Full Judgment Text
Neutral Citation No. 2023:DHC:3301
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision:11.05.2023
+ MAC.APP. 914/2019, CM APPL. 51954/2019 (stay), CM APPL.
51955/2019 (delay if any) & CM APPL. 51957/2019 (delay in RF)
GEETA DEVI & ANR ..... Appellants
Through: Mr. Tushar Bathija, Mr. Abhimanyu
Tewari, Ms. Eliza, Advs.
versus
KAVITA & ORS(IFFCO TOKIO GENERAL INSURANCE
COMPANY LTD) ..... Respondents
Through: Mr. Sameer Nandwani, Ms. Pooja
Tandon, Advs. for R-3
CORAM:
HON'BLE MS. JUSTICE REKHA PALLI
REKHA PALLI (ORAL)
MAC.APP. 914/2019
1. The present appeal under Section 173 of the Motor Vehicles Act,
1988 preferred by the owner of the offending vehicle seeks to assail the
award dated 06.07.2018 passed by the learned Motor Accidents Claims
Tribunal in MACT No. 4415/2016 insofar as it grants recovery rights in
favour of the insurer/respondent no.3.
2. Vide the impugned award, the learned Tribunal held that since the
driving licence held by the driver of the insured vehicle, i.e., respondent no.2
was fake, there was a breach of the terms and conditions of the insurance
policy and therefore the insurer was entitled to a right of recovery against
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the appellant.
3. The primary submission of Mr. Tushar Bathija, learned counsel for
the appellant is that not only was the driving license of the respondent no.2
which, was later found to be fake, duly verified by her late husband at the
time of engaging him but he had even taken a driving test of respondent no.2
and had found him fit for driving. The late husband of the appellant, having
taken all possible steps to check that the driver was holding a valid license
and was fit to drive the vehicle; even if the said license later turned out to be
fake, it could not be held that the appellant had breached the terms and
conditions of the insurance policy.
4. He submits that since the appellant’s husband had expired by the time
evidence was led before the learned Tribunal, the appellant had stepped into
the witness box and specifically deposed during her cross-examination that
her late husband had duly verified the licence of the driver at the time of his
employment and also taken his driving test before employing him. He
contends that in the light of these specific averments by the appellant, the
learned Tribunal has erred in holding that there was a breach of the terms
and conditions of the insurance policy thereby granting recovery rights in
favour of the insurer. In support of his plea, he seeks to place reliance on the
decisions of the Apex Court United India Insurance Co. v. Lehru, (2003) 3
SCC 338 and Nirmala Kothari v. United India Insurance Co. Ltd., (2020)
4 SCC 49 . He, therefore, prays that the impugned award in so far as it grants
recovery rights to the respondent no.3 be set aside.
5. Per Contra , Mr. Sameer Nandwani, learned counsel for the insurer
seeks to defend the impugned award by contending that once there was no
direct evidence before the learned Tribunal to show that the late husband of
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the appellant had taken all possible steps to verify the driving license of the
driver at the time of engaging him, the learned Tribunal cannot be faulted in
holding that there was a breach of the terms and conditions of the insurance
policy. He submits that the appellant merely stated that she had been
informed by her husband about having taken a driving test of respondent
no.2 and having checked his driving license. This he contends was not
sufficient to show that the appellant’s late husband had taken appropriate
steps to check the licence of respondent no.1 at the time of taking him in
employment.
6. Furthermore, respondent no.2, the driver of the offending vehicle had
himself admitted during his cross examination that despite not being a
resident of Mathura, he had obtained his driving licence from the license
authority at Mathura. Even during his cross examination the respondent no.2
was not able to produce his driving license verification fee obtained from the
licensing authorities. He therefore contends that once it was evident that the
driving license of respondent no.2 was fake, the learned Tribunal was
justified in granting recovery rights in favour of respondent no.3. He
therefore prays that the appeal be dismissed.
