UNITED INDIA INSURANCE COMPANY LTD. vs NERIS KHARMALKI AND 2 ORS.

2026:MLHC:749


Serial No. 01
Supplementary List
HIGH COURT OF MEGHALAYA
AT SHILLONG

MACApp. No. 4 of 2024
Date of Decision: 22.07.2026

United India Insurance Company Ltd.,
Beat House, Laitumkhrah, Shillong,
Meghalaya -793003,
Represented by its Divisional Manager
…Appellant
Versus
1. Smti. Neris Kharmalki,
w/o Shri. Binus Khongmawpat,
R/o Ur-masi-u-Joh-, Smit – 793015
East Khasi Hills, District,
Meghalaya

2. Smti. Riola Nongrum,
R/o. Madanriting, Block C,
Shillong – 793021, East Khasi Hills District,
Meghalaya
(Owner of Bolero Pickup No. ML05 K 8865)

3. Shri. Phrangstone Nongspun,
S/o. (L) Swoe Nongrum,
R/o. Thynriot, East Khasi Hills,
District - East Khasi Hills, Meghalaya
(Driver of Bolero Pickup No. ML05 K 8865)
…Respondents

Coram:
Hon’ble Mr. Justice W. Diengdoh, Judge

Appearance:
For the Petitioner/Appellant(s) : Mr. S. Jindal, Adv.

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For the Respondent(s) : Mr. S. Pandit, Adv. (For R 1)
Mr. D. Das, Adv. (For R 2)
Mr. S.P. Mahanta, Sr. Adv. with
Ms. S. Chettri, Adv.
Ms. D.D. Fancon, Adv. (For R 3)

i) Whether approved for reporting in Yes/No
Law journals etc.:
ii) Whether approved for publication
in press: Yes/No

JUDGMENT
1. The genesis of this case stems from an incident which occurred on
26.10.2014 at about 4.30 pm or so, when the respondent No. 1, Neris
Kharmalki along with her daughter, Iadalin Kharmalki and her grandson
were walking by the side of the road at Mawkathien, suddenly, one Bolero
Pick-Up bearing registration No. ML-05-K-8865 driven by Phrangstone
Nongspung came from behind and in a rash and negligent act, hit Iadalin
Kharmalki from behind and ran over her, following which she was
immediately rushed to Nazareth Hospital where she succumbed to her
injuries on the same day.
2. It is also on record that the police came to know of the said motor
vehicle accident and upon enquiry, it was found to be correct. Accordingly,
UBC 1111 Shri Bishnu Chettri lodged an FIR at the Madanrting Police
Station. Investigation revealed that the fault and cause of the said accident
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was due to the rash and negligent driving of the said driver, Phrangstone
Nongspung.
3. In due course, the claimant/respondent No. 1 filed a claim application
before the Member Accident Claims Tribunal (MACT), Shillong with a
prayer for grant of compensation on account of the death of her deceased
daughter who had died as a result of the said motor vehicle accident. The
owner and driver of the said vehicle No. ML-05-K-8865 as well as the
insurer of the said vehicle, that is, the appellant/Insurance Company Ltd.,
herein, were arrayed as party respondent.
4. Joining issues with the claimant, the said owner as Opposite Party
(OP) No. 1 has filed her written statement on her own behalf as well as on
behalf of the OP No. 2/driver denying all the allegations made in the claim
application, similarly, the appellant/Insurance Company as OP No. 3 has also
filed his written statement inter-alia claiming that the claim petition is not
maintainable as there is no cause of action against the said Insurance
Company and also that it is not liable to compensate the claimant as the OP
No. 2/driver does not possess any driving licence at the time.
5. The Tribunal has then framed the following issues:
i. Whether ladalin Kharmalki expired due to the Motor vehicle
Accident which had occurred due to the rash and negligent
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driving of the vehicle bearing registration no. ML-05-K-8865
driven by OP No.2, own by OP No.1 and insured with OP No.3
ii. Whether the claimant is entitled to any compensation? If so, to
what extend and from whom?

