A) ABSTRACT / HEADNOTE

The Supreme Court in M/s Chatha Service Station v. Lalmati Devi & Ors., Civil Appeal Nos. 5089–5092 of 2025, affirmed the Tribunal’s direction that the insurer must pay-and-recover compensation awarded in motor-accident claims where the driver of an oil-tanker did not carry the statutorily required endorsement to drive a vehicle carrying dangerous or hazardous goods under s.11 of the Motor Vehicles Act, 1988 read with r.9 of the Central Motor Vehicles Rules, 1989. The Court examined the object and syllabus of r.9, emphasising that the prescribed three-day course addresses professional driving skill (Parts A & B) as well as product safety and emergency procedures (Part C). Where the vehicle was carrying oil and the accident resulted from rash and negligent driving, the absence of the endorsement was not a mere formal or venial breach: the statutory training requirement bore on the driver’s competence and could be a contributory cause of the accident. The driver had no endorsement and a purported training certificate surfaced only at the appellate stage without explanation; the certificate’s veracity was treated with suspicion under Or.41 r.27, CPC. Reliance on High Court decisions treating the absence of endorsement as non-fundamental was rejected on textual and purposive grounds; Swaran Singh was distinguished on its facts. Appeals were dismissed and the pay-and-recover direction affirmed.

Keywords: Motor Vehicles Act, 1988; Central Motor Vehicles Rules, 1989; endorsement; dangerous/hazardous goods; pay-and-recover; training syllabus; rash and negligent driving.

B) CASE DETAILS

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The appeals originate from awards by Motor Accident Claims Tribunals where claimants succeeded for deaths caused by an oil-tanker. The Tribunal fixed liability and quantum; liability of the insurer was conditioned on whether the driver was duly authorised to drive a tanker carrying hazardous goods. The Tribunal directed the insurer to pay compensation and recover from the owner and driver because the driver’s licence lacked the endorsement mandated by s.11 read with r.9. The owner appealed that direction; High Court and review applications failed. The principal legal contest before this Court concerned (a) the legal effect of absence of endorsement under r.9 — whether it is a venial/technical breach or a fundamental breach disentitling insurer from indemnity; (b) whether the cargo (oil) at the time bore the character of hazardous goods; and (c) admissibility and weight of a training certificate produced only at appellate stage. The Court framed statutory construction questions (interpretation of ‘class’ and ‘description’ in s.11) and doctrinal questions about effective license vs duly licensed in the insurer’s indemnity context. The Court placed significance on the content of the r.9 syllabus (Parts A–C) and emphasised that training encompasses defensive and advanced driving skills not merely product handling thereby making the endorsement a material pre-condition to competent driving of tankers.

D) FACTS OF THE CASE

An oil-tanker owned by the appellant struck and caused the deaths of two persons: a bicyclist and a pedestrian. FIR and charge-sheet recorded rash and negligent driving by the tanker driver; an eyewitness (CW2) corroborated rash driving. Claim petitions succeeded; Tribunal awarded compensation. The Tribunal found that at the time the tanker carried oil. The driver produced a transport vehicle licence but it lacked the special endorsement required by r.9 for vehicles carrying dangerous or hazardous goods. At the appellate stage the owner produced a certificate stating the driver had completed the three-day training between 13.01.2012 – 16.01.2012, but this certificate had not been produced before the Tribunal. The certificate lacked serial number and round seal; the driver when examined had not claimed prior training nor shown endorsement. High Court and Tribunal found the late certificate inadmissible or not credible under Or.41 r.27, CPC; insurer was ordered to pay compensation and recover from owner/driver. The appellant owner challenged only the pay-and-recover direction before this Court, relying on High Court precedents where absence of endorsement was held not to be a fundamental breach where hazardous cargo was not causative of the accident.

E) LEGAL ISSUES RAISED

i. Whether absence of r.9 endorsement on a transport driving licence is a venial/technical breach or a material breach attracting insurer’s pay-and-recover liability where the offending vehicle is designed to carry hazardous goods and was carrying oil at the time of accident?
ii. Whether the syllabus of r.9 confines training to product safety only, or includes professional driving skill such that lack of training could contribute to an accident caused by rash driving?
iii. Whether a training certificate produced for the first time at appellate stage without explanation is admissible and sufficient to absolve owner/insurer?

F) PETITIONER / APPELLANT’S ARGUMENTS

i. The owner argued decisions of some High Courts establish that insurer must prove breach and that absence of endorsement is not fundamental unless it contributed to the accident; if hazardous goods did not cause the accident, non-endorsement should not disentitle indemnity.
ii. The appellant relied on a three-day training certificate produced in first appeal to show the driver had requisite training; absence of endorsement was a venial or technical lapse.

G) RESPONDENT’S ARGUMENTS

i. The insurer/respondents contended that r.9 and s.11 make endorsement mandatory; r.9 prescribes a three-day syllabus that includes defensive and advanced driving skills — training central to safe operation of tankers. The driver had admitted no endorsement; depositions and charge-sheet established rash driving while carrying oil. The late certificate bore no serial number/seal and was not produced before the Tribunal; therefore it could not be relied upon.