7. Having considered the submissions of the learned counsel for the
parties and perused the record, I find that while the factual matrix of the
manner in which the accident took place is not in dispute, the only question
which arises for consideration of this Court is as to whether the learned
Tribunal was justified in holding that there was a breach of the terms and
conditions of the insurance policy by the appellant’s late husband. The
answer to this would depend on as to whether the appellant’s late husband
can be said to have taken all possible steps as is expected to be taken from
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an owner at the time of engaging a driver. While the appellant contends that
all necessary steps were taken, the respondent seeks to contend otherwise.
8. In order to appreciate the rival submissions of the parties, it would be
apposite to first refer to the findings of the learned Tribunal on this aspect.
The relevant extracts of the decision read as under:
“36. In order to appreciate the aforesaid contention raised
on behalf of insurance company, it would be relevant to
discuss the testimonies of relevant witnesses examined in this
regard. Smt. Geeta Devi(widow of Sh. Netra Pal
Singh/Registered owner of offending vehicle) has examined
herself as R2W1. Although, she has deposed in her evidence
by way of affidavit (Ex. R2W1/A) that at the time of
employing Ujay Pal (R1) as driver on vehicle no. HR69-D-
0246,- her husband i.e. deceased registered owner had taken
his driving skill test and was satisfied about his driving skills
and also that her deceased husband had kept copy of DL of
R1 in respect of HMV but during her cross-examination on
behalf of insurance company, she could not disclose as to
when R1 was employed by her deceased husband and as to
when copy of DL of R1 was taken by her deceased husband.
She admitted that no such driving test was taken before her
but claimed that her husband has told her about the same.
She herself did not get DL of R1 verified. She denied the
suggestion that no driving skill test of R1 was taken at the
time of employing him as driver for the said vehicle or that
R1 was not holding valid DL as on the date of accident or
that copy of DL(Ex. R2W1/1) was forged and fabricated one.
37. R1 has examined himself as R1W2 and has deposed
during his cross-examination that he never resided in the
area of Mathura but volunteered that he had occasionally
visited the said place 3-4 times in a year. He had got DL
prepared from Licencing Authority, Mathura by personally
visiting the said place and reiterated that copy of DL (Ex.
R2W1/1) is genuine one. Although, he claimed to have paid
driving licence verification fee but could not produce receipt
thereof when asked to do so. He further deposed that his
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original DL was seized by IO in the criminal case. He denied
the suggestion that he was not holding valid and effective DL
as on the date of accident.
38. In view of the aforesaid factual matrix, my Ld.
Predecessor summoned the concerned official i.e. Record
Clerk from the office of ARTO, Mathura, U.P. He produced
relevant record in respect of Driving Licence No.
1347/MTR/2000 and testified that as per their record, said
licence was issued In the name of Irshad Qureshi S/o Islam
Qureshl. He exhibited copy of computerized extracts of said
DL as Ex. CW1/A. He further deposed that DL verification
report. (Ex. RW2/1) dated 30.08.13(which is relied by R1 &
R2) was never issued by their office and same is fake report.
He also deposed that said DL was never issued in the name
of Sh. Ujay Pal S/o Sh. Anokhe Lal and also that copy of
DL(Ex. CW1/B) was fake. He further deposed that DL
verification report (Ex. CW1/C) produced by insurance
company, genuine report. During his cross-examination on
behalf of respondent nos.1 and 2, he deposed that DL in the
name of Irshad Qureshi was issued on 24.02.2000 having
validity upto 23.02.2020 and record was computerized in the
year 2013 onwards. He reiterated that report Ex. RW2/1 was
fake and denied the suggestion that Ex. CW1/A was false
report.
39. It is quite evident from the aforesaid discussion that DL
produced by R1 was found to be fake. It is pertinent to note
that R1 & legal heirs of R2 did not raise any plea in their WS
that registered owner had taken driving skill test of R1 at the
time of employing him or that he had retained copy of DL of
R1 in respect of HMV at that time. The said plea is sought to
be raised for the first time during the course of RE in aid of
the submission that since registered owner/insured had taken
due care and precaution while employing R1 as driver for the
offending vehicle, insurance company is liable to pay the
compensation amount. It is well settled law that there can not
be any evidence beyond pleadings and thus, the, the said
respondents cannot be allowed to rely upon the said plea.
