The Chhattisgarh High Court reaffirms that when a driver does not possess a valid and effective licence on the date of a motor accident, the insurer is not liable to compensate claimants; however, following the Supreme Court’s precedent in Swaran Singh, the Court must direct the insurer to pay first and recover the amount from the vehicle owner/driver. This decision clarifies the statutory interpretation of Sections 14(2)(b)(ii) and (iii) of the Motor Vehicles Act, 1988, and upholds existing precedent, serving as binding authority for subordinate courts in Chhattisgarh and persuasive authority elsewhere.
Summary
| Category | Data |
|---|---|
| Case Name | MAC/875/2022 of BRANCH MANAGER, THE ORIENTAL INSURANCE COMPANY LIMITED Vs SHYAM SAI RAJWADE |
| CNR | CGHC010233822022 |
| Date of Registration | 27-07-2022 |
| Decision Date | 02-09-2025 |
| Disposal Nature | DISPOSED OFF |
| Judgment Author | HON’BLE SHRI JUSTICE SANJAY K. AGRAWAL |
| Court | High Court Of Chhattisgarh |
| Bench | Single Bench: Hon’ble Shri Justice Sanjay K. Agrawal |
| Precedent Value | Binding within High Court jurisdiction; persuasive elsewhere |
| Overrules / Affirms | Affirms Supreme Court precedent (Swaran Singh) and correct statutory interpretation |
| Type of Law | Motor Vehicles Act, 1988 – Insurance Law, Compensation |
| Questions of Law |
|
| Ratio Decidendi |
The Court held that, per Section 14(2)(b)(ii) of the MV Act (pre-amendment), a driving licence granted to a person over 50 is effective for 5 years from its issue/renewal. Since the driver’s licence had expired before the accident and was renewed only after the event, he did not possess a valid licence at the time. Even under the amended Section 14(2)(b)(iii), the licence would not have covered the relevant period. Thus, the insurer was not liable to compensate claimants. However, applying the principle from Swaran Singh, the insurer must first satisfy the award and then recover the amount from the owner/driver. |
| Judgments Relied Upon | National Insurance Co. Ltd. v. Swaran Singh (2004) 3 SCC 297 |
| Logic / Jurisprudence / Authorities Relied Upon by the Court | Statutory construction of Section 14(2)(b)(ii) and Section 14(2)(b)(iii) of the Motor Vehicles Act, 1988; binding effect of Swaran Singh Supreme Court decision. |
| Facts as Summarised by the Court | Accident occurred on 12.09.2019; the driver’s licence had expired on 25.03.2015; licence renewed only on 18.10.2019; Claims Tribunal had fastened liability on insurer; insurer appealed. |
| Citations | National Insurance Co. Ltd. v. Swaran Singh (2004) 3 SCC 297; 2025:CGHC:44980 |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts within Chhattisgarh |
| Persuasive For | Other High Courts, Supreme Court |
| Follows | National Insurance Co. Ltd. v. Swaran Singh (2004) 3 SCC 297 |
What’s New / What Lawyers Should Note
- Clarifies correct statutory application of Section 14(2)(b)(ii) and (iii) of the Motor Vehicles Act regarding the tenure of driving licences issued/renewed to persons aged above 50 years.
- Reiterates binding application of “pay and recover” even where insurer proves the driver’s licence was invalid at the time of accident.
- Demonstrates careful analysis of both pre-amendment and post-amendment provisions to settle the insurer’s liability.
- Lawyers should cite this authority to argue both liability and “pay and recover” in similar factual matrices.
- Claims Tribunals must ensure that, even if insurers are directed to pay, recovery directions against the owner/driver are mandatory when licence conditions are not met.
Summary of Legal Reasoning
- The Court examined the dates: accident on 12.09.2019; licence expired 25.03.2015; renewed only on 18.10.2019.
- Section 14(2)(b)(ii) (pre-amendment): Licence issued to a person over 50 years is valid for five years from the date of issue/renewal. Here, the driver was 52 years, 10 months at issue, so the licence expired 25.03.2015.
- Amended Section 14(2)(b)(iii): Even assuming applicability, the licence would have expired when the driver attained 60 years (01.05.2018); accident occurred after expiry.
- Tribunal’s reliance on (b)(iii) found erroneous; on either interpretation, driver lacked a “valid and effective” licence at the material time.
- Following Swaran Singh (2004) 3 SCC 297, insurer is not liable to the claimants if driver is unlicensed, but must “pay and recover”—pay claimants, then recover from owner/driver.
- Award against the insurer was set aside, but “pay and recover” direction imposed to protect claimants.
Arguments by the Parties
Petitioner (Insurer):
- Claims Tribunal wrongly fastened liability on insurer though the driver’s licence had expired and was only renewed after the accident.
- Section 14(2)(b)(ii) (pre-amendment) is applicable; Tribunal erred in applying (iii).
- In the alternative, if liability is fastened, “pay and recover” must be applied as per Swaran Singh.
Respondents (Claimants):
- Supported the Tribunal’s award.
- Sought dismissal of insurer’s appeal.
Factual Background
A motor vehicle accident occurred on 12.09.2019. The driver’s licence had expired on 25.03.2015 and was renewed only on 18.10.2019, after the accident. The Claims Tribunal fastened liability for compensation on the insurer, which was challenged by the insurer before the High Court, arguing the driver had no valid licence at the relevant time.
Statutory Analysis
- Section 14(2)(b)(ii) of the Motor Vehicles Act, 1988 (pre-amendment): Licence for persons above 50 effective for five years from issue/renewal.
- Section 14(2)(b)(iii) (post-amendment): Licence valid up to the date the licensee attains 60 years of age (if aged between 50–55 at issue).
- The judgment interprets both versions and concludes, on facts, the driver’s licence was not valid on accident date under either.
Alert Indicators
- ✔ Precedent Followed
Citations
- National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297
- 2025:CGHC:44980