In a recent, remarkable and righteous decision titled Beli Ram vs. Rajinder Kumar in Civil Appeal Nos. 7220-7221 of 2011 delivered as recently as on September 23, 2020, the three-Judge Bench of the Apex Court has minced no words in ruling clearly, categorically and convincingly that when an employer employs a driver, he has to take reasonable care to see that his employee gets his licence renewed within time. This latest, landmark and laudable judgment was authored by Justice Sanjay Kishan Kaul for himself, Justice Aniruddha Bose and Justice Krishna Murari. It was made abundantly clear that insurer not liable unless vehicle owner proves that he took reasonable care to see that his driver renewed driving licence within time. Very rightly so!
To start with, it is first and foremost provided in para 1 that, "The sole question of law for consideration in the present appeals is whether in case of a valid driving licence, if the licence has expired, the insurer is absolved of its liability."
While elaborating on the facts of the case, it is then stated in para 2 that, "The facts are in a very narrow compass. The first respondent herein, met with an accident on 20.5.1999 while driving a truck owned by the appellant herein, under whom he was gainfully employed. The consequence for the first respondent was 20 percent permanent disability. The first respondent herein filed a petition under the Workmen’s Compensation Act, 1923 (hereinafter referred to as ‘the Compensation Act’) before the Commissioner, Sadar, Bilaspur on 17.2.1999 seeking compensation of an amount of Rs. 5,00,000/-, impleading the appellant and second respondent herein – the insurance company which had insured the vehicle. These proceedings resulted in an award by the Commissioner on 8.12.2004 granting Rs. 94,464/- for the injuries suffered and Rs. 67,313/- towards medical expenses of the first respondent. The amounts awarded were to carry interest @ 9 percent per annum from the date of filing of the application till the date of payment. The compensation amount was mulled on to the second respondent as insurer, while the interest was directed to be paid by the appellant herein."
Delving deeper, para 3 then states that, "The parties to the proceedings all filed appeals aggrieved by different aspects of the award. An intrinsic part of the consideration by the High Court was the issue raised about the validity of the driving licence of the first respondent at the time of the accident. The driving licence was endorsed by the Superintendent of R&LA Office, Udaipur but the licence expired on 6.9.1996 and there was no endorsement for renewal thereafter. Thus, the first respondent was driving the vehicle as the driver of the appellant herein for almost three years without the licence being renewed."
As it turned out, it is then enumerated in para 4 that, "The aforesaid aspect of the non-validity of the driving licence weighed with the High Court while passing the impugned judgment dated 3.3.2009, absolving the insurance company of any liability and fastening the same upon the appellant herein on account of there being a material breach of the insurance policy."
To be sure, it is then elucidated in para 5 that, "The High Court, after the aforesaid finding took note of Section 4 of the Compensation Act, more specifically the following aspect:
"4. Amount of compensation –
(1) Subject to the provisions of this Act, the amount of compensation shall be as follows, namely:-
(a) Where death results from the injury
- An amount equal to fifty percent of the monthly wages of the deceased workman multiplied by the relevant factor; or
- An amount of eighty thousand, whichever is more;
(b) Where permanent total disability results from the injury
- An amount equal to sixty percent of the monthly wages of the injured workman multiplied by the relevant factor; Or
- An amount of ninety thousand rupees, whichever is more.
Explanation I. - For the purposes of clause (a) and clause(b), "relevant factor", in relation to a workman means the factor specified in the second column of Schedule IV against the entry in the first column of that Schedule specifying the number of years which are the same as the completed years of the age of the workman on his last birthday immediately preceding the date on which the compensation fell due.
As a corollary, what we next see is that it is disclosed in para 6 that, "On consideration of the aforesaid provision, the High Court opined that there was no provision under the Compensation Act for payment of medical expenditure incurred by the claimant for treatment. The accident having taken place in the year 1999, the monthly wages stated to be Rs. 4,500/-, it was found that the maximum amount of wages permissible under the Compensation Act for determining the compensation could be Rs. 2,000/-. Compensation was liable to be paid within thirty (30) days of the accident and the owner could have recovered the amount from the insurer if ultimately it was established that the insurer was liable to have indemnified the insured. The appellant was found to be in breach of the statutory duty of a benevolent legislation, i.e., the Compensation Act and, thus, the appellant was burdened to pay interest as also maximum penalty of 50 percent. The amount of compensation was thus quantified as under:
1. Amount of compensation = Rs. 83,968/-
2. Penalty @ 50% on the amount of compensation = Rs. 41,984/-
3. Interest w.e.f. 20.6.1999 to 3.3.2009 (9 years & 257 days) on the amount of compensation = Rs. 73,335/-.""
What ensued following this is then stated in para 7 that, "The result was that the appeals of the insurer and the claimant were allowed. The endeavour to seek review of the judgment on the basis of pronouncement of this Court in National Insurance Co. Ltd. v. Swaran Singh and Ors. (2004) 3 SCC 297 failed and the application was dismissed on 8.7.2009."