iii. Relief
6. Accordingly, the Tribunal has recorded the evidence of the witnesses
of the parties, the claimant bringing four witnesses to the box, including
herself as CW-1 and three other witnesses to make out her case. The
Opposite Parties have not adduced any evidence on their respective behalf.
As has been stated, the learned Tribunal after hearing the parties had passed
the impugned judgment finding that a case has been made out for award of
compensation to the claimant, the total compensation of which comes to ₹
18,84,400/- along with simple interest @ 8% p.a. from the date of filing the
claim petition. Liability for payment of the said compensation being fastened
upon the OP Insurance/appellant herein, it was further directed that the same
should be deposited before the Tribunal within 30 days from the date of
receipt of the copy of the judgment.
7. Mr. S. Jindal, learned counsel for the appellant/Insurance Company
has, at the outset, submitted that the appellant is not aggrieved by the
quantum of compensation awarded, however, the main contention raised
herein, is that the learned Tribunal in the impugned judgment and order has
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come to the conclusion that the claimant being entitled to the said
compensation, has also come to a finding that the appellant herein is liable
to satisfy the said award and was accordingly directed to do so.
8. The fact that the appellant/Insurance Company is made liable to pay
the said compensation is the core issue raised in this appeal, since the facts
and law would prove that the Insurance Company is not at all liable for the
same since it is evident that the driver of the vehicle in question does not
possessed any driving licence at all and as such, the learned Tribunal having
failed to appreciate this fact which was brought forth by CW-4 who was the
Investigating Officer (I/O) of the criminal case, when in his deposition before
the Tribunal he has stated that:
“When the driver has surrendered before the Madanrting Traffic
Branch he did not produce any driving license.
I have asked him whether he has any driving license or not he has
answered he did not possess any valid driving license….”
9. The learned counsel has laid stressed on the contention that there is a
difference between holding an invalid driving licence and not holding any
licence at all. The case of Pappu and Ors. v. Vinod Kumar Lamba and
Anr., (2018) 3 SCC 208, para 12 and 13 was cited in this regard, wherein it
was held that:
“12. This Court in National Insurance Co. Ltd. [(2004) 3 SCC 297]
has noticed the defences available to the insurance company under
Section 149(2)(a)(ii) of the Motor Vehicles Act, 1988. The insurance
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company is entitled to take a defence that the offending vehicle was
driven by an unauthorised person or the person driving the vehicle did
not have a valid driving licence. The onus would shift on the insurance
company only after the owner of the offending vehicle pleads and
proves the basic facts within his knowledge that the driver of the
offending vehicle was authorised by him to drive the vehicle and was
having a valid driving licence at the relevant time.
13. In the present case, Respondent 1 owner of the offending vehicle
merely raised a vague plea in the written statement that the offending
Vehicle No. DIL 5955 was being driven by a person having valid
driving licence. He did not disclose the name of the driver and his
other details. Besides, Respondent 1 did not enter the witness box or
examine any witness in support of this plea. Respondent 2 insurance
company in the written statement has plainly refuted that plea and also
asserted that the offending vehicle was not driven by an authorised
person and having valid driving licence. Respondent 1 owner of the
offending vehicle did not produce any evidence except a driving
licence of one Joginder Singh, without any specific stand taken in the
pleadings or in the evidence that the same Joginder Singh was, in fact,
authorised to drive the vehicle in question at the relevant time. Only
then would onus shift, requiring Respondent 2 insurance company to
rebut such evidence and to produce other evidence to substantiate its
defence. Merely producing a valid insurance certificate in respect of
the offending truck was not enough for Respondent 1 to make the
insurance company liable to discharge his liability arising from rash
and negligent driving by the driver of his vehicle. The insurance
company can be fastened with the liability on the basis of a valid
insurance policy only after the basic facts are pleaded and established
by the owner of the offending vehicle that the vehicle was not only
duly insured but also that it was driven by an authorised person having
a valid driving licence. Without disclosing the name of the driver in
the written statement or producing any evidence to substantiate the
fact that the copy of the driving licence produced in support was of a
person who, in fact, was authorised to drive the offending vehicle at
the relevant time, the owner of the vehicle cannot be said to have
extricated himself from his liability. The insurance company would
become liable only after such foundational facts are pleaded and
proved by the owner of the offending vehicle.”
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10. Another authority in this regard relied upon by the appellant is the
case of National Insurance Co. Ltd. v. Swaran Singh & Ors. (2004) 3
SSC 297 , para 84, where it was held that:
“84. We have analysed the relevant provisions of the said Act in
terms whereof a motor vehicle must be driven by a person having a
driving license. The owner of a motor vehicle in terms of Section 5
of the Act has a responsibility to see that no vehicle is driven except
by a person who does not satisfy the provisions of Section 3 or 4 of
the Act. In a case, therefore, where the driver of the vehicle,
admittedly, did not hold any license and the same was allowed
consciously to be driven by the owner of the vehicle by such person,
the insurer is entitled to succeed in its defence and avoid liability….”

11. Yet another case cited by the learned counsel to canvass the stand of
the appellant in this regard is the case of United India Insurance Co. Ltd.,
v. Gian Chand and Ors., (1997) 7 SCC 558, para 10 and 12, wherein the
Apex court has held as follows:
“10. We fail to appreciate how the aforesaid decision can be of any
avail to learned counsel for the respondent-claimants on the peculiar
facts of the present case. It has been clearly held by the Tribunal as
well as by the High Court that Respondent 1 who was permitted to
drive the vehicle by Respondent 9, the insured, was admittedly not
having any driving licence. It was not the case of Respondent 9, the
insured, that he did not know that Respondent 1 whom the vehicle
was being handed over was not having a valid licence. In fact, once
he did not step in the witness-box to prove his case, an adverse
inference had necessarily to be drawn against him to the effect that
the vehicle had been handed over by him for being driven by an
unlicensed driver, Respondent 1. That finding reached by the
Tribunal as well as by the High Court must result in exonerating the
Insurance Company of its obligation as the statutory defence became
available to it. The High Court, even though agreeing with the finding
of fact reached by the Tribunal, has in our view, by misconstruing
the ratio of the decision of this Court in Skandia Insurance Co. Ltd.
v. Kokilaben Chandravadan [(1987) 2 SCC 654] erroneously held
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that the said defence was not available to the Insurance Company on
the facts of the present case. Even that apart, a Bench of three learned
Judges of this Court in Sohan Lal [(1996) 5 SCC 21] while upholding
the ratio of the decision of this Court in Skandia Insurance Co. Ltd.
v. Kokilaben Chandravadan [(1987) 2 SCC 654] has also taken the
same view.
12. Under the circumstances, when the insured had handed over the
vehicle for being driven by an unlicensed driver, the Insurance
Company would get exonerated from its liability to meet the claims
of the third party who might have suffered on account of vehicular
accident caused by such unlicensed driver. In view of the aforesaid
two sets of decisions of this Court, which deal with different fact
situations, it cannot be said that the decisions rendered by this Court
in Skandia Insurance Co. Ltd. v. Kokilaben Chandravadan [(1987) 2
SCC 654] and the decision of the Bench of three learned Judges in

Sohan Lal [(1996) 5 SCC 21] in any way conflict with the decisions
rendered by this Court in the cases of New India Assurance Co. Ltd.
v. Mandar Madhav Tambe [(1996) 2 SCC 238] and Kashiram Yadav
v. Oriental Fire & General Insurance Co. [(1989) 4 SCC 128].”

