United India Insurance Co Ltd vs Sarjo & Ors
- Court
- Delhi High Court
* IN THE HIGH COURT OF DELHI AT NEW DELHI
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% Reserved on : 20 May 2026
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Pronounced on : 01 July 2026
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Uploaded on : 02 July 2026
+ MAC.APP. 1113/2018 & CM APPL. 52406/2018
UNITED INDIA INSURANCE CO LTD .....Appellant
Through: Mr. Amit Kumar Singh, Advocate
and Ms. Rokosienoz Meyase,
Advs.
versus
SARJO & ORS .....Respondents
Through: Ms. Aditi Gupta, Ms. Lavanya
Bhardwaj, Ms. Anjali Choudhary
and Mr. Akashdeep, Advs. for
DTC/R-4.
CORAM:
HON'BLE MR. JUSTICE ANISH DAYAL
JUDGMENT
ANISH DAYAL, J.
1. This appeal has been filed by the Insurance Company assailing
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award dated 04 October 2018 passed the MACT, Rohini Courts in MAC
Petition No. 4663/2016, awarding compensation of Rs.9,22,000/- along
with interest @ 9% per annum in relation to an accident, which occurred
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on 11 February 2011, where one Mahavir, a 48-year-old self-employed
individual, lost his life.
2. Mr. Amit Kumar Singh , counsel for the Insurance Company,
contended that the MACT, by the impugned award, had directed the
Insurance Company to pay the awarded amount despite rendering a
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conclusive finding that the driving licence of the driver/respondent no.3
was fake. However, no recovery rights were granted against the
owner/respondent no.4, namely the Delhi Transport Corporation (‘ DTC’ ),
on the premise that the owner had exercised due diligence at the time of
employment. The present appeal is confined to challenging only this
aspect of the award and seeks grant of recovery rights against respondent
no.4.
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3. The accident occurred on 11 February 2011 when Mahavir , along
with Sanjay ( PW2 ), was proceeding on foot from Sardar Colony, Sector-
16, Rohini to Shahabad Daulatpur . At about 05:45 p.m., when they
reached Bawana Road, the offending vehicle, i.e., DTC bus bearing
registration No. DL-1PC-7489, driven by respondent no.3 in an allegedly
rash and negligent manner, came from behind and hit Mahavir . FIR No.
51/2011 was registered at PS Shahabad Dairy. Mahavir succumbed to his
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injuries on 14 February 2011. The vehicle was owned by respondent no.4
and was insured with the appellant.
4. On the issue of liability, the MACT considered the Insurance
Company's contention that the driving licence was fake in the context of
the testimonies of R3W1 , an officer from the Insurance Company, and
R3W2 , an officer from the Road Transport Authorities (‘ RTO’ ), Mathura,
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Uttar Pradesh, who stated that the driving licence was issued on 22 May
2003 in the name of Prem Anant s/o Mahabir . DTC argued that the driver
was holding a valid and effective driving licence at the time of the accident
and that all necessary precautions had been taken at the time of his
employment to verify the licence.
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5. Before appreciating the submissions of the parties, the facts and
testimonies on record, it would be apposite to examine the material relating
to the driving licence. The driving licence produced by respondent No.
3/driver is reproduced as under:
6. The endorsement obtained by the driver from the Road Transport
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Authorities, Nuh, dated 10 September 2010 and valid up to 09
September 2013, is also reproduced as under:
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7. R2W1, an official from DTC, deposed that, as per the records, Shri
Pankaj Kumar , Badge No. NRD-024, had been appointed as a driver on a
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contractual basis with DTC. Agreements dated 20 September 2010 and
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20 December 2010 were executed between the driver and DTC. At the
time of appointment, the driver produced the original driving licence (as
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extracted above), which appeared to be genuine. The witness further stated
that DTC conducted a driving test and found the driver competent to drive
a bus, pursuant to which he was appointed. Copies of the agreement were
also placed on record of the Trial Court as Ex.R2W1/1 and Ex.R2W1/2 .
8. In his cross-examination, R2W1 stated that DTC had not got the
particulars of the driving licence verified from the RTO, Mathura, before
appointment of respondent no.3/driver and that no driving test report had
been filed. He denied the suggestion that DTC had not conducted any
driving test.
