United India Insurnace Company Limted v. Paramjit Kaur & Ors.

Present: Ms. Sonal Datta, Advocate for Mr. Vikas Mohan, 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 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 FAO No.640 of 2008 -2- 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:

13. 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 breach of terms of the policy. The fact that the driver had a fake licence will absolve the insurer of the liability FAO No.640 of 2008 -3- 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 had not produced the register. It merely relied on a report of the DTO. The onus, which is heavily on the insurer cannot be discharged by producing a report. The Tribunal has considered the issue of the onus appropriately and found the insurer liable. Learned counsel also makes reference about the fact that the deduction had been wrongly applied in the case. The insurance company shall have no ground to urge on the question of quantum. This plea is also rejected.

The claim of exclusion of liability by the Insurance Co cannot be accepted and the appeal is dismissed. July 14, 2010 Pankaj* (K. KANNAN) JUDGE