An insurer’s investigator report alone cannot establish wilful breach or justify recovery rights for a fake licence.

On 9 September 2009 at about 10:00 p.m., the deceased, aged 21 years, was riding a bicycle when he was hit from behind by an RTV vehicle. He sustained grievous injuries and subsequently died at GTB Hospital.

The Motor Accident Claims Tribunal, Karkardooma Courts, awarded compensation of ₹4,63,780 with interest at 7.5% per annum by award dated 21 March 2013 in MAC Petition No. 630/2010.

The Insurance Company appealed, contending that the driver possessed a fake licence and that it was entitled to recovery rights. It also challenged the computation of compensation on the basis of the principles subsequently laid down in *National Insurance Co. Ltd. v. Pranay Sethi*.

The vehicle owner asserted that he had tested the driver’s driving ability, found him competent, and had relied on the driving licence produced by him.

Whether the Insurance Company established a wilful breach of the insurance policy by proving that the offending vehicle was driven by a person holding a fake driving licence, so as to justify grant of recovery rights.

Whether the compensation awarded by the Tribunal required enhancement and recalculation in accordance with *Pranay Sethi* and subsequent applicable principles.

The Court applied the principles in *National Insurance Co. Ltd. v. Swaran Singh*, (2004) 3 SCC 297, and *United India Insurance Co. Ltd. v. Lehru*, (2003) 3 SCC 338, that the insurer bears the burden of proving a wilful breach by the insured and that the owner’s duty ordinarily extends to verifying that the driver possesses a driving licence and is competent to drive, but does not require independent verification from the licensing authority.

For computation of compensation, the Court applied *National Insurance Co. Ltd. v. Pranay Sethi*, (2017) 16 SCC 680, requiring 40% addition towards future prospects for a deceased below 40 years, use of the deceased’s age for selecting the multiplier, and standardized amounts under conventional heads.

It also applied *United India Insurance Co. Ltd. v. Satinder Kaur*, (2021) 11 SCC 780, under which no separate amount is awardable for loss of love and affection.

The Court held that the Insurance Company failed to prove the alleged fake licence and the requisite wilful breach. Its evidence consisted principally of an investigator’s testimony and report bearing an alleged endorsement from the Hisar Licensing Authority. However, the Licensing Authority itself was not summoned, the investigator could not establish his authorization by the insurer, and he could not identify the official who allegedly supplied the report.

Conversely, the owner testified that he had tested the driver, was satisfied with his driving competence, and had obtained a copy of the licence.

Applying *Swaran Singh* and *Lehru*, the Court found that this evidence was sufficient to negate a finding of wilful breach and declined to grant recovery rights.

On compensation, the Court substituted 40% rather than 30% for future prospects, applied a one-half deduction for personal expenses of the bachelor deceased, and used multiplier 18 based on the deceased’s age of 21 years rather than multiplier 14 based on the mother’s age.

It further awarded ₹80,000 for consortium to two claimants, ₹15,000 for loss of estate, and ₹15,000 for funeral expenses, while deleting the ₹25,000 awarded for loss of love and affection.

The compensation was enhanced from ₹4,63,780 to ₹7,07,240, resulting in an enhancement of ₹2,43,460.

The enhanced amount was directed to be deposited with accrued interest at 7.5% per annum from the date of filing of the claim petition within four weeks, for release to the claimants upon appropriate application.

If the original compensation had not already been deposited, it was also directed to be deposited with accrued interest; compliance was made a condition for refund of the statutory deposit.