Punjab & Haryana High Court Upholds Tribunal Award; Says Licence Valid During Statutory Grace Period, No Recovery Rights Available to Insurer

Case Name: National Insurance Co. Ltd. vs. Satbir & Others
Date of Judgment: 21 November 2025
Citation: FAO-1479-2003
Bench: Hon’ble Mr. Justice Virinder Aggarwal

Held: The Punjab and Haryana High Court dismissed the insurer’s appeal seeking recovery rights, holding that a driving licence remains legally effective for thirty days after expiry under the statutory proviso to Section 14 of the Motor Vehicles Act. Since the accident occurred within this grace period, the driver was not “unlicensed,” and no breach of policy conditions was established.

Summary: The insurer argued that the driver’s licence had expired a month before the accident and was renewed only afterward, entitling it to recover compensation from the vehicle owner. Rejecting the argument, the Court applied the statutory extension built into Section 14, which keeps an expired licence valid for thirty days. On correct computation, the accident fell squarely within this legally protected period.

The Court relied on earlier decisions, including State of Haryana v. Karkor and Oriental Insurance Co. v. Santosh Kumari, reaffirming that insurers cannot claim a policy breach solely because the licence had expired when the accident occurred within the statutory grace window. The Court concluded that the Tribunal rightly fastened liability on the insurer and no ground existed to disturb the award.

Decision: The appeal was dismissed, and the Tribunal’s award was affirmed. The Court reiterated that insurance liability cannot be avoided when the law itself preserves the validity of the driving licence on the date of the accident.