The Punjab and Haryana High Court has ruled that a driving licence continues to remain effective for a statutory period of thirty days from its expiry under the Motor Vehicles Act, 1988. The Court dismissed an appeal filed by the National Insurance Company Limited, rejecting its plea for recovery rights on the ground that the driver’s licence had expired prior to the date of the accident.
The High Court adjudicated an appeal filed by the Insurance Company against an award passed by the Motor Accident Claims Tribunal, Jind. The legal issue before the Court was whether the insurer is entitled to recovery rights when the driver’s licence had expired on 04.06.2001, and the accident occurred on 04.07.2001. Justice Virinder Aggarwal held that pursuant to the proviso to Section 14 of the Motor Vehicles Act, 1988, the licence remained valid for a grace period of 30 days. Consequently, the Court affirmed the Tribunal’s decision to fasten liability on the Insurance Company without granting recovery rights.
Background of the Case
The National Insurance Company Limited preferred an appeal assailing the award dated January 4, 2003, passed by the Motor Accident Claims Tribunal, Jind. The Tribunal had awarded compensation to the claimants and directed the Insurance Company to indemnify the insured. The appellant-insurer sought recovery rights, contending that the driver of the offending vehicle (Respondent No. 3) did not possess a valid and effective driving licence on the day of the accident.
Arguments of the Parties
The learned counsel for the appellant-Insurance Company argued that the driving licence of the respondent-driver had expired on June 4, 2001, whereas the accident took place on July 4, 2001. It was submitted that the driver renewed his licence only on August 6, 2001. The appellant contended 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.” Therefore, on the date of occurrence, the driver was not duly licensed, and the Tribunal ought to have granted recovery rights to the insurer.
Conversely, the learned counsel for Respondent No. 4 (the owner of the offending vehicle) contested the appeal, submitting that the insurer’s contention was contrary to the statutory mandate. Counsel argued that the proviso to Section 14 of the Motor Vehicles Act, 1988, specifically provides that a licence shall continue to remain effective for a period of thirty days from such expiry. It was computed that the licence expired at midnight on June 4, 2001, and the statutory grace period began on June 5, 2001. The counsel urged that the thirtieth day fell on July 4, 2001, the date of the accident, making the licence legally effective at the time of the occurrence.
Court’s Analysis and Observations
Justice Virinder Aggarwal analyzed the proviso to Section 14 of the Motor Vehicles Act, 1988, observing that a “plain reading of the aforesaid proviso 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.”
The Court undertook a specific computation of the dates involved:
- Date of Expiry: 04.06.2001
- Start of Grace Period: 05.06.2001
- End of 30-Day Period: 04.07.2001 (valid till midnight)
- Date and Time of Accident: 04.07.2001 at 10:45 AM
The Court observed: “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.”
In support of its findings, the Court referred to the following precedents:
- State of Haryana and another v. Karkor and others (FAO No. 2975 of 2005): The Court noted that it was held therein 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.”
- Oriental Insurance Co. Ltd. v. Smt. Santosh Kumari (2018 (4) ADJ 527): The Allahabad High Court 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.”
Decision
The High Court concluded that the licence of Respondent No. 3 was subsisting on the date and time of the accident. Justice Aggarwal held that the expiry of the licence on 04.06.2001, read with the thirty-day extension, left “no room for doubt that the accident having occurred on 04.07.2001 at 10:45 AM fell well within the period of its legal efficacy.”
Finding the plea of the Insurance Company to be without merit, the Court dismissed the appeal and affirmed the award dated 04.01.2003 passed by the Motor Accident Claims Tribunal, Jind.
Case Details:
- Case Title: National Insurance Company Limited vs Satbir and Others
- Case Number: FAO No. 1479 of 2003(O&M)
- Coram: Justice Virinder Aggarwal
