NEW INDIA ASSURANCE CO. LTD. v. PRABHU LAL

Citation: [2007] 12 S.C.R. 724

Court: Supreme Court of India

Bench: C.K. THAKKER, TARUN CHATTERJEE

Case summary

NEW INDIA ASSURANCE CO. LTD. v. PRABHU LAL.pdf

Judgment text

NEW INDIA ASSURANCE CO. LTD. v. PRABHULAL NOVEMBER 30, 2007 [C. K. THAKKER AND TARUN CHATTERJEE, JJ. ] Consumer Protection Act, 1986-s. 12-Vehicle ofcomplainant got damaged in an accident-Claim towards vehicle and other expenses-Held: Documentary evidence by Insurance Company show that vehicle which met with accident was a 'transport vehicle '-Driver held licence to drive Light Motor Vehicle only-There was no requisite endorsement which would entitle him to ply such 'transport vehicle·- Thus, complainant not entitled to any compensation and Insurance company cannot be held liable-Order ofDistrict Forum upheld, and ·~ that ofState Commission an affirmed by National Commission set aside-Motor Vehicles Act, 1988-ss. 147, 2(47), and 3-Central Motor Vehicle Rules, 1989-Rule 16. The respondent filed a complaint under s. 12 ofthe Consumer Protection Act, 1986 before the District Consumer Dispute Redressal Forum that his vehicle, TATA 709, was hit by a Roadways bus and got damaged.

He claimed certain amount towards claim of vehicle, mental agony, survey fees and charges ofdriving the vehicle from the place ofaccident. The Insurance Company contested and stated that it did not commit any deficiency in rendering service. The case oflnsurance Company was that the vehicle was being driven by 'RN', the brother of complainant who possessed only a licence to drive light motor vehicle and not heavy motor vehicle and as such could not have driven the vehicle in question which was 'transport vehicle' in the absence ofnecessary endorsement as required and, therefore, the Insurance Company could not be held liable. The ,. . • District Consumer Dispute Redressal Forum held the claim as not tenable and dismissed the complaint. However, the Consumer Dispute Redressal Forum of the State allowed the appeal of the claimant and the National Consumer Dispute Redressal Forum confirmed the order. Aggrieved, the Insurance Company filed the instant appeal.

Allowing the appeal, the Court HELD: 1. 1 In the instant case, the District Forum considered the assertion of the complainant and defence of the Insurance Company in the light of the relevant documentary evidence and rightly held that it was established that the vehicle which met with an accident was a 'transport vehicle' as defined under section 2(47) ofthe Motor Vehicles Act, 1988; that it was 'RN' who was driving the vehicle that met with an accident; that RN was having a licence to drive Light Motor Vehicle only and there was no endorsement as required by Section 3 of the Act read with Rule 16 of the Central Motor Vehicles Rules, 1989 and Form No. 6, and thus, 'RN was not -i having licence to drive 'transport vehicle'. In view of necessary .. documents on record, the Insurance Company was right in submitting that *Ashok Gangadhar 's case did not apply to the instant case and the Insurance Company was not liable. [Para 33] [739-B, CJ 1. 2.

Ashok Gangadhar 's case did not lay down that the driver holding licence to drive a Light Motor Vehicle need not have an endorsement to drive transport vehicle and yet he can drive such vehicle. It was on the peculiar facts of the case, as the Insurance Company neither pleaded nor proved that the vehicle was transport vehicle by placing on record the permit issued by the Transport Authority that the Insurance Company was held liable. [Para 32] [738-H; 739-A] *Ashok Gangadhar Maratha v. Oriental Insurance Co. Ltd. , [1999] 6 sec 620, distinguished. >.. -j 1. 3. Section 14 of the Act provides for currency of licence to drive motor vehicles. Sub-section (2) states that ifa licence is issued or renewed in respect of a transport vehicle, it can be done only for a period of three years, but, in case of any other vehicle, such issuance or renewal can be for twenty years provided the person in whose favour licence issued or renewed had not attained the age of 50 years.

In the instant case, the licence was renewed on November 17, 1995 upto November 16, 2015 i. e. for a period of twenty years from which it is clear that the licence was in respect of 'a motor vehicle other than the transport vehicle'. [Para 34) [739-D-G) 1. 4. The conclusion arrived at by the District Forum cannot be said to be faulty and it was right in holding that on the basis of the evidence adduced by the Insurance Company, the complainant was not entitled to claim any compensation from the Insurance Company and the Insurance Company cannot be held liable. The State Commission or the National Commission could not have interfered with the decision ofthe District Forum and hence, the orders ofthe State Commission and National Commission are set aside and the order passed by the District Forum is restored. [Paras 42, 43 and 46) [743-C-E) Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan & Ors. , [1987] 2 sec 654, distinguished. National Insurance Co. Ltd. v. Swaran Singh & Ors.

