JUSTICE SUDIP AHLUWALIA, MEMBER

2. The factual background, in brief, is that the Complainant’s truck bearing No. BR-24-G-0344 was insured with the Petitioner/Insurance Company, covering risks related to Own Damage and Third Party claims. On 10.07.2003, while the truck was traveling from Sundergarh, Orissa towards Jhareguda, Orissa, it encountered a rashly driven truck approaching from the wrong side of the road. To avoid a collision, the driver of the Complainant’s truck maneuvered abruptly, causing the vehicle to overturn. The Police were promptly informed, and an intimation of the accident was also given to the nearest branch office of the Petitioner/Insurance Company. Subsequently, a Surveyor was appointed to assess the damage. After inspecting the truck, it was taken to a garage for repairs, and an estimate amounting to Rs.1,33,934/- was prepared. The Complainant, anticipating the settlement of the claim, was later served with a letter dated 14.10.2008, from the Petitioner/Insurance Company, repudiating the claim. The repudiation was based on the assertion that the Driver’s License was found to be fake. Aggrieved by wrongful repudiation of the claim by the Petitioner/Insurance Company, the Complainant filed his complaint before the Ld. District Forum, Rohtas at Sasaram.

3. The District Forum vide its Order dated 17.09.2013 partly allowed the complaint and directed the Petitioner/Insurance Company to pay to the Complainant the sum of Rs. 81,823/- i.e. 75% of Rs. 1,09,097/- along with Rs. 10,000/- towards mental agony and litigation costs. The Petitioner then filed Appeal before the Ld. State Commission, which dismissed it and affirmed the Order of the District Forum. The relevant extracts of the impugned Order are set out as below -

“6. Considering the submissions of both parties and on perusal of the order passed by the District Forum as also material brought on record, it appears that the District Forum has considered all aspects of the matter in right perspective. It is admitted fact that the vehicle in question which met an accident was insured by the appellant and met an accident during insurance period. The cost of repairing has been produced by the respondent for Rs. 1,09,097/- only. The only dispute is Driving license of the driver who was driving the Truck at the time of accident.

7. When an owner of a vehicle is hiring a driver, he checks whether the driver has driving License. If a driver produces a driving license which on the face of it looks genuine, the owner is not expected to find out whether the License has in fact been issued by a competent Authority or not. The owner then takes the test of driving. If he finds that the driver is competent to drive the vehicle, he hires the driver. But, here we find that the Insurance Company expects the owner to make enquiry with DTO/RTO which is spread all over the country. Whether the Driving License shown to them is valid or not …, where the owner is himself that the driver has a license and is driving competently, there will be no breach of section 149(2)(a)(ii). The Insurance Company will not then be absolved of ability. The appellant Insurance Company has not proved that the owner/insured was aware or had noticed that the License was fake and shall permitted that person to drive the vehicle.

8. In this view of the matter, we see no substance in this appeal. The appeal stands dismissed and the District Forum order is affirmed.”

 

4. Ld. Counsel for Petitioner has argued that there is no deficiency of service on the part of the Insurance Company. The repudiation of the claim was justified because the Driver of the insured vehicle was found to have a fake Driving License. This contravenes the terms and conditions under which the Insurance Policy was issued, as a genuine Driving License is a fundamental requirement for any claim involving vehicle damage, and the presence of a fake License constitutes a breach of the Insurance contract; That both the District Forum and the State Commission erred in their Orders. The District Forum, in holding the Insurance Company liable to indemnify the vehicle owner, failed to recognize the owner’s responsibility to verify the authenticity of the Driver's License. This is a fundamental duty of the vehicle owner, especially when hiring a Driver. The State Commission, by upholding the District Forum's Order, also did not rectify this oversight, and wrongly concluded that the vehicle owner had no obligation to check the validity of the Driver’s License; That during the proceedings before the State Commission, the Insured admitted to the License being fake. The Insured did not take any steps to prove that the License was genuine, which should have been his responsibility to establish the claim's legitimacy. This lack of effort to validate the License supports the Insurance Company’s decision to repudiate the claim; That the Surveyor conducted a thorough verification of the Driver's License from the concerned Regional Transport Office (RTO). The verification revealed that the License was actually issued to a different individual, and not to the driver of the Insured truck. This conclusive evidence demonstrates that the License was fake, and consequently, the driver did not possess a valid License at the time of the accident. Based on this evidence, the Insurance Company’s decision to repudiate the claim was in full compliance with the policy's terms and conditions. Thus, the responsibility for ensuring the validity of the Driver’s License lies with the insured, and the Insurance Company should not be held liable for the claim under these circumstances; That the Order of the District Forum, which was upheld by the State Commission needs to be set aside, as the claim was rightfully repudiated due to the breach of Policy conditions.

