Point of Law: When driver of a vehicle commits a fraudulent and criminal act by driving vehicle with a forged licence without knowledge of owner, such driver cannot escape liability towards Insurance Company on account of breach of contract.

JUDGMENT :

1. Is the owner of the offending vehicle, who bonafide believed the driving licence of the driver as a genuine one, liable to restitute the compensation amount paid by the Insurance Company, is the question mooted in this appeal.

2. Above appeal has been preferred by the 1st respondent/owner in O.P (MV) No.202 of 2007 on the file of Motor Accidents Claims Tribunal, Perumbavoor, challenging the pay and recovery ordered by the Tribunal.

3. As per the impugned award, the learned Tribunal awarded compensation of Rs.5,66,061/-to the injured, and directed the Insurance Company to deposit the amount with interