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Mere fact that the driving licence is fake, per se, would not absolve the insurer

In Ram Chandra Singh vs Rajaram, singular question involved in the appeal against the judgment and order of the High Court of Judicature at Allahabad was whether the Motor Accident Claims Tribunal,  was right in holding that the insurer was not liable as the driver had a fake licence.

In this matter, a claim was filed against death due to negligent driving was filed before the MACT which partly allowed the claim petition but absolved the insurer, Oriental Insurance Company Ltd. on the finding that the driver of the offending vehicle did not have a valid driving licence. The Tribunal, however, directed the insurer to pay the compensation amount as determined in terms of the award with liberty to recover the same from the vehicle owner (appellant herein) and the driver (respondent No.6) jointly and severally.

The appellant, being the vehicle owner, alone filed an appeal before the High Court of Judicature at Allahabad which was dismissed on the finding that the counsel for the appellant did not dispute that the driving licence was found to be fake and no evidence was adduced before the Court to show that the driving licence was genuine. 

The Supreme Court on appeal relegated the matter to the High Court for fresh consideration only on the question of liability of the owner or of the insurer  to pay the compensation amount and referring to judgments in PEPSU Road Transport Corporation Vs. National Insurance Company, and Premkumari and Ors. Vs. Prahlad Dev and Ors. held that suffice it to observe that it is well established that if the owner was aware of the fact that the licence was fake and still permitted the driver to drive the vehicle, then the insurer would stand absolved. However, the mere fact that the driving licence is fake, per se, would not absolve the insurer. Indubitably, the High Court noted that the counsel for the appellant did not dispute that the driving licence was found to be fake, but that concession by itself was not sufficient to absolve the insurer.

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