Iffco Tokyo General Insurance Co. Ltd. Vs. Geeta Devi And Ors. - (Supreme Court) (30 Oct 2023)

Unless licence is demonstrably invalid, burden is upon insurer to prove failure on part of vehicle owner

MANU/SC/1194/2023

Motor Vehicles

IFFCO Tokio General Insurance Co. Ltd. seeks to assail the order of the Delhi High Court thereby, the High Court reversed the Award dated 6th July, 2018 passed by the Motor Accident Claims Tribunal, to the extent it granted the right of recovery to the Petitioner-insurance company. Aggrieved by the denial of such right of recovery, the Petitioner-insurance company is before present Court.

In Ram Chandra Singh vs. Rajaram and others, present Court found that no attempt was made to ascertain whether the owner was aware of the fake driving licence possessed by the driver and held that it is only if the owner was aware of the fact that the licence was fake but still permitted such driver to drive the vehicle that the insurer would stand absolved. It was unequivocally held that the mere fact that the driving licence was fake, per se, would not absolve the insurer.

In present case, it may be noted that the Petitioner-insurance company did not even raise the plea that, the owner of the vehicle allowed Ujay Pal to drive the vehicle knowing that his licence was fake. Its stand was that, the accident had occurred due to the negligence of the victim himself. Further, the insurance policy did not require the vehicle owner to undertake verification of the driving licence of the driver of the vehicle by getting the same confirmed with the RTO. Therefore, the claim of the Petitioner-insurance company that it has the right to recover the compensation from the owners of the vehicle, owing to a willful breach of the condition of the insurance policy, viz., to ensure that the vehicle was driven by a licenced driver, is without pleading and proof.

Once a seemingly valid driving licence is produced by a person employed to drive a vehicle, unless such licence is demonstrably fake on the face of it, warranting any sensible employer to make inquiries as to its genuineness, or when the period of the licence has already expired, or there is some other reason to entertain a genuine doubt as to its validity, the burden is upon the insurance company to prove that there was a failure on the part of the vehicle owner in carrying out due diligence apropos such driving licence before employing that person to drive the vehicle. Presently, no evidence has been placed on record whereby an inference could be drawn that the deceased vehicle owner ought to have gotten verified Ujay Pal’s driving licence.

Therefore, it was for the petitioner-insurance company to prove willful breach on the part of the said vehicle owner. As no such exercise was undertaken, the Petitioner-insurance company would have no right to recover the compensation amount from the present owners of the vehicle. The impugned order passed by the Delhi High Court holding to that effect, therefore, does not brook interference either on facts or in law. Petition is accordingly dismissed.

Tags : COMPENSATION INSURER RIGHT TO RECOVER