Employer is not liable for breach of policy if they verified the driver’s skills and apparent license genuineness.

The New India Insurance Company (Appellant) challenged the award dated 28.02.2019 passed by the 4th Additional Motor Accident Claims Tribunal, Raipur

The Tribunal had awarded compensation to the claimants (Respondents No. 1–4) for a motor accident involving a truck owned by Ranjeet Kumar Gupta and driven by Lav Sharma

The Insurance Company sought to be exonerated from liability on the ground that the driver of the offending vehicle possessed a fake driving license

The owner of the vehicle (NAW-1) testified that he had verified the driver's license and driving skills before employment

1. Whether the Insurance Company can be exonerated from liability to pay compensation solely on the basis that the driver’s license was fake, despite the owner having verified the driver's skills and license at the time of hiring

principles governing the liability of insurers under Section 149(2)(a)(ii) of the Motor Vehicles Act, 1988

Nirmala Kothari v. United India Insurance Company Limited (2020), which established that an employer is only expected to verify if a license looks genuine on its face and is not required to investigate its authenticity with the RTO unless there is cause for suspicion

Rishi Pal Singh v. New India Assurance Co. Ltd. (2022), which held that an owner must verify driving skills but is not expected to verify the genuineness of the license with the issuing authority before appointment

The Court analyzed the testimony of the vehicle owner, Ranjeet Gupta, who appeared as NAW-1 and confirmed that he had physically checked Lav Sharma’s license and tested his driving competence before handing over the vehicle

Applying the Nirmala Kothari doctrine, the Court reasoned that since the driver appeared competent and the license was produced, there was no "willful negligence" on the part of the owner

the Appellant/Insurance Company failed to prove that the owner was aware or had notice that the license was fake

The Court found that placing a high onus on the insured to verify records from RTO offices across the country would be "unreasonable"

the Tribunal’s finding that the owner acted with due diligence was legally sound

The appeal filed by the Insurance Company was dismissed, and no costs were awarded