The Oriental Insurance Co Ltd vs Basant Ballabh @ Basant Pandey & Ors

$~6
* IN THE HIGH COURT OF DELHI AT NEW DELHI
th
% Date of decision: 06 July 2026

+ MAC.APP. 809/2018 & CM APPL. 36851/2018
THE ORIENTAL INSURANCE CO LTD .....Appellant
Through: Ms. Shruti Jain, Adv. for Mr. Pankaj
Seth, Adv.
versus

BASANT BALLABH @ BASANT PANDEY & ORS
.....Respondents
Through: Mr. S N Prashar & Mr. Ritik Singh,
Advs. for R-1

CORAM:
HON'BLE MR. JUSTICE ANISH DAYAL
JUDGMENT


ANISH DAYAL, J (ORAL)
1. This appeal has been filed by Insurance Company assailing Award
th th
dated 06 June 2018, read with order dated 24 July 2018 passed by the
Motor Accident Claims Tribunal, Saket Courts, New Delhi
(‘ MACT/Tribunal ’), in petition no. 75646/2016.
th
2. On 30 December 2012 at about 8.15 p.m., when respondent no.1 was
standing on the road, he was hit by Innova car no. HR 55 ET 2689, which was
being driven by respondent no. 2, owned by respondent no. 3, M/s Raj Tours
and Travels , a commercial tour operator. As a result of the accident
respondent no.1 sustained grievous injuries.
3. Ms. Shruti Jain , counsel appearing for the insurance company, seeks
grant of ‘ recovery rights ’ against the driver and the owner on the ground that
the driver was holding a fake driving licence.
Signature Not Verified
MAC.APP. 809/2018 Page- 1/7

Digitally Signed
By:MANISH KUMAR
Signing Date:14.07.2026
17:13:05

th
4. The Joint Registrar's order dated 04 September 2019 noted that notice
to respondent nos.2 and 3, driver and owner, was received back unserved with
remarks “ address not found ”; accordingly, fresh notices were directed to be
st
issued. On 01 November 2019, the appellant's counsel stated that they were
rd
still trying to locate fresh addresses of respondent nos.2 and 3. On 23
January 2020, counsel for appellant stated that fresh address of respondent no.
2 and 3 could not be located and sought liberty to move an application to serve
respondent nos.2 and 3 through substitution.
5. Since no application for substitution service was filed for the next three
th
dates, last opportunity was given on 08 September 2021 Thereafter, costs
th
were imposed on 12 January 2022 for the delay in filing the application.
th
6. Finally, on 18 May 2022, CM APPL. 1174/2022 was moved under
Order V Rule 20 of the Code of Civil Procedure, 1908, which was allowed.
rd
On 23 March 2023, proof of service through publication was filed and,
accordingly, respondent nos.2 and 3 were considered duly served.
7. Since there is no appearance on behalf of respondent nos. 2 and 3
despite service, they are proceeded against ex parte .
8. On determination of liability, counsel for insurance company pleaded
before the MACT that respondent no.1 was driving the offending vehicle
using a fake license. In support of its contention, the verification report of
driving licence Ex.R3W1/3 was produced, as per which the driving licence of
Mukesh Kumar Yadav , respondent no. 2 (the driver), was found to be fake.
9. This issue was considered by the MACT in paragraphs 24 to 28 in the
impugned award. Relying upon the decisions in United India Insurance co
ltd. v Lehru & Ors . (2003) 3 SCC 338 and National Insurance Co. Ltd. v.
Swaran Singh (2004) 3 SCC 297, the MACT held that the insurer was
required to prove that the owner of the vehicle had been negligent in verifying
Signature Not Verified
MAC.APP. 809/2018 Page- 2/7

Digitally Signed
By:MANISH KUMAR
Signing Date:14.07.2026
17:13:05

the genuineness of the driving licence.
10. In this regard, testimony of R2W1, Om Prakash , proprietor of M/s. Raj
Tours and Travels needs to be considered. He deposed that he had been
running the firm since 2004 and owned about 15-16 vehicles. He further
stated that the driver was not known to him prior to joining the firm, that he
had taken the driver's driving test, which the driver had successfully passed,
and that he also knew Anil Sharma , the driver's previous employer for the last
4-5 years, who had also certified his ability.
11. Testimony of R3W1 , a witness on behalf of the insurance company,
also requires consideration. He deposed that the driving licence of the driver
of the offending vehicle had been verified through the company's
investigator, whose report revealed that no such licence had ever been issued
by the Faridabad Licensing Authority. It is stated that the insured vehicle falls
under the category of a commercial vehicle, and as per certain terms and
conditions of the policy, the driver is required to possess a valid fitness
certificate and a valid driver’s license.
12. The issue relating to verification of driving licences has recently been
considered by this Court in United India Insurance Company v. Sarjo &
Ors . 2026:DHC:5182, which relates to the issue of a fake driving licence held
by a driver employed by the Delhi Transport Corporation. The Court
considered, inter alia , the decisions in Lehru ( supra ) and Swaran Singh
( supra ), reiterating that the insurer must establish not only that the licence
was fake but also that the insured had failed to exercise due diligence in
verifying its genuineness. The Court therefore held as under:


“28. This being the settled position of law, the burden
of proof on the insurance company is to firstly,
establish that the licence was fake at the time of the
Signature Not Verified
MAC.APP. 809/2018 Page- 3/7

Digitally Signed
By:MANISH KUMAR
Signing Date:14.07.2026
17:13:05

accident; and secondly, the owner did not exercise
due diligence in verifying the licence. Though the
insurance company would remain liable to pay the
compensation, it would nevertheless have recovery
rights against the employer.”
(emphasis added)

