M/S.
United India Insurance Co. Ltd Vs. Davinder Singh [2007] Insc 1063 (12 October 2007)
S.B.
Sinha & Harjit Singh Bedi
[Arising
out of SLP (Civil) No. 1939 of 2007] S.B. SINHA, J:
1.
Leave granted.
2.
Whether renewal of a licence granted to drive a motor vehicle which was
originally found to be forged would lead to any liability on the part of the
insurance company is the core question involved in this appeal which arises out
of a judgment and order dated 9.10.2006 passed by National Consumer Disputes Redressal
Commission, New Delhi in R.P. No. 2908 of 2006.
3.
Respondent is the owner of the vehicle bearing No. HR-37A-5521.
He got
the said vehicle insured on 10.11.2003 for one year, i.e., upto 9.11.2004. It
met with an accident on 20.04.2004 with a truck. The said vehicle was being
driven by one Kulbir Singh. Upon investigation made in this behalf, it was
found that the licence bearing No. 6604/R-91-92 held by Kulbir Singh was not
issued by the Licensing Authority, Solan.
4.
However, a complaint petition was filed under Section 12 of the Consumer
Protection Act, 1986 before the District Consumer Disputes Redressal Forum
complaining deficiency in service for not paying the amount of damages which
was covered by the insurance policy, which the appellant was allegedly bound to
pay. The said complaint petition was allowed awarding a sum of Rs. 1,23,412/-
towards damages, as also a sum of Rs. 20,000/- towards other heads, besides
interest at the rate of 9% per annum, holding :
8.
A plea has been taken by the opposite parties that Kulbir Singh, driver was not
possessing a valid driving licence at the time of driving the vehicle. However,
when Mr. Rajesh Shori inspected the driving licence, he found that the driving licence
had been issued by the DTO, Hoshiarpur on 23.11.1998. The original driving licence
was issued by the Licencing Authority, Solan in 1991-92. Learned Counsel for
the opposite parties stated that there is no evidence on the file to the effect
that the original driving licence had been issued by the Licencing Authority at
Solan (H.P.), however, a report has been received on the back of the summons to
the effect that, the original driving licence No. 6604/R-91-92 in the name of Kulbir
Singh son of Amrik Singh had not been issued by the Licencing Authority, Solan
(H.P.) as mentioned in the report Ex.R-10.
It has
been clearly stated by the complainant in his affidavit Ex. C-1 that, when he
employed the driver Kulbir Singh, he was possessing a valid driving licence
issued by the Licencing Authority, Hoshiarpur. He also verified this driving licence
issued by Licencing Authority, Hosiarpur and also took his driving test and
found that he was an efficient driver. There is no rebuttal evidence from the
side of the opposite parties and hence we hold that the driver Kulbir Singh was
possessing a valid driving licence when the accident took place and hence the
opposite parties illegally repudiated the claim of the complainant. As the
opposite parties failed to make payment of compensation and, therefore, it is a
case of deficiency in service.
5. An
appeal preferred thereagainst was also dismissed by the State Consumer Dispute Redressal
Commission. A revision application filed before the National Commission met
with the same result.
6. The
learned counsel appearing on behalf of the appellant, inter alia, would submit
:
(i) that
a fake licence cannot be renewed and that too by an Authority which did not
originally grant the same;
(ii) indisputably,
the complainant was the owner of the vehicle in question;
(iii) it
was comprehensibly insured;
(iv)
the vehicle, however, was being driven by Kulbir Singh who did not have an
effective driving licence and in that view of the matter, the respondent was
not entitled to grant of any amount by way of compensation or otherwise.
7. The
learned counsel appearing on behalf of the respondent, on the other hand, would
submit that :
(i) in
terms of the insurance policy the owner was required to take only reasonable
care to ascertain as to whether the driver had been possessing a valid licence
or not ;
(ii) it
was not possible for him to ascertain from the original Licensing Authority as
to whether any licence had been issued by it or not;
(iii) the
duty of the owner is merely to take reasonable care in the matter as it is not
expected that he would make a detailed enquiry in this behalf.
8. The
complainant is the owner of the vehicle. The Motor Vehicles Act, 1988 was
enacted to meet the social obligation in regard to a third party as a result
whereof taking a cover of insurance is mandatory.
9. In
terms of Section 149 of the Motor Vehicles Act, however, taking of an insurance
policy in relation to damages which may be suffered by the owner of the vehicle
was not compulsorily insurable.
10. It
is, thus, axiomatic that whereas an insurance company may be held to be liable
to indemnify the owner for the purpose of meeting the object and purport of the
provisions of the Motor Vehicles Act, the same may not necessary in a case
where an insurance company may refuse to compensate the owner of the vehicle
towards his own loss. A distinction must be borne in mind as regard the
statutory liability of the insurer vis-`-vis the purport and object sought to
be achieved by a beneficient legislation before a forum constituted under the
Motor Vehicles Act and enforcement of a contract qua contract before a Consumer
Forum.
11. In
National Insurance Co. Ltd. v. Swaran Singh and Others [(2004) 3 SCC 297],
whereupon strong reliance has been placed by the learned counsel appearing on
behalf of the respondent, this Court was dealing with a question in regard to
the claim of a third party vis-`-vis the role of an insurance company. It is in
that context, this Court opined:
89.
