Licence gap can cost insurance, rules SC

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By OUR LEGAL CORRESPONDENT in Delhi
  • Published 18.09.08
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New Delhi, Sept. 17: The Supreme Court today said an insurance company is not legally bound to pay for an accident if the driver’s licence has expired.

“It is open to the claimant to recover the amount,” the apex court said, overturning a Rajasthan High Court ruling.

The high court had upheld a motor claims appellate tribunal order asking National Insurance Company Limited to pay Rs 403,650 to truck owner Vidyadhar Mahariwala after an accident involving one of his vehicles despite the fact that the driver’s licence had not been renewed.

The high court had said “merely a gap in the renewal of licence” could not be a “ground for exoneration”.

The driver’s licence had expired on December 14, 2003, and the accident had taken place on June 11, 2004. The licence was renewed on May 16, 2005.

The insurance company argued that since the driving licence was not valid on the date of the accident, it had no liability.

But the tribunal turned down the plea, saying that just because there was a gap between the date of the accident and the renewal of licence, a person could be dubbed incompetent to drive during the intervening period.

The high court had said if it was found that the cause of the accident was “unforeseen”, such as a mechanical failure, “the insurer will not be allowed to avoid its liability”.