12. The above cited authorities being applicable to the case of the
appellant herein, once the evidence of CW-4 has established that the driver
did not possess any licence at all, the natural consequent would be for the
Insurance Company to be absolved of any liability to pay compensation,
submits the learned counsel.
13. The second limb of argument advanced by the learned counsel is that
in any view of the matter on the facts and circumstances of the case, once it
has established that the driver did not possess any licence at all, the
consequent should have been that, even though the insurance company was
not to be released from its liability, the learned Tribunal should have ordered
payment of the compensation by the appellant/Insurance Company herein,
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with the right to Pay & Recover from the owner of the pending vehicle, the
relevant judgment in this regard being the case of New India Assurance
Co., Shimla v. Kamla & Ors., (2001) 4 SCC 342, para 21, 22 and 25 which
is reproduced herein below as:
“21. A reading of the proviso to sub-section (4) as well as the language
employed in sub-section (5) would indicate that they are intended to
safeguard the interest of an insurer who otherwise has no liability to
pay any amount to the insured but for the provisions contained in
Chapter XI of the Act. This means, the insurer has to pay to the third
parties only on account of the fact that a policy of insurance has been
issued in respect of the vehicle, but the insurer is entitled to recover
any such sum from the insured if the insurer were not otherwise liable
to pay such sum to the insured by virtue of the conditions of the
contract of insurance indicated by the policy.
22. To repeat, the effect of the above provisions is this: when a valid
insurance policy has been issued in respect of a vehicle as evidenced
by a certificate of insurance the burden is on the insurer to pay to the
third parties, whether or not there has been any breach or violation of
the policy conditions. But the amount so paid by the insurer to third
parties can be allowed to be recovered from the insured if as per the
policy conditions the insurer had no liability to pay such sum to the
insured.
25. The position can be summed up thus:
The insurer and the insured are bound by the conditions
enumerated in the policy and the insurer is not liable to the insured
if there is violation of any policy condition. But the insurer who is
made statutorily liable to pay compensation to third parties on
account of the certificate of insurance issued shall be entitled to
recover from the insured the amount paid to the third parties, if
there was any breach of policy conditions on account of the vehicle
being driven without a valid driving licence. Learned counsel for
the insured contended that it is enough if he establishes that he
made all due enquiries and believed bona fide that the driver
employed by him had a valid driving licence, in which case there
was no breach of the policy condition. As we have not decided on
that contention it is open to the insured to raise it before the Claims
Tribunal. In the present case, if the Insurance Company succeeds
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in establishing that there was breach of the policy condition, the
Claims Tribunal shall direct the insured to pay that amount to the
insurer. In default the insurer shall be allowed to recover that
amount (which the insurer is directed to pay to the claimant third
parties) from the insured person.”

14. Finally, the learned counsel has submitted that while passing the
impugned judgment the learned Tribunal has lost sight of the fact, that the
appellant/Insurance Company has already paid the claimant an amount of ₹
50,000/- “no fault liability”, however, this amount has not been deducted
from the principal compensation awarded, which would make the total award
to be reduced to ₹ 18,34,000/-.
15. In view of the above, the learned counsel has submitted that this Court
be pleased to set aside the impugned judgment or alternatively, to modify the
same.
16. In reply, Mr. S. Pandit, learned counsel for the respondent No.
1/Claimant has confined his argument only on the issues raised by the
learned counsel for the appellant, that is, that the driver of the offending
vehicle did not possess any driving licence and secondly, that the contention
that this Court direct the appellant to pay the compensation award and then
recover the same from the owner.
17. As regard the contention that the Opposite Party/respondent No. 2
herein who is the driver did not possess any driving licence at all, the learned
counsel has submitted that the attempt of the learned counsel for the
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appellant to differentiate a case between “No licence” and “Invalid
licence/fake licence” is misplaced in view of the fact that the Insurer is duty
bound to discharge its burden as per law by adducing evidence or effective
cross-examination to establish the breach of policy condition, which the
appellant has failed to do so in this case. The case of Swaran Singh(supra)
was referred to, when at para 110 (iii) the Supreme Court has observed as
follows:
“110. The summary of our findings to the various issues as raised in
these petitions is as follows:
(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.”

