Chandigarh

DF-II

CC/204/2020

Bestway Cabs Services Private Ltd., - Complainant(s)

Versus

United India Insurance Company Limited - Opp.Party(s)

Adv. kamal Kant Verma

19 Dec 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-II, U.T. CHANDIGARH

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Consumer Complaint  No	:	204 of 2020
Date  of  Institution	:	20.03.2020
Date   of   Decision	:	19.12.2024

 

 

 

 

Bestway Cabs Services Private Ltd. SCO No.1072-73, Cabin No.8, Sector 22-B, Chandigarh through its Proprietor Rahul Mittal.

             … … … Complainant

 

Versus

 

United India Insurance Company Limited, SCO No.855, 1^st Floor, NAC Manimajra, Chandigarh through its Branch Manager.

   … … … Opposite Party

BEFORE:  MR.AMRINDER SINGH SIDHU,       PRESIDENT

                MR.BRIJ MOHAN SHARMA,     MEMBER

                               

Argued by:    Ms.Nilakshi Joseph, Counsel for Complainant.

Sh.Sukaam Gupta, Counsel for Opposite Party(OP).

 

 

ORDER BY AMRINDER SINGH SIDHU, M.A.(Eng.),LLM,PRESIDENT

 

1]       The complainant has filed the present complaint pleading that he purchased one Toyota Etios Car in the year 2015 and the same was registered as Taxi vide Reg.No.CH02AA-1838. Copy of the Registration Certificate is annexed with the complaint as Annexure C-1. The said car was insured with the OP for the period 18.07.2017 to 17.07.2018. Copy of the Policy is annexed with the complaint as Annexure C-2. Sh.Bikrampal Singh was employed as driver, who was holding a valid driving licence (Annexure C-3).

 

    It is pleaded that on 18.05.2019 at about 7.00 PM, the car in question met with an accident at Sundernagar when it was going from Chandigarh to Manali and one Himachal Roadways Bus No.HP66A-2580 hit the car in question resulting to which the car was badly damaged and declared total loss by the repairer. On the next day i.e. 19.05.2018 due information was given to the nearest registered office of OP at Hamirpur(HP), spot survey was conducted by Sh.Deepak Sood, Surveyor and under the instructions of OP vide e-mail dated 16.08.2018 (Annexure C-4), the Spot Surveyor submitted his report to the OP (Annexure C-5). The OP appointed Sh.Vinod Sharma as Final Surveyor, who demanded some documents from the complainant vide e-mail dated 26.05.2018 (Annexure C-6) and the same were supplied on the same day vide e-mail dated 26.05.2018 (Annexure C-7) and thereafter the Final Surveyor submitted the final survey report to the OP.

 

    It is pleaded that the complainant sent e-mail dated 15.10.2019 (Annexure C-8) and letter dated 15.10.2019 (Annexure C-9) to the OP by courier to settle the claim but no reply was received. A letter dated 01.11.2019 (Annexure C-10) was also written by the complainant to the OP to settle his claim but no effect. Alleging the aforesaid act of OP deficiency in service and unfair trade practice on their part, the present complaint has been filed by complainant with a prayer to direct the OP to pay the amount of sum assured i.e. Rs.5,80,000/- along with interest, compensation for mental agony & harassment and cost of litigation.    

 

2]       The OP in their written version, while admitting the factual matrix of the case, have stated that after receiving the intimation with regard to the accident of the vehicle in question, OP deputed the Surveyor namely Sh.Vinod Kumar Sharma to assess the loss and subsequently deputed the Investigator Sh.Dhan Prakash Sherwal to verify the particulars with regard to driving licence of the driver namely Bikrampal Singh. The Surveyor assessed the loss to the tune of Rs.2,80,000/- on net of salvage basis and submitted his survey report. It is stated that after receiving the survey report, OP also received the investigation report of the Investigator and as per investigation report, concerned Licensing Authority, Ferozpur Jhikra, Haryana, has stated that the driving licence of the driver on wheels at the time of accident i.e. Bikrampal Singh has not been issued from the said Licensing Authority. It is stated that since the driver of the vehicle at the relevant time of accident was not holding a valid and effective driving license, which is breach of terms and conditions of the insurance policy, the claim of the complainant was not payable. It is further stated that in the present complaint, the claim is for own damage and as per Section 3(1) of the Motor Vehicle Act, 1988, no person shall drive a motor vehicle in any public place unless he hold an effective license issue to him authorized him to drive the vehicle. In the case of own damage, the driver must have possessed valid licence otherwise he is not entitled to insurance. Denying any deficiency in service or adoption of unfair trade practice on their part, a prayer for dismissal of the complaint has been made by OP.

