Booklet Driving Licence cannot be dismissed as Forged merely on Insurer's Suspicion when Transport Authority vouches for its genuineness, says HC

In a significant ruling on motor insurance liability, the Delhi High Court dismissed an appeal by an insurance company and upheld a compensation award of Rs.13.77 lakh with 12% interest to a transport owner whose truck was destroyed in an accident. The decision reinforces that insurers cannot reject genuine claims on hyper-technical grounds, especially when the validity of a driving licence is not conclusively disproved.

The dispute arose after a Tata LPT truck met with a fatal accident in Karnataka, resulting in total loss of the vehicle and the death of its driver. While the vehicle was duly insured, the insurer rejected the claim alleging that the driver’s licence, issued in booklet form by the Nagaland Transport Authority, was fake and in violation of policy terms. The owner countered that the licence had been verified as genuine and remained valid on the date of the accident. The trial court accepted this position and decreed the recovery suit, prompting the insurer to challenge the finding in appeal.

The Court found no merit in the insurer’s defence, noting that the reliance on a notification mandating conversion of booklet licences into smart cards was misplaced. It observed that “merely because it was in a booklet form and not a smart card, the driving licence cannot be termed as fake,” especially when the deadline for such conversion had not expired at the time of the accident. The bench further highlighted that the insurer failed to produce any official record or witness to establish that the licence was forged.

Holding that no breach of policy conditions was proved, the Court affirmed the trial court’s decree and dismissed the appeal.

Case Title: The New India Assurance Company Ltd Vs. M/S Kapoor Diesels Garage Pvt Ltd

Case No.: RFA 131/2023

Coram: Hon'ble Mr. Justice Neena Bansal Krishna

Advocate for the Petitioner: Adv. J.P.N. Shahi, Adv. Divyanshu Kumar

Advocate for the Respondent: Adv. Daljeet Singh

Read Judgment @Latestlaws.com