What the Supreme Court ruled on Insurer’s liability when Driving Licence is fake

The Supreme Court today reiterated that the mere fact that the driving licence of a driver, who was involved in an accident, is fake, would not per se, absolve the insurer of liability..Only if the owner was aware of the fact that the driving licence was fake and still permitted the driver to drive the vehicle would the insurer stand absolved..The judgment was passed by a Bench Chief Justice of India, Dipak Misra and Justice AM Khanwilkar..By way of background, the respondents in the case had filed a motor accident claim before the Motor Accident Claims Tribunal, Firozabad, consequent to the death of one Sanoj Kumar on account of motor accident. Kumar was going for his morning walk, when the driver of a Bolero driving the vehicle at a high speed and in a rash and negligent manner, hit him from behind leading to his death..The Tribunal partly allowed the claim petition and awarded compensation amount of Rs. 6,27,000, but absolved the Oriental Insurance Company Ltd. (insurer) on the finding that the offending vehicle was driven by one Shivgyani (respondent No.6) who did not have a valid driving licence..The Tribunal, however, directed the insurer to pay the compensation amount with liberty to recover the same from the vehicle owner (appellant in Supreme Court) and the driver jointly and severally..The appellant, being the vehicle owner, filed an appeal before the Allahabad High Court which was dismissed on the finding that the counsel for the appellant did not dispute that the driving licence was found to be fake and no evidence was adduced before the Court to show that the driving licence was genuine. This was the subject matter of challenge in the appeal before the Supreme Court..It was contended by the appellant that the Tribunal could not have absolved the insurer and made the owner of the vehicle liable, in the absence of a clear finding that the owner of the vehicle was aware of the factum of fake licence and despite the same, made no attempt to take corrective measures..The counsel for the insurer, however, submitted that the appellant having admitted the fact that the driving licence was fake and failing to produce any other evidence to prove otherwise, cannot be heard to make any grievance about the finding recorded by the Tribunal and affirmed by the High Court absolving the insurer of the any liability..The Court adverted to various judgments and proceeded to hold that it is well established that if the owner was aware of the fact that the licence was fake and still permitted the driver to drive the vehicle, then the insurer would stand absolved. However, the mere fact that the driving licence is fake, per se, would not absolve the insurer..“Indubitably, the High Court noted that the counsel for the appellant did not dispute that the driving licence was found to be fake, but that concession by itself was not sufficient to absolve the insurer.”.Neither the Tribunal nor the High Court has bothered to analyse the pleadings and evidence adduced by the parties on the crucial matter, the Court noted..It, therefore, remanded the matter back to the High Court for fresh consideration of the appeal filed by the appellant only on the question of liability of the owner or of the insurer to pay the compensation amount..Read the judgment below.