IMPORTANT POINT
Insurance company cannot be permitted to
avoid its liability only on ground that person driving vehicle at the time of accident was not duly licensed.

Kurian, J.— Breach of conditions under Section 149(2)(a) of the Motor Vehicles Act, 1988 absolves the insurer of its liability to the insured. Section 149(2)(a)(ii) deals with the conditions regarding driving licence. In case the vehicle at the time of accident is driven by a person who is not duly licensed or by a person who has been disqualified from holding or obtaining a driving licence during the period of disqualification, the insurer is not liable for the compensation. In the instant case, we are called upon to deal with a situation where the driver allegedly possessing only a fake driving licence.

2. Widow and two minor sons of late Gurjinder Singh Modi are claimants before the Motor Accidents Claims Tribunal, Chandigarh in M.A.C.T. No. 63/481 filed in the year 2002. The allegation was that Gurjinder Singh Modi died out of a motor accident on 04.10.2001 on account of the negligent driving of bus no. PB-11-K-8512 of the Pepsu Road Transport Corporation (for short, ‘PRTC’), Patiala, the appellant herein. Rs.30,00,000/- was claimed as compensation. Negligence was proved. The Tribunal awarded Rs.11,03,404/- as compensation. However, the insurance company was absolved of its liability since the licence issued to the driver was found to be fake. The insurance company took the Local Commissioner to licensing authority, Darjeeling, West-Bengal and, on verification of the available records, it was reported that no such licence as possessed by the driver has been issued by the said licensing Authority at Darjeeling. Thus, aggrieved, the owner of the vehicle, viz., PRTC, Patiala has come up in appeal.

3. It is the contention of the appellant that they had appointed the third respondent - Nirmal Singh as driver with PRTC in 1994, he was given proper training from the driving school at Patiala and, thus, having taken reasonable steps in verifying the driving licence and, thereafter, having trained the driver by the employer himself, it cannot be said that the insurance company is not liable. There is no breach of any conditions by the insured. In other words, it is contended that even if the licence is fake, the owner having taken all reasonable steps, the insurer is liable. The other contention on merits is that the insurer had not established before the Tribunal that the licence issued to Nirmal Singh was fake. In this context, our reference has been invited to Annexure-2-evidence of the licensing authority before the Tribunal. It is stated that as per the available office records, no driving licence was issued to Nirmal Singh on 12.06.1985 with no.12385 of 1985. Licence numbers of 1985 as per record start from 22579 of 1985. Photocopy of the register maintained for issuing the licences was marked as R-1. However, it was also stated that: -

“…It can be possible that other licence register pertaining to year 1985 are not available today as it might be misplaced during the shifting of our office…” Still further, it was stated:

“… It is possible that the registers which are misplaced might contain the name of Nirmal Singh.”

4. Though the appellant is entitled to succeed on the ground that the insurer had not proved beyond doubt that driver Nirmal Singh did not possess a valid driving licence, we shall also advert to the legal position regarding the liability of the insurance company when the driver of the offending vehicle possessed a fake driving licence.

5. In United India Insurance Company Limited vs. Lehru and Others1, (2003) 3 SCC 338 a two-Judge Bench of this Court has taken the view that the insurance company cannot be permitted to avoid its liability only on the ground that the person driving the vehicle at the time of accident was not duly licensed. It was further held that the wilful breach of the conditions of the policy should be established. Still further it was held that it was not expected of the employer to verify the genuineness of a driving licence from the issuing authority at the time of employment. The em