, [2004) 3 SCC 297; National Insurance Companyv. Kusum Rai & Ors. , [2006] 4 SCC 250; New India Assurance Co. Ltd. , Shim/av. Suraj Prakash and Ors. , AIR (2000) HP 91; B. V Nagarajuv. Mis. Oriental Insurance Co. Ltd. , [1996) 4 SCC 647 andJitendra Kumarv. Oriental Insurance Co. Ltd. & Anr. , [2003] 6 SCC 420, referred to. CIVIL APPELLATE JURISDICTION :Civil Appeal No. 5539 of 2007. From the Judgment and final Order dated 17. 10. 2003 of the National Consumer Disputes Redressal Commision, New Delhi in Revision Petition No. 880 of2002. WITH . • C. A. Nos. 5540 and 5541 of2007. Kishore Rawat and M. K. Dua for the Appellant. Sangram Singh Solanki, Pankaj Kumar Singh, J. P. N. Gupta, K. L. Janjani, Jagjit Singh Chhabra, Shekhar G. Devasa, B. V. Pinto and D. K. Garg for the Respondent. The Judgment ofthe Court was delivered by C. K. THAKKER, J. I. Leave granted. 2. In all these appeals, a common question oflaw has been raised by the parties.

It is, therefore, appropriate ifwe deal with and decide all the appeals by a commonjudgment. In all the three appeals, the claim of the claimant has been upheld finally by the National Consumer Disputes Redressal Com. 111ission, New Delhi ('National Commission' for short) which has been challenged by the Insurance Company in this Court. 3. To appreciate the controversy, it would be appropriate if we narrate the facts in the first case i. e. New India Assurance Co. Ltd. v. Prabhu Lal. 4. A complaint was filed by the complainant Prabhu Lal under Section 12 of the Consumer Protection Act, 1986 before the District Consumer Disputes Redressal Forum, Kota (Rajasthan) ('District Forum' for short) claiming compensation from the respondent Insurance Company as also from Tata Finance Limited, Jaipur. The case ofthe complainant was that he purchased a vehicle-Tata 709 with Registration No. RJ- 20G-2828 from Tata Finance Limited, Jaipur.

The insurance was taken from New India Assurance Company effective from October 17, 1997 to October 16, 1998. Premium amount ofRs. 8235/- was duly paid. It was the case ofthe complainant that on April 17, 1998, the vehicle of the complainant was being driven by Mohd. Julfikar to Indore for getting Chilly. At about 4. 30 a. m. in the early morning, the driver ofRoadways Bus No. MP 13-C-3935 drove the bus with very high speed in rash and negligent manner which resulted in an accident at Yashwant Nagar. Due to said accident, Ram Narain-brother ofthe complainant who was sitting .. with Mohd. Julfikar, sustained injuries. Mohd. Julfikar immediately ran -I away leaving the vehicle but as Ram Narain received seri~us injuries, he could not come out of the vehicle. The complainant lodged First Information Report (FIR) No. 131 of 1998 with the Manpur Police Station, Yashwant Nagar, District Indore under Sections 279 and 337 of H the Indian Penal Code (IPC) against driver Kalu ofM. P.

Roadways Bus. Vehicle ofthe complainant was then inspected by Tatas, estimate was prepared and claim was submitted in the prescribed form by the complainant to the Insurance Company on June 12, 1998. The amount ofthe claim was, however, not paid to the complainant. The complainant, therefore, moved the District Forum praying for an award of Rs. 4,70,000/- towards the claim of vehicle, Rs. 15,000/- towards mental agony, Rs. 5,000/- towards driving charges ofthe vehicle from Indore to Kota and Rs. 25,000/- for survey fee. 5. The Insurance Company filed its reply refuting the claim ofthe complainant. According to the Company, it had not committed any deficiency in rendering 'service'. It was also the case ofthe Company that it had fulfilled all contractual obligations as to claim. The Company informed the complainant about its decision on December 21, 1999 stating that the claim was not allowable and the amount was not payable.

The 0 Insurance Company, therefore, prayed for the dismissal ofthe complaint. 6. According to the District Forum, the main question was whether the Insurance Company was deficient in rendering service and wrongly disallowed insurance claim ofthe complainant. The Forum considered the question and heard the parties. According the complainant, at the time of accident, vehicle was driven by Mohd. Julfikar who was having a licence to drive Light Motor Vehicle (LMV) as also Heavy Motor Vehicle (HMV). In spite of it, the Insurance Company disallowed the insurance claim ofthe complainant on the ground that the driver was not having valid driving licence to drive the vehicle in question. It was also the contention ofthe complainant that certain documents produced by the Insurance Company were not genuine. The complainant was not an educated man and he knew only how to sign.

