A fake driving licence alone does not absolve the insurer absent wilful breach by the insured.

Mohammad Manjur, aged approximately 22–23 years, died in a motor-vehicle accident on 15 June 2000 due to the rash and negligent driving of truck No. PBP-5151 by respondent No.1, Balwinder Singh. The truck was owned by respondent No.2 and insured with respondent No.3-Insurance Company.

His wife and father instituted a claim petition under Section 166 of the Motor Vehicles Act, 1988. The Tribunal awarded ₹2,81,500 with interest at 9% per annum, assessing the deceased’s monthly income at ₹2,000, applying a multiplier of 17, and directing the Insurance Company to pay the award initially with liberty to recover it from the owner on the ground that the driver possessed a fake driving licence.

The claimants appealed for enhancement of compensation. The owner filed cross-objections challenging the finding that the driving licence was fake and the grant of recovery rights to the Insurance Company. The cross-objections were treated as an independent appeal pursuant to an earlier order of the High Court.

During the proceedings, additional evidence was led regarding the driving licence and records from the DTO, Sangrur.

The Court applied Section 166 of the Motor Vehicles Act, 1988, under which claimants are entitled to “just compensation” for death caused by a motor accident.

In assessing compensation, it relied on Sarla Verma v. Delhi Transport Corporation, 2009 (6) SCC 121, for deductions towards personal expenses and the appropriate multiplier; National Insurance Co. Ltd. v. Pranay Sethi, 2017 (16) SCC 680, for future prospects and conventional heads; Magma General Insurance Co. Ltd. v. Nanu Ram, 2018 (4) RCR (Civil) 333, and United India Insurance Co. Ltd. v. Satinder Kaur, (2021) 11 SCC 780, for consortium; and Chandra alias Chander alias Chanda Ram v. Mukesh Kumar Yadav, (2022) 1 SCC 198, for reasonable assessment of income where documentary proof is unavailable.

The Court further relied on Sadhana Tomar v. Ashok Kushwaha, 2025 LiveLaw (SC) 309, to treat the deceased’s father as a dependent.

On liability, the Court applied the principle that a fake or invalid driving licence, by itself, does not absolve the insurer; the insurer must prove that the insured committed a conscious or wilful breach by knowingly entrusting the vehicle to an unlicensed driver.

This principle was drawn from Rishi Pal Singh v. New India Assurance Co. Ltd., 2022 ACJ 1868; IFFCO Tokio General Insurance Co. Ltd. v. Geeta Devi, 2023 SCC OnLine SC 1398; and Hind Samachar Ltd. v. National Insurance Co. Ltd.

Section 151 CPC was invoked in the application seeking release of the attached property.

The Court reassessed the deceased’s income at ₹2,500 per month, observing that strict documentary proof was not mandatory for an unorganised-sector worker and that the income had to be determined on a reasonable and probable basis.

Since the deceased was 22–23 years old, 40% was added towards future prospects, resulting in a monthly income of ₹3,500.

Treating both the wife and father as dependants, the Court deducted one-third towards personal expenses and applied a multiplier of 18, resulting in a loss of dependency of ₹5,03,928.

It additionally awarded ₹70,000 to the wife under conventional heads and ₹40,000 to the father towards filial consortium, making the total compensation ₹6,13,928.

Although the evidence from the DTO, Sangrur, established serious discrepancies in the licence records—including the absence of regular entries, the later affixation of a photocopy, and inconsistency between old licence numbers 5151 and 5152—the Court upheld the finding that the licence was not genuine.

However, it held that the Insurance Company had not proved that the owner knowingly permitted the driver to operate the vehicle with a fake licence or had otherwise committed a wilful breach of the policy conditions. Therefore, the fake licence alone could not justify either exoneration of the insurer or a direction to recover the compensation from the owner.

The compensation was enhanced by ₹3,32,000, representing the rounded difference between the reassessed compensation of ₹6,13,928 and the Tribunal’s award of ₹2,81,500.

The enhanced amount was directed to carry interest at 9% per annum from 7 August 2000 until realization.

Respondents Nos. 1 to 3—the driver, owner, and Insurance Company—were held jointly and severally liable, and the Insurance Company was held liable to indemnify the insured without any right of recovery.

Out of the enhanced compensation, ₹1,00,000 with proportionate interest was directed to be paid to the deceased’s father, with the balance payable to his wife.

Since the insurer was held liable to indemnify the owner, the attached property of the owner was ordered to be released under the application filed under Section 151 CPC.