9. R3W2 , the Record Clerk from the Transport Authority, Mathura,
stated that he had brought the summoned record and that, as per the said
record, Driving Licence No. 6467/MTR/03 had been issued in the name of
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Sh. Prem Anand , son of Sh. Mahabir . The date of issue was 22 May 2003,
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and it was valid up to 21 May 2023.
10. Thereafter, an additional affidavit was filed on behalf of the DTC
before this Court, placing on record relevant documents which would
throw light on this issue. As per the affidavit, the following points need to
be noted:
(i) As per the records of DTC, there is no driving licence
endorsed by any authority in Delhi.
(ii) The only document available in DTC records, which was
issued by a Delhi authority, is the PSV Badge.
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(iii) Guidelines dated 26 March 2010 issued by the DTC
Headquarters prescribe the procedure for obtaining a PSV
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Badge and for verification of licences from the issuing
authority.
(iv) The original driving licence issued by the Mathura Authority
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was shown to DTC by the driver. It was valid up to 08 July
2010.
(v) For the purpose of contractual employment, DTC conducted
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a driving test on 20 February 2010, and the driver was
declared successful.
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(vi) When the driver did not join, a letter dated 24 August 2010
was sent to him, to which he replied stating that he was facing
certain difficulties and requested permission to join.
(vii) Subsequently, the driver got the driving licence issued by
RTO, Mathura, and endorsed from the authorities at Nuh ,
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Haryana ; the endorsement was valid from 10 September
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2010 till 09 September 2013. According to the DTC
guidelines, this endorsement from one State to another was
not a matter concerning DTC.
(viii) The driver was issued a PSV Badge by the authorities in
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Delhi, which was valid from 03 May 2010 till 03 August
2010.
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(ix) A letter dated 03 December 2010 was written by DTC to the
Mathura Authority seeking verification of the driving licence.
However, no response was received; in the meantime, the
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accident occurred on 11 February 2011. Thereafter, the
driver was immediately terminated and blacklisted.
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Submissions on behalf of DTC
11. In this context, Ms. Aditi Gupta , counsel for DTC, submitted the
following:
11.1. At no point of time, either at the stage of recruitment or thereafter,
was DTC aware that the driving licence issued from Mathura was fake.
11.2. It is not the case of the appellant that DTC recruited the driver
despite having knowledge that the licence was fake or that DTC was
informed about the fake licence at any point in time.
11.3. At the time of recruitment, DTC examined the original driving
licence and also conducted a driving test.
11.4. There was no clause in the insurance policy mandating DTC to
obtain verification of the original driving licence before recruitment.
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11.5. DTC had written to the Mathura Authorities on 03 December
2010 seeking verification, but did not receive any response. The
endorsement obtained from the Nuh Authorities was at the behest of the
driver himself.
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11.6. PSV Badge was issued on 03 May 2010 to the driver by the State
Transport Authority, Delhi, on the basis of the documents, including the
driving licence, which were available with him at that time.
11.7. She relied upon the decisions in Hind Samachar v. National
Insurance Company Ltd . 2025:INSC;1204, Pepsu Road Transport
Corporation v. National Insurance Compan y AIR 2014 SC 305 and
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IFFCO Tokio General Insurance Co. Ltd. v. Geeta Devi & Ors.
2023:INSC:954, in support of her contention.
Submissions on behalf of Insurance Company
12. Mr. Amit Kumar Singh , counsel appearing on behalf of the
Insurance Company, placed the following submissions:
12.1. On the basis of the testimony of R3W2 , the official from the
licensing authority at Mathura , it stood established that the licence had not
been issued by the said authority, and this finding remains unchallenged.
12.2. It is a settled principle of law that driving a vehicle with a fake
licence is equivalent to driving without a licence and constitutes a
fundamental breach of the terms and conditions of the insurance policy,
particularly the condition envisaged under Section 149(2)(a)(ii) of the
Motor Vehicles Act. Consequently, the insurer is statutorily entitled to be
indemnified.
12.3. In New India Assurance Company Ltd. v. Kamla (2001) 4 SCC
342, the Supreme Court unequivocally held, in paragraph 12 , that a fake
licence cannot be rendered genuine merely by renewal.
12.4. DTC, being a public undertaking, failed to exercise the higher
standard of care and due diligence expected of it. DTC operates a vast fleet
of public transport vehicles, employs thousands of drivers, and possesses
the necessary administrative and financial wherewithal to conduct proper
verification.