Ifthe officials ofInsurance Company had obtained signatures ofthe complainant on certain documents without reading over to him and making him properly understood, the complainant should not suffer. According to the complainant, Insurance Company wrongly presumed and proceeded on the basis that the vehicle was driven by Ram Narain at the time of accident, who was having a valid driving licence to drive only Light Motor Vehicle and negatived the claim. It was, therefore, prayed that an award be passed in favour of the complainant. '-"---t [THAKKER, J. ] 7. The case ofthe Insurance Company, on the other hand, was that the vehicle in question, at the time ofaccident, was driven by Ram Narain, brother of the complainant. Admittedly, Ram Narain was possessing licence to drive Light Motor Vehicle and not Heavy Motor Vehicle. He, therefore, could not have driven Transport Vehicle in absence ofnecessary endorsement as required and the Insurance Company could not be held liable.

In this connection, Insurance Company relied on the permit issued by Transport Authority, the Form submitted by the complainant, licence issued and other documents. The Insurance Company also relied upon FIR filed at Police Station, Manpur, wherein it was stated that the vehicle was driven by Ram Narain. Moreover, when the officers ofthe Insurance Company approached the complainant, they were informed by the complainant that the vehicle was driven by Ram Narain. As an after thought, only with a view to get the amount of compensation, it was asserted and a case had been put forward before the Consumer Forum i that the vehicle was driven by Mohd. Julfikar. It was contended that the ~ complainant realized belatedly that iftrue facts would be placed before the Forum, in view of legal position, he would not be able to get any amount from the Insurance Company. It was, therefore, asserted that Mohd. Julfikar was driving the vehicle but it was not true.

The Insurance Company, hence, submitted that there was no deficiency in rendering service by the Company and the claim was liable to be dismissed. 8. The Tata Finance Limited, Jaipur in its reply stated that the complainant had purchased the vehicle on the basis of Hire Purchase Agreement and the amount was to be paid in instalments. At the time of -~ incident, Rs. 3,65,026/- were due and payable to the Company. Until the full amount was paid, the Financer was to remain owner ofthe vehicle. It was also stated that though Tata Finance Company requested the Insurance Company several times to make payment ofthe balance hire purchase amount, it was not done. ;. _ 9. The District Forum, after considering the rival contentions ofthe -I parties and referring to the case law on the point, particularly a decision ofthis Court in Ashok Gangadhar Maratha v. Oriental Insurance Co. Ltd.. [1999] 6 SCC 620, held that the complainant was not entitled to compensation.

According to the District Forum, in Ashok Gangadhar, this Court held that ifthe driver was having effective driving licence to ply Light Motor Vehicle (LMV), he could not have plied Heavy Motor Vehicle (HMV) or Transport Vehicle. The District Forum observed that from the evidence on record, it was proved that at the time of accident, Ram Narain was plying the vehicle in question and not Mohd. Julfikar as asserted. Ram Narain was having valid and effective driving licence to ply Light Motor Vehicle and as such he could not have plied the transport vehicle. The claim was, therefore, not tenable and accordingly the complaint was dismissed. 10. Being aggrieved by the order passed by the District Forum, the claimant approached the Consumer Disputes Redressal Commission of Rajasthan, Jaipur ('State Commission' for short). The State Commission held that the principle laid down in Ashok Gangadhar would apply.

But according to the State Commission, the District Forum was not right in dismissing the claim observing that the said decision was against the complainant. In fact, the point was decided in favour ofthe complainant and the complainant-claimant would be entitled to the benefit of the judgment and the Insurance Company must be held liable. Accordingly, the appeal was allowed. The order passed by the District Forum was set aside and the Insurance Company was ordered to pay the amount mentioned in the operative part ofthe judgment along with interest at the rate of 15% p. a. 11. Aggrieved Insurance Company approached National Fomm against the order passed by the State Commission but the National Commission also dismissed the Revision and confirmed the order passed by the State Commission. It is this order which is challenged in this Court. 12. On April 23, 2004, notice was issued by the Court.

It appears that meanwhile in other matters, a similar question came up before this Court and hence all the matters were ordered to be placed for hearing together. 13. We have heard learned counsel for the parties. 14. The learned counsel for the appellant-Insurance Company contended that the State Forum as well as National Forum had committed an error oflaw in holding the appellant-Insurance Company liable and -{ --1 directing it to pay compensation. It was submitted that there was no deficiency on the part ofthe appellant-Company in rendering service to the complainant and hence Consumer Forum had no jurisdiction to entertain, deal with and decide the dispute. It was also submitted that it was clearly established from the relevant documents on record that at the time of accident, Ram Narain was plying the vehicle and not Mohd. Julfikar. Admittedly, Ram Narain was having valid driving licence to ply Light Motor Vehicle.

The vehicle in question was a transport vehicle and hence it could not have been plied by Ram Narain. In absence of valid licence to drive the said vehicle, the complainant could not claim compensation from the Insurance Company and no direction could be issued to the Company to pay compensation to the complainant. The District Forum was, therefore, fully justified in dismissing complaint ofthe respondent- complainant and both, State Commission as well as National Commission - were in error in granting the prayer ofthe complainant ~ and the orders passed by them are liable to be set aside. It was also ) submitted by the learned counsel that State Commission as also National Commission, misunderstood Ashok Gangadhar. It is no doubt true that in Ashok Gangadhar, the claim ofthe complainant was upheld by this Court. But it was because the relevant documentary evidence was not placed before the Authorities.

