NEW INDIA ASSURANCE CO. LTD. vs JASBIR SINGH & ANR.

The complainants/respondents, who are owners of truck No.HR38A/1924 got the said truck insured with the petitioner company. The aforesaid vehicle met with an accident on 29-06-2000 and got extensively damaged. The complainants claim to have spent a sum of Rs.2,50,000/- in getting the said truck repaired. However, the claim lodged by them with the insurance company was repudiated on the ground that Mr. Jasbir Singh, who was driving the vehicle at the time it met with an accident, did not possess a valid licence and the driving license which the insured had submitted was found to be a forged certificate.

Being aggrieved from the rejection of the claim the complainant approached the concerned District Forum by way of a complaint.

The complaint was resisted by the insurance company on the same ground on which the claim was repudiated. It was also pointed out in the reply that though the vehicle had met with the accident on 29-06-2000 the information to the insurance company was given only on 01-07-2000.

Vide its order dated 26-05-2004 the concerned District Forum directed the insurance company to pay a sum of Rs.1,56,000/- as compensation to the complainants along with interest at the rate of 12% per annum. Another sum of Rs.3,000/- was awarded to them as compensation for mental harassment and cost of litigation.

Being aggrieved from the order passed by the District Forum the petitioner company approached the concerned State Commission by way of an appeal. Vide impugned order dated 25-05-2010 the State Commission reduced the quantum of compensation to Rs.1,52,200/- and also reduced the interest rate to 7.5% per annum. However, the direction of the District Forum for payment of cost of litigation amounting to Rs.3,000/- was maintained. Being still dissatisfied the petitioner company is before us by way of this revision petition.

It is complainants'' own case that at the time the truck met with an accident it was being driven by one Jasbir Singh son of Nirmal Singh. A perusal of the reply to the revision petition filed by the complainant/respondent would show that the driving license provided to the insurance company was bearing No.4026/Hyderabad/82-83 and purported to be issued by Licensing Authority, Hyderabad. A perusal of the statement of Ms. Sunita, Clerk of Regional Transport Authority, Hyderabad recorded by Shri Gursagar Singh, Advocate, who was appointed as Local Commissioner by the District Forum, would show that no data of license No.4026/Hyderabad/82-83 was found in the office of the Regional Transport Authority, Hyderabad. It is, thus, evident that no such driving licence was issued by the said authority. Had any driving license bearing No.4026/Hyderabad/82-83 been issued by the Regional Transport Authority, Hyderabad, record/data to this effect would have been available with the said authority. Therefore, we have no hesitation in holding that Mr. Jasbir Singh who was driving the truck at the time it met with an accident did not possess a valid driving license and the driving licence which the complainants submitted to the insurance company was a forged document.

In National Insurance Co. Ltd. Vs. Laxmi Narain Dhut (2007) 3 SCC 700, the Hon''ble Supreme Court noted as under: " 24. In the background of the statutory provisions, one thing is crystal clear i.e. the statute is beneficial one qua the third party. But that benefit cannot be extended to the owner of the offending vehicle. The logic of fake licence has to be considered differently in respect of the third party and in respect of own damage claims.

The inevitable conclusion therefore is that the decision in Swaran Singh case has no application to own damage cases. The effect of fake licence has to be considered in the light of what has been stated by this Court in New India Assurance Co. V. Kamla. Once the licence is a fake one the renewal cannot take away the effect of fake licence. It was observed in Kamla case as follows: (SCC p. 347, para 12)

As a point of law we have no manner of doubt that a fake licence cannot get its forgery outfit stripped off merely on account of some officer renewing the same

with or without knowing it to be forged. Section 15 of the Act only empowers any licensing authority to ''renew a driving licence issued under the provisions of this Act with effect from the date of its expiry''. No licencing authority has the power to renew a fake licence and, therefore, a renewal if at all made cannot transform a fake licence as genuine. Any counterfeit document showing that it contains a purported order of a statutory authority would ever remain counterfeit albeit the fact that other persons including some statutory authorities would have acted on the document unwittingly on the assumption that it is genuine".

As noted above, the conceptual difference between third-party right and own damage cases has to be kept in view. Initially, the burden is on the insurer to prove that the licence was a fake one. Once it is established the natural consequences have to flow.

In view of the above analysis the following situations emerge:

The decision in Swaran Singh case has no application to cases other than third-party risks.

Where originally the licence was a fake one, renewal cannot cure the inherent fatality.

In case of third-party risks the insurer has to indemnify the amount, and if so advised, to recover the same from the insured.

The concept of purposive interpretation has no application to cases relatable to Section 149 of the Act.