13. However, the Court observed that the decisions in Lehru ( supra ),
Swaran Singh ( supra ), and National Insurance Co. Ltd. v. Geeta Bhatt &
Ors. (2008) 12 SCC 426 were rendered in the context of private vehicles and
proceeded to examine the extent and nature of the duty of due diligence
applicable to owners of commercial vehicles. In this regard, reference can be
made to paragraphs 32 to 34 of the judgment, which are extracted as under:
32. In the opinion of this Court, the extent of due
diligence, which a private owner can or must
exercise, as compared to that which a public
authority (employing a fleet of vehicles) or a
commercial operator, (operating a fleet of vehicles)
must exercise, is fundamentally different.
33. A private employer may not have the
administrative machinery at its command to seek
physical verification, at least prior to 2015 (when the
Parivahan facility came into existence or when it
became fully operational and accessible). However, a
commercial fleet operator or a State Authority
operating a fleet of buses, taxis or transport vehicles
has vast administrative machinery at its command.
The responsibility is much greater considering that
such vehicles carry members of the public who travel
on the assurance that they will be safe in the said
vehicles.
34. It would, therefore, be incumbent upon such
entities to ensure that the drivers operating such
vehicles, whether carrying a private consumer or the
public at large in transport vehicles, have undergone
a complete verification process, beyond merely
Signature Not Verified
MAC.APP. 809/2018 Page- 4/7

Digitally Signed
By:MANISH KUMAR
Signing Date:14.07.2026
17:13:05

taking a driving test, so as to verify the authenticity of
their licences.
35. In the present case, an effort was made by the
DTC to issue a letter to the Mathura Authority for
verification of the licence. However, they did not wait
for the response. Even if the response had not been
received in time, the DTC machinery could have
taken several further steps to ensure proper
verification. However, it chose not to do so. Had the
Mathura Authority responded, even with some delay,
the DTC would have become aware at that very stage
that the driver was carrying a fake licence. This is
apart from the fact that, as noted earlier, ex facie the
licence appeared to be fake on the basis of the dates
endorsed therein.
(emphasis added)


14. In this context, the Court also considered the opinion by a Coordinate
Bench of this Court in Delhi Transport Corporation v. United India
Insurance Company Limited and Others 2017:DHC:2649.
15. The MACT also noted that R3W2 , the Inspector from the RTO,
Faridabad, deposed that there was no official record related to the driving
licence of respondent no. 2 and that the said licence had never been issued by
the RTO, Faridabad.
16. In this context, the Court has already recorded an opinion, as above,
with regard to owners of commercial vehicles, who are required to exercise a
higher degree of diligence in verifying the authenticity of the driving licence
of their drivers.
17. In the present case, there is no proof that the owner/respondent no.3
had actually taken steps to verify the license of respondent no. 2/driver, in any
manner, before permitting the driver to operate a passenger-carrying
commercial vehicle. As observed by this Court in Sarjo ( supra ), merely
Signature Not Verified
MAC.APP. 809/2018 Page- 5/7

Digitally Signed
By:MANISH KUMAR
Signing Date:14.07.2026
17:13:05

conducting a driving test does not amount to due verification of the driver's
competence or the genuineness of the driving licence. An employer,
particularly a commercial fleet operator or a State authority, is expected to
exercise a higher degree of diligence by getting the driver's licence verified
from the competent licensing authority before entrusting such a vehicle to the
driver. The relevant paragraphs from Sarjo ( supra ) are extracted below:
“ 37. The only distinguishing fact in that matter was
that DTC had not conducted the necessary driving
tests regarding the capability and competence of the
drivers, and, therefore, it was held that DTC could
not absolve itself of liability. Though this
distinguishing feature has been pointed out by the
counsel for DTC in the present appeal, this Court
does not consider it to be material. The mere conduct
of a driving test by the employer does not amount to
certification of the driver’s competence or fitness to
drive.
38. The DTC is not a statutory authority empowered
under the Motor Vehicles Act, 1988 or the Rules
framed thereunder to issue driving licences or certify
a person’s eligibility to drive a motor vehicle. Any
driving test conducted by it is only for its internal
assessment and satisfaction and has no statutory
basis. It is only upon due examination by the
competent licensing authority that a driving licence is
issued, which constitutes a statutory authorization
permitting the holder to drive. Accordingly, the
submission of the DTC is untenable and cannot be
accepted.”
(emphasis added)

18. In view of the observation made hereinabove, this Court is of the
opinion that the insurance company is entitled to recovery rights.
19. Accordingly, the appeal is allowed and stands disposed of in the above
terms, granting ‘ right of recovery ’ to the insurance company against
Signature Not Verified
MAC.APP. 809/2018 Page- 6/7

Digitally Signed
By:MANISH KUMAR
Signing Date:14.07.2026
17:13:05

respondent no.3.
st
20. By Order dated 21 May 2019, 70% of the awarded amount was
directed to be released. The balance amount, as per revised compensation, as
arrived at vide judgment of the same date, in MAC.APP. 624/2019 , be
released to the claimant.
21. Statutory deposit, if any, be refunded to appellant-Insurance Company,
only if the order of deposit has been complied with.
22. Judgment be uploaded on the website of this Court.

(ANISH DAYAL)
JUDGE
JULY 6, 2026/sm/ bp
























Signature Not Verified
MAC.APP. 809/2018 Page- 7/7

Digitally Signed
By:MANISH KUMAR
Signing Date:14.07.2026
17:13:05