CONSUMER DISPUTES REDRESSAL COMMISSION – X

GOVERNMENT OF N.C.T. OF DELHI

Udyog Sadan, C – 22 & 23, Institutional Area

(Behind Qutub Hotel)

New Delhi – 110016

Case No.660/09

M/s. IRVINE TECHNOLOGIES INC.,

811, HEMKUNT TOWER, 98, NEHRU PLACE,

NEW DELHI – 110019., THROUGH ITS PARTNER

SH. ANJANI KUMAR MISHRA                             …..COMPLAINANT

Vs.   

M/S. RELIANCE GENERAL INSURANCE COMPANY LTD.

60, SECOND FLOOR, OKHLA INDUSTRIAL ESTATE,

NEW DELHI – 110020., THROUGH ITS GENERAL MANAGER

SERVICE ALSO TO BE EFFECTED AT:-

M/s. RELIANCE GENERAL INSURNCE COMPANY LTD.,

202-201, SECOND FLOOR, MERCHANTILE HOUSE,

15 K.G. MARG, NEW DELHI-110001.

THROUGH GENERAL MANAGERS                        ....RESPONDENT

 Date of Institution-05/09/2009

              Date of Order- 05/08/2022

 O R D E R

RASHMI BANSAL- MEMBER

The present complaint filed on behalf of the complainant against repudiation of insurance claim of his vehicle by OP on the ground that driver was not having the legal and valid driving license at the time of accident.

The complainant is a partnership concern as per partnership deed, Ex. CW1/A, and owner of a car make Honda city with registration in its name, Ex. CW1/B, duly insured with OP for a period from 18.01.2009 to 17.01.2010, vide policy Ex. CW1/C. The said car met with an accident on 02.02.2009 and OP was intimated on 03.02.2009. Under the instructions of the OP, the car was given to service centre for repair work on 05.02.2009, in the presence of surveyor of OP who inspected and surveyed the car and also signed on the job card, Ex. CW1/D. The service centre sent bills to OP along with letter dated 4.05.2009, Ex. CW1/E, asking for payment so that complainant can take delivery of the car. OP failed to make payment of the said bills despite many telephonic calls and reminder dated 30.04.2009, Ex. CW 1/F, therefore, the complainant has paid the said bill to the service center amounting to Rs. 2,78,093/- on 10.06.2009,  against invoices, Ex. CW1/G, by paying in two installments, one of Rs. 40,000/  through cheque on 13.02.2009, Ex. CW1/H and other of  Rs. 2,38,093/- paid in cash vide payment receipt no. 198 dated 10.06.2009, Ex. CW1/I. Since OP failed to reimburse the complainant of the above said amount, therefore a legal notice dated 20.07.2009, CW1/J, was issued to OP, by each possible mode, postal receipt, UPC and acknowledgement due card, Ex. CW1/K, CW1/L and CW1/M respectively, which was not replied to by OP.  Complainant stated that non -payment of repair charges by OP amounts to negligence and deficiency of services on the part of the OP and unfair trade practice as OP acted against business ethics and commercial dealing in view of the valid policy in favour of complainant, and therefore OP is liable to reimburse the said amount along with interest and to compensate him towards harassment, inconvenience and mental agony suffered by him as well as for the expenses incurred for using private conveyance in the absence of his car.

OP through his reply and evidence by way of affidavit admitted the policy in favour of complainant and the accident dated 02.02.2009 and stated that the complaint is not maintainable as the complainant has failed to disclose the material facts before this court. OP submitted that on filing the claim form by complainant, the surveyor and loss assessor assessed the loss, Ex. R1. While processing the claim it was found that at the time of accident, the vehicle was being driven by the driver without valid license. OP states that as per the policy conditions the person driving the vehicle must hold a valid license to drive the vehicle. The driving license of the complainant driver named Upendra Kumar Yadav, issued by licensing authority, Kolkata, West Bengal, was submitted with

OP, Ex. R2, which on verification turned out to be issued to one Mr. Pradip Kumar Roy and not to the driver of complainant. The report of the investigator is Ex. R3. Since there is fundamental breach of policy condition and violation of Section 3 of the Motor Vehicle Act, 1988, hence the claim of the complainant has been repudiated. OP submits that the driver was not authorised to drive the vehicle as he had no license in law at the time of accident. The OP further submits that the present case is not of a third party claim and is a case of own damage,  the applicant has to be vigilant in respect of terms and conditions of the policy as well as the provisions of the Motor Vehicle Act. The complainant has failed to bring to the notice of Commission that driving license was not valid for LTV as per the description of class of vehicle in the certificate of registration, therefore the owner of a vehicle cannot contend that he was not aware and has no liability to verify the fact as to whether the driver of the vehicle possessed a valid license or not. The repudiation letter was also sent vide letter dated 02.03.2009, Ex. R4.

