ORIENTAL INSURANCE COMPANY LIMITED Vs. PAULOSE

JUDGEMENT

(1.) Is the insurer absolved of the liability to indemnify the insured merely because the driver's licence had not been renewed on the date of the accident This is the short question.

(2.) Facts are not in dispute. The accident occurred on 23.5.1997. Ext. P1 insurance policy was subsisting as on the said date. The third respondent, who was riding the scooter having registration No.KL-7/A-9171 had a driving licence. Its validity period expired on 30.11.1996. He renewed it later, on 18.6.1997. As on the date of accident, he did not have a valid driving licence, according to the appellant. Therefore, the appellant did not have the liability to indemnify the owner, the appellant submitted. A person without an effective and valid driving licence is not duly licenced. Consequently there was breach of the terms and conditions in the policy. On the basis of this violation of policy conditions, the insurer can plead immunity from the liability to indemnify the insured. Policy contained a condition that only those having "an effective and valid driving licence" alone can drive the vehicle. In this case the rider did not have an effective and valid licence as on the date of the accident. This breach of the policy conditions enables the insurer to avoid the liability, in terms of the policy.

(3.) Reliance was placed on the decision reported in Ashok Gangadhar Maratha v. Oriental Insurance Co. Ltd. ( 1999 (6) SCC 620 ) to contend that effective driving licence means a valid licence both as regards the period and type of licence and on the judgment in MFA 507/00 of this Court to contend that, if the driver was not having an effective driving licence as on the date of the accident, the insurer will not be liable to indemnify the insured. It was also contended, placing reliance on the decision in New India Assurance Co., Shimla v. Kamala and Others (2001 (2) KLT (SC) (SN) 18) that, even if the insurer is found liable to pay the award amount to the claimant, the appellant shall be permitted to recover the same from the insured. It was further contended citing the decision in Beer Singh and Others v. Santhir Singh & Anr. (2000 (3) TAC 351 (P&H)) that, when there is evidence to show that the driving licence had expired prior to the date of accident, it was not necessary for an insurer to further establish that the driver was disqualified from holding the licence. The appellant also submits that possession of an effective and valid driving licence was a condition in terms of the policy.