This Court, therefore, held that since material documents were not produced by the Company, the complainant should not suffer and in absence ofsuch evidence, the Insurance Company cannot be absolved ofliability. But the ratio laid down in Ashok Gangadhar supports the case ofthe Insurance Company that ifnecessary documents are on record and they go to show that the licence issued in favour ofthe driver to ply a particular type ofvehicle, he could not have plied other vehicle and the Insurance Company could not be held liable ifthere was breach ofthat condition. In the case on hand, all the documents were on record, contention was raised by the Insurance Company from the very beginning that the vehicle was a transport vehicle, which driven by Ram Narain who was holding licence to ply only Light Motor Vehicle.

Hence, ~ --1 he could not have plied the vehicle in question, a finding was recorded in favour ofthe Insurance Company by the District Forum which had not been disturbed by the State Commission or by the National Commission and hence the complaint ought to have been dismissed. 15. The learned counsel for the respondent submitted that it was the case of the complainant before District Forum that the vehicle was driven by Mohd. Julfikar who possessed valid licence to ply the vehicle but as soon as the accidence took place, he fled away since he was scared that passengers in the bus might not spare him and he might be beaten. As Ram Narain sustained several injuries, he could not go away. Unfortunately, the District Forum dismissed the complaint which necessitated challenging the decision and the complainant succeeded before the State Forum and National Forum.

As to Ashok Gangadhar, the counsel submitted that the said decision helps the complainant and both the Commissions were right in following it and in directing the Insurance Company to pay compensation to the complainant. He, therefore, submitted that the appeal deserves to be dismissed. 16. Before we deal with contentions raised by the parties on merits, it would be appropriate to examine the relevant provisions ofthe Motor Vehicles Act, 1988 (hereinafter referred to as 'the Act'). By the Act of 1988, the Motor Vehicles Act, 1939 (old Act) had been repealed. The new Act has been enacted with a view 'to consolidate and amend the law relating to motor vehicles'. Section 2 is a 'legislative dictionary' and defines various tenns. Relevant clauses ofthe said section are Clauses (10), (14), (21), (28) and (47) which define 'driving licence', 'goods carriage', 'light motor vehicle', 'motor vehicle' and 'transport vehicle' respectively. They read as under: 2. Definitions.

- In tlμs Act, unless the context otherwise requires,- (10) "driving licence" means the licence issued by a competent authority under Chapter II authorising the person specified therein to drive, otherwise than as a learner, a motor vehicle or a motor vehicle ofany specified class or description; (14) "goods carriage" means any motor vehicle constructed or adapted for use solely for the carriage of goods, or any motor vehicle not so constructed or adapted when used for the carriage of goods; (21) "light motor vehicle" means a transport vehicle or omnibus the gross vehicle weight ofeither ofwhich or a motor car or tractor or road-roller the unladen weight of any ofwhich, does not exceed 7,500 kilograms; (28) "motor vehicle" or "vehicle" means any mechanically propelled vehicle adapted for use upon roads whether the power of 1 Subs. & ins. by Act.

580 propulsion is transmitted thereto from an external or internal source and includes a chassis to which body has not been attached and a trailer; but does not include a vehicle running upon fixed rails or a vehicle ofa special type adapted for use only in a factory or in any other enclosed premises or a vehicle having less than four wheels fitted with engine capacity of not exceeding thirty-five cubic centimetres; (47) "transport vehicle" means a public service vehicle, a goods carriage, an educational institution bus or a private service vehicle; 17. Section 3(1) ofthe Act requires holding ofdriving licence which is material and reads thus; > 3. Necessity for driving licence.

-{ I) No person shall drive a motor vehicle in any public place unless he holds an effective driving licence issued to him authorising him to drive the vehicle; and no person shall so drive a transport vehicle other than motor cab hired for his own use or rented under any scheme made under sub- section (2) of section 75 unless his driving licence specifically entitles him so to do. (emphasis supplied) 18. Section 5 declares that no owner or person in charge of motor vehicle shall cause or permit any person which does not satisfy the provisions ofSection 3 to drive the vehicle. Section 10 deals with form and contents of licences. It enacts that every driving licence (except driving licence issued under Section 18 which provides for driving motor vehicles belonged to the Central Government) shall be in such form and shall contain such information as may be prescribed by the Central Government.

It also states that a driving licence shall be expressed as entitling the driver to drive a motor vehicle ofone or more ofthe types of motor vehicles specified in sub-section (2). Section 15 provides for f- r- 'renewal of driving licences'. Section 27 empowers the Central Government to make mies in respect of matters enumerated therein. :>- Section 66 prohibits an owner of motor vehicle to use or to permit the use of motor vehicle as a transport vehicle in any public place save in accordance with the conditions of permit granted by an appropriate authority. Whereas Section 147 deals with requirements ofpolicies and limits ofliability, Section 149 imposes duty on insurers to satisfy judgments and awards against persons insured in respect ofthird party risks. 19. The Central Government has framed rules known as the Central Motor Vehicles Rules, 1989 (hereinafter referred to as 'the Rules'). 20. Rule 16 ofthe Rules prescribes the form in which driving licence is issued.

