Allahabad High Court
United India Insurance Co. Ltd. vs Gulam Rasool And 3 Others on 27 October, 2025
HIGH COURT OF JUDICATURE AT ALLAHABAD
Neutral Citation No. - 2025:AHC:188038
HIGH COURT OF JUDICATURE AT ALLAHABAD
FIRST APPEAL FROM ORDER No. - 2578 of 2015
United India Insurance Co. Ltd.
.....Appellant(s)
Versus
Gulam Rasool And 3 Others
.....Respondent(s)
Counsel for Appellant(s)
:
Aarushi Khare, Vinay Kumar Khare(Senior Adv.)
Counsel for Respondent(s)
:
Anurag Dubey, Ashish Kumar Gupta, Suryansh Pandey
Court No. - 38
HON'BLE SANDEEP JAIN, J.
1. The instant appeal under Section 173 of the Motor Vehicles Act, 1988 has been preferred by the insurer of offending Bolero No.UP-61-S-2200 against the impugned judgment and award dated 16.07.2015 passed by the Motor Accident Claims Tribunal/ Additional District Judge, Court No.8, Varanasi in Motor Accident Claim Petition No.172 of 2014 (Gulam Rasool and another vs. United India Insurance Company Limited and others), whereby for the untimely death of Shoeb Ahmad in a motor accident that occurred on 23.07.2014, a compensation of Rs.3,26,000/- alongwith interest @ 7% per annum has been awarded to claimants and it has been ordered to be indemnified by the insurer of the offending vehicle.
2. Learned counsel for the appellant ? Insurance Company has submitted that on the date of the accident, the driver Santosh Singh Yadav of the offending vehicle No.UP-61-S-2200 was not having a valid and effective license, as such, no liability could have been fastened upon the appellant- Insurance Company.
3. Per contra, learned counsel for the claimant- respondent nos.1 and 2 submitted that in a connected F.A.F.O. No. 2577 of 2015, the same argument was raised by the appellant- Insurance Company, which was repelled by this Court and the appeal was dismissed on 28.02.2019, as such, the earlier judgment applies as res judicata and the Insurance Company is barred from raising this plea in this appeal.
4. I have heard learned counsel for both the parties and perused the impugned judgment of the trial court and the documents submitted with the appeal.
5. It is evident that in a connected F.A.F.O. No.2577 of 2015 (United India Insurance Company Limited vs. Shahjade and others), an application was filed by the Insurance Company under Order 41 Rule 27 C.P.C. to take on record the driving license verification report of the offending driver issued by the Licensing Authority, Mau on record, which was rejected by this Court and thereafter, the appeal of the Insurance Company was also dismissed. This Court concluded that since the Insurance Company did not lead any evidence to demonstrate that driving license of the driver of the offending vehicle was fake, as such, the submission of the appellant ? Insurance Company cannot be accepted in this regard.
6. It is apparent that driving licence of offending driver Santosh Singh Yadav was verified from ARTO(Administration) Ghazipur, which discloses that it was issued on 18.08.2004, which was valid for LMV(from 18.08.2004) and Heavy Transport vehicle (from 27.09.2006) which was renewed from 01.06.2010 to 31.05.2013 and from 16.08.2013 to 15.08.2016. It was also disclosed that the original driving licence was issued by ARTO, District Mau(UP). The licence verification report from ARTO, Mau(UP) discloses that it was not issued from Mau. On the basis of this report, it is submitted by the Ld. Counsel of the appellant that the driving licence of the offending driver was fake and it?s subsequent renewal,will not make it valid and effective, as such, the appellant is not liable to indemnify the claimants.
7. The Apex Court in the case of Nirmala Kothari vs. United India Insurance Co. Ltd. (2020) 4 SCC 49, held as under:-
?12. While hiring a driver the employer is expected to verify if the driver has a driving licence. If the driver produces a licence which on the face of it looks genuine, the employer is not expected to further investigate into the authenticity of the licence unless there is cause to believe otherwise. If the employer finds the driver to be competent to drive the vehicle and has satisfied himself that the driver has a driving licence there would be no breach of Section 149(2)(a)(ii) and the insurance company would be liable under the policy. It would be unreasonable to place such a high onus on the insured to make enquiries with RTOs all over the country to ascertain the veracity of the driving licence. However, if the insurance company is able to prove that the owner/insured was aware or had notice that the licence was fake or invalid and still permitted the person to drive, the insurance company would no longer continue to be liable.?
