Delhi High Court Shields Policyholders: Booklet Driving Licences Can't Be Branded 'Fake' Overnight

In a significant win for insurance claimants, the Delhi High Court has dismissed an appeal by The New India Assurance Company Ltd , upholding a trial court's order to pay Rs 13,77,500 plus 12% interest to M/s Kapoor Diesels Garage Pvt Ltd . The ruling, delivered by Justice Neena Bansal Krishna on March 30, 2026, clarifies that a driving licence in booklet form remains valid until the official conversion deadline to smart cards—rejecting the insurer's attempt to void a truck accident claim on flimsy grounds.

The ill-Fated Journey That Sparked the Battle

M/s Kapoor Diesels Garage Pvt Ltd, a transport business, insured its Tata LPT truck (HR-38S-9314) with New India Assurance from September 16, 2013, to September 15, 2014. Tragedy struck on July 11, 2014, when the vehicle crashed near Turuvanur (Jogi), Karnataka, resulting in total loss and the death of driver Salmu. An FIR (No. 0104/2014) was filed, and the owner promptly notified the insurer, submitting all documents including the surrendered registration certificate.

The claim for total loss stood at Rs 13,77,500. But the insurer repudiated it in January 2016, alleging Salmu's Nagaland-issued driving licence (No. 6737/TV/MKG/Prof, valid 08.01.2014 to 13.01.2016) was "fake" because it was a booklet, not a smart card, citing a Nagaland Transport Authority circular dated August 1, 2014.

The garage sued in 2017 (CS No. 972/2017), securing a decree on July 2, 2022. The insurer appealed (RFA 131/2023), leading to this high-stakes showdown.

Insurer's Stand: 'Fake Licence, No Payout'

New India Assurance argued a "gross breach" of policy terms: Salmu's licence, issued January 14, 2010, post a 2009 cutoff for booklets, violated the August 1, 2014 circular discontinuing manual formats after smart card introduction (effective October 30, 2009). They claimed he was under 20, not a Nagaland resident, and their investigator deemed it fake. Citing Abdul Salam v. Mazher Khan , they insisted post-deadline booklets were invalid, justifying repudiation.

Owner's Counter: Verification Trumps Assumptions

The respondent countered with solid proof: They verified the licence on April 23, 2015, with Nagaland authorities (Ex. PW1/H), confirming genuineness covering the accident date. The circular allowed conversion by December 1, 2014—five months after the crash. Salmu's DOB (August 4, 1991) made him 23 at the accident; no evidence disproved Nagaland residency. They stressed the insurer's burden to prove fakery, unmet here, and invoked settled law favoring claimants post-premium payment.

Decoding the Circular: Deadline Drama Unravels

Justice Krishna meticulously dissected the Nagaland notification, aimed at curbing fakes by mandating digitization by December 1, 2014. "The accident happened on 11.07.2014, i.e., prior to the last date for getting the driving licence converted," she noted, rejecting the insurer's misinterpretation. No Transport Authority witness rebutted the owner's verification report. Claims of underage driving or non-residency crumbled against licence details, unproven by evidence.

The court dismissed Abdul Salam as non-binding and irrelevant, emphasizing: insurer bears the onus, discharged via "bald assertions" alone? No.

Key Observations from the Bench

"Merely because it was in a booklet form and not a smart card, the driving licence cannot be termed as fake. Such interpretation is absolutely contrary to the Notification dated 01.08.2014 of the Transport Authority, Nagaland."

"The driver had the window till 01.12.2014 to convert his booklet driving licence into the smart card."

"The onus was on the Insurance Company to rebut the testimony of the Plaintiff about the genuineness of the driving licence."

"No evidence whatsoever has been led by the Insurance Company to prove that the deceased was not a resident of Nagaland."

No Merit in Appeal: Payout Stands Firm

"There is no merit in the present Appeal, which is hereby dismissed," ruled the court (para 39). The insurer must honor the Rs 13,77,500 decree with 12% p.a. interest from the trial court.

This precedent bolsters policyholders against technical repudiations, reminding insurers: prove your case or pay up. It underscores timeline precision in administrative shifts like licence reforms, potentially easing claims nationwide where booklets linger pre-deadline.

As reports note, the verdict aligns with road safety goals without punishing compliant owners— a balanced win in insurance litigation.