The United India Insurance Company Limited, having its Regional v. Office, Sector-8, Chandigarh

Shri Karnail Singh son of Shri Piara Singh and others .......Respondents Present: Mr. Sanjiv Pabbi, Advocate for the appellant. None for the respondents. CORAM:HON'BLE MR. JUSTICE K. KANNAN

1. Whether Reporters of local papers may be allowed to see the judgment ?

2. To be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest? 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 is 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 judgment, it has been held that a renewal of a fake driving licence is no licence at all and hence the insurer FAO No.1703 of 1997 -2- 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.

It is a case where the Tribunal has found the driving licence to be fake but the renewal to be genuine. This aspect has been covered by the Hon'ble Supreme Court in United Indian Insurance v Divinder Singh referred to above.

Even if the insurance company is not liable, the duty to satisfy the award for the claimants cannot be doubted. In such a situation, the liability to satisfy the award will be accompanied with a right of recovery from the owner/insured. This cannot be doubted FAO No.1703 of 1997 -3- in anyway, as specifically provided by the decision of the Supreme Court while dealing with the effect of proviso to section 149(4) and section 149(5) of the M.V.Act in New India Assurance co v Kamla (2001) 4 SCC 342.

Under the circumstances, the Insurance Company shall not be liable to indemnify the insured. The liability is to satisfy the claim under the award with a right of recovery against the insured. The award of the Tribunal is modified and the appeal allowed to the above extent. July 20, 2010 Pankaj* (K. KANNAN) JUDGE