The form provides that the holder of a licence can drive any vehicle ofthe description mentioned therein. Where authoriz. ation is granted to drive transport vehicle, it is expressly so provided by making an endorsement to that effect. )< 21. Now, it is the case ofthe Insurance Company that the vehicle ofthe complainant which met with an accident was a 'transport vehicle'. It was submitted that the insured vehicle was a 'goods carriage' and was thus a 'transport vehicle'. The vehicle was driven by Ram Narain, who was authorized to drive Light Motor Vehicle and not a transport vehicle. Since the driver had no licence to drive transport vehicle in absence of necessary endorsement in his licence to that effect, he could not have driven Tata 709 and when that vehicle met with an accident, Insurance Company could not be made liable to pay compensation. 22. Now, let us consider both these points.

As far as vehicle is "concerned, it is clear from the record that it was Tata 709, registration No. RJ-20G-2828. The permit in respect ofthe said vehicle is on record issued by the Transport Authority, Kota. From the registration, it is clear that it was registered as a truck, a goods carrier and was described as public carrier. Load carrying capacity was shown to be 4100. 00 Kgs. The permit was valid up to November 11, 2002. r 23. The District Forum held that the documents clearly mentioned that the vehicle was a'goods carriage' as defined in Section 2(14) covered by the category of 'transport vehicle' under Section 2(47) of the Act. NEW INDIA ASSURANCE CO. LTD. v. PRABHU LAL 735 [THAKKER, 1. ] ~~. The State Commission held that since the gross weight ofthe vehicle was only 6800 Kgs and did not exceed permissible limits (7500 Kgs) nor it was carrying goods at the time ofaccident, it was a Light Motor Vehicle.

For coming to that conclusion, the State Commission relied uponAshok Gangadhar. 24. In our considered view, the State Commission was wrong in reversing the finding recorded by the District Forum. So far as Ashok Gangadhar is concerned, we will deal with the said decision little later but from the documentary evidence on record and particularly, from the permit issued by the Transport Authority, it is amply clear that the vehicle was a 'goods carrier' [Section 2(14)]. Ifit is so, obviously, it was 'transport vehicle' falling under clause (47) ofSection 2 ofthe Act. The District Forum was, therefore, right in considering the question ofliability ofthe Insurance Company on the basis that Tata 709 which met with an accident was 'transport vehicle'. i . ;, 25. The second question is as to who was driving the vehicle which collided with M. P. Roadways Bus on April 17, 1998.

In this connection, it may be stated that it was the case ofthe compliinant that the vehicle (Tata 709) was driven by Mohd. Julfikar to Indore. Because ofrash and negligent driving by Ka1u, driver ofother vehicle i. e. M. P. Roadways bus, there was an accident and Ram Narain, brother of the complainant, sustained serious injuries. Mohd. Julfikar was having valid licence to drive Light Motor Vehicle (LMV) as well as Heavy Motor Vehicle (HMV) and hence the complainant was entitled to compensation from the Insurance Company. ---j 26. The contention ofthe Insurance Company, on the other hand, was that it conducted an inquiry which revealed that at the time ofaccident it was not Mohd. Julfikar who was driving the vehicle, but it was Ram Narain who was driving it. Ram Narain was having licence to drive Light Motor Vehicle only and since the vehicle in question was a transport I'- _.

, vehicle, he could not have driven the said vehicle in absence of an endorsement as required by law and hence the complainant was not entitled to any amount from the Insurance Company and the Insurance Company could not be held liable. 27. The District Forum, as observed earlier, considered the assertion ofthe complainant and the defence ofthe Insurance Company as to who was driving Tata 709 and on the basis ofoverall evidence adduced before it, held that it was Ram Narain who was driving the vehicle that met with an accident. The said Ram Narain was not having licence to drive transport vehicle and as such, Insurance Company was not liable. The District Forum noted that in the FIR lodged in respect ofthe accident, Ram Narain was shown to be the driver ofthe vehicle. Not only that but the evidence adduced before the District Forum also went to show that at the time ofaccident, Ram Narain was the driver ofthe insured vehicle.

The argument of the complainant that the officials of the Insurance Company obtained his signatures on some documents without reading them over and making the claimant to understand the contents thereofwas negatived. The assertion of the complainant that he was 'illiterate' and was knowing only how to put his signature was also not believed by the District Forum. The said finding of fact has not been set aside either by the State Commission or by the National Commission. Even otherwise, from the evidence on record, we are satisfied that it was Ram Narain who was driving the vehicle at the time ofaccident. We have, therefore, to proceed to consider whether the complainant was entitled to claim compensation from the Insurance Company in such an eventuality. 28. The argument ofthe Insurance Company is that at the time of accident, Ram Narain had no valid and effective licence to drive Tata 709. Indisputably, Ram Narain was having a licence to drtve Light Motor Vehicle.

