Full Judgment Text
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CASE NO.:
Appeal (civil) 4883 of 2007
PETITIONER:
M/s. United India Insurance Co. Ltd
RESPONDENT:
Davinder Singh
DATE OF JUDGMENT: 12/10/2007
BENCH:
S.B. Sinha & Harjit Singh Bedi
JUDGMENT:
J U D G M E N T
[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 :
\0238. 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
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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.\024
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:
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\02489. 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 \023goods carriage\024, \023heavy
goods vehicle\024, \023heavy passenger motor vehicle\024,
\023invalid carriage\024, \023light motor vehicle\024, \023maxi-
cab\024, \023medium goods vehicle\024, \023medium
passenger motor vehicle\024, \023motor-cab\024,
\023motorcycle\024, \023omnibus\024, \023private service
vehicle\024, \023semi-trailer\024, \023tourist vehicle\024,
\023tractor\024, \023trailer\024 and \023transport vehicle\005
*
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
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the relevant time.\024
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:
\02436. 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)
\023 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 \021renew a driving licence issued
under the provisions of this Act with effect
from the date of its expiry\022. 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.\022 \024
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:
\023It 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.
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4. The concept of purposive interpretation has no
application to cases relatable to Section 149 of the
Act.\024
[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.