Punjab and Haryana High Court: Valid Driving License Exonerates Vehicle Owner from Liability for Compensation

07 May 2024 8:19 AM

By: Admin

In a recent judgment by the Punjab and Haryana High Court, the court held that a valid driving license absolves the owner of a vehicle from liability for compensation in a motor vehicle accident case. The court modified the award passed by the Motor Accident Claims Tribunal and granted relief to the vehicle owner.

The judgment was delivered by Mr. Harpreet Singh Brar, J., on May 12, 2023, in the case of Jaspal Singh versus National Insurance Company Limited and others. The court observed that if a driving license is found to be validly issued, the recovery rights of the insurance company cannot be granted.

The case pertained to an accident that occurred on April 10, 2012, involving two trucks. The claimant, Raj Kumar, had filed a claim for compensation under Section 166 of the Motor Vehicles Act, 1988, seeking redress for injuries sustained in the accident. The Motor Accident Claims Tribunal partly accepted the claim and granted recovery rights to the insurance company to recover the compensation amount from the owner and driver of the offending vehicle.

The vehicle owner, Jaspal Singh, filed an appeal challenging the Tribunal's award. The appellant contended that the insurance company had failed to establish a breach of policy by the insured. The key issue in the case was the validity of the driver's license of Gurmukh Singh, the driver of the offending vehicle.

During the hearing, the insurance company accepted the validity of the driving license, and a verification report confirmed its authenticity. The court, referring to various judgments, held that the burden to prove the license's invalidity rested on the insurance company. As the license was found to be validly issued, the recovery rights of the insurance company were dismissed.

Mr. Harpreet Singh Brar, J., observed, "Once the driving licence issued by the concerned RTO of Nagaland was found to be genuine... the owner of the offending vehicle cannot be held liable to pay compensation to the victim." The court further emphasized that the appellant had taken reasonable care in hiring the driver, who possessed a valid license.

Consequently, the court allowed the appeal and modified the award. The compensation amount of Rs. 5,95,000/- along with interest at the rate of 7.5% p.a. was directed to be paid by the insurance company. The insurance company was also directed to reimburse any amount already paid by the appellant. The court ordered the insurance company to pay the compensation within two months from the date of the order, along with the specified interest.

Date of Decision: 12.05.2023

Jaspal Singh VS National Insurance Company Limited and ors.