The learned counsel for the Insurance Company, referring to various provisions ofthe Act submitted that ifa person is having licence to drive Light Motor Vehicle, he cannot drive a transport vehicle unless his driving licence specifically entitles him so to do (Section 3). Clauses (14), (21 ), (28) and (47) of Section 2 make it clear that if a vehicle is 'Light Motor Vehicle', but falls under the category ofTransport Vehicle:, the driving licence has to be duly endorsed under Section 3 ofthe Act. If it is not done, aperson holding driving licence to ply Light Motor Vehicle cannot ply transport vehicle. It is not in dispute that in the instant case, Ram Narain was having licence to drive Light Motor Vehicle. The licence was not endorsed as required and hence, he could not have driven Tata 709 in absence ofrequisite endorsement and Insurance Company could not be held liable. 29. We find considerable force in the submission ofthe learned counsel for the Insurance Company.

We also find that the District Forum considered the question in its proper perspective and held that the vehicle driven by Ram Narain was covered by the category oftransport vehicle under Clause (47) ofSection 2 ofthe Act. Section 3, therefore, required the driver to have an endorsement which would entitle him to ply such vehicle. It is not even the case ofthe complainant that there was such endorsement and Ram Narain was allowed to ply transport vehicle. On the contrary, the case ofthe complainant was that it was Mohd. Julfikar who wa~ driving the vehicle. To us, therefore, the District Forum was right in holding that Ram Narain could not have driven the vehicle in question. 30. The learned counsel for the complainant, however, heavily relied· upon Ashok Gangadhar. In that case, the appellant was the owner of truck, Light Motor Vehicle, which was insured with the respondent Insurance Company.

The vehicle met with an accident and a claim was lodged by the complainant before the Consumer Commission. It was contended by the Insurance Company that the truck was a goods carriage or atransport vehicle and since the driver ofthe truck was holding a driving licence issued in Fonn No. 6 to drive light motor vehicle only, he was not authorized to drive transport vehicle as there was no endorsement on his driving licence authorizing him to drive such transport vehicle. The aggrieved complainant approached this Court. Allowing the appeal and setting aside the order passed by the Commission, this Court held that ---l the driver ofthe vehicle was holding a valid driving licence for driving Light Motor Vehicle and there was no material on record to show that he was disqualified from holding an effective valid licence at the time of accident.

In view ofthose facts, the Court held that the policy did not insist on the driver to have a licence to drive atransport vehicle by obtaining a specific endorsement. Considering the definition of'Light Motor Vehicle' as given in Clause (21) ofSection 2 ofthe Act, this Court held that such Light Motor Vehicle (LMV) cannot always mean a light goods carriage. A Light Motor Vehicle (LMV) can be a non-transport vehicle as well. The Court proceeded to observe that since there was neither a pleading nor a permit produced on record, the vehicle remained as a Light Motor ,- - Vehicle. And though it can be said to have been designed to use as a transport vehicle or a goods carriage, it could not be held on account of statutol)· prohibition contained in Section 66 ofthe Act to be a transport vehicle. It was, therefore, held that the Commission was not right in rejecting the claim ofthe claimant.

Accordingly this Court set aside the order passed by the Commission and directed the Insurance Company to pay compensation to the complainant. 31. It is no doubt true that in Ashok Gangadhar, in spite of the fact that the driver was holding valid driving licence to ply Light Motor Vehicle (LMV), this Court upheld the claim and ordered the Insurance Company to pay compensation. But, in our considered opinion, the learned counsel for the Insurance Company is right in submitting that it was because ofthe fact that there was neither pleading nor proofas regards the permit issued by the Transport Authority. In absence ofpleading and p? 'oof, this Court held that, it could not be said that the driver had no ~ valid licence to ply the vehicle which met with an accident and he could not be deprived ofthe compensation. This is clear ifone reads paragraph 11 ofthe judgment, which reads thus: "11.

To reiterate, since a vehicle cannot be used as transport vehicle on a public road unless there is a permit issued by the Regional Transport Authority for that purpose, and since in the instant case there is neither a pleading to that effect by any party nor is there any permit on record, the vehicle in question would remain a light motor vehicle. The respondent also does not say that any permit was granted to the appellant for plying the vehicle as a transport vehicle under Section 66 ofthe Act, Moreover, on the date of accident, the vehicle was not carrying any goods, and though it could be said to have been designed to be used as a transport vehicle or goods-carrier, it cannot be so held on account ofthe statutory prohibition contained in Section 66 ofthe Act". .. "' (emphasis supplied) 32.