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12.5. The additional affidavit filed by DTC on 23 April 2026 reveals a
gross dereliction of duty. DTC claims to have sent a letter on 03rd
December 2010 to the Mathura Authorities seeking verification, but
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despite not receiving any response, allowed respondent no.3 to continue
driving the bus.
12.6. In Delhi Transport Corporation v. United India Insurance Co.
Ltd . MAC.APP. 1081/2016, this Court held that a public transport
undertaking is expected to exercise a greater degree of care.
12.7. The decisions of the Supreme Court in United India Insurance Co.
Ltd. v. Lehru & Ors. (2003) 3 SCC 338 and National Insurance Co. Ltd.
v. Geeta Bhatt & Ors. (2008) 12 SCC 426 mandate the grant of recovery
rights in cases where breach stands established.
12.8. The Supreme Court in National Insurance Co. Ltd. v. Swaran
Singh (2004) 3 SCC 297, requires ‘ reasonable care’ to be taken by the
employer in verifying the driver's licence. The onus shifts to the insurer
only after the owner establishes that such verification was undertaken, as
held in Pappu v. Vinod Kumar Lamba (2018) 3 SCC 208.
12.9. The MACT erred in holding that the Insurance Company had failed
to prove a fundamental breach of the terms and conditions of the insurance
policy and, consequently, erred in denying recovery rights to the insurer.
Analysis
13. The facts relating to the licence seem to be undisputed. When the
driver, Pankaj Kumar , applied to the DTC for a job as a driver, he had
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produced a licence issued by the RTO, Mathura, on 22 May 2003, valid
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from 09 July 2007 to 08th July 2010. By the time he joined, he had also
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obtained an endorsement from Nuh, Haryana, dated 10 September 2010,
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valid up to 09 September 2013.
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14. DTC sent a letter dated 03 December 2010 to the RTO, Mathura,
to verify the licence, but did not receive any response.
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15. The DTC conducted a driving test on 20 February 2010 and, upon
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the driver having succeeded, he was first contracted on 20 September
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2010 and thereafter by agreement dated 20 December 2010. The second
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engagement was to continue till 18 March 2011.
16. The fact that the licence was fake was established by the evidence
of R3W2 , the officer from RTO, Mathura. The licence bearing the number
which had been produced by the driver was not even issued in the name of
the driver, but in the name of some other person, namely Prem Anant , son
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of Sh. Mahabir , with the date of issuance being 22 May 2003 and having
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validity up to 21 May 2023.
17. A bare perusal of the licence produced by the driver would show
that while the number and the date of issue are the same, the licence is
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shown to be valid from 09 July 2007 to 08 July 2010. A bare perusal of
the licence, as extracted in paragraph 5 above, would show that when the
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date of issue was 22 May 2003, there was no reason why the validity
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would commence from 09 July 2007, i.e., four years later, till 08 July
2010. A licence, when issued, is usually valid from the date of issue for a
particular period, usually about 10 years.
18. This aspect was clearly missed by the DTC officials when the
licence was presented, which, in the opinion of this Court, amounts to a
serious dereliction of duty. DTC is a public organization operating a large
fleet of transport vehicles carrying passengers and has an inherent
responsibility to verify and cross-check whether the drivers whom they are
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recruiting are suitably licensed to drive or not. Taking a driving test of a
driver and his having succeeded in the driving test cannot circumvent or
dilute the duty of verifying the licence.
19. The submission of the DTC that there was no condition in the
insurance policy requiring verification of the licence, in the opinion of this
Court, has no merit. Verification of the licence is not something which
needs to be assessed on the basis of the small print of the insurance policy,
but instead for the safety of the passengers and those travelling on the road.
The statutory mandate that a motor vehicle on the road should only be
operated by a person holding a valid licence issued by the concerned
authority is contained in Section 3 of the Motor Vehicles Act, 1988.
20. Third-party insurance, as mandated under Section 149(2)(a)(ii) of
the Motor Vehicles Act, 1988 (prior to the 2019 Amendment), provides a
condition excluding driving by a person who is not duly licensed or who
has been disqualified from holding or obtaining a driving licence. The
statutory mandate is, therefore, clear and categorical and does not require
any further paraphrasing. A motor vehicle must only be driven by
somebody who holds a valid licence issued by a duly constituted authority.
