Vehicle Owner Must Ensure Driver’s Licence Remains Valid and Renewed; Failure Breaches Policy Conditions: Supreme Court
Case Name: Reliance General Insurance Company Ltd. v. Om Parkash & Ors.
Date of Judgment: 30 July 2026
Citation: 2026 INSC 767
Bench: Justice Sanjay Karol and Justice Nongmeikapam Kotiswar Singh
Held: The Supreme Court held that where the driver did not possess a valid and effective driving licence on the date of the accident, the insurer cannot be made to bear the final liability under the policy, particularly when the owner has failed to discharge his duty to verify that the driver’s licence remained valid and was renewed in time. The validity of an official document such as a driving licence must ordinarily be established through proper official records; secondary evidence is admissible only after the foundational requirements under Section 65 of the Indian Evidence Act are satisfied. A mere oral assertion by a licensing officer or a later letter referring to data loss cannot displace contradictory official records without adequate proof. The Court nevertheless applied the “pay and recover” principle, permitting the insurer to satisfy the award already released to the claimants and recover the amount from the driver and owner.
Summary: The case arose from a motor accident the MACT awarded compensation but held the insurer not liable because the offending vehicle’s driver, Om Prakash, did not possess a valid driving licence on the date of the accident. The Punjab and Haryana High Court reversed that finding, relying principally on the testimony of a Motor Licensing Officer and a communication stating that renewal data for 2007-2010 had been lost during migration between outsourced data-management agencies. The High Court consequently fastened liability on Reliance General Insurance.
The Supreme Court examined the evidentiary basis of the alleged licence renewal. Official records showed validity only up to 21 June 2007, followed by a renewed transport licence from 25 August 2010, leaving the accident date within the intervening gap. Although the licensing officer claimed that the licence had remained valid and that data had been lost, no official material was produced to demonstrate the alleged data-loss process or restoration of the missing records. The Court held that such evidence was insufficient to presume continuous validity of the licence.
The Court also attached significance to the fact that a penalty had been charged for the intervening period between 21 June 2007 and 25 August 2010. This was inconsistent with the assertion that the licence had remained valid throughout. Further, the official licence extract itself recorded the relevant gap, yet the High Court had not meaningfully considered that document while giving undue weight to the licensing officer’s oral statement.
Relying on Beli Ram v. Rajinder Kumar and National Insurance Co. Ltd. v. Hem Raj, the Court reiterated that a vehicle owner must take reasonable care to verify not only that the driver holds a licence when employed, but also that it is renewed within time. The owner in this case did not enter the witness box to establish that he had checked the licence or taken steps to ensure timely renewal. Accordingly, the insurer could not be saddled with final liability for the award.
Decision: The Supreme Court allowed the insurer’s appeals and held that Reliance General Insurance Company could not be made finally liable for the compensation award, with the ultimate burden falling upon the driver and owner. Since the awarded amount had already been directed to be released to the claimants, the Court applied the pay-and-recover principle, granting the insurer liberty to recover the amount from the responsible parties in accordance with law. It also urged the Central and State transport authorities to undertake awareness campaigns and improve compliance, accessibility and processes relating to driving-licence issuance and renewal.