Court case(2017) 14 SCC 663

In a number of motor accident claims insurers denied liability on the ground that the driver of the vehicle involved held a licence only for a "light motor vehicle" (LMV), while the vehicle was a transport vehicle (for example a light goods carriage or taxi) whose unladen or gross weight did not exceed 7,500 kg. The insurers argued that a separate licence or endorsement to drive a transport vehicle was required, so that the driver was "not duly licensed" and the statutory defence applied. Conflicting decisions of two-judge benches led to a reference to a three-judge bench.

The Supreme Court held that "light motor vehicle" as defined in s. 2 of the Act includes a transport vehicle, omnibus, motor car, tractor or road-roller whose weight does not exceed 7,500 kg. After the 1994 amendment of s. 10(2), which replaced the separate categories of "medium goods vehicle", "heavy goods vehicle" and the like with "transport vehicle", the classes of licence are determined by the class of vehicle, and the LMV class includes light transport vehicles. A person holding a licence for the LMV class is therefore entitled to drive a transport vehicle of that class without a separate endorsement, and an insurer cannot deny liability to a third party on the ground that such a driver lacked a transport licence.