Complainant has filed his rejoinder and vehemently denied that he ever knew that hired driver was holding a fake license. Complainant submits that this fact came to his knowledge only after reading the reply filed by the OP. The complainant further submits that complainant‘s duty before hiring the driver is to verify whether the driver knows driving, traffic rules and holding a driving license or not and in the present case the driver showed original driving license to the complainant and was a good driver aware with all traffic rules knowledge. The complainant alleged that the OP, in order to avoid its liability, has acted against business ethics and caused him severe losses.

Having heard the learned counsels for the parties, perusal of the documents on record filed by both the parties, it emerged that the only dispute between the parties is whether the claim of the complainant can be repudiated on the ground that the driver of the vehicle was not holding valid license at the time of accident?

The Apex Court in United India insurance Co Ltd versus Lehru and others, (2003) 3 SCC 338, has held “para 20: When an owner is hiring a driver he will therefore have to check whether the driver has a valid driving licence. If the driver produces a driving licence which on the face of it looks genuine, the owner is not expected to find out whether the license was in fact has been issued by a competent authority or not. The owner would then take the test of the

driver. If he finds that the driver is competent to drive the vehicle, he will hire the driver. We find it rather strange that Insurance Companies expect owners to make enquiries with RTO's, which are spread all over the country, whether the driving licence shown to them is valid or not. Thus, where the owner has satisfied himself that the driver has a licence and is driving competently, there would be no breach of section 149(2)(a)(ii). The insurance company would not then be absolved Of liability. It ultimately turns out that the license was fake, the insurance company would continue to remain liable unless the prove that the owner/insured was aware or had noticed that the license was free and still permitted that person to drive.”

Later, a three-judge bench of Hon'ble Supreme Court of India  in “National Insurance Co Ltd versus Sawaran Singh and others,” (2004) 3 SCC 297, has clarified that observations in ‘Lehru’ must not be read to mean that an owner of a vehicle can under no circumstances have any duty to make any enquiry in this respect and has observed that the insurer is required to establish willful breach on the part of the insured, by holding, that, “ We may wish to point out that the defense to the effect that the license held by a person driving a vehicle was a fake one, would be available to the insurance company, but whether despite the same, the plea of default on the part of the owner has been established or not would be a question which will have to be determined in each case.”

Further, “Mere absence, fake or invalid driving license 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 the 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 conditions of the policy regarding use of Vehicle by a duly licensed driver or one who was not disqualified to drive at the relevant time.”

This view was reiterated in Pappu and others versus Vinod Kumar Lamba and another, (2018) 3. SCC 208, wherein It was held that the onus would shift on the insurance company after the owner of the offending vehicle pleads and proves the basic facts within his knowledge that the driver of the offending vehicle was authorized by him to drive the vehicle and was having a valid driving license at the relevant time. The valid driving license is the license which is produced before the owner.

Relying on the ‘Lehru’ and ‘Sawaran Singh’, Hon'ble Supreme Court of India recently in Rishipal Singh versus new India assurance Co Ltd and others, civil appeal number 4919 of 2022, vide its order dated 26.07.2022 has held that “ The owner of the vehicle is expected to verify the driving skills and not run to the licensing authorities to verify the genuineness of the driving lessons before appointing a driver. Therefore, once the owner is satisfied that the driver is competent to drive the vehicle, it is not expected from the owner thereafter to verify the genuineness of the driving licence issued to the driver.” (Para 10).

In view of the established position of law, the insurance company cannot avoid its liability only by showing that the person driving at the time of accident was not duly licensed. The onus is always upon the insurance company to prove that the driver had no valid driving license and that there was willful violation or breach of  policy conditions by the owner of the vehicle.

Upon consideration of the facts and circumstances of the case, it cannot be said that the complainant committed any fault in appointing the driver who has shown his driving license and was found fit for driving after enquiry about the traffic rules and regulations.  Driver was having a license and complainant was having no other means to verify the same.

Since OP has failed to prove that the complainant had deliberately committed any breach of any condition of the policy as no evidence led by the OP, we allow the complaint and direct OP to pay to the complainant an amount of Rs. 2,78,093 (Rs. Two lakh, Seventy Eight Thousand and Ninety Three only) towards the amount paid by complainant for repairs along with interest at the rate of 6%  p.a. from the date of rejection till actual realisation of the amount, an amount of Rs. 25,000/- towards harassment, inconvenience, mental agony and financial loss caused to the complainant due to deficiency of service on the part of OP, and Rs. 25,000/- towards litigation cost. The above said order be complied with by OP within 90 days from the date of passing of the order, failing which  the entire amount shall carry an interest at the rate of 9% p.a. till actual payment to complainant.

Copy of order be given to the parties as per rules and thereafter file be consigned to record room. The order be uploaded on the website www.confonet.nic.in.

The consumer complaint could not be decided within the statutory period due to heavy pendency of Court cases.

The order contains 6 pages and bears my signature on each page.

(Dr. RAJENDER DHAR)              (RASHMI BANSAL)        (MONIKA SRIVASTAVA)

       MEMBER                                          MEMBER                           PRESIDENT