Observing that the insurer would not be held liable when the driver did not possess a valid driving license at the time of the accident, the Supreme Court on Thursday (July 30) urged the Union Ministry of Road, Transport and Highways (MoRTH) to undertake nationwide awareness campaigns to emphasize the importance of valid driving licenses and streamline the process of issuance and renewal.

“The Ministry of Road, Transport and Highways, Government of India, as also the respective counterparts of the States should, we may suggest, undertake campaigns through all mediums such as awareness drives, social media, etc. to drive home this importance; introduce measures to ensure strict compliance; and also streamline the process of issuance/renewal of licenses. Other issues such as regulation of driving schools, the affordability thereof, and accessibility in terms of regional languages, when it comes to applications and tests, etc. also need urgent attention.”, observed a bench of Justice Sanjay Karol and Justice Nongmeikapam Kotiswar Singh.

The aforesaid observation of the bench came while hearing an appeal filed by Reliance General Insurance Company Ltd. against the Punjab & Haryana High Court's judgment, which held the insurer liable to pay compensation to the claimants despite the accident caused by the rash and negligent driving of the offending vehicle whose driver lacked a valid driving license.

The accident occurred on October 14, 2009, when an offending vehicle hit a two-wheeler.

The Motor Accidents Claims Tribunal held that the driver did not possess a valid driving license at the time of the accident and directed the owner and driver to pay compensation of Rs. 86,95,947.

The High Court reversed this finding, relying on a letter from the Motor Licensing Officer stating that due to a "technical error" at the time of data transfer to an outsourced company, records for the period 2007-2010 were lost, and certified that the license was valid during that period.

Challenging the High Court's decision, the insurer appealed to the Supreme Court.

Setting aside the impugned decision, the judgment authored by Justice Karol found that the driver's license had expired, and the renewal was made only in 2010 after payment of a penalty of Rs. 200 for the intervening period.

The Court said that since the driver lacked a valid driving license at the time of the occurrence of the accident, the liability of the insurer abated, and the vehicle owner cannot wash his hands of the responsibility of checking whether the driver has renewed it. [See Beli Ram v. Rajinder Kumar, (2022) 15 SCC 572]

“The appellant insurer cannot be held liable to make good the award. The final burden shall be on both the employer and the driver.”, the Court held, directing the Appellant-insurer to pay compensation to the claimants and then would be at liberty to recover the compensation amount from the driver and owner in accordance with law.

The Court also highlighted the hardship that the vehicle owner and driver would face in being required to pay a substantial amount due to their failure to take adequate steps to ensure that the driving licence remained valid.

“This Court cannot be oblivious to the fact that asking a driver or an owner to pay such a large amount is a humongous burden upon them. It may throw into disarray, their entire lives all because the driver and the owner did not take adequate precaution to ensure that there was no break in the validity of the driving license. Had that been done, the burden would not have fallen upon them, and the appellant-insurer would have been bound to honour the award. In our view, this underscores the importance of the driving license. It is a document that certifies the ability to drive on the road, and so it stands to reason that all drivers should have it.”, the Court observed.

Therefore, to avoid such negligence, the Court asked the MoRTH to spread awareness about the importance of the driving license, introducing measures to ensure strict compliance; and also streamline the process of issuance/renewal of license so that the owners and drivers would regularly check the expiry date of the driving license, and seek timely renewal of the same to avoid liability, which could otherwise be fastened on to the insurer.

Also Read: Motor Accident Claims | No Right To Recovery For Insurer Merely Because Vehicle Owner Didn't Verify Driver's License : Supreme Court

Cause Title: RELIANCE GENERAL INSURANCE COMPANY LTD. VERSUS OM PARKASH & ORS.

Citation : 2026 LiveLaw (SC) 742

Click here to download judgment

Appearance:

For Petitioner(s) :Mr. Atul Nanda, Sr. Adv. Ms. Vartika Aggarwal, Adv. Ms. Prerna Mehta, AOR

For Respondent(s) :Mr. Rameshwar Singh Malik, Sr. Adv. Mr. Jitesh Malik, Adv. Mr. Jatin Hooda, Adv. Mr. Abhaya Nath Das, Adv. Ms. Barnali Basak, Adv. Mr. Yogendra Kumar Verma, Adv. Dr. Jyoti Verma, Adv. Mr. Satish Kumar, AOR Ms. Sunita Sharma, AOR Mr. Hari Om Singh Rajaur, Adv. Mr. Anurag Agarwal, Adv. Mr. Aditya Kumar, Adv.