VERY IMPORTANT POINT
If a fake licence happened to be renewed by the statutory authority it would not become valid. The Claims Tribunal should give an opportunity, if asked, to prove fakeness of original licence to the Insurance Company. In this case Tribunal did not give this opportunity and Insurance Company was obliged to pay to the claimant compensation for motor accident. Now the Claims Tribunal is to decide the next question whether the Insurance Company is entitled to recover that amount from owner of the vehicle on account of the vehicle being driven by a person who had no valid licence to drive the vehicle.

Headnote:(i) Motor Vehicles Act, 1988-Section 15-Renewed driving licence-Insurance Company seeking leave to prove that original licence was fake-Refused by Claims Tribunal-Whether proper? (No).
       As a point of law we have no manner of doubt that a fake licence cannot get its forgery outfit stripped off merely on account of some officer renewing the same with or without knowing it to be forged. Section 15 of the Act only empowers any licensing authority to "renew a driving licence issued under the provisions of this Act with effect from the date of its expiry." No licensing authority has the power to renew a fake licence and, therefore, a renewal if at all made cannot transform a fake licence as genuine. Any counterfeit document showing that it contains a purported order of a statutory authority would ever remain counterfeit albeit the fact that other persons including some statutory authorities would have acted on the document unwittingly on the assumption that it is genuine. (Para 11)
       Held : The observation of the Division Bench of the Punjab and Haryana High Court in National Insurance Co. Ltd. v. Sucha Singh, 1994(1) ACJ 374 that renewal of a document which purports to be a driving licence, will robe even a forged document with validity on account of Section 15 of the Act, propounds a very dangerous proposition. If that proposition is allowed to stand as a legal principle, it may, no doubt, thrill counterfeiters the world over as they would be encouraged to manufacture fake documents in a legion. What was originally a forgery would remain null and void for ever and it would not acquire legal validity at any time by whatever process of sanctification subsequently done on it. Forgery is antithesis to legality and law cannot afford to validate a forgery. We are not considering the question whether the insured exhausted the enquiry expected of him for satisfying himself about the genuineness of the document produced by the 8th respondent as his driving licence. The Insurance Company must have, under law, the opportunity to substantiate its contention that the document is a fabricated one. The Claims Tribunal went wrong in denying such an opportunity to the appellant Insurance Company. (Paras 12 & 13)
       (ii) Motor Vehicles Act, 1988-Section 149-Liability of Insurance Company-Insurance Company paying to third party in Motor Accident Claim-Can it recover from insured on ground that as per policy insurer had no liability to pay such sum to the insured? (Yes)-Proper course-Case remanded.
       Held : To repeat, the effect of the above provisions is this: When a valid insurance policy has been issued in respect of a vehicle as evidenced by a certificate of insurance the burden is on the insurer to pay to third parties, whether or not there has been any breach or violation of the policy conditions. But the amount so paid by the insurer to third parties can be allowed to be recovered from the insured if as per the policy conditions the insurer had no liability to pay such sum to the insured. (Para 21)
       We may point out that as per the order passed by this Court on 6.3.2000, the appellant Insurance Company was directed to pay the award amount to the claimants. We are told that the amount was paid by the appellant to the claimants. Now the Claims Tribunal has to decide the next question whether the insurance company is entitled to recover that amount from the owner of the vehicle on account of the vehicle being driven by a person who had no valid licence to drive the vehicle. For that purpose we remit the case to the Claims Tribunal. An opportunity shall be afforded to the parties concerned for adducing evidence in that regard. We make it clear that the claimants shall not be bothered during the remaining part of the proceedings. The appeals are disposed of in the above terms. (Paras 24 & 25)

Judgement Key Points

Key Points: - The judgment addresses whether a renewed driving licence can validate a forged/licence document and the implications for insurer liability. (!) (!) (!) - It analyzes the insurer's right to recover from the insured when a policy covers third-party liability but the driver lacked a valid licence, and the conditions under which recovery is permitted. (!) (!) (!) - It remits to the Claims Tribunal to determine if there was a breach of policy conditions due to driving without a valid licence and to allow evidence from involved parties. (!) (!)

Question 1?

Question 2?

Question 3?

JUDGMENT

Thomas, J.-Leave granted.

If a fake driving licence happened to be renewed by the statutory authorities, would the fakeness of the original document get legally sanctified? If it cannot, would the Insurance Company be liable to pay compensation in respect of a motor accident occurred while the vehicle was driven by a person holding such a sham licence? These are the main questions involved in these appeals.

2. An accident occurred on 1.3.1993 when a truck, driven by the 8th respondent (Liaqat Ali) capsized. Three inmates of the vehicle died in the accident. Legal heirs of those three deceased persons preferred claims before the Motor Accident Claims Tribunal concerned (for short the Claims Tribunal ) as per the provisions of the Motor Vehicles Act, 1988 (for short the Act ). The owner of the vehicle as well as the driver were made parties, besides impleading the insurer (appellant Insurance Company) in the claims proceedings. It is admitted that the truck was then covered by a valid insurance policy issued by the appellant company. As we are now concerned only with the contentions of the appellant Insurance Company, that too restricted to the question relating to the driving licence held by the 8th respondent, we do not think it worth referring to the details of other pleadings set out by the claimants and the contending resistors.

3. The appellant Insurance Company, in the written statement filed before the Claims Tribunal, pleaded inter alia that the driver of the vehicle did not have a valid driving licence and hence there was breach of the policy condition and the corollary is that the Insurance Company cannot be fastened with the liability to pay compensation to any one in respect of the accident referred to in the claim petitions.

4. The insured owner of the vehicle as well as the driver 8th respondent relied on a document purporting to be a driving licence issued by the licensing authority (SDM, Paonta, Sirmaur District in Himachal Pradesh) bearing No.1874-P/90. The document further shows that it was issued in favour of Liaqat Ali whose photo affixed thereon is admitted to be that of 8th respondent. That licence is claimed to have been renewed by the Licensing Authority, Rohru (H.P.) on 17.4.1993, for a period of three years. According to the insurance company, the said document is a fabricated one as no such licence was granted by the Licensing Authority (SDM), Paonta.

5. To substantiate the contention appellant insurance company examined three witnesses. RW-2 was Superintendent in the office of the SDM, Paonta. He said that no such licence was issued from that office to a person called Liaqat Ali. He further said that no intimation whatsoever was received by the SDM, Paonta, that the licensing authority of Rohru (SDM) had renewed the licence No.1874-P/90. But RW-3 a clerk in the office of the SDM, Rohru has stated that the licence bearing No.1874-P/90 which stood in the name of Liaqat Ali was renewed by the SDM, Rohru on 17.4.1993, for a period of three years with effect from the date of its expiry. One Anil Chawla, legal officer of the appellant insurance company at Shimla, was examined as RW-4 and he said that on enquiry it was found that SDM, Paonta had not issued any driving licence to Liaqat Ali and hence the document produced by the 8th respondent as his driving licence is a forged document.

6. The driver Liaqat Ali was not examined before the Claims Tribunal. But the owner of the truck gave evidence to the effect that he engaged the 8th respondent for driving the truck only after satisfying himself that R-8 had a valid licence. He admitted that the said satisfaction is based entirely on looking at the questioned document.

7. The Claims Tribunal repelled the contention of the insurance company for which the following observations have been made:

"Evidently, it was for the New India Assurance Company to prove that the truck driver did not have valid driving licence on the date of acc

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2001 Supreme(SC) 585

Question 1?

Question 2?

Question 3?

Cases Referred (3)