Insurer Can 'Pay & Recover' If Driver Of Vehicle Meant To Carry Hazardous Substance Didn't Have Endorsement U/R 9 CMV Rules : Supreme Court

The Supreme Court on Tuesday (April 8) ruled that an endorsement under Rule 9 of Central Motor Vehicles Rules, 1989 is mandatory in the driving license for driving a vehicle carrying any dangerous or hazardous goods.

Rule 9 mandates specialized training (including defensive driving, emergency handling, and product safety) and an endorsement for drivers of vehicles carrying hazardous goods.

The Court emphasized that this training is integral to safe operation, rejecting arguments that the endorsement is a mere formality. The absence of such training directly relates to driving competence, especially for vehicles designed for hazardous cargo.

“We have to also emphasise that in the present case, the tanker was carrying oil; for which it is intended, while the accident occurred. We hasten to add that we may not be misunderstood as agreeing to the corollary to the argument that a licence holder without the endorsement under Rule 9, could drive an empty goods vehicle intended to carry hazardous goods, designed specifically for that purpose. The breach of noncompliance of the statutory requirement to undergo a training course to upskill the driving efficiency and product safety cannot be brushed aside as a technical breach not contributing to the accident.”, the Court observed.

The bench comprising Justice Sudhanshu Dhulia and Justice K Vinod Chandran was hearing the appeal filed by a truck driver, who was driving a vehicle used for transporting hazardous goods when the accident occurred leading to the death of a pedestrian and bicycle rider who was the sole breadwinner of their families.

During the incident, the driver held a driving license but didn't hold an endorsement under Rule 9 to permit him to drive cargo carrying hazardous substances.

The Motor Accident Claims Tribunal (“MACT”) applying the “pay and recover” principle allowed the claimant's application and directed the insurer to disburse the compensation to the claimant and recover the compensation amount from the Appellant-vehicle owner.

Being aggrieved by the High Court's decision to uphold the MACT's decision prompted the Appellant-owner of the offending vehicle to appeal to the Supreme Court.

Before the Supreme Court, the appellant citing National Insurance Co. Ltd vs. Swaran Singh, (2004) 3 SCC 297 argued that since the accident occurred due to rash and negligent driving of the driver, and there was no involvement of hazardous goods in the accident, therefore no liability could be imposed on the Appellant for failing to have an endorsement under Rule 9 on the driver's license.

Issue

The question that felled for the Court's consideration was whether the absence of the endorsement in the driver's license to drive a vehicle carrying a hazardous vehicle absolved the insurer from honouring the claim because of a breach of condition.

Decision

Affirming the impugned findings, the judgment authored by Justice Chandran rejected the appellant's argument that the lack of involvement of the hazardous goods in the accident would not require endorsement under Rule 9.

The Court found the appellant's claim that the vehicle was not carrying any hazardous substance to be false, noting that the vehicle was carrying oil strengthened by the findings of the Court below.

“Admittedly, the driver did not have a licence as required under the Act and the Rules to drive a vehicle carrying dangerous and hazardous goods. There is also no dispute that the offending vehicle; the oil tanker, was a vehicle intended to carry goods of dangerous and hazardous nature. The contention taken by the owner of the offending vehicle that there was no goods carried at the time of the accident, was negated by both the Tribunal and the High Court finding from the testimony of the driver that it was carrying oil at the relevant time.”, the court observed.

The Court distinguished the case of Swaran Singh, which the Appellants had relied upon, observing that such reliance was misplaced. In Swaran Singh, the Court had examined various circumstances under which an insurer could be absolved of liability to indemnify, including situations where the driver held a license for one type of vehicle but was driving a different type at the time of the accident

Because the Appellant's driver was driving a vehicle carrying a hazardous vehicle but had a normal driving license, the Court held that the insurer would be absolved from paying the compensation to the claimants and instead entitled to recover the amount from the Appellant because of breach of condition.

“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 Singh 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.”, the court observed.

Case Title: M/S. CHATHA SERVICE STATION VERSUS LALMATI DEVI & ORS.

Citation : 2025 LiveLaw (SC) 408

Click here to read/download the judgment

Appearance:

For Petitioner(s) : Mr. Amit Pai, Adv. Mr. Tushar Bakshi, AOR

For Respondent(s) : Mr. T. Mahipal, AOR Mr. Rohit Kumar Sinha, Adv.