On April 8, 2025, the Supreme Court of India delivered a significant ruling concerning insurance liability and driver qualifications under the Central Motor Vehicles Rules, 1989. The Court held that a driver transporting dangerous or hazardous goods must possess a mandatory endorsement under Rule 9 on their driving license. If the driver lacks this endorsement, the insurance company can be directed to pay the compensation and recover it from the vehicle owner.
The judgment was passed in the case of M/s Chatha Service Station vs Lal Mati Devi & Ors., involving a fatal accident caused by an oil tanker, which led to the death of two individuals—a pedestrian and a bicycle rider, both sole breadwinners of their families.
"We cannot treat the absence of such mandatory training and endorsement as a mere technicality—it directly affects driving competence when hazardous cargo is involved," the Court emphasized.
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Background of the Case:
The accident occurred due to the rash and negligent driving of an oil tanker. The victims' families approached the Motor Accident Claims Tribunal (MACT), which granted them compensation and applied the "pay and recover" principle—directing the insurance company to compensate the victims and recover the amount from the owner, as the driver lacked the required Rule 9 endorsement.
Appeals were filed by the vehicle owner in the Punjab and Haryana High Court, which upheld the Tribunal's order. Review applications against the High Court judgment were also dismissed, prompting the vehicle owner to move the Supreme Court.
Whether the absence of a Rule 9 endorsement on the driver’s license absolves the insurance company from liability when the vehicle is carrying hazardous substances?
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A bench comprising Justice Sudhanshu Dhulia and Justice K. Vinod Chandran rejected the appellant's contention that the absence of hazardous material at the time of the accident invalidated the Rule 9 breach. The Court noted that:
“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.”
The Court affirmed that the oil tanker was indeed carrying oil at the time of the incident, a fact confirmed by both the driver's testimony and evidence before the Tribunal.
Rule 9 of the Central Motor Vehicles Rules requires:
- Drivers of hazardous goods vehicles must complete a three-day certified training course.
- The training covers:
- Defensive driving
- Emergency handling
- Product safety and spillage control
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The Supreme Court clarified that this is not merely about emergency procedures but is essential to the driving skill required for operating vehicles with hazardous loads.
"The breach of statutory requirement for undergoing the training course cannot be brushed aside as a technical breach," the Court declared.
The appellant argued that the training certificate, produced only during appeal, proved the driver was qualified. The Court dismissed this claim, noting:
- The certificate was not produced at the trial stage.
- No explanation was given for its delayed submission.
- The driver did not claim to have undergone training when examined before the Tribunal.
“There is genuine suspicion over the authenticity of the certificate, especially as it lacked a serial number or official seal,” the Court added.
The Court also distinguished the present case from National Insurance Co. Ltd. vs. Swaran Singh (2004). In Swaran Singh, the focus was on whether the license mismatch contributed to the accident. Here, however:
- The tanker was carrying hazardous material.
- The driver lacked proper endorsement.
- The accident was caused by his rash and negligent driving.
Thus, the breach was directly linked to the cause of the accident, justifying the insurer’s right to recover compensation from the vehicle owner.
The Supreme Court dismissed the appeal and upheld the "pay and recover" directive:
“We affirm the High Court’s findings and find no reason to interfere. The insurer is entitled to recover the amount from the vehicle owner.”
Case Title: M/S. CHATHA SERVICE STATION VERSUS LALMATI DEVI & ORS.
Appearance:
For Petitioner(s) : Mr. Amit Pai, Adv. Mr. Tushar Bakshi, AOR
For Respondent(s) : Mr. T. Mahipal, AOR Mr. Rohit Kumar Sinha, Adv.
