M/s New India Assurance Company Limited v. Baru Ram & Ors.

CORAM: HON’BLE MR. JUSTICE K. KANNAN ---- Present: Mr. V. Ramswaroop, 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) ----

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

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 Company Versus Swaran Singh- (2004) 3 SCC 297 and United India Insurance Versus 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. FAO No.173 of 1998 - 2 -

The Tribunal found that there was no valid driving licence and without having to look for, the evidence of the owner as to how he entrusted the vehicle to the driver, who did not have a valid driving licence, it found that even if there was no renewal of the driving licence which had expired, the Insurance Company should still be made liable. It failed to note that the owner who had filed a written statement but did not take the witness's stand to give evidence to explain the evidence adduced on behalf of the insurer that the driving licence produced with the renewal endorsement was a fake.

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 in anyway, as specifically provided by the decision of the Hon'ble 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 Company Versus 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.

01.07.2010 sanjeev (K.KANNAN) JUDGE