The Supreme Court has held that the insurance company cannot repudiate the claim of a vehicle owner merely because the driver was possessing a fake licence.
The bench of Justices Navin Sinha and Krishna Murari said that 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
The bench was considering an appeal filed by the complainant against NCDRC order which absolved the Insurance Company of its liability since no record of the licence of the Driver was found with the licencing authority. The issue considered by the bench was about the extent of care/diligence expected of the employer/insured while employing a driver?
The Court noted that, in United India Insurance Co. Ltd. vs. Lehru & Ors.,wherein it was held 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.
"While hiring a driver the employer is expected to verify if the driver has a driving licence. If the driver produces a licence which on the face of it looks genuine, the employer is not expected to further investigate into the authenticity of the licence unless there is cause to believe otherwise. If the employer finds the driver to be 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) and the Insurance Company would be liable under the policy. It would be unreasonable to place such a high onus on the insured to make enquiries with RTOs all over the country to ascertain the veracity of the driving licence."
The Court clarified that if the Insurance Company is able to prove that the owner/insured was aware or had notice that the licence was fake or invalid and still permitted the person to drive, the insurance company would no longer continue to be liable.
Case name: NIRMALA KOTHARI vs. UNITED INDIA INSURANCE CO. LTDCase no.: CIVIL APPEAL NOS. 1999-2000 OF 2020Coram: Justices Navin Sinha and Krishna MurariCounsel: Adv Jasmeet Singh (AOR)
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