The Karnataka High Court, in a single judge bench presided over by Justice Raghavendra Seetharam Srivatsa at Dharwad, has ruled that an insurance company cannot be held liable under its policy when a learner’s licence holder is involved in an accident without satisfying the statutory conditions under Rule 3 of the Central Motor Vehicles Rules, 1989. The court emphasized that the burden of proving compliance with these conditions rests on the driver, and in the absence of such proof, the insurer’s liability under the contract of insurance is excluded.
The case arose from a claim filed by the parents of a deceased minor who was fatally injured in a road accident involving a vehicle driven by a person holding only a learner’s licence. The Chikodi Motor Accidents Claims Tribunal had earlier awarded compensation, holding the insurer liable despite the driver’s licence status, relying on the Supreme Court’s decision in National Insurance Company Limited v. Swaran Singh (2004). The Tribunal had concluded, based solely on the driver’s statement, that he was accompanied by an instructor at the time of the accident.
The High Court, however, found this conclusion untenable. It noted that the purported instructor was not examined as a witness, despite being the key person whose testimony could substantiate the claim of compliance. Furthermore, the police charge sheet, which cited several eyewitnesses, did not mention the presence of any instructor, and none of those witnesses were examined during the proceedings. The complaint filed by the child’s father also made no reference to the presence of an instructor. The court observed that there was ‘absolutely no evidence’ of compliance with clause (c) of Rule 3, which requires the display of an ‘L’ sign on the vehicle.
The court further highlighted that the insurance policy issued by New India Assurance Company Ltd. contained an express clause permitting a learner’s licence holder to drive only if the conditions of Rule 3 were satisfied. It held that this stipulation functioned as an exclusion clause: non-compliance with Rule 3 absolves the insurer of liability under the policy. The bench endorsed the ratio decidendi of Swaran Singh, stating that a learner’s licence holder is deemed to have a valid licence only when driving under the conditions specified in the licence, and any deviation therefrom negates the legal fiction of validity.
In modifying the Tribunal’s award, the High Court allowed the insurer’s appeal in part. While holding that the insurer was not liable ‘stricto sensu’—that is, in the strict legal sense—the court directed it to deposit the compensation amount with the Tribunal under the ‘pay and recover’ principle. This mechanism enables the insurer to make the payment to the claimants and subsequently recover the sum from the vehicle owner, who remains ultimately responsible for ensuring that the driver complies with statutory conditions before permitting the use of the vehicle.
The judgment underscores the importance of evidentiary rigor in motor accident claims, particularly where statutory conditions governing the use of learner’s licences are concerned. It reaffirms that mere assertions by the driver, uncorroborated by evidence or witness testimony, are insufficient to establish compliance with mandatory safety prerequisites. The decision also clarifies the interplay between contractual exclusions in motor insurance policies and statutory regulations, affirming that insurers may validly exclude liability where the insured fails to adhere to the conditions precedent to coverage.