United Inida Insurance Co. Ltd v. Surjit Kaur & Ors.

BEFORE: HON'BLE MR. JUSTICE K.KANNAN Present: Mr. Ravinder Arora, Advocate, for the appellant. None 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 Singh (2007) 8 SCC 342 are instructive. In the latter F.A.O.NO.931 OF 1995 2 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 committed a F.A.O.NO.931 OF 1995 3 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 Tribunal has considered the aspect that the appellant 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. The Tribunal has held that the original register by the Licencing Authority of Rajasthan was not summoned, no witness by the original issuing authority was examined. The Insurance Company relied on a verification report of the surveyor that the licence was not issued.