        

3]       Replication has also been filed by the complainant controverting the assertions of OP as made in their written version.

 

4]       Parties led evidence in support of their contention.

 

5]       We have heard the learned counsels for the parties and have gone through entire documents on record.

 

6]       In this case, the main contention of the OP is that the driver of the vehicle in question which met with an accident was not having a valid driving licence, alleging that the driving licence of the said driver, which is purported to be issued by the Licensing Authority, Firozpur Zirkha (Hr.) is a fake one.  Complainant from his side has placed on record copy of the driving licence of Mr.Bikrampal Singh, which was valid upto 12.07.2035 for Non-Transport and valid upto 12.07.2020 for Transport. In this case, the accident took place on 18.05.2018, hence at the time of accident, as per the contention of the complainant, the driver was having a valid licence. It is the contention of the OP that the licence held by the driver Bikrampal Singh was a fake one.  Hence, being in violation of the Motor Vehicle Act, the claim of the complainant is not payable.   

       

7]       It is established on record that Sh.Bikrampal Singh possessed a M.C. with Gear, LMV-NT-Car, LMV-T-Car Driving License issued by the Licensing Authority, Firozpur Zirkha (Hr.) valid upto 12.07.2035 for Non-Transport and valid upto 12.07.2020 for Transport. The burden of proof lay upon the Insurance Company to demonstrate that the driver did not possess a valid and effective driving license at the time of the accident. It was observed by the Hon'ble Supreme Court in Nirmala Kothari vs. United India Insurance Co. Ltd. (2020) 4 SCC 49 that the mere existence of a fake driving license does not absolve the insurance company of liability, as they are further obligated to prove that the vehicle owner failed to exercise reasonable care in employing the driver. Furthermore, if the owner exercised due diligence in verifying the driver's credentials at the time of employment, they are not obliged to verify the authenticity of the license from the licensing authority. The owner diligently inspected the driver's license at the time of employment, thus fulfilling their duty of reasonable care. There is no evidence to suggest that the insurer (OP) directed the owner to conduct further verification of the licence. Moreover, there is no evidence on record indicating that the insurer alerted the owner prior to the accident regarding the alleged fraudulent nature of the driver's licence. In this case, the Hon'ble Supreme Court further observed that the Insurance Company is liable to indemnify the Insured unless it can prove that there was willful negligence on the part of the Insured in employing the driver regarding the veracity of the Driving License. Relevant portion of the order are reproduced below:-

 

"9. Having set forth the facts of the present case, the question of law that arises for consideration is what is the extent of care/diligence expected of the employer/insured while employing a driver? To answer this question, we shall advert to the legal position regarding the liability of the Insurance Company when the driver of the offending vehicle possessed an invalid/fake driving licence. In the case of United India Insurance Co. Ltd. vs. Lehru & Ors. a two Judge Bench of this court has taken the view that the Insurance Company cannot be permitted to avoid its liability on the ground that the person driving the vehicle at the time of the accident was not duly licenced. It was further held that the willful breach of the conditions of the policy should be established. The law with this respect has been discussed in detail in the case of Pepsu RTC vs. National Insurance Co. We may extract the relevant paragraph from the Judgment: (Pepsu case, SCC pp. 223-24, para10)   "In a claim for compensation, it is certainly open to the insurer under Section 149(2)(a)(ii) to take a defence that the driver of the vehicle involved in the accident was not duly licensed. Once such a defence is taken, the onus is on the insurer. But even after it is proved that the licence possessed by the driver was a fake one, whether there is liability on the insurer is the moot question. As far as the owner of the vehicle is concerned, when he hires a driver, he has to check whether the driver has a valid driving licence. Thereafter he has to satisfy himself as to the competence of the driver. If satisfied in that regard also, it can be said that the owner had taken reasonable care in employing a person who is qualified and competent to drive the vehicle. The owner cannot be expected to go beyond that, to the extent of verifying the genuineness of the driving licence with the licensing authority before hiring the services of the driver. However, the situation would be different if at the time of insurance of the vehicle or thereafter the insurance company requires the owner of the vehicle to have the licence duly verified from the licensing authority or if the attention of the owner of the vehicle is otherwise invited to the allegation that the licence issued to the driver employed by him is a fake one and yet the owner does not take appropriate action for verification of the matter regarding the genuineness of the licence from the licensing authority. That is what is explained in Swaran Singh's case (supra). If despite such information with the owner that the licence possessed by his driver is fake, no action is taken by the insured for appropriate verification, then the insured will be at fault and, in such circumstances, the insurance company is not liable for the compensation."