5. Ld. Counsel for Respondent has argued that that the State Commission correctly upheld the Order of the District Forum, which allowed the Complaint and ruled in favour of the Respondent. The State Commission's observation was based on the premise that when an owner of a vehicle hires a Driver, the owner's responsibility is to check if the Driver possesses a Driving License that appears genuine. The owner is not expected to investigate whether the License has been issued by a competent Authority or to verify its authenticity with the issuing Authority; That the Hon'ble Apex Court's judgment in "Rishi Pal Singh v. New India Assurance Co. Ltd. & Ors., CA No. 4919 of 2022" held that the vehicle owner is expected to verify the driving skills of the Driver and not to undertake the task of verifying the genuineness of the Driving License with the Licensing Authority before hiring a Driver. This judgment is directly applicable to the present case and supports the Respondent's position. Consequently, this Revision Petition should be rejected on these grounds; That the Respondent took reasonable steps to ensure the Driver's qualification by verifying that he had a Driving License and by assessing his driving skills. The Driver was tested and found competent to operate the vehicle, leading to his appointment as the truck Driver. At the time of the accident, there was no fault on the part of the Driver concerning his driving competence or conduct; That the Petitioner/Insurance Company’s contention that the owner of the vehicle should have verified the authenticity of the Driver’s License with the RTO is unrealistic and goes beyond the reasonable expectations placed on a vehicle owner. The owner had no reason to suspect that the License might be fake, as it appeared genuine, and the Driver demonstrated adequate driving skills. The responsibility for ensuring the authenticity of a Driving License should not rest solely on the vehicle owner. Since the Respondent took reasonable steps to verify the Driver’s credentials, the Petitioner’s claim that the License was fake does not justify repudiating the Insurance Claim.

6. This Commission has heard both the Ld. Counsel for Petitioner and Respondent, and perused the material available on record.

7. From the verification report obtained by the Petitioner/Insurance Company from the office of the Regional Transport Authority, Rourkela, Orissa (Annexure-P2), it was ascertained that the Driving License No. 3342/06 RKL dated 9.6.2006 had been issued in the name of one Yudhisthir Pradhan.  Consequently, it was concluded that the Driving License bearing the same number issued by the Licensing Authority, Rourkela in the name of Sangam Hasda, driver of the vehicle in question was fake.  It is seen from the Order of the Ld. District Forum dated 17.9.2013 that this contention was not considered adequately by the Forum. However, the State Commission in passing its impugned Order subsequently in the Appeal filed on behalf of the Insurance Company was of the opinion that even if the license of the Driver was not genuine, still the Insured/Owner of the vehicle could not be blamed for the same as it was for the Insurance Company to show that the Insured was actually aware that the license was fake, and had still permitted the concerned License Holder to drive the vehicle.  The relevant extracts from the Order of the Ld. State Commission are set out as below –

“7. When an owner of a vehicle is hiring a driver, he checks whether the driver has driving License. If a driver produces a driving license which on the face of it looks genuine, the owner is not expected to find out whether the License has in fact been issued by a competent Authority or not.  The owner then takes the test of driving.  If he finds that the driver is competent to drive the vehicle, he hires the driver.  But, here we find that the Insurance Company expects the owner to make enquiry with DTO/RTO which is spread all over the country. Whether the Driving License shown to them is valid or not …… (not legible), where the owner is satisfied himself that the driver has a license and is driving competently, there will be no breach of section 149(2)(a)(ii).  The Insurance Company will not then be absolved of ability.  The appellant Insurance Company has not proved that the owner/insured was aware or had noticed that the License was fake and shall permitted that person to drive the vehicle.”

 

8. In various Orders of the Hon’ble Supreme Court, it has been held that in a case of an Insurance Claim being raised by the Insured for own damage suffered, and not on account of a damage inflicted by a Third Party, the Insurer is absolved from its liability as soon as it is able to prove that the License was a fake one, irrespective of whether or not it was so within the knowledge of the Insured. The relevant decisions in this regard cited on behalf of the Petitioner are mentioned below –

a. Oriental Insurance Co. Ltd. Vs. Prithvi Raj,1(2008) CPJ 33 (SC)

b. National Insurance Co. Ltd. Vs. Meena Aggarwal, Civil Appeal No. 396 of 2009 , MANU/SC/0070/2009;

c. National Insurance Co. Ltd. Vs. Harbhajan, Civil Appeal No. 3501 of 2004;

d. National Insurance Co. Ltd. Vs. Laxmi Narain, MANU/SC/1233/2007.

9. From his side the Ld. Counsel for the Respondent/Complainant has relied upon a recent decision of the Hon’ble Supreme Court in Civil Appeal No. 4919 of 2022 on 26.7.2022 in which it was observed inter alia –

“The owner of the vehicle is expected to verify the driving skills and not run to the licensing authority to verify the genuineness of the driving license 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 license issued to the driver.”

10. The aforesaid decision however is not helpful for the Respondent in the present case, since it admittedly arises out of a Motor Accident Claim case in which compensation had been awarded in favour of a third party who had been injured, and not the owner of the vehicle/Insured himself.

11. Consequently, this Commission is of the view that both the Ld. Fora had acted erroneously in allowing the Insurance Claim which was for the Owner’s on damage, and not a Third Party damage, once it was established that the License had held by the Driver (Sangam Hasda) of the vehicle in question was not genuine, whether or not the Insured was himself aware of this fact.

12. Consequently, the Revision Petition is allowed after setting aside the Orders of both the Ld. Fora below and the Complaint filed on behalf of the Respondent stands dismissed. Parties to bear their own costs,

13. Pending application(s), if any, also stand disposed off as having been rendered infructuous.