Supreme Court frees insurer, holds driver's licence lapsed on accident date

A bench of Justices Sanjay Karol and Nongmeikapam Kotiswar Singh set aside the High Court, holding the driver's licence unproven for 2007-2010 and applying pay-and-recover.

The Supreme Court set aside a Punjab and Haryana High Court order that had fastened accident compensation liability on an insurer, holding that the driver of the offending vehicle had not been shown to hold a valid driving licence on the date of the accident. Justice Sanjay Karol, writing for a bench that also included Justice Nongmeikapam Kotiswar Singh, found that the licence's renewal for the period between 2007 and 2010 was never proved by the kind of official record the law requires. The Court restored the reasoning of the Motor Accidents Claims Tribunal, Panipat, that the driver lacked a valid licence, and ruled that Reliance General Insurance Company Ltd. could not be held liable for the award. It directed that the principle of pay and recover apply, placing the final burden on the driver and the owner.

How the dispute reached the Court

The accident occurred on 14 October 2009, when the offending vehicle struck a two-wheeler driven by the claimant. Rash and negligent driving was not in dispute. The Tribunal, in MACT Case No. 116 of 2012, held only the driver, Om Prakash, and the owner, Rajinder Singh, liable, because at the time of the accident the driver did not possess a valid licence. It quantified compensation at Rs.86,95,947 with 7.5% interest, rising to 9% if unpaid within two months, and held the insurer not liable.

On appeals by the claimant, driver and owner in FAO No.1049 of 2016 and FAO No.8517 of 2015, the High Court took a different view by its judgment dated 14 September 2022. It held that the driver did hold a valid licence and that the insurer was liable, computing the total at Rs.1,08,08,909 with 8% interest.

The single question before the Court

The Court framed the issue narrowly: whether Om Prakash, on the date of the accident, held a valid driving licence. If yes, the High Court would be affirmed; if no, the Tribunal's order would be upheld.

It was undisputed that Om Prakash held a driving licence since 1992. The dispute was whether that licence stood renewed and was valid at the time of the accident. The Tribunal had found a contradiction between the oral testimony of RW3, the Motor Licensing Officer, and the record he himself produced. RW3 deposed that a licence issued on 22 June 2007 was valid till 21 June 2010, but the extract he produced did not match those dates. Another witness, RW1, deposed that Om Prakash did not have a licence covering 14 October 2009, and RW2 admitted the licence was not renewed for that period from his authority.

Why the secondary evidence failed

The Court treated the licence as an official document that can only be issued by the competent authority, and held that when such a document is itself in question, official records must be produced to prove or disprove it. It set out the framework of Sections 61 to 64 of the Indian Evidence Act, 1872, and drew on the Constitution Bench decision in Neeraj Dutta v. State (NCT of Delhi) and the recent ruling in Tharammel Peethambaran v. T. Ushakrishnan on when secondary evidence is admissible.

Applying those principles, the Court held that unless the circumstances in Section 65 are pleaded, present and proved, an original document must be proved by primary evidence, and if it cannot, the party must establish that the original existed and explain why it cannot be produced.

The High Court had relied on a letter dated 8 May 2015, Ex.RW3/B, which stated that records for 2007 to 2010 were unavailable due to a technical error during transfer of work from HCL to DIMTS, and certified that Om Prakash held a valid licence in that interval. The Court found the letter unpersuasive. It was addressed to Om Prakash on his own request, recorded only that the authority had no record for that period, and nowhere stated whether the licence was valid on the date of the accident. No official record corroborated the alleged data loss, and RW3 produced nothing showing the steps the authority took to recover the missing data or how other similarly placed licences were treated.

“This was not done,” the Court said of the absence of official proof of the data gap. It added that the document Ex.RW3/A, said to contradict the renewal claim, was not even mentioned by the High Court.

The unexplained penalty

The Court pointed to an additional problem. RW3 admitted in cross-examination that a penalty of Rs.200 had been charged for the intervening period between 21 June 2007 and 25 August 2010. If the licence had remained continuously valid, the Court asked, what occasioned the penalty. Both the Tribunal and the High Court acknowledged the penalty, but only the Tribunal carried the point to a conclusion, while the High Court merely mentioned it before returning to the statement of RW3.

Owner's duty and the insurer's liability

The Court noted that the owner had not entered the witness box to say whether the driver held a valid licence on the accident date or to show that steps had been taken to renew it. It relied on the three-judge bench decision in Beli Ram v. Rajinder Kumar, which held that where a licence valid at the time of the policy later expires, the owner cannot wash his hands of the duty to check renewal, and on National Insurance Co. Ltd. v. Hem Raj, approved in Beli Ram, on an owner's duty to verify a driver's licence.

The Court also cited its own observations in Telangana State Level Police Recruitment Board v. Penjarla Vijay Kumar on the importance of driving licences, including that a renewal after a gap cannot be read as continuing validity through the interregnum.

Order

The Court allowed the appeals and held that the insurer cannot be made to bear the award, with the final burden resting on both the employer and the driver. Having earlier directed that the computed amount be released to the claimants, it applied the principle of pay and recover, leaving the insurer at liberty to take steps in accordance with law.

The Court suggested that the Ministry of Road, Transport and Highways and the States undertake awareness campaigns on the importance of driving licences, introduce measures for strict compliance, streamline issuance and renewal, and attend to regulation and affordability of driving schools and accessibility of applications and tests in regional languages. Pending applications were disposed of.