The Supreme Court Bench comprising of Justices Sanjay Kishan Kaul, Aniruddha Bose and Krishna Murari observed that, when the driver did not renew his license, the insurer viz. insurance company cannot be held liable unless the insured proves that he had either checked the driving license or had given instructions to his driver to get his driving license renewed on expiry thereof.

In this case, Rajinder Kumar (Respondent No.1) was employed as a driver by Beli Ram (Appellant). The former met with an accident while driving a truck owned by the latter and suffered 20 per cent permanent disability. Thereafter the Respondent No.1 filed a petition under the Workmen’s Compensation Act, 1923 wherein the Commissioner passed an award directing,

  1. the insurance company (Respondent No.2) to pay compensation worth 94,464/- for the injuries suffered and Rs.67,313/towards medical expenses and
  2. the Appellant to pay an interest @ 9% on the aforementioned amount

In appeal, the High Court absolved the insurance company of any liability on account of there being a material breach of the insurance policy in as much as the Respondent No.1 driving license had expired at the relevant time.

The question of law considered by the Apex Court was whether in case of a valid driving license, if the license has expired, the insured is absolved of its liability to verify the license failing which its obligation to compensate for the injuries suffered?

The Hon’ble Supreme Court noted that this is not a case where a license has not been renewed for a short period of time, say a month, as was considered in the case of National Insurance Co. Ltd. v. Swaran Singh and Ors (2004) 3 SCC 297 where the benefit was given to a third party by burdening the insurance company, but in the present case the license has been expired for a period of 3 years.

The Bench came to the conclusion that such a situation is quite likely to arise in proceedings under the Motor Vehicle Act where a third party is claiming the amount, but the person who has caused the sufferance and sufferer are one and the same person, i.e., Respondent No 1. Apart from that the proceedings here are being considered under the Workmen’s Compensation Act, the consequences here are not flowing to the Respondent No.1 as the initial negligent person, but also to the insurer (Appellant). The appeal is therefore dismissed by settling the aforesaid question of law and the Respondent No. 2 has been directed to pay the compensation and the Appellant the interest on it.

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Judgment link: Beli Ram v. Rajender Kumar