board

07/01/2026

1. The appellant/Insurance Company has challenged the liability part of award passed by the learned XII^th Additional Motor Accident Claims Tribunal, Raipur (C.G.) in Claim Case No. 653/2018 dated 11.01.2022, whereby the learned Claims Tribunal granted compensation to the tune of Rs. 18,91,512/- with interest @ 9% per annum on account of death of Yogita Pal and fastened liability with the Insurance Company.

2. The facts, in brief, are that on 30.07.2018 at around 12:45 hours, deceased Yogita Pal was travelling on her motorbike bearing registration No. CG-04 / LP-3243 and she was dashed by a Oil-Tanker bearing registration No. CG-19 / H-0919. Husband of the deceased filed claim case, inter alia on the ground that at the time of accident, age of the deceased was 26 years and earning Rs.9,530/- per month. He claimed a sum of Rs.18 lacs.

3. The Insurance Company filed reply to the claim petition and specific plea was taken that the driver of the offending Oil-Tanker, bearing registration No. No. CG-19 / H-0919, did not have valid driving licence to drive a hazardous vehicle. It is also pleaded that there was no endorsement over the driving licence issued in favour of the driver of the offending vehicle.

4. The learned Claims Tribunal framed issues, parties led evidence and thereafter award was passed.

5. Mr. R.N. Pusty, learned counsel appearing for the appellant/Insurance Company would vehemently argue that the driver of the offending vehicle did not have valid driving licence to drive a hazardous vehicle. He would contend that an Oil-Tanker comes within the category of hazardous vehicle. He would contend that according to sub-rule (3) of Rule 9 of the Central Motor Vehicles Rules, 1989 (for short ‘Rules of 1989), there must be an endorsement in the driving licence of the applicant to the effect that he is authorised to drive a goods carriage carrying goods of dangerous or hazardous nature to human life. He would submit that the learned Claims Tribunal fastened the liability on the Insurance Company on the ground that the endorsement to drive a hazardous vehicle neither increases the efficiency of the driver nor by its absence reduces such efficiency in any manner and for driving such a vehicle, no further expertise or driving skill is required. Mr. R.N. Pusty would submit that the learned Claims Tribunal further recorded a finding that the Oil-Tanker was empty and breach of non-compliance of statutory requirement would not absolve the liability of the Insurance Company. He would submit that the findings recorded by the learned Claims Tribunal are erroneous. Mr. R.N. Pusty has placed reliance on the judgment passed by the Hon’ble Supreme Court in the matter of Chatha Service Station Vs. Lalmati Devi and Others , reported in 2025 SCC OnLine SC 756

6. On the other hand, Mr. A.L. Singroul, learned counsel appearing for respondent No. 3/Owner would oppose the submission made by Mr. R.N. Pusty. He would submit that the learned Claims Tribunal has considered this issue at length and decided it against the Insurance Company. He would submit that endorsement according to the provisions of Rule 9 of the Rules 1989 would neither increases the efficiency of the driver nor by its absence reduces such efficiency. He would contend that the Oil-Tanker was empty and such vehicle could have been driven by any ordinary driver. He would submit that the learned Claims Tribunal has passed well reasoned award and appeal deserves to be dismissed.

7. Ms. Priya Kaiwart, learned counsel appearing for respondent No. 1/Claimant would support the award passed by the learned Claims Tribunal.

8. I have heard learned counsels for the parties and perused the records of the learned Claims Tribunal with utmost circumspection.

9. Admittedly, the driver of the offending vehicle had driving licence to drive heavy transport vehicle, but there was no endorsement to drive hazardous or dangerous vehicle. A specific plea was taken by the Insurance Com

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2026 Supreme(Online)(Chh) 23304

IN THE HIGH COURT OF CHHATTISGARH AT BILASPURRAKESH MOHAN PANDEY, JThe Oriental Insurance Company Limited – AppellantVersusFanesh Pal – RespondentMAC No. 563 of 2022

IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR
RAKESH MOHAN PANDEY, J
The Oriental Insurance Company Limited – Appellant
Versus
Fanesh Pal – Respondent
MAC No. 563 of 2022