18. Having heard the submission of the learned counsel for the parties, it
appears that the main issue which is required to be looked into, is whether
there is evidence that the driver in question was holding a valid driving
licence, or whether he does not possess any driving licence at all, for it is
around this issue that the fate of the appellant hangs as regard its liability to
pay the award. The only piece of evidence relied upon by the
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appellant/Insurance Company is the statement of the Investigating Officer
who was conducting the criminal aspect of the case arising out of the said
motor vehicle accident when he said that “…When the driver has
surrendered before the Madanrting Traffic Branch he did not produce any
driving license.
I have asked him whether he has any driving license or not he has answered
he did not possess any valid driving license…”.
19. The appellant has relied on this statement to say that it has been proven
that the said driver does not have any licence at all. The fact is that the driver
never said he does not have any licence, but that he does not have any valid
driving licence. The words valid driving licence carries a meaning which can
be assumed that the said driver does possess a driving licence, albeit it may
be an invalid or a fake one, but certainly, it does not mean that there was no
driving licence at all. This leaves room for this Court to infer in a fashion
that, following the general principle in this regard, the benefit of doubt
should go to the advantage of the claimant. The observations of the Supreme
Court in the case of Swaran Singh(supra) at para 110(iii), relied upon by the
respondent/claimant will then become applicable.
20. As to the contention of the appellant that the onus of proving the fact
that the said driver was not having a valid driving licence or that the licence
was a fake one, would shift on the Insurance Company only after the Owner
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of the offending vehicle pleads and proves the basic facts within his
knowledge that the driver of the offending vehicle was authorised by him to
drive the vehicle and was having a valid driving licence at the relevant time,
para 12 of Pappu (supra), this proposition would indeed apply to the case
herein, inasmuch as the owner has indeed failed to produce such evidence as
regard the driving licence of the said driver.
21. However, as has been observed above, there is no complete or fool
proof evidence that the said driver was not having a driving licence at all,
even though the same may be invalid or fake. In such a situation, what was
held in the case of Rukmani & Ors v. New India Assurance Co. & Ors,
(1998) 9 SCC 160 , para 3 would apply. The same reads as under:
“3. We have seen the only evidence which the Insurance Company
produced in support of the plea. This is the evidence of Inspector of
Police who investigated the accident. In his evidence, PW 1 who was
the Inspector of Police, stated in his examination-in-chief, "My
enquiry revealed that the 1st respondent did not produce the licence to
drive the abovesaid scooter. The 1st respondent even after my demand
did not submit the licence since he was not having it." In his cross-
examination he has said that it is the Inspector of Motor Vehicles who
is required to check whether the licence is there but he had not
informed the Inspector of Motor Vehicles that the 1st respondent was
not having a licence since he thought it was not necessary. In our view,
this evidence is not sufficient to discharge the burden which was cast
on the Insurance Company. It did not summon the driver of the
vehicle. No record from the Road Transport Authority has also been
produced. In these circumstances, the Insurance Company has not
discharged the burden cast upon it under Section 96(2)(b)(ii) of the
Motor Vehicles Act, 1939. The impugned order of the High Court is,
therefore, set aside and the order of the Tribunal is restored. The
appeal is allowed accordingly. No order as to costs.”

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22. Under such circumstances, on the further ground that the
appellant/Insurer has not denied the validity of the insurance policy, one of
the condition precedents is that it has to satisfy third party claims, therefore,
the principle of pay and recover would and can be made applicable to the
Insurer in this case. The case relied upon by the appellant reflected at para
13 hereinabove would also be applied in this regard.
23. In an overall consideration of the matter, this Court is convinced that
this appeal can be partially allowed to the extent indicated above, that the
quantum of award cannot be disturbed, except to the fact that the sum of ₹
50,000/- already paid as No-Fault Liability has to be deducted from the total
sum awarded and that the appellant/Insurance Company has to first satisfy
the same and then can take recourse to recover the same from the Owner of
the said offending vehicle.
24. The sum awarded, which will now be calculated at ₹ 18,34,000/-,
together with interest is to be paid to the respondent No. 1/claimant within
30 days from the date of passing of this order.
25. Appeal disposed of accordingly.
Judge

Meghalaya
22.07.2026
“ Tiprilynti– PS ”


Signature Not Verified
Digitally signed by
TIPRILYNTI KHARKONGOR
Date: 2026.07.22 19:05:57 IST
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