Vehicle Owners Can't Be Expected To Make Enquiries With RTOs All Over Country To Cross Check Validity Of Driver's License: J&K&L High Court

The Jammu and Kashmir and Ladakh High Court has recently held that it is open to insurance company to take a defence in a claim petition under MV Act that the driver of offending vehicle was not duly licenced, but it is required to prove such a plea.

A bench of Justice Vinod Chatterji Koul observed,

"Nevertheless, even after proving that licence was a fake one, it is to be looked into that the owner of vehicle while hiring a driver checked the licence and satisfied himself as to competence of driver and if the owner is drew such satisfaction from the DL no breach u/s 149 of the said will stand attracted".

The bench was hearing a challenge thrown in an appeal to an award dated passed by Motor Accident Claims Tribunal, Anantnag, in a claim petition. The appellant was mainly aggrieved of the finding of the Tribunal whereby Licence Clerk had stated before the Tribunal that the driving licence of driver was not genuine, so official witness supported the contention of respondent that driver of offending vehicle was not having valid and effective driving licence at the time of accident and the Tribunal, accordingly, directed payment of compensation by respondent Insurance Company with right of recovery from owner of offending vehicle.

The appeal preferred by owner of the offending vehicle submitted that the burden of proof on Insurance Company was not restricted to establishing mere breach of insurance policy terms and conditions but to establish wilful breach of such conditions. The appellant further argued that the Insurance Company has not proved the factum of wilful breach and negligence on the part of owner/appellant qua genuineness of driving licence held by respondent no.6/driver of offending vehicle and the appellant was never given an opportunity to cross-examine the witnesses produced by claimants/respondents.

The moot question that fell for adjudication was as to what is the responsibility and duty of an owner of a vehicle while engaging and/or appointing a driver therefor.

Dealing with matter in hand the bench observed when insured has done everything within his power inasmuch as he has engaged a licenced driver and has placed the vehicle in charge of licenced driver, with the express or implied mandate to drive himself, it cannot be said that the insured is guilty of any breach. Unless insured is at fault and is guilty of a breach, insurer cannot escape from obligation to indemnify insured and successfully contend that it is exonerated having regard to the fact that promisor/insured committed a breach of his promise, the bench underscored.

Deliberating on the contention of the appellant that even if the contention of respondent-Insurance Company qua validity and effectiveness of driving licence of driver of offending vehicle is taken into account, yet respondent-Insurance Company has not established or proved that owner/appellant was aware of the fact that driver of offending vehicle was not holding driving licence, and still permitted him to drive the vehicle, the bench observed that it is undoubtedly open to insurance company to take a defence in a claim petition that driver of offending vehicle was not duly licenced, but it is required to prove such a plea. Nevertheless, even after proving that licence was a fake one, it is to be looked into that the owner of vehicle while hiring a driver checked the licence and satisfied himself as to competence of driver, the bench explained.

"It would be strange that insurance companies would expect owners to make enquiries with RTOs, which are spread all over the country, whether driving licence shown to them is valid or not. Thus, where owner has satisfied himself that driver has a licence and is driving competently, there would be no breach of Section 149 (2)(a) (ii) and the insurance company would not then be absolved of its liability", the bench observed.

Applying the stated position of law to the instant case the bench observed that when the present case is looked into, owner of offending vehicle had gone through the driving licence and, as such, satisfied himself. In such circumstances, holding the owner liable to pay compensation or giving recovery right to insurance company to pay compensation is against the settled legal position and to this extent impugned Award is liable to be set-aside.

Allowing the appeal the bench set aside the order of the tribunal to the extent it gives right of recovery to respondent-United India Insurance Company Limited

Case Title : Mohammad Abbas wani Vs Sharifa & Ors.

Citation : 2022 LiveLaw (JKL) 158

Click Here To Read/Download Judgment