8. Moreover, the Apex Court in the case of Hind Samachar Limited (Delhi Unit) vs. National Insurance Company Limited and others, 2025 SSC Online SC 2185, while considering the issue of fake driving license and has held as under :-
"7. United India Insurance Co. Ltd. vs. Lehru & Others (2003) 3 SCC 338 was a case in which though an allegation of the driving licence produced being fake was raised, the same was not proved before the Tribunal. The trite law was noticed that even if the licence is fake, the insurance company is liable to pay compensation, if they fail to prove that the insured had deliberately committed breach in entrusting the vehicle to a driver who had a fake licence. New India Assurance Co. v. Kamla (2001) 4 SCC 342 wherein despite finding breach, the insurer was directed to pay compensation to the third parties, but, enabled recovery from the insured was noticed. It was categorically held that whether the insured would be protected by such an order was left open to be considered on the facts of each case. It was held in Lehru(supra) that:-
?18??we are thus in agreement with what is laid down in the aforementioned cases viz. that in order to avoid liability it is not sufficient to show that the person driving at the time of accident was not duly licensed. The Insurance Co. must establish that the breach was on the part of the insured?
8. In National Insurance Co. Ltd. vs Swaran Singh & Others (2004) 3 SCC 297, a three Judge Bench of this Court, considered the purported conflict in Kamla (supra) and Lehru (supra) to hold as under:?
?99. So far as the purported conflict in the judgments of Kamla(supra) and Lehru(supra)is concerned, we may wish to point out that the defence to the effect that the licence held by the person driving the vehicle was a fake one, would be available to the insurance companies, but whether despite the same, the plea of default on the part of the owner has been established or not would be a question which will have to be determined in each case.?
9. In Pepsu Road Transport Corporation vs. National Insurance Company (2013) 10 SCC 217, it was held so on the facts arising in the said case, as under:?
?11. On facts, in the instant case, the appellant employer had employed the third respondent Nirmal Singh as driver in 1994. In the process of employment, he had been put to a driving test and he had been imparted training also. The accident took place only after six years of his service in PRTC as driver. In such circumstances, it cannot be said that the insured is at fault in having employed a person whose licence has been proved to be fake by the Insurance Company before the Tribunal. As we have already noted above, on scanning the evidence of the licensing authority before the Tribunal, it cannot also be absolutely held that the licence to the driver had not been issued by the said authority and that the licence was fake. Though the appellant had also taken a contention that the compensation is on the higher side, no serious attempt has been made and according to us justifiably, to canvas that position.?
10. In IFFCO Tokio General Insurance Co. Ltd. vs. Geeta Devi & Ors.(2024) 13 SCC 755, this Court deprecated the practice of the insurance companies blithely claiming that the deceased vehicle owner did not conduct due diligence while employing a driver; which is not a condition prescribed either in the statute or in the insurance policy, despite the wealth of precedents. It was held so in paragraph 15, as under:?
?15. Applying the afore-stated edicts to the case on hand, it may be noted that the petitioner-insurance company did not even raise the plea that the owner of the vehicle allowed Ujay Pal to drive the vehicle knowing that his licence was fake. Its stand was that the accident had occurred due to the negligence of the victim himself. Further, the insurance policy did not require the vehicle owner to undertake verification of the driving licence of the driver of the vehicle by getting the same confirmed with the RTO. Therefore, the claim of the petitioner-insurance company that it has the right to recover the compensation from the owners of the vehicle, owing to a willful breach of the condition of the insurance policy, viz., to ensure that the vehicle was driven by a licenced driver, is without pleading and proof.?
9. It is apparent from the above law laid down by the Apex Court that there must be pleading on the part of the Insurance Company to prove that there was no due diligence at the time, when the driver was employed by the owner and the vehicle was entrusted to him. The owner of a vehicle employing a driver can only look at the licence produced by the person seeking employment and is not expected to verify from the licence issuing authority, whether the licence is effective or not. It is apparent that the Insurance Company, from the totality of the circumstances, has to establish that the owner failed to exercise due diligence in the employment of the driver or in the entrustment of the vehicle, in order to prove breach by the insured.
10. When the evidence in the instant case is examined in light of the law laid down by the Hon?ble Apex Court, it is evident that there is no evidence on record to prove that the owner of the offending vehicle had entrusted the vehicle to the driver Santosh Singh Yadav knowing that he was not having a valid driving license and his driving license was forged and fabricated. The Insurance Company has not led any evidence to this effect, as such, in view of the law laid down by the Apex Court in the above cases, even if the driving license of the offending driver was forged and fabricated even then the Insurance Company is liable to pay the compensation to the claimants. No other issue was pressed by learned counsel for the appellant.
11. In view of the aforesaid analysis, this appeal has got no merit and is liable to be dismissed.
12. The appeal is hereby dismissed.
13. The impugned judgment and award of the Tribunal dated 16.07.2015 is affirmed.
14. Office is directed to remit back the statutory deposit made by appellant to the Tribunal concerned, forthwith.
15. Interim order, if any, stands vacated.
(Sandeep Jain,J.)
October 27, 2025
Jitendra