Even otherwise, the said plea remained unsubstantiated
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during the course of inquiry in as much as insured did not
enter into witness box and his widow(R2W1) admitted during
her cross examination that no such driving skill test of R1
was taken in her presence. In other words, relevant portion of
her testimony is based upon hearsay evidence and thus, same
is not admissible under the law.
40. Hence, I find substance in the submission made on
behalf of insurance company that had there been any valid
DL in favour of respondent no.1 to drive the type of vehicle
like the present one, copy thereof would have been provided
by him to the police or would have been placed on record.
41. In view of the aforesaid discussion, I find substance in the
plea raised on behalf of insurance company that for want of
valid and effective DL in favour of respondent no. 1 being
proved on record, it would be termed as breach in the terms
and conditions of insurance policy on the part of insured i.e.
respondent no. 2. Thus, insurance company is entitled to
recovery rights against the respondent no. 1 & legal heirs of
respondent no. 2. Issue no. 2 is decided accordingly.”
9. From a bare perusal of the aforesaid cross-examination of the
appellant as has been noted in the impugned award itself, it is evident that
the appellant had clearly stated that her late husband, who had engaged the
driver, had not only kept the copy of the driving license furnished by the
respondent no.2 but had also taken his driving test before employing him.
Merely because the appellant could not disclose the details as to when the
respondent no.2/the driver was employed by her late husband or as to when
was the copy of the driving license of the driver taken by her deceased
husband, the learned Tribunal could not have presumed that there was any
failure on the part of the appellant’s late husband to verify the credentials of
the driver at the time of his employment. Once the appellant had
categorically stated in her cross examination that her husband apprised her
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of the fact of the verification of the driving licence and the driving test being
conducted by him, the learned Tribunal ought to have accepted her plea
instead of drawing an adverse inference against her.
10. Even otherwise, the Tribunal appears to have misdirected itself by
ignoring the fact that as held by the Apex Court in Nirmala Kothari (supra),
it is for the insurer to prove that the owner of the vehicle did not take
adequate care and caution to verify the genuineness of the driver. The
relevant extracts of the said decision reads as under:
8.Breach of conditions under Section 149(2)(a) of the Motor
Vehicles Act, 1988 absolves the insurer of its liability to the
insured. Section 149(2)(a)(ii) deals with the conditions
regarding driving licence. In case the vehicle at the time of
accident is driven by a person who is not duly licenced or by
a person who has been disqualified from holding or obtaining
a driving licence during the period of disqualification, the
insurer is not liable for compensation. In the instant case it is
a matter of fact that no record of the licence bearing No.
P03041288753070 was found with the licensing authority.
9. Having set forth the facts of the present case, the question
of law that arises for consideration is what is the extent of
care/diligence expected of the employer/insured while
employing a driver? To answer this question, we shall advert
to the legal position regarding the liability of the insurance
company when the driver of the offending vehicle possessed
an invalid/fake driving licence. In United India Insurance Co.
Ltd. v. Lehru [United India Insurance Co. Ltd. v. Lehru,
(2003) 3 SCC 338 : 2003 SCC (Cri) 614] a two-Judge Bench
of this Court has taken the view that the insurance company
cannot be permitted to avoid its liability on the ground that
the person driving the vehicle at the time of the accident was
not duly licensed. It was further held that the wilful breach of
the conditions of the policy should be established. The law
with this respect has been discussed in detail
EPSU EPSU
in P RTC v NationalInsuranceCo. [P RTC v. Nation
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al Insurance Co., (2013) 10 SCC 217 : (2013) 4 SCC (Civ)
713 : (2013) 4 SCC (Cri) 768 : (2014) 1 SCC (L&S) 750] .
