Insurer not liable to pay compensation after accident if employer does not ensure driver has valid driving licence: Karnataka High Court

In the order dated December 19, a bench of Justice K Manmadha noted that contrary to the claim of the school, there was no evidence that Badruddin was holding a valid licence at the time of the accident

The Karnataka High Court last month ruled that an insurer would not be liable to pay compensation for an accident under the Workmen’s Compensation Act if the employers had not ensured their driver had a valid driving licence at the time of the accident.

In this case, a driver, Badruddin, was driving a school bus to Balma English Medium School in Mangaluru’s Thenkulipady after picking up schoolchildren from Ulaibettu village during the rainy season in 2008. The bus fell into the Phalguni River, resulting in the deaths of Badruddin and several children.

When the family members of Badruddin approached the Commissioner for Employees Compensation regarding the matter, it was decided in 2015 that the sole liability for the compensation payable of Rs 5.38 lakh (with 12 per cent interest from date of accident) would be on the owner of the vehicle i.e Badruddin’s employer, the school management, as opposed to the insurance company, Bajaj Allianz General Insurance.

The Commissioner ruled that, because Badruddin’s licence had expired two months before the accident, it constituted a violation of the insurance policy. The matter then came before the Karnataka High Court in 2017, with the school management appealing the decision.

“(Witness) has categorically denied that Baddruddin was holding a valid and effective driving licence to drive the school bus…..Though a suggestion was put that the deceased was holding a valid and effective driving licence, the claimants have failed to produce any documentary evidence in support of the same,” it said.

Referring to the Supreme Court case of Beli Ram v Rajinder Kumar and another, the bench said, “On the contrary, the said decision reinforces the principle that the employer bears the responsibility to ensure that the driver holds a valid and effective driving licence and that failure thereof constitutes a clear breach of policy conditions absolving the insurer of liability.”

Having made these observations, the high court upheld the earlier decision of the Commissioner, holding the school management solely liable to pay the compensation.