The Punjab & Haryana High Court has held that a driving licence continues to remain valid during the statutory grace period of thirty days, and that the Insurance Company is not entitled to recover from the driver the compensation ordered to be paid by it, merely because the licence had expired within the said period.

The Court was considering an Appeal against an award passed by the Motor Accident Claims Tribunal whereby compensation was awarded in favour of the Claimants and the liability was fastened upon the Insurance Company without granting recovery rights.

The Bench of Justice Virinder Aggarwal held, "This Court has already considered this issue in State of Haryana and another v. Karkor and others, FAO No. 2975 of 2005, decided on 24.05.2018, wherein it has been held that a driving licence continues to remain valid during the statutory grace period of thirty days and the Insurance Company is not entitled to recovery rights merely because the licence had expired within the said period. Similarly, the Allahabad High Court in Oriental Insurance Co. Ltd. v. Smt. Santosh Kumari, 2018 (4) ADJ 527, has interpreted the same proviso to hold that an expired licence remains legally effective for thirty days and the insurer cannot allege breach of policy conditions during this period."

The Appellant was represented by Advocate Harjinder Singh, while the Respondent was represented by Advocate M.K. Sood.

Facts of the Case

The Appeal was filed by Insurance Company seeking recovery rights on the sole ground that the driver of the offending vehicle did not possess a valid and effective driving licence on the day of the accident.

Counsel for the Insurance Company submitted that the driving licence of the driver expired on June 04, 2001, whereas the accident in question took place on July 07, 2001 and he renewed his licence on August 06, 2001. It was argued that once the licence had expired on 04.06.2001, the driver ceased to possess a valid licence, resulting in a violation of the policy conditions. The Counsel contended that the renewal of licence was effected only after the accident, and therefore, on the date of occurrence, the driver was not duly licensed.

On the other hand, Counsel for the Insurance Company contended that the contention of the Insurer is contrary to the statutory mandate contained in the Motor Vehicles Act, 1988 as the proviso to Section 14 specifically provides that the licence shall continue to remain effective from for period of thirty days from such expiry. He argued that the licence in the present case expired at midnight of June 04, 2001, and the computation of the statutory grace period begins from June 05, 2001.

It was submitted that the thirtieth day, on proper computation, therefore falls on July 04, 2001, which is the date of accident and thus it was urged that the licence was legally effective on the date of occurrence, and the driver cannot be treated as unlicensed.

Reasoning By Court

The Court at the outset noted that the legislature has expressly extended the effectiveness of an expired driving licence for a statutory period of thirty days beyond the date of its expiry.

"In the present case, the licence expired on 04.06.2001, and the thirty-day statutory grace period commenced on 05.06.2001. Computed accordingly, the thirtieth day fell on 04.07.2001 and remained valid till midnight of that day. The accident admittedly occurred on 04.07.2001 at about 10:45 AM, well within the statutory window of validity. Therefore, by operation of law, the licence continued to remain effective at the time of the accident", the Court ruled.

The Appeal was accordingly dismissed.

Cause Title: National Insurance Company Limited v. Satbir and Others (2025:PHHC:163083)

Click here to read/ download Order






Punjab & Haryana High Court

Sheetal Joon