On the duty of verification
21. The issue then arises as to the extent to which the duty of
verification is to be extended to the employer of the said driver. In this
regard, the decisions of the Supreme Court in Lehru ( supra ), Swaran
Singh ( supra ), and Geeta Bhat ( supra ) are relevant. The relevant
paragraphs of the three decisions are extracted as under:
i. Relevant paragraph of Lehru ( supra )
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“ 20. When an owner is hiring a driver he will
therefore have to check whether the driver has a
driving licence. If the driver produces a driving
licence which on the face of it looks genuine, the
owner is not expected to find out whether the
licence has in fact been issued by a competent
authority or not. The owner would then take the test
of the driver. If he finds that the driver is competent
to drive the vehicle, he will hire the driver. We find
it rather strange that insurance companies expect
owners to make enquiries with RTOs, which are
spread all over the country, whether the driving
licence shown to them is valid or not. Thus where
the owner has satisfied himself that the driver has
a licence and is driving competently there would be
no breach of Section 149(2)(a)(ii). The insurance
company would not then be absolved of liability. If
it ultimately turns out that the licence was fake, the
insurance company would continue to remain
liable unless they prove that the owner/insured was
aware or had noticed that the licence was fake and
still permitted that person to drive. More
importantly, even in such a case the insurance
company would remain liable to the innocent third
party, but it may be able to recover from the
insured. This is the law which has been laid down
in Skandia [(1987) 2 SCC 654] , Sohan Lal Passi
[(1996) 5 SCC 21 : 1996 SCC (Cri) 871] and
Kamla [(2001) 4 SCC 342 : 2001 SCC (Cri) 701]
cases. We are in full agreement with the views
expressed therein and see no reason to take a
different view. ”
(emphasis added)
ii. Relevant paragraphs of Swaran Singh ( supra )
“ 90. We have construed and determined the scope
of sub-clause (ii) of sub-section (2) of Section 149
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of the Act. Minor breaches of licence conditions,
such as want of medical fitness certificate,
requirement about age of the driver and the like not
found to have been the direct cause of the accident,
would be treated as minor breaches of
inconsequential deviation in the matter of use of
vehicles. Such minor and inconsequential
deviations with regard to licensing conditions
would not constitute sufficient ground to deny the
benefit of coverage of insurance to the third
parties.
91. On all pleas of breach of licensing conditions
taken by the insurer, it would be open to the
Tribunal to adjudicate the claim and decide inter
se liability of insurer and insured; although where
such adjudication is likely to entail undue delay in
decision of the claim of the victim, the Tribunal in
its discretion may relegate the insurer to seek its
remedy of reimbursement from the insured in the
civil court.
Where the driver's licence is found to be fake
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 [(2003) 3 SCC
338 : 2003 SCC (Cri) 614] 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
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whatsoever. We would be dealing in some detail
with this aspect of the matter a little later.”
(emphasis added)
iii. Relevant paragraphs of Geeta Bhat ( supra ):
“ 7. An owner of the vehicle is bound to make
reasonable enquiry as to whether the person who
is authorised to drive the vehicle holds a licence or
not. Such a licence not only must be an effective
one but should also be a valid one. It should be
issued for driving a category of vehicle as specified
in the Motor Vehicles Act and/or Rules framed
thereunder. ”
(emphasis added)
22. Paragraph 20 of Lehru ( supra ), extracted above, categorically
provides that when an owner hires a driver, he is required to check whether
the driver has a driving licence. If, however, the driver produces a licence
which appears, on the face of it, to be genuine, the owner is not expected
to find out whether the licence has in fact been issued by a competent
authority. The owner may then take a driving test of the driver and, if he
finds the driver competent, can hire the driver.
23. The Supreme Court further noted that the enquiry, as expected by
the insurance companies from the owners to further verify the driving
licence from a competent authority which issued it, is unreasonable.
Therefore, employer/owner having complied with the aforesaid steps, the
Insurance Company would not be absolved of liability.
24. The Supreme Court in paragraph 92 of Swaran Singh ( supra ), as
extracted above, stated that the Court was in general agreement with the
approach adopted in Lehru ( supra ).
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25. Further, in paragraph 99 of the judgment, it is stated that the
defence to the effect that the licence held by the person driving was fake
would be available to the insurance companies, but despite the same,
whether the plea of default on the part of the owner has been established
or not would have to be determined on the facts of each case.
