"Fake Or Invalid Driving Licenses Are Not Valid Defenses To Avoid Liability Of Insurer": J&K High Court [Read Judgment]

- the Jammu and Kashmir High Court stated in an appeal filed by National Insurance Company Limited (NICL) challenging the order of the Motor Accident Claims Tribunal, Jammu which had directed the appellant/insurer (NICL) to pay a sum of Rs. 88,045/- along with pendente lite and future interest at the rate of 7.5% per annum to the claimant for the injuries suffered by him in a motor vehicular accident caused due to rash and negligent driving of the offending vehicle by its driver.

The award of the Tribunal was primarily challenged by the National Insurance Company Limited on the ground that the driver of the offending vehicle was not holding a valid and effective driving license at the time of accident and therefore it is absolved of its liability to indemnify the insured i.e. owner of the offending vehicle. Moreover, it submitted that the Tribunal, after recording a finding that the license of the driver of the offending vehicle was fake, was not right in directing it to pay compensation to the claimant in indemnification of the insured.

The Bench comprising of Justice Sanjeev Kumar stated that the appeal had no substance as even though it was proved by NICL that the driving license of the driver of the offending vehicle was fake, he had not presented any evidence showing that the owner of the vehicle was aware that the driving license possessed by the driver was fake.

The Court noted that the Supreme Court in National Insurance Company Ltd v. Swaran Singh and Others (2004) had elaborately discussed the issue and stated that

" The breach of policy condition e.g., disqualification of driver or invalid driving licence of the driver, as contained in sub-section (2)(a)(ii) of section 149, have to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by duly licensed driver or one who was not disqualified to drive at the relevant time."

Also that

"The question as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver, (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case"

The Court relied on the above ruling of the Supreme Court to conclude that

"NICL succeeded in proving that the driving license held by the driver of the offending vehicle, at the time of accident, was fake. However, the evidence oral as well as documentary produced by the insurer before the Tribunal, nowhere suggests that the insured was guilty of negligence and had failed to exercise reasonable care before engaging respondent No.3 as driver to drive the offending vehicle to find out as to whether the driving license did not fulfill the requisites of law. That aside, it is also not the case of the insurer that the breach on the condition of license is so fundamental as is found to have contributed to the cause of accident."

The appeal was thus found devoid of any merit and was dismissed by the Court with a direction to release the amount due to the claimant in terms of the award of the Motor Accidents Tribunal after proper identification and verification.

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