New India Assurance Company Limited v. Smt. Sudesh & Ors.

Smt. Phoolpati and others ...Respondents FAO No.2284 of 1995 V. FAO No.2094 of 1995 - 2 - New India Assurance Company Limited ....Appellant versus Smt. Raj Bala and others ...Respondents VI. FAO No.2095 of 1995 New India Assurance Company Limited ....Appellant versus Smt. Bimla and others ...Respondents CORAM: HON’BLE MR. JUSTICE K. KANNAN ---- Present: Mr. Deepak Suri, Advocate and Mr. Neeraj Khanna, Advocate, for the appellant. None for the respondents. ----

1. Whether reporters of local papers may be allowed to see the judgment ? To be referred to the reporters or not ?

2.

3. Whether the judgment should be reported in the digest ? ---- K.Kannan, J. (Oral)

All the above six cases arise out of the same accident and are dealt with by a common order.

The Insurance Company 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. FAO No.2284 of 1995 - 3 -

The liability of the Insurance Company in a case of a fake licence or a renewal of licence 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 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 Insurance company that the insured had FAO No.2284 of 1995 - 4 - 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. The Insurance Company has produced a report to say that the licence had not been issued. The document produced in Court was secured from the Magistrate's Court that showed that the driving licence had been originally issued by the Licensing Authority, Sholapur on 23.07.1986 and it had been renewed twice and the entries of such renewal was made from the Licensing Authority, Sonepat. The original register from Sholapur or Sonepat had not been produced before the Court. The insurer cannot be said to have discharged the burden of proof that there had been no valid driving licence and the insured had committed breach of terms of the policy.

The Tribunal has considered the aspect that the petitioner had not adduced sufficient proof of the fact that the driving licence is a fake one. Mere production of a report from the licensing authority or through an investigator of the insurer that the register maintained by the licensing authority does not contain any reference to issue of a licence to the driver, shall not be sufficient in the absence of production of the original register before the Court and proof of the recitals of such register through a witness, who is acquainted with the register. FAO No.2284 of 1995 - 5 -

The claim of exclusion of liability by the Insurance Company cannot be accepted.