The New India Assurance Company Ltd v. Malkiat Kaur & Ors.

BEFORE: HON'BLE MR. JUSTICE K.KANNAN Present: Mr. Tejinder Pal Singh, Advocate, for the appellant. Mr. G.S.Punia, Advocate, for the respondents.

1. Whether Reporters of local papers may be allowed to see the judgment? Yes/No To be referred to the Reporters or not?Yes/No

2.

3. Whether the judgment should be reported in the Digest? Yes/No K.Kannan, J.(Oral)

The Insurance Co is in appeal against the judgment of the MACT contending that in spite of the fact that the driver who drove the vehicle was proved to have had a fake driving licence, the liability was wrongly cast on it.

The liability of the Insurance Co in a case of a fake licence or a renewal of a licence which was a fake one have been considered by the Hon’ble Supreme Court in several cases and the decisions in National Insurance Co v Swaran Singh (2004) 3 SCC 297 and United Indian Insurance v Divinder F.A.O.NO. 1529 OF 1995 and Cross Objection NO. 37-CII of 1999 2 Singh (2007) 8 SCC 342 are instructive. In the latter judgment, it has been held that a renewal of a fake driving licence is no licence at all and hence the insurer shall not be liable.

It was even held earlier by the Hon’ble Supreme Court, while referring to the effect of a renewal of forged licence, in New India Assurance Co., Shimla v. Kamla,(2001) 4 SCC 342:

The observation of the Division Bench of the Punjab and Haryana High Court in National Insurance Co. Ltd. v. Sucha Singh that renewal of a document which purports to be a driving licence, will robe even a forged document with validity on account of Section 15 of the Act, propounds a very dangerous proposition. If that proposition is allowed to stand as a legal principle, it may, no doubt, thrill counterfeiters the world over as they would be encouraged to manufacture fake documents in a legion. What was originally a forgery would remain null and void forever and it would not acquire legal validity at any time by whatever process of sanctification subsequently done on it. Forgery is antithesis to legality and law cannot afford to validate a forgery.

The judgment of the Supreme Court in Swaran Singh (supra) has an immediate relevance for us in this case for the effect of proof of fake licence in the context of the need for discharging the burden of proof on the F.A.O.NO. 1529 OF 1995 and Cross Objection NO. 37-CII of 1999 3 Insurance company that the insured had committed a breach of terms of the policy. The fact that the driver had a fake licence will absolve the insurer of the liability of the insurer only, if it is established that the accident was on account of reasons where the possession of valid driving licence will have relevance for consideration of the aspect of negligence that has to be proved. If the accident was on account of say, mechanical defect in the vehicle, the issue of the validity of licence will have no relevance.

In this case, the Insurance Company had not served any notice to the insured or the driver to produce the driving licence. It had also not summoned the register or obtain the evidence of any person connected with the original records.

The claim of exclusion of liability by the Insurance Co cannot be accepted. The appeal is dismissed.

There is also a cross objection for enhancement of compensation. The claim arise out of death of labourer whose income was taken by the Tribunal to be Rs. 2000/-. The Tribunal provided 1/3rd towards personal expenses and adopted a multiplier of 16. The learned counsel appearing for the claimants says that the deceased was aged 28 years and the dependents were widow, four minor children and a mother. I am of the view that appropriate deduction would have been 1/4th and the monthly contribution to the family must have been taken to Rs.9,00/-. Consequently, the annual dependence shall be taken at Rs.1,08,00/-. Even the choice of multiplier for a person who F.A.O.NO. 1529 OF 1995 and Cross Objection NO. 37-CII of 1999 4 was aged 28 years at 16 was not correct, it should have been as what is provided under Schedule II of the Motor Vehicles Act namely 18. The compensation would therefore, be Rs.1,94,400/-. The Tribunal has not made provision for loss of consortium for the wife, loss of love and affection for children, for funeral expenses and for loss to estate. I would provide Rs. 10,000/- to the wife for loss of consortium and make further provision of Rs. 5,000/- for each one of the children for loss of love and affection. An amount of Rs.2,500/- has taken for loss to estate, Rs. 2,500/- for funeral expenses. In all the amount that will become payable at Rs.2,29,400/-. The Tribunal has awarded Rs. 1,53,600/- and the cross objection is allowed to provide for the additional amount of Rs. 75,800/-. This additional amount shall bear interest at 7.5% from the date of the petition till the date of the payment. Therefore, the cross appeal is allowed to the above extent only. 20th July, 2010 Shivani Kaushik [K.KANNAN] JUDGE