We may extract the relevant paragraph from the judgment :
(P EPSU case [P EPSU RTC v. National Insurance Co., (2013)
10 SCC 217 : (2013) 4 SCC (Civ) 713 : (2013) 4 SCC (Cri)
768 : (2014) 1 SCC (L&S) 750] , SCC p. 223, para 10)
“10. In a claim for compensation, it is certainly open to the
insurer under Section 149(2)(a)(ii) to take a defence that the
driver of the vehicle involved in the accident was not duly
licensed. Once such a defence is taken, the onus is on the
insurer. But even after it is proved that the licence possessed
by the driver was a fake one, whether there is liability on the
insurer is the moot question. As far as the owner of the
vehicle is concerned, when he hires a driver, he has to check
whether the driver has a valid driving licence. Thereafter he
has to satisfy himself as to the competence of the driver. If
satisfied in that regard also, it can be said that the owner had
taken reasonable care in employing a person who is qualified
and competent to drive the vehicle. The owner cannot be
expected to go beyond that, to the extent of verifying the
genuineness of the driving licence with the licensing
authority before hiring the services of the driver. However,
the situation would be different if at the time of insurance of
the vehicle or thereafter the insurance company requires the
owner of the vehicle to have the licence duly verified from the
licensing authority or if the attention of the owner of the
vehicle is otherwise invited to the allegation that the licence
issued to the driver employed by him is a fake one and yet the
owner does not take appropriate action for verification of the
matter regarding the genuineness of the licence from the
licensing authority. That is what is explained in Swaran
Singh case [National Insurance Co. Ltd. v. Swaran Singh,
(2004) 3 SCC 297 : 2004 SCC (Cri) 733] . If despite such
information with the owner that the licence possessed by his
driver is fake, no action is taken by the insured for
appropriate verification, then the insured will be at fault and,
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in such circumstances, the insurance company is not liable
for the compensation.”
12. While hiring a driver the employer is expected to verify if
the driver has a driving licence. If the driver produces a
licence which on the face of it looks genuine, the employer is
not expected to further investigate into the authenticity of the
licence unless there is cause to believe otherwise. If the
employer finds the driver to be competent to drive the vehicle
and has satisfied himself that the driver has a driving licence
there would be no breach of Section 149(2)(a)(ii) and the
insurance company would be liable under the policy. It would
be unreasonable to place such a high onus on the insured to
make enquiries with RTOs all over the country to ascertain
the veracity of the driving licence. However, if the insurance
company is able to prove that the owner/insured was aware
or had notice that the licence was fake or invalid and still
permitted the person to drive, the insurance company would
no longer continue to be liable.
11. In the present case, it is an admitted position that the respondent no.3
did not take any steps to prove that the appellant’s late husband did not take
adequate steps to verify the genuineness of the driving license of the
respondent no.2. On the other hand, in her detailed cross examination by
respondent no.3, the appellant stuck to her stand that the driving license of
respondent no.2 was duly checked by her husband who had also kept a copy
thereof. I am, therefore, of the view that once the respondent no.3 did not
take any such plea, the learned Tribunal could not have held that there was
any breach of the terms and conditions of the insurance policy.
12. I also find that the learned Tribunal appears to have been swayed by
the fact that the respondent no.2 had admitted in this cross examination that
though he was not a resident of Mathura, he had obtained a driving license
from the licensing authority at Mathura. In my considered opinion, nothing
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much would turn on this statement of the driver that his license was fake as
it is not even the appellant’s case that the driving license of respondent no.2
was in fact genuine. It is however her case that this fact about the driving
license being fake was known only to respondent no.2 and not to her late
husband, who never had any reason to doubt that the driving licence of the
respondent no.2 was fake especially when he was found to be able to drive
the vehicle properly
13. For the aforesaid reasons, the impugned award insofar as it grants
recovery rights to the respondent no.3 against the appellant is unsustainable
and is, accordingly, set aside.
14. At this stage, learned counsel for the appellant submits that the
statutory amount of Rs. 25,000/- deposited by the appellant be refunded. He,
however submits that this amount along with accrued interest, instead of
being refunded to the appellant, be refunded to any deserving widow who
lost her husband during the pandemic of Covid-19. The Registry is,
accordingly, directed to remit the statutory amount of Rs.25,000/- alongwith
accrued interest thereon to the Kotak Mahindra Bank account of Smt. Preeti
Singh Solanki, Account No. 5745470231, IFSC Code- KKBK0004618,
CRN- 457721571.
REKHA PALLI, J
MAY 11, 2023
al
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