In our judgment, Ashok Gangadhar did not lay down that the driver holding licence to drive a Light Motor Vehicle need not have an endorsement to drive transport vehicle and yet he can drive such vehicle. It was on the peculiar facts ofthe case, as the Insurance Company neither pleaded nor proved that the vehicle was transport vehicle by placing on record the permit issued by the Transport Authority that the Insurance Company was held liable. 33. In the present case, all the facts were before the District Forum. It considered the assertion ofthe complainant and defence ofthe Insurance Company in the light ofthe relevant documentary evidence and held that it was established that the vehicle which met with an accident was 'transport vehicle'. Ram Narain was having a licence to drive Light Motor Vehicle only and there was no endorsement as required by Section 3 of C the Act read with Rule 16 of the Rules and Form No. 6.

In view of necessary documents on record, the Insurance Company was right in submitting that Ashok Gangadhar does not apply to the case on hand and the Insurance Company was not liable. 34. The matter can be looked from another angle also. Section 14 referred to above, provides for currency oflicence to drive motor vehicles. Sub-section (2) thereofexpressly enacts that a driving licence issued or renewed under the Act shall, "in the case ofa licence to drive a transport vehicle, be effective for a period ofthree years". It also states that "in the case of any other licence, if the person obtaining the licence, either originally or on renewal thereof, had not attained the. age offifty years on the date of issue or, as the case may be, renewal thereof, be effective for a period of twenty years from the date of such issue or renewal". It is --I thus clear that if a licence is issued or renewed in respect ofa transport vehicle, it can be done only for a period ofthree years.

But, in case of any other vehicle, such issuance or renewal can be for twenty years provided the person in whose favour licence issued or renewed had not attained the age of 50 years. In the present case, the licence was renewed on November 17, 1995 upto November 16, 2015 i. e. for a period of . _, twenty years. From this fact also, it is clear that the licence was in respect of 'a motor vehicle other than the transport vehicle'. 35. The learned counsel for the Insurance Company also referred to a decision ofthis Court in National Insurance Company v. Kusum Rai & Ors. , [2006] 4 SCC 250, wherein this Court held that ifthe vehicle is taxi which is being driven by a driver holding licence for driving Light Motor Vehicle only without there being any endorsement for driving transport vehicle, the Insurance Company cannot be ordered to pay compensation. 36. We may also refer to a decision ofthe High Court ofHimachal Pradesh in New India Assurance Co. Ltd. , Shim/av. Suraj Prakash & Ors.

, AIR (2000) HP 91. There the vehicle involved in an accident was taxi, a public service vehicle. But the licence issued in favour ofthe driver was to ply light motor vehicle and there was no endorsement to drive transport vehicle. It was, therefore, held by the High Court that the Insurance Company cannot be saddled with the liability to pay compensation to the claimant. There too, the claimant placed reliance on Ashok Gangadhar. The Court, however, distinguished it observing that "there was neither any evidence therein nor was there any claim for insurer that the vehicle concerned therein was having a permit for goods carriage or that it had a permit or authori:zation for plying the vehicle as a transport vehicle". In our considered view, the High Court was right in taking the above view. 37. The learned counsel for the complainant invited our attention to certain decisions of this Court. In Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan & Ors.

, [1987] 2 SCC 654, it was held that if truck driver leaves the truck with engine in motion after handing over the truck to cleaner who was not a duly licensed person who drives the truck which causes an accident, it cannot be contended by the Insurance Company that it would not be liable to pay compensation to a thirdparty who sustains injury because ofthe accident. 38. The ratio laid down in Skandia Insurance Co. Ltd. , in our considered opinion, does not apply to the case on hand as it was in respect of 'thirdparty' that the Court held that the Insurance Company must pay compensation. This is clear from paragraph 13 ofthe judgment in which the Court stated: "13. In order to divine (sic derive) the intention ofthe legislature in the course ofinterpretation ofthe relevant provisions there can scarcely be a better test than that ofprobing into the motive and philosophy ofthe relevant provisions keeping in mind the goals to be achieved by enacting the same.

Ordinarily it is not the concern ofthe legislature whether the owner ofthe vehicle insures his vehicle or not. Ifthe vehicle is not insured any legal liability arising on account ofthird party risk will have to be borne by the owner of the vehicle. Why then has the legislature insisted on a person using a motor vehicle in a public place to insure against third party risk by enacting Section 94. Surely the obligation has not been imposed in order to promote the business ofthe insurers engaged in the business ofautomobile insurance. The provision has been inserted in order to protect the members ofthe Community travelling in vehicles or using the roads from the risk attendant upon the user of motor vehicles on the roads. The law may provide for compensation to victims ofthe accidents who sustain injuries in the course of an automobile accident or compensation to the dependents ofthe victims in the case ofa fatal accident.

However, such protection would remain a protection on paper unless there is a guarantee that the compensation awarded by the Courts would be recoverable from the persons held liable for the consequences ofthe accident. A Court can only pass an award or a decree. It cannot ensure that such an award or decree results in the amount awarded being actually recovered, from the person held liable who may not have the resources. The exercise undertaken by the law Courts would then be an exercise in futility. And the outcome of the legal proceedings which by the very nature ofthings involve ----1 the time cost and money cost invested from the scarce resources ofthe Community would make a mockery ofthe injured victim, or the dependents of the deceased victim of the accident, who themselves are obliged to incur not inconsiderable expenditure of time, money and energy in litigation.