26. It was further clarified that Lehru ( supra ) cannot be read to mean
that the owner of a vehicle can, under no circumstances, have any duty to
make further enquiry in this respect. Defence by Insurance Company can
still be raised, but it is for the insurer to prove that the insured did not take
adequate care and caution to verify the genuineness or otherwise of the
licence.
27. In Geeta Bhatt ( supra ), which followed Lehru ( supra ) and Swaran
Singh ( supra ), it was assumed that the licence possessed by the driver was
fake, but despite that, as per the settled legal position, it would not absolve
the insurer from paying compensation in favour of the third party. The
Court simply verified and endorsed the two principles that the decision in
Swaran Singh ( supra ) has no application to cases other than third-party
cases and that if the licence was fake, renewal cannot cure the inherent
fatality, which aspect had also been confirmed earlier by the Supreme
Court in Kamla ( supra ).
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 accident; and secondly , the owner did not exercise due
diligence in verifying the licence. Though the insurance company would
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remain liable to pay the compensation, it would nevertheless have
recovery rights against the employer.
29. Notably, the facts before the Court in Lehru ( supra ), Swaran Singh
( supra ), and Geeta Bhatt ( supra ) were related to private vehicles.
However, what is imperative to examine is the extent and nature of the due
diligence that the owner/employer is required to undertake in order to
verify the licence of the driver whom they intend to employ.
30. As stated in paragraph 20 of Lehru ( supra ), at best, a private
employer can examine whether the licence, on the face of it, appears
genuine or fake, and then take a driving test in order to satisfy itself
regarding the competence of the driver, along with making an attempt at
verification from the authority concerned, though the latter may not be
practical in most cases.
31. The issue of verification, therefore, must also be considered in the
modern context. The Government introduced an online portal called
'Parivahan' in 2015, order to place details of licences on the portal so that
they could be verified at the touch of a button. However, this facility was
not available in 2011 when the accident took place. Physical verification
being difficult, Lehru ( supra ) gave some relaxation regarding the onus in
this respect. However, in Swaran Singh ( supra ), the Supreme Court
cautioned that Tribunals and Courts have to be careful while assessing this
aspect and would have to consider the facts and circumstances of each
case.
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
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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 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.
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36. The distinction between public duty and private duty was
considered in detail by a Coordinate Bench of this Court in Delhi
Transport Corporation v. United India Insurance Company Ltd. & Ors .
2017:DHC:2649, wherein the Court observed as under in paragraphs 13
and 14 :
“ 13. An insurance contract is based on uberrimae
fides i.e. utmost good faith. When an insurer
extends an insurance cover, it is done in the belief
that the insured would take all necessary
precautions and act as a reasonable person. The
appellant is a statutory authority. It is statutorily
mandated to provide public transport facility in the
National Capital Territory of Delhi. It is expected
from a public employer to check the antecedents of
its prospective employees and in particular the fact
that the candidate possessed a valid driving license
and that only after passing the special training, the
selected candidates would be offered employment.
In employment of drivers by a Government
undertaking, the basic qualification is the
possession of the driving license. The exercise of
checking the validity of the driving license could be
carried out even after offering provisional
employment to the successful candidates. The
position of a public transport undertaking, or a
large public transporter, who engage a number of
drivers – in hundreds and thousands, to drive their
fleet of vehicles, is different from a private
individual who engages one or two drivers for his/
her personal service. The latter would not possess
the necessary administrative or financial
wherewithal to verify the driving license. The
individual may perhaps be also constrained by
exigencies to employ a driver immediately without
awaiting a driving licence verification report. In
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Lehru (supra), the Court’s concern that the
objective of the legislation being that innocent
third parties should be compensated, hence, it held
that even in instances where the driving licence
was fake, the insurer would remain liable to the
innocent third party so that stipulations in sections
146, 147 and 149 of the Act are fulfilled and the
award of compensation does not remain a hollow
promise. In the present case, the third party
liability has been met by the insurer, hence, the
objective of the legislation apropos the innocent
third party stands fulfilled. However, the Court
went on to hold that after paying compensation to
the third party, the insurer ‘may be able to recover
from the insured’.
14. In this regard, what needs to be examined is
whether the appellant failed to exercise the
reasonable care expected of it. The impugned
award, while dealing with the issue of liability,
records that the respondents had not led any
evidence to establish that, at the time of employing
the driver, the owner had undertaken any
necessary test or verification regarding the driver's
capability to operate the vehicle or the genuineness
of his driving licence, and therefore could not be
absolved of liability. It was observed that the
appellant/DTC similarly failed to adduce any
evidence to demonstrate that, before employing its
drivers, it had conducted the requisite driving tests
to assess their competence and capability or had
verified the authenticity of their driving licences.
