Delhi High Court
New India Assurance Co. Ltd. vs Ranbir Singh Shastri & Ors. on 18 May, 2011
Author: Reva Khetrapal
UNREPORTED
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO 323/2000
NEW INDIA ASSURANCE CO. LTD. ..... Appellant
Through: Mr. Salil Paul, Advocate
versus
RANBIR SINGH SHASTRI & ORS. ..... Respondents
Through: None
% Date of Decision : May 18, 2011
CORAM:
HON'BLE MS. JUSTICE REVA KHETRAPAL
1. Whether reporters of local papers may be allowed
to see the judgment?
2. To be referred to the Reporter or not?
3. Whether judgment should be reported in Digest?
JUDGMENT
: REVA KHETRAPAL, J.
1. By way of this appeal, the appellant - Insurance Company
seeks to assail the judgment and award of the Motor Accidents
Claims Tribunal dated 15.05.2000 on the ground that it erred in
fastening the liability of the award passed in the claim petition upon
the appellant-Insurance Company.
2. At the outset, it may be mentioned that though all the
respondents were duly served with the notice of the filing of the
appeal, the appeal was not contested by any of the respondents.
3. Mr. Salil Paul, the learned counsel for the Insurance Company
pointed out that in its amended written statement the appellant had
taken the plea that the driver of the offending vehicle was not holding
a valid and effective driving licence at the time of the accident and an
additional issue, being Issue No.4A, was framed as follows:
"Whether respondent No.5 was not holding a
valid driving licence at the time of the
accident? If so, to what effect?"
4. The learned counsel further pointed out that in order to prove
the fact that the respondent No.9 (the respondent No.5 in the Claim
Petition) was not holding a valid driving licence at the time of the
accident, the appellant Company had examined RW1 Jeevan Kumar,
a Licencing Clerk from the Office of the Registering and Licencing
Authority (Motor Vehicles), Una, H.P., who testified that driving
licence (Ex.PB) belonging to Shri Amrik Singh, the driver of the
offending vehicle, had not been issued by their Authority. He further
testified that as per the record, for the period 01.04.1984 to
31.03.1985, only 292 driving licences had been issued by their
Authority, as per the report prepared by Shri S.S. Chaniel
(Ex.PW1/A), who was the Registering and Licencing Authority at the
relevant time. In cross-examination, the witness admitted that the
driving licence had been renewed twice, once in the year 1987 from
Una and then in the year 1993 from Abohar, Punjab.
5. Mr. Salil Paul contended that the aforesaid evidence adduced
by the appellant was sufficient to bear out the contention of the
appellant that on the date of the accident, that is, on 15.10.1990, the
insured vehicle was being driven by the respondent No.9 - driver Shri
Amrik Singh with a fake and fabricated driving licence. The learned
Claims Tribunal, therefore, erred in fastening the liability for the
award amount upon the Insurance Company, more so, in view of the
fact that it is settled law that renewal of a fake licence does not make
the licence valid.
6. While this Court is conscious of the fact that renewal of a fake
licence does not make a licence valid and it has been so held in a
number of decisions of the Supreme Court, including the following:
(i) New India Assurance Co., Shimla vs. Kamla and Ors.
Etc. Etc., (2001) 4 SCC 342,
(ii) National Insurance Co. Ltd. vs. Laxmi Narain Dhut,
(2007) 3 SCC 700,
(iii) National Insurance Co. vs. Sajjan Kumar Aggarwalla,
(2009) 4 SCC 751,
(iv) The Oriental Insurance Company Limited vs. Meena
Variyal and Ors., (2007) 5 SCC 428,
the fact that the licence of the driver of the offending vehicle was a
fake one is of no avail to the Insurance Company in the instant case,
for the reason that it is an equally well settled position of law that the
Insurance Company in order to succeed in its defence must
conclusively establish on record that the insured had 'wilfully'
committed breach of the conditions of the insurance policy by
permitting his vehicle to be driven by a person not holding a valid and
effective driving licence. This is the law laid down by a three-Judge
Bench decision of the Supreme Court in the case of National
Insurance Co. Ltd. vs. Swaran Singh and Ors. (2004) 3 SCC 297,
wherein it is observed as under:
"96. The summary of our findings to the
various issues as raised in these petitions are as
follows:
(i) ......................................
(ii) ......................................
(iii) The breach of policy condition, e.g.
disqualification of driver or invalid driving
licence of the driver, as contained in Sub-
section (2)(a)(ii) of Section 149, have to be
proved to have been committed by the insured
for avoiding liability by the insurer. Mere
absence, fake or invalid driving licence or
disqualification of the driver for driving at the
relevant time, are not in themselves defences
available to the insurer against either the
insured or the third parties. To avoid its
liability towards insured, the insurer has to
prove that the insured was guilty of negligence
and failed to exercise reasonable care in the
matter of fulfilling the condition of the policy
regarding use of vehicles by duly licensed
driver or one who was not disqualified to drive
at the relevant time.
(iv) The insurance companies are, however,
with a view to avoid their liability must not
only establish the available defence(s) raised
in the said proceedings but must also establish
'breach' on the part of the owner of the
vehicle; the burden of proof where for would
be on them."
7. In Narcinva V. Kamat and Anr. vs. Alfredo Antonio Doe
Martins and Ors. (1985) 3 SCR 951, the Supreme Court had also
pointedly observed:
"......The insurance company complains of
breach of a term of contract which would
permit it to disown its liability under the
contract of insurance. If a breach of term of
contract permits a party to the contract to not
to perform the contract, the burden is squarely
on that party which complains of breach to
prove that the breach has been committed by
the other party to the contract. The test in such
a situation would be who would fail if no
evidence is led....".
8. Thus, it is clear that for the purpose of proving wilful breach of
the policy conditions by the insured, the insurer must lead evidence to
prove its allegation of wilful breach. If the insurer is able to establish
that the insured did not take adequate care and caution to verify the
genuineness or otherwise of the licence held by the driver, the
defence of the insurer must succeed. If, on the other hand, the insured
is able to show that he exercised reasonable care in the matter of
fulfilling the condition of the policy regarding use of the vehicle by a
duly licenced driver, the defence of the insurer must necessarily fail
9. In the present case, there is admittedly no evidence on record to
show that the insured was aware of the fact that the driving licence of
his driver was a fake one. The inevitable conclusion therefore is that
the Insurance Company has failed to establish that the insured was
guilty of wilful breach of the policy condition with regard to the
driving licence of his driver. There is, therefore, no merit in the
present appeal. The appeal is accordingly dismissed. There will be
no order as to costs.
REVA KHETRAPAL
(JUDGE)
May 18, 2011
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