More damningly, it is then laudably pointed out in para 15 that, "We are of the view that once the basic care of verifying the driving licence has to be taken by the employer, the owner of the vehicle would know the validity of the driving licence as is set out in the licence itself. It cannot be said that thereafter he can wash his hands off the responsibility of not checking up whether the driver has renewed the licence. It is not a case where a licence has not been renewed for a short period of time, say a month, as was considered in the case of National Insurance Co. Ltd vs Swaran Singh & Ors (2004) 3 SCC 297 where the benefit was given to a third party by burdening the insurance company. The licence in the instant case, has not been renewed for a period of three years and that too in respect of commercial vehicle like a truck. The appellant showed gross negligence in verifying the same."
Some of the notable judgments cited are that of the Delhi High Court in Tata AIG General Insurance Co. Ltd. v. Akansha & Ors. 2015 SCC OnLine 6758 : (2015) 2 TAC 52 in para 18, of Allahabad High Court in The Oriental Insurance Co. Ltd. v. Manoj Kumar & Ors. (2015) 111 ALR 275 (authored by Krishna Murari, J., as he then was) in para 19 and lastly the Himachal Pradesh High Court in National Insurance Co. Ltd. v. Hem Raj & Ors. 2012 ACJ 1891 (authored by Deepak Gupta, J., as he then was) in para 20. It must be mentioned that the facts of the Hem Raj case decided by the Himachal Pradesh High Court resemble very much with this case also and the Apex Court has acknowledged this also!
Finally and far most significantly, it is very rightly stated in para 23 without mincing any words that, "When we turn to the facts of the present case there is almost an identical situation where the appellant has permitted to let the first respondent driver drive the truck with an expired licence for almost three (3) years. It is clearly a case of lack of reasonable care to see that the employee gets his licence renewed, further, if the original licence is verified, certainly the employer would know when the licence expires. And here it was a commercial vehicle being a truck. The appellant has to, thus, bear responsibility and consequent liability of permitting the driver to drive with an expired licence over a period of three (3) years. The only thing we note is that fortunately there has been no accident with a third party claimant but the person who has caused the sufferance and sufferer are one and the same person, i.e., the first respondent driver. We are, however, dealing with the determination under the Compensation Act and those provisions are for the benefit of the workmen like the first respondent, even though he may be at fault, by determining a small amount payable to provide succor at the relevant stage when the larger issues could be debated in other proceedings.
The only exception is in the provisos to Section 3 of the Compensation Act, which is not the factual situation in the present case. The relevant provisions reads as under:
"3. Employer’s liability for compensation.-
(1) If personal injury is caused to a workman by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provisions of this Chapter:
Provided that the employer shall not be so liable –
(a) In respect of any injury which does not result in the total or partial disablement of the workman for a period exceeding [four] days;
(b) In respect of any [injury, not resulting in death, caused by] an accident which is directly attributable to –
(i) the workman having been at the time thereof under the influence of drink or drugs, or
(ii) the wilful disobedience of the workman to an order expressly given, or to a rule expressly framed, for the purpose of securing the safety of workmen, or
(iii) the wilful removal or disregard by the workman of any safety guard or other device which he knew to have been provided for the purpose of securing the safety of workmen."
We are not aware whether any other proceedings have been initiated or not, at least, none that have been brought to our notice. The aforesaid findings of the initial lack of care by the first respondent in not renewing the driving licence would be present, but the lack of care of the appellant as the employer would also arise. We have penned down the aforesaid views as such a situation is quite likely to arise in proceedings under the MV Act where a third party is claiming the amount. Proceedings here being under the Compensation Act, the consequences are not flowing to the first respondent as the initial negligent person." Lastly, para 24 concludes by holding that, "In view of the aforesaid, the appeals are dismissed by settling the aforesaid question of law and leaving the parties to bear their own costs."
All said and done, it merits no reiteration that when an employer employs a driver, he has to take reasonable care to see that his employee gets his licence renewed within time. The licence in the instant case, has not been renewed for a period of three years and that too in respect of commercial vehicle like a truck. The appellant showed gross negligence in verifying the same. How then can he exonerate himself of his liability in this regard? It is thus clearly a no-brainer that the insurer in such cases cannot be held liable! Very rightly so!