Consequently, the DTC could not escape liability
on that count. If the appellant had in fact carried
out the necessary assessment of the driving
competence of prospective candidates and
imparted the requisite training before entrusting
them with public buses, it ought to have produced
evidence to that effect. Although the appellant
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asserted that the drivers had undergone the
necessary special training, no material was placed
on record to substantiate such a claim. In the
absence of any supporting evidence, it was evident
that the appellant had failed to exercise reasonable
care while employing the drivers. The Court
further emphasised that responsible governance
and prudence demand that drivers entrusted with
ferrying commuters across the National Capital
Territory of Delhi be imparted special training,
particularly in view of the ever-increasing
population and the corresponding rise in vehicular
traffic on the city's roads. The numerous instances
of rash and negligent driving involving DTC buses
resulting in serious injuries and fatalities during
the relevant period, and the continuing prevalence
of such concerns, could not be ignored. A public
transport undertaking, therefore, cannot be
expected to place untrained, incompetent, or
unlicensed drivers on the roads to the detriment of
unsuspecting members of the public. ”
(emphasis added)
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
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17:36:41
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.
39. As regards the question whether the Insurance Company has
discharged the burden of proof cast upon it, it would suffice to examine
the pleadings and the evidence led by the Insurance Company through the
testimony of R3W1 , Jagdish Chander , Assistant, United India Insurance
Company. In his affidavit by way of evidence, he deposed that during the
investigation conducted by the police following the accident, it was
discovered that the driver was not holding a valid driving licence, which
constituted a breach of the terms and conditions of the insurance policy.
40. In the written statement, the Insurance Company specifically stated
that the driver was not holding a valid driving licence on the date of the
accident, and further stated that its liability would be governed by the
terms and conditions of the insurance policy as well as the provisions of
the Motor Vehicles Act. It may be contended that the Insurance Company
did not specifically plead the aspect of due diligence required to be
exercised by the DTC while employing the driver.
41. However, certain material facts relating thereto have since come on
record during the pendency of the present appeal through additional
documents placed on record by the DTC, along with an additional
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MAC.APP. 1113/2018 21/23
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affidavit. Therefore, the issue can be examined on the basis of the material
now available before this Court.
42. Considering that the appeal is a continuation of the original
proceedings, this Court considers it appropriate to assess the matter on the
basis of the submissions advanced by the Insurance Company and the
documents on record. It has been categorically averred and submitted by
the Insurance Company, as noted above in the submissions of Mr. Amit
Kumar Singh , counsel for Insurance Company, that the DTC failed to
perform its duty to ensure proper verification of the licence. According to
the Insurance Company, there was a serious omission on the part of DTC
in failing to follow up and ensure that the authenticity of the licence was
verified before employing the driver.
43. Moreover, it is noted that after engaging the driver following the
rd
driving test, the verification letter was sent on 03 December 2010, soon
after which the accident took place. Therefore, the burden of proof on
Insurance Company would be considered to have been discharged,
particularly in light of the documents elicited during the proceedings from
the DTC itself.
44. Considering that these documents were produced by the DTC
during the appeal proceedings, after having taken liberty from the Court,
the Court cannot ignore the same and instead relegate the parties to rely on
mere pleadings or statements before the MACT.
45. It is clear and categorical that the DTC was completely amiss in not
awaiting verification of the licence from the Mathura Authorities before
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employing the driver, as would be expected in discharge of the duty of a
State Public Transport Corporation.
46. Accordingly, the Insurance Company’s plea is accepted.
47. The appeal is allowed.
48. Recovery rights are granted to the Insurance Company against the
Delhi Transport Corporation/respondent no.4.
49. Accordingly, the appeal is disposed of.
50. Pending applications, if any, are also disposed of as being rendered
infructuous.
51. Statutory deposit, if any, be refunded.
52. Judgment be uploaded on the website of this Court.
ANISH DAYAL
(JUDGE)
JULY 01, 2026/ mk / bp
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MAC.APP. 1113/2018 23/23
Digitally Signed
By:MANISH KUMAR
Signing Date:02.07.2026
17:36:41