To overcome this ugly situation the legislature has made it obligatory that no motor vehicle shall be used unless a third party insurance is in force. To use the vehicle -without the requisite third party insurance being in force is a penal offence (Section 94 ofthe Motor Vehicles Act). The legislature was also faced with another problem. The insurance policy might provide for liability walled in by conditions which may be specified t . , ~ in the contract ofpolicy. In order to make the protection real, the legislature has also provided that the judgment obtained shall not be defeated by the incorporation of exclusion clauses other than those authorised by Section 96 and by providing that except and save to the extent permitted by Section 96 it will be the obligation ofthe Insurance Company to satisfy the judgment obtained against the persons insured against third party risks. (vide Section 96).

In other words, the legislature has insisted and made it incumbent on the user of a motor vehicle to be armed with an insurance policy covering third party risks which is in conformity with the provisions enacted by the legislature. It is so provided in order to ensure that the injured victims ofautomobile accidents or the dependents of the victims of fatal accidents are really compensated in terms of money and not in terms of promise. Such a benign provision enacted by the legislature having regard to the fact that in the modem age the use ofmotor vehicles notwithstanding the attendant "' hazards, has become an inescapable fact of life, has to be interpreted in a meaningful manner which serves rather than defi::ats the purpose of the legislation. The provision has therefore to be interpreted in the twilight ofthe aforesaid perspective". 39. Similar is the reasoning and conclusion in B. VNagaraju v. Mis. Oriental Insurance Co. Ltd. , [1996] 4 SCC 647.

In that case, there was breach ofcondition as to carry passengers in a goods vehicle more than the number permitted in terms ofinsurance policy. The Court there held that the breach ofthe said provision could not be said to be such a ,. _ fundamental character so as to afford ground to the insurer to deny indemnification unless there were some factors which contributed to the causing ofthe accident. The Court held that exclusionary permission in the insurance policy must be retained so as to serve the main purpose of the policy which was to indemnify the damage caused to the vehicle. ,- 40. In Jitendra Kumar v. Oriental Insurance Co. Ltd.

& Anr, )- [2003] 6 SCC 420, the Court held that ifthe vehicle was damaged due to accidental fire, the fact that the driver was not holding valid driving licence at the time ofincident would not empower the Insurance Company to repudiate the claim and it could not be put forward as a ground to deny the liability ofthe Insurance Company that the driver did not have valid licence at the time ofaccident in question. 41. Finally, a reference was made to National Insurance Co. Ltd. v. Swaran Singh & Ors. , [2004] 3 SCC 297. That case also related to thirdparty victims ofmotor vehicle accidents and to us the ratio in Swaran Singh does not carry the case ofthe claimant further. 42.

For the aforesaid reasons, in our opinion, the conclusion arrived at by the District Forum cannot be said to be faulty and it was right in holding that on the basis of the evidence adduced by the Insurance Company, the complainant was not entitled to claim any compensation from the Insurance Company and Insurance Company cannot be held liable. The decision could not have been interfered with by the State Commission or by the National Commission and hence the orders ofthe State Commission and National Commission are liable to be set aside by restoring the order passed by the District Forum. we do accordingly. 43. The appeal is, therefore, allowed. The orders passed by the State Commission and National Commission are set aside and the order passed by the District Forum is restored. 44. In the matter of Nasir Ahmed (SLP No. 7618 of 2005), the vehicle was a luxury taxi-passenger carrying commercial vehicle.

There also the driving licence issued in favour ofthe driver was to ply Light Motor Vehicle (LMV) and hence the driver could not have driven the vehicle in question. In that case too, the licence was renewed for a period oftwenty years i. e. from February 5, 2000 to February 4, 2020. Again, there was no endorsement as required by Section 3 ofthe Act. A specific plea was taken by the Insurance Company but the Authorities held the Insurance Company liable which could not have been done. The reasoning and conclusion arrived at by us in the matter ofPrabhu Lal (SLP No. 7370 of 2004) would apply to the case of Nasir Ahmed. That appeal is, therefore, allowed. 45. In Chandra Prakash Saxena (SLP No. 17794 of 2004), the vt:hicle involved in accident was a Jeep Commander made by Mahindra & Mahindra, a passenger carrying commercial vehicle, and in view ofthe fact that the driver was holding licence to drive Light Motor Vehicle (LMV), he could not have plied the vehicle in question.

For the reasons recorded hereinabove in the main matter ofPrabhu Lal i. e. SLP(C) No. 7370 of2004, the Insurance Company could not have been held liable and that appeal also deserves to be allowed. 46. For the foregoing reasons, all the three appeals are allowed and the orders passed against the Insurance Company are set aside holding that the Insurance Company cannot be held liable. There shall, however, be no order as to costs. N. J. Appeal allowed. \--