H) JUDGEMENT

The Court held that r.9 is not limited to product handling; it explicitly requires literacy, a three-day course and a syllabus in Parts A–C. Parts A & B address defensive and advanced driving skills and thus the Rule is aimed at professional driving skill of specially designed vehicles carrying hazardous goods while Part C addresses product safety and emergency procedures. The statutory architecture (Sections 10 and 11) uses ‘class’ or ‘description’ disjunctively, permitting additions to licence to cover distinct types like goods carriages or vehicles of specified description (tankers). Notifications under s.41 further distinguish tankers and similar vehicles. The Court distinguished prior High Court precedents that treated absence of endorsement as non-fundamental, holding that those decisions misread r.9 and its syllabus. Swaran Singh was considered: while that decision outlines contingencies where insurer may be absolved, each case requires fact-specific inquiry whether absence of licence was main or contributory cause. In the present facts, FIR, charge-sheet and eyewitness deposition pointed to rash and negligent driving by a driver who had no endorsement; the tanker was carrying oil. Therefore absence of endorsement could not be treated as a mere technical breach. The training certificate produced at appellate stage without explanation lacked features of credibility (no serial number/round seal), and its belated production violated Or.41 r.27, CPC; the Tribunal had a chance to test the claim at trial but the document was not tendered. The Court affirmed the Tribunal’s direction that insurer pay the awards and recover from owner/driver under the statutory pay-and-recover principle. Appeals dismissed.

a. RATIO DECIDENDI

The controlling ratio is that r.9 prescribes training that includes professional driving skills; absence of the required endorsement by a driver of a tanker carrying hazardous goods is a material breach that may render his driving unauthorised and contribute to the cause of the accident. Where evidence establishes rash and negligent driving by an unendorsed driver operating a tanker with hazardous cargo, insurer’s indemnity can be subject to pay-and-recover. Late production of a training certificate at appellate stage without explanation may be rejected under Or.41 r.27, CPC. The statutory language of ss.10 & 11 must be read disjunctively to permit endorsements by class or description, thus supporting the special competence requirement for tankers.

b. OBITER DICTA

The Court observed that a licence holder without endorsement should not be presumed competent to drive tankers even when empty; the legislative scheme contemplates distinct registration and design types (S.O.1248(E) dated 05.11.2004). The Court reiterated that fact-specific enquiry (as in Swaran Singh) remains essential — insurer cannot avoid liability mechanically; but statutory training should not be dismissed as merely formal. The Court also flagged the evidentiary consequences of producing crucial documents only at appellate stage, inviting suspicion when not explained.

c. GUIDELINES

i. r.9 must be construed to include driving competency; licensing authorities must ensure endorsements reflect completed syllabus.
ii. Tribunals must examine whether hazardous cargo was present and whether absence of endorsement was causally connected to accident.
iii. Insurers alleging breach should prove both absence of required authority and causal nexus to accident; courts will decide on facts.
iv. Documents establishing training must be produced at the trial stage; unexplained, belated production at appeal may be rejected per Or.41 r.27, CPC.
v. Licensing authorities and employers should maintain verifiable records (serial numbers, seals) of training to avoid disputes.

I) CONCLUSION & COMMENTS

The decision realigns judicial approach to r.9: textual and purposive reading confirms training encompasses professional driving skill, not merely hazard-management. Practically, the judgment places onus on owners and insurers to ensure tankers are manned by endorsed drivers; failure can translate into pay-and-recover exposure. The ruling preserves the fact-sensitive principle from Swaran Singh but clarifies that where a specially designed vehicle is carrying hazardous goods and an unendorsed driver’s rash driving causes death, the absence of endorsement cannot be dismissed as a technicality. The procedural lesson is stark: evidence of training must be produced at trial and be credibly authenticated. For insurers, the judgment underscores that proof of non-endorsement and causal contribution can sustain recovery from owner/driver even where insurer initially pays victims. For regulators, the decision recommends stricter enforcement of endorsement issuance and clearer record-keeping of training to prevent post-hoc document disputes.

J) REFERENCES

a. Important Cases Referred

i. National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297.
ii. National Insurance Co. Ltd. v. K. Ramasamy, 2006 SCC OnLine Mad 963.
iii. United India Insurance Co. Ltd. v. A. Verlaxmi, 2013 SCC OnLine Chh 272.
iv. National Insurance Company v. Harbans Kaur, FAO Nos. 1210 & 8292 of 2004 (26.03.2018).

b. Important Statutes Referred

i. Motor Vehicles Act, 1988 — ss.2, 3, 9, 10, 11, 14, 41.
ii. Central Motor Vehicles Rules, 1989 — r.9.
iii. Civil Procedure Code, 1908 — Order 41 Rule 27.