Renewal Application Within One Year Saves Insurance Claim Despite Expired Transport Licence, Holds Punjab Consumer Commission
The Chandigarh State Consumer Disputes Redressal Commission, comprising Justice Daya Chaudhary (President) and Vishav Kant Garg (Member), held that although the driver's transport licence had expired on the date of the accident, his application for renewal had been filed within the one-year statutory window under Section 15(1) of the Motor Vehicles Act, 1988, and therefore the lapse...
The Chandigarh State Consumer Disputes Redressal Commission, comprising Justice Daya Chaudhary (President) and Vishav Kant Garg (Member), held that although the driver's transport licence had expired on the date of the accident, his application for renewal had been filed within the one-year statutory window under Section 15(1) of the Motor Vehicles Act, 1988, and therefore the lapse could not be attributed to the vehicle owner. Consequently, the Commission found that the insurer was not justified in repudiating the claim in toto and affirmed the District Commission's direction to settle the claim on a non-standard basis.
Brief Facts
The complainant's father, Jagtar Singh, was the owner of the insured truck, which was covered by New India Assurance Company for the period 16.02.2017 to 15.02.2018 with an Insured Declared Value (IDV) of ₹27,00,000.
On 21.09.2017, the truck met with an accident near Village Shivar, Pothulanadugu, in Andhra Pradesh. The vehicle was being driven by Harvinder Singh, and in the collision, the owner Jagtar Singh died. An FIR under Sections 304A and 337 IPC was lodged by the driver of the other lorry involved in the accident.
After the accident, an insurance claim was submitted. The insurer repudiated the claim on the ground that the driver's transport-vehicle licence had expired on 18.12.2016, and therefore he did not hold a valid and effective licence to drive the truck on the date of the accident.
Aggrieved by the repudiation, the complainant approached the District Consumer Disputes Redressal Commission, Fatehgarh Sahib, alleging deficiency in service. The District Commission partly allowed the complaint and directed the insurer to pay ₹20,25,000 (75% of IDV) along with ₹20,000 as composite compensation.
Dissatisfied, the insurer preferred an appeal before the State Consumer Commission, Punjab.
Arguments by the Parties
For the Complainant
Gurpreet Singh argued that the insurer had wrongly repudiated the claim, amounting to deficiency in service. He submitted that although the transport endorsement of driver Harvinder Singh had expired on 18.12.2016, the driver held a licence valid up to 17.12.2030 for non-transport vehicles and had applied for renewal of the transport licence within the one-year statutory period under Section 15(1) of the Motor Vehicles Act, 1988.
He contended that his father had exercised due diligence by employing the driver for nearly five years, during which the driver regularly drove the truck and never disclosed the lapse in renewal. Therefore, the owner could not be held at fault. The complainant sought the insured sum of ₹27,00,000, with interest and other consequential reliefs.
For the Opposite Party (Insurer)
New India Assurance argued that repudiation was justified because the driver did not possess a valid and effective transport-vehicle licence on the date of the accident, constituting a breach of policy conditions. It asserted that there was no deficiency in service.
The insurer further submitted that since the vehicle was a total loss, payment of the claim on a non-standard basis would entitle it to the vehicle and its salvage, and the complainant should be directed to transfer the truck and hand over the salvage at the time of settlement.
Findings of the Commission
The Punjab State Consumer Disputes Redressal Commission concurred with the District Commission's reasoning and examined the issue with reference to Section 15(1) of the Motor Vehicles Act, 1988, which allows renewal applications within one year before or after the date of expiry, with renewal taking effect from the date of actual renewal.
Since the driver had applied for renewal within 10–11 months of expiry, his application fell within the permissible statutory window. The Commission held that the owner was not negligent, as he had engaged a driver with a licence valid on its face and was not required to repeatedly verify its renewal. Therefore, the insurer was not justified in repudiating the claim in entirety.
Regarding salvage, the Commission noted that the vehicle had sustained total damage, and the District Commission had awarded 75% of IDV on a non-standard basis. It held that once such a claim is paid, salvage and ownership of the vehicle automatically vest in the insurer. Accordingly, the insurer was entitled to transfer of the truck and delivery of its salvage.
The appeal was therefore partly allowed, not on the point of liability—which was upheld against the insurer—but only to direct the complainant to transfer the vehicle to the insurer and hand over the salvage at the time of settlement. The monetary relief granted by the District Commission was affirmed.
Case Title: New India Assurance Co. Ltd. v. Gurpreet Singh, First Appeal No. 358 of 2024.