 

 

8]       While the insurer can certainly take the defence that the licence of the driver of the vehicle at the time of accident was invalid/fake, however, the onus of proving that the insured did not take adequate care and caution to verify the genuineness of the licence or was guilty of willful breach of the conditions of the insurance policy or the contract of insurance lies on the insurer.

9]                  It has been held in the case of National Insurance Co. Ltd. vs. Swaran Singh & Ors.(SCC pp.341, para 110) that:-

"110. (iii)...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 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 condition of the policy regarding use of vehicles by a duly licenced driver or one who was not disqualified to drive at the relevant time."

 

10]      The owner of the vehicle is expected to verify the driving skills of the driver and if the driver produces a licence which on the face of it looks genuine, the owner/employer is not expected to further verify/investigate the genuineness/authenticity of the driving licence before appointing a driver unless there is cause to believe otherwise. If the owner/employer is satisfied that the driver is competent to drive the vehicle and has satisfied himself that the driver has a driving licence there would be no breach of Section 149(2)(a)(ii) of the Motor  Vehicle Act and the Insurance Company would be liable under the policy.

11]      Not only this, it is usual with the insurance company to show all types of green pastures to the customer at the time of selling insurance policies, and when it comes to payment of the insurance claim, they invent all sorts of excuses to deny the claim. In the facts of this case, ratio of the decision of Hon’ble Apex Court in case of Dharmendra Goel Vs. Oriental Insurance Co. Ltd., III (2008) CPJ 63 (SC) is fully attracted, wherein it was held that, Insurance Company being in a dominant position, often acts in an unreasonable manner and after having accepted the value of a particular insured goods, disowns that very figure on one pretext or the other, when they are called upon to pay compensation.  This ‘take it or leave it’, attitude is clearly unwarranted not only as being bad in law, but ethically indefensible.  It is generally seen that the insurance companies are only interested in earning the premiums and find ways and means to decline claims.

12]      In similar set of facts the Hon’ble Punjab & Haryana High Court, Chandigarh in case titled as New India Assurance Company Limited Vs. Smt.Usha Yadav & Others, 2008(3) RCR (Civil) Page 111 went on to hold as under:-

“It seems that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. All conditions which generally are hidden, need to be simplified so that these are easily understood by a person at the time of buying any policy.  The Insurance Companies in such cases rely upon clauses of the agreement, which a person is generally made to sign on dotted lines at the time of obtaining policy. Insurance Company also directed to pay costs of Rs.5000/- for luxury litigation, being rich”

 

13]      In view of the above discussion, it can be safely concluded that the act of OP/Insurer in not paying the genuine claim of the complainant is not only wrong and arbitrary but also certainly amounts to deficiency in service as well as unfair trade practice by OPs. The complaint of the complainant is partly allowed. OP is directed to pay the amount of sum assured i.e. Rs.5,80,000/- to the complainant along with interest @ 6% per annum from the date of filing of this complaint i.e. 20.03.2020 till the date of its actual realization.

 

    The above said order shall be complied with by the OP within a period of 45 days from the date of receipt of certified copy of this order.

 

14]      The pending application(s) if any, stands disposed of accordingly.

 

        The Office is directed to send certified copy of this order to the parties, free of cost, as per Rules under The Consumer Protection Rules, 2020. After compliance file be consigned to record room.

Announced

19.12.2024                                                               

 

 (AMRINDER SINGH SIDHU)

PRESIDENT

 

 

 

 (BRIJ MOHAN SHARMA)

MEMBER

as