Situations Where an Insurance Company Doesn’t Have to Pay for an Accident:

15. Swaran Singh5 distinguished an ‘effective licence’ as used in Section 3 of the Act and the words ‘duly licenced’ used in Section 149 of the Act; as it existed before the amendment of 2019. The said decision considered the various contingencies in which the insurer could absolve themselves from their liability to indemnify. These contingencies were in relation to the driver of the offending vehicle, (i) having a licence of one type, at the time of accident driving another type of vehicle (ii) procuring a fake licence; (iii) possessing a learner's licence and (iv) admittedly having not obtained a license. We are concerned in the present case, with a situation where the driver of the offending goods vehicle having licence to drive a transport vehicle, under which class a goods vehicle falls; which however does not enable him to drive a goods vehicle carrying dangerous & hazardous goods. To enable this a transport vehicle licence holder; which vehicle includes the description of a goods carriage vehicle, will have to submit an application and obtain an endorsement under Section 11 read with Rule 9 of the Act and Rules. As has been held in Swaran Singh5 it is incumbent on the Court/Tribunal considering a case of a licensee driving another type of vehicle, for which he has not obtained a licence, to take a decision as to whether this fact was the main or contributory cause of negligence. This factum of absence of licence to drive another type of vehicle is inconsequential if that is not the main or contributory cause of accident. It was so held in Swaran Singh5:

“… In each case, on evidence led before the Tribunal, a decision has to be taken whether the fact of the driver possessing licence for one type of vehicle but found driving another type of vehicle, was the main or contributory cause of accident. If on facts, it is found that the accident was caused solely because of some other unforeseen or intervening causes like mechanical failures and similar other causes having no nexus with the driver not possessing requisite type of licence, the insurer will not be allowed to avoid its liability merely for technical breach of conditions concerning driving licence.” [sic. Para 89]