Section 3 of the Act casts an obligation on a driver to hold an effective
driving licence for the type of vehicle which he intends to drive. Section 10
of the Act enables the Central Government to prescribe forms of driving licences
for various categories of vehicles mentioned in sub-section (2) of the said
section. The various types of vehicles described for which a driver may obtain
a licence for one or more of them are:
(a) motorcycle
without gear,
(b) motorcycle
with gear,
(c) invalid
carriage,
(d) light
motor vehicle,
(e) transport
vehicle,
(f) road
roller, and
(g) motor
vehicle of other specified description.
The
definition clause in Section 2 of the Act defines various categories of
vehicles which are covered in broad types mentioned in sub-section (2) of
Section 10. They are goods carriage, heavy goods vehicle,
heavy passenger motor vehicle, invalid carriage, light
motor vehicle, maxi- cab, medium goods vehicle,
medium passenger motor vehicle, motor-cab,
motorcycle, omnibus, private service vehicle,
semi-trailer, tourist vehicle, tractor,
trailer and transport vehicle *** *** ***
92. It
may be true as has been contended on behalf of the petitioner that a fake or
forged licence is as good as no licence but the question herein, as noticed
hereinbefore, is whether the insurer must prove that the owner was guilty of
the wilful breach of the conditions of the insurance policy or the contract of
insurance. In Lehru case 5 the matter has been considered in some detail. We
are in general agreement with the approach of the Bench but we intend to point
out that the observations made therein must be understood to have been made in
the light of the requirements of the law in terms whereof the insurer is to
establish wilful breach on the part of the insured and not for the purpose of
its disentitlement from raising any defence or for the owners to be absolved
from any liability whatsoever. We would be dealing in some detail with this
aspect of the matter a little later. *** *** *** 110. ( iii ) The breach of
policy condition e.g. disqualification of the driver or invalid driving licence
of the driver, as contained in sub-section (2)( a )( ii ) of Section 149, has
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 the 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 a
duly licensed driver or one who was not disqualified to drive at the relevant
time.
12.
The said decision has been distinguished by a Bench of this Court in National
Insurance Co. Ltd. v. Laxmi Narain Dhut [(2007) 3 SCC 700] in the following
terms:
36.
The inevitable conclusion therefore is that the decision in Swaran Singh case 1
has no application to own damage cases. The effect of fake licence has to be
considered in the light of what has been stated by this Court in New India
Assurance Co. v. Kamla. Once the licence is a fake one the renewal cannot take
away the effect of fake licence. It was observed in Kamla case as follows: (SCC
p. 347, para 12) 12 . As a point of law we have no manner of doubt that a
fake licence cannot get its forgery outfit stripped off merely on account of
some officer renewing the same with or without knowing it to be forged. Section
15 of the Act only empowers any licensing authority to renew a driving licence
issued under the provisions of this Act with effect from the date of its
expiry. No licensing authority has the power to renew a fake licence and,
therefore, a renewal if at all made cannot transform a fake licence as genuine.
Any counterfeit document showing that it contains a purported order of a
statutory authority would ever remain counterfeit albeit the fact that other
persons including some statutory authorities would have acted on the document
unwittingly on the assumption that it is genuine.
13. Laxmi
Narain Dhut (supra) has since been followed by this Court in The Oriental
Insurance Company Limited v. Meena Variyal and Ors. [2007 (5) SCALE 269] wherein
this Court referring to Swarn Singh (supra) held:
It
is difficult to apply the ratio of this decision to a case not involving a
third party. The whole protection provided by Chapter XI of the Act is against
third party risk. Therefore, in a case where a person is not a third party
within the meaning of the Act, the insurance company cannot be made
automatically liable merely by resorting to the Swaran Singh (supra) ratio.
This appears to be the position. This position was expounded recently by this
Court in National Insurance Co. Ltd. v. Laxmi Narain Dhut 2007 (4) SCALE 36.
This Court after referring to Swaran Singh (supra) and discussing the law
summed up the position thus:
In
view of the above analysis the following situations emerge:
1. The
decision in Swaran Singh's case (supra) has no application to cases other than
third party risks.
2.
Where originally the licence was a fake one, renewal cannot cure the inherent
fatality.
3. In
case of third party risks the insurer has to indemnify the amount and if so
advised, to recover the same from the insured.
4. The
concept of purposive interpretation has no application to cases relatable to
Section 149 of the Act. [See also Oriental Insurance Co. Ltd. v. Brij
Mohan and Ors., 2007 (7) SCALE 753].
14. The
decisions of this Court in Laxmi Narain Dhut (supra) as also Meena Variyal
(supra) being directly on the point, we are bound thereby.
15. In
view of the aforementioned authoritative pronouncements, we are of the opinion
that the court below committed an error in holding the appellant liable to
indemnify the owner of the vehicle in regard to losses sustained by him.
16.
Different considerations would arise in a case of this nature, as the consumer
forum established under the Consumer Protection Act, 1986 was concerned only
with a question as to whether there was deficiency of service on the part of
the appellant or not. A right on the part of the Insurance Company not to pay
the amount of insurance would depend upon the facts and circumstances of each case.
It in certain situation may be bound to pay the claim made by the third party;
if the same is filed before a forum created under the Motor Vehicles Act. But defence
may be held to be justified before a different forum where the question raised
is required to be considered in a different manner.
17. For
the reasons aforementioned, the impugned judgment cannot be sustained which is
set aside accordingly. The appeal is allowed. However, in the facts and
circumstances of the case, there shall be no order as to costs.
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