Motor Accident Compensation| Insurance Company Not Liable When Driver Of Offending Vehicle Didn’t Possess Valid Driving License: Supreme Court

The Appeal before the Apex Court was filed by the appellant-insurer against the fastening of liability upon it by the High Court in terms of the impugned judgment by the Punjab and Haryana High Court, reversing the finding of the Motor Accidents Claim Tribunal though granting compensation to the claimants but directing the respondents, namely, Om Prakash (driver of the offending vehicle) and Rajinder Singh (owner of the offending vehicle), to pay the amount as awarded. The Tribunal held the appellant-insurer not liable to pay the same.

The Division Bench of Justice Sanjay Karol and Justice Nongmeikapam Kotiswar Singh held, “This Court cannot be oblivious to the fact that asking a driver or an owner to pay such a large amount is a humongous burden upon them. It may throw into disarray, their entire lives all because the driver and the owner did not take adequate precaution to ensure that there was no break in the validity of the driving license. Had that been done, the burden would not have fallen upon them, and the appellant-insurer would have been bound to honour the award. In our view, this underscores the importance of the driving license. It is a document that certifies the ability to drive on the road, and so it stands to reason that all drivers should have it.”

"The appellant insurer cannot be held liable to make good the award. The final burden shall be on both the employer and the driver. In the order issuing notice, we had directed that the amount as computed be released in favour of the claimants. In view of the above  discussion, we hold the principle of ‘pay and recover’ to be applicable in this case. The appellant-insurer shall therefore be at liberty to take steps in accordance with law", it ordered.

AOR Prerna Mehta represented the Appellant while Senior Advocate Rameshwar Singh Malik represented the Respondent.

Factual Background

The accident in question took place on October 14, 2009, when the offending vehicle hit the two-wheeler being driven by the claimant. The aspect of rash and negligent driving was not disputed. The Tribunal had observed that at the time of the accident the driver did not possess a valid license. The total amount quantified as compensation, payable to the claimants, was Rs 86,95,947 along with 7.5% interest. On appeals filed by the claimant, driver, and the owner, the High Court held that the driver did indeed have a valid license and, as such, the appellant insurer would be liable to pay compensation. The total amount in the High Court’s computation was Rs.1,08,08,909 with interest.

Reasoning

The Bench dealt with the aspect of whether the driver of the offending vehicle, as on the date of the accident, possessed a valid driving license or not. The Bench explained that a driving license is an official document that can only be issued by the competent authority, subject to the applicant meeting all requirements. “When the document is itself in question, it only stands to reason that the official authority will produce the records pertaining to the license in question, either putting to rest questions about its validity or establishing conclusively that the document so relied upon by the driver is in fact not valid. To put it differently, to prove an official document, official records as per the procedure given in the Indian Evidence Act, 18723 are required to be produced”, it added.

Referring to a letter issued by the Office of the Motor Licensing Officer on May 8, 2015, the Bench noted that it was recorded that on the said date the license of Om Prakash was valid till 2016, but the authority had no record of the status of his license between 2007 and 2010. It was thus required of him to produce the records from the authority for this time period. The Bench noted it was nowhere observed whether on the date of the accident, the license held by Om Prakash was valid or not. “Apart from this document that alleged the gap in data and the oral statement of RW3, no official record corroborates this position”, it stated while also adding, “. If the license of Om Prakash was valid throughout, as is the statement of RW3, what occasioned the payment of penalty is a gap that is unaddressed.”

Referring to the statement of the RW3, Shailendra Pal Singh, who is the Motor Licensing Officer, the Bench stated, “When in question was an official document, and the law is that the certain circumstances have to be established before secondary evidence can be taken to prove the same, we fail to understand the undue importance which is placed by the High Court on the statement of RW3, more so, in view of the fact that the Tribunal has explicitly recorded there being a contradiction with documentary evidence RW3/A…”

The Bench noticed that the document with which there was an alleged contradiction had not even been mentioned by the High Court. Thus, holding that the appellant insurer cannot be held liable to make good the award, the Bench allowed the appeal.

The Bench also suggested, “The Ministry of Road, Transport and Highways, Government of India, as also the respective counterparts of the States should, we may suggest, undertake campaigns through all mediums such as awareness drives, social media, etc. to drive home this importance; introduce measures to ensure strict compliance; and also streamline the process of issuance/renewal of licenses. Other issues such as regulation of driving schools, the affordability thereof, and accessibility in terms of regional languages, when it comes to applications and tests, etc. also need urgent attention.”

Cause Title: Reliance General Insurance Company Ltd. v. Om Parkash & Ors. (Neutral Citation: 2026 INSC 767)

Appearance

Appellant: AOR Prerna Mehta,

Respondent: Senior Advocate Rameshwar Singh Malik, Advocates Jitesh Malik, Jatin Hooda, Abhaya Nath Das, K Gopinath, Madhav Dewasi, G Hemalatha, AOR Satish Kumar, AOR Sunita Sharma, Advocate Hariom Singh Rajaur

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