The High Courts/Commission shall now consider the matter afresh in the light of the position in law as delineated above."

"In National Insurance Co. Ltd. Vs. Om Prakash Jain Civil Appeal No. 6248 of 2009 decided on 14.09.2009, the Hon''ble Supreme Court referring to its earlier decision in Laxmi Narain Dhut (supra) and Swaran Singh (supra) specifically held as under:

"In National Insurance Company Limited Vs. Laxmi Narain Dhut [2007 (3) S.C.C. 700], it has been clearly laid down that the decision in the case of National Insurance Company Ltd. Vs. Swaran Singh & Anr. [2004 (3) S.C.C. 297] has no application to the cases other than third-party risks and where originally licence was a fake, renewal thereof cannot validate the same. In the present case, the complaint was filed for damage of the vehicle of the insured and not the third party risk. The District Forum and State Commission have concurrently held that the original licence of the driver was fake. This being the position, the District Forum was justified in dismissing the complaint and the State Commission committed an error by awarding compensation to the respondent".

In the aforesaid case, the complaint was filed by the insured himself seeking compensation for the damage caused to his vehicle, which had met with an accident. It was found that the driving license possessed by the driver of the vehicle was a fake licence. The National Commission having decided in favour of the complainant, the matter was taken by the insurance company to the Apex Court. 10. In United India Insurance Co. Ltd. Vs. Davinder Singh (2007) 8 SCC 698, the respondent owned a vehicle which he had got insured from the appellant United India Insurance Co. Ltd. The said vehicle met an accident with a truck. It was being driven by a person, who did not possess a valid license. The owner of the vehicle filed a complaint before the District Forum, seeking compensation for the damages caused to his vehicle.

This Commission have ruled in his favour. The matter was taken to the Hon''ble Supreme Court by way of an appeal. Allowing the appeal filed by the insurance company, the Apex Court inter-alia held that the fora below had committed an error in holding the insurance company liable to indemnify the owner of the vehicle with regard to the losses sustained by him. During the course of the judgment, the Hon''ble Supreme Court, inter-alia observed as under:

"10. It is, thus, axiomatic that whereas an insurance company may be held to be liable to indemnify the owner for the purpose of meeting the object and purport f the provisions of the Motor Vehicles Act, the same may not be necessary in a case where an insurance company may refuse to compensate the owner of the vehicle towards his own loss. A distinction must be borne in mind as regards the statutory liability of the insurer vis-?-vis the purport and object sought to be achieved by a beneficent legislation before a forum constituted under the Motor Vehicles Act and enforcement of a contract qua contract before a Consumer Forum". In Oriental Insurance Co. Ltd. V. Meena Variyal (2007) 5 SCC 428, the Hon''ble Supreme Court referring to its earlier decision in Swaran Singh, 2004(3) SCC 297 held as under:

"It is difficult to apply the ratio of this decision to a case not involving a third party. The whole protection provided by Chapter XI of the Act is against third-party risk. Therefore, in a case where a person is not a third party within the meaning of the Act, the insurance company cannot be made automatically liable merely by resorting to Swaran Singh ratio. This appears to be the position. This position was expounded recently by this Court in Naitonal Insurance Co. Ltd. Vs. Laxmi Narain Dhut. This Court after referring to Swaran Singh and discussing the law summed up the position thus : (Laxmi Narain Dhut case, SCC p. 719 para 38) 38. In view of the above analysis the following situations emerge:

The decision in Swaran Singh case has no application to cases other than third-partly risks.

Where originally the licence was a fake one, renewal cannot cure the inherent fatality.

In case of third-party risks the insurer has to indemnify the amount and if so advised, to recover the same from the insured.

The concept of purposive interpretation has no application to cases relatable to Section 149 of the Act?".

The legal proposition emerges from the above referred decisions of the Hon''ble Supreme Court is that though the insurance company is liable to a third-party even if the vehicle, at the time it meets with an accident is being driven by a person who does not possess a valid driving licence, the position would be different in a case where compensation is sought by the insured himself, for the damage caused to his vehicle. Wherever, the insured himself is the claimant, the insurance company is not liable to reimburse him for the damage caused to the vehicle, if it is found that the driver of the vehicle did not possess a valid license at the time the vehicle met with an accident."

Since the driver who was driving the vehicle in question at the time it met with the accident did not possess a valid and genuine licence, the insured is not entitled to any payment from the insurance company. The impugned orders passed by the District Forum and the State Commission, therefore, cannot be sustained and the same are, accordingly, set aside and the complaint is dismissed. No order as to costs.