Licence Remains Valid for 30 Days After Expiry: Punjab & Haryana High Court Denies Insurer’s Plea for Recovery Rights

“A licence that expired on 4th June 2001 was still legally effective on 4th July 2001—the date of the accident—by virtue of the statutory grace period under the Motor Vehicles Act,” P&H High Court

In a latest judgment Punjab and Haryana High Court dismissed an insurer's appeal that sought recovery rights on the ground that the driver involved in a fatal accident held an expired driving licence. The Court upheld the award passed by the Motor Accident Claims Tribunal, Jind, and categorically ruled that the expired licence continued to be valid under the statutory grace period of 30 days provided by the proviso to Section 14 of the Motor Vehicles Act, 1988.

Justice Virinder Aggarwal, speaking for the Bench, held that “A plain reading of the proviso to Section 14 makes it manifest 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.” Accordingly, the Court concluded that there was no breach of policy conditions and the insurer was not entitled to avoid liability or claim recovery rights.

“Accident occurred within the statutory window — licence was legally valid at the time of occurrence”

The accident in question occurred at 10:45 AM on 4 July 2001. The driver's licence had expired a month earlier, on 4 June 2001, and was renewed only on 6 August 2001. The appellant, National Insurance Company, challenged the Tribunal’s refusal to grant it recovery rights, arguing that on the date of the accident, the driver was “not duly licensed” as per the terms of the policy.

However, the High Court rejected this argument outright, stating, “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 at 10:45 AM, well within the statutory window.”

The Court further clarified that the subsequent renewal of the licence on 6 August 2001 was immaterial to the insurer’s claim, as the licence enjoyed legal efficacy on the date of the accident by operation of law.

“Computation of grace period must follow Section 9 of the General Clauses Act”

The Court also invoked Section 9 of the General Clauses Act, 1897 to interpret the commencement of the statutory grace period. It held that “the day of expiry is excluded from computation and the grace period begins from the following day, i.e., 05.06.2001. Thus, the 30th day rightly falls on 04.07.2001.”

This finding harmonised the reading of Section 14’s proviso with general principles of statutory interpretation and reinforced the validity of the licence up to and including the date of the accident.

“No breach of policy conditions — insurer cannot claim recovery rights”

Rejecting the insurer’s reliance on the fact that the licence was not renewed until August 2001, the Court held that the existence of the statutory extension of validity ruled out any breach on the part of the insured. Justice Aggarwal observed, “Once the statutory grace period is applied, the position becomes entirely clear that the licence of respondent No.3 was subsisting on the date and time of the accident.”

He added that “In such circumstances, the plea of the Insurance Company thus lacks merit, and the findings recorded by the learned Tribunal call for no interference.”

Judicial Precedents Affirmed — Licence deemed valid during grace period

The Court relied on two previous decisions that interpreted the same statutory provision:

• In State of Haryana & Anr. v. Karkor & Ors., the Punjab & Haryana High Court had held that a driver continues to be legally licensed during the grace period and insurers are not entitled to recovery rights in such circumstances.

• Similarly, in Oriental Insurance Co. Ltd. v. Santosh Kumari, the Allahabad High Court ruled that a driving licence remains effective for 30 days beyond expiry and insurers cannot claim that policy conditions were breached merely because the driver renewed the licence later.

Applying the ratio of these judgments, Justice Aggarwal reaffirmed the settled position of law and refused to disturb the MACT’s award.

Appeal Dismissed — Insurer’s Liability Stands

Dismissing the first appeal, the High Court upheld the award of compensation and liability fastened upon the insurer by the Motor Accident Claims Tribunal, Jind, dated 04.01.2003.

“The award dated 04.01.2003 passed by the learned Motor Accident Claims Tribunal, Jind is hereby affirmed,” concluded the Court. “Any pending application(s), if any, also stands disposed of.”

By reinforcing the statutory safeguard of a 30-day grace period after licence expiry, this judgment once again clarifies that mere technical lapses in licence renewal cannot absolve insurers from their liability in motor accident compensation cases when the driver is statutorily deemed to be licensed.

Date of Decision: 21 November 2025