The New India Assurance Co. Ltd., New India Centre, 17-A, Cooperage Road v. Phool Singh & Ors.

Present: Mr. Ravinder Arora, 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 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 a licence which was a fake one have been considered by the Hon'ble Supreme Court in several cases and the decision in National Insurance Company Ltd. Vs. Swaran Singh (2004) 3 SCC 297 and United India Insurance Company Ltd. VS. 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.551 of 1998 -2-

As a matter of fact, in this case, Clerk of the Licensing Authority, Alwar RW-1 had given evidence to the effect that the particular driving licence that was produced before Court with the particular licence number, had not been issued by the licensing authority, Alwar and as per the record, the licence number, which it borne, had been issued to yet another person by name R.P. Parekh. In the case of clear evidence that neither the driver nor the owner gave any evidence to either contradict or explain the circumstances under which the insured had gained the belief that the driver had a valid driving licence.

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 any way, 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 Motor Vehicles Act in New India Assurancy Co. Ltd. Vs. 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 01, 2010 Pankaj* (K. KANNAN) JUDGE