Supreme Court Holds Owner Liable To Take Reasonable Care To See That His Employee Gets His License Renewed Within Time

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On September 23, a three-judge bench affixed liability of the owner of a vehicle in the case of Beli Ram versus Rajinder Kumar. The owner must show that he has verified the licence. He must also take reasonable care to see that his employee gets his licence renewed within time. It is no defence for the owner to plead that he forgot that the driving licence of his employee had to be renewed.

Background

On 20.5.1999, the respondent Rajinder Kumar met with an accident while driving a truck owned by the appellant Beli Ram, under whom he was gainfully employed. The respondent suffered 20 per cent permanent disability. The respondent filed a petition under the Workmen’s Compensation Act, 1923 before the Commissioner, Sadar, Bilaspur on 17.2.1999 seeking compensation impleading the appellant and the insurance company which had insured the vehicle. These proceedings resulted in an award by the Commissioner on 8.12.2004 in favour of the driver respondent. 

The parties to the proceedings all filed appeals aggrieved by different aspects of the award. An issue was raised before the High Court about the validity of the driving licence of the respondent at the time of the accident. The respondent was driving the vehicle as to the driver of the appellant for almost three years without the licence being renewed. the High Court absolved the insurance company of any liability on account of there being a material breach of the insurance policy. 

Issue

Whether in case of a valid driving licence, if the licence has expired, the insured is absolved of its liability. 

Court’s Observations

The bench comprising Justices Sanjay Kishan Kaul, Aniruddha Bose and Krishna Murari made the following observations: 

  1. Once the basic care of verifying the driving licence has to be taken by the employer, though a detailed enquiry may not be necessary, 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. v. Swaran Singh and Ors., 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.
  2. The appellant has to bear responsibility and consequent liability of permitting the driver to drive with an expired licence over a period of three years. 
  3. The Court concurred with the observations made by the Delhi High Court in Tata AIG General Insurance Co. Ltd. v. Akansha & Ors., by Allahabad High Court in Oriental Insurance v. HemRaj. It especially noted observation made in the case of Hem Raj (supra) reproduced as follows: 

“When an employer employees a driver, it is his duty to check that the driver is duly licensed to drive the vehicle. Section- 5 of the Motor Vehicles Act provides that no owner or person in charge of a motor vehicle shall cause or permit any person to drive the vehicle if he does not fulfil the requirements of Sections 3 and 4 of the Motor Vehicles Act. The owner must show that he has verified the licence. He must also take reasonable care to see that his employee gets his licence renewed within time. …it is no defence for the owner to plead that he forgot that the driving licence of his employee had to be renewed. A person when he hands his motor vehicle to a driver owes some responsibility to society at large. Lives of innocent people are put to risk in case the vehicle is handed over to a person not duly licensed. Therefore, there must be some evidence to show that the owner had either checked the driving licence or had given instructions to his driver to get his driving licence renewed on expiry thereof…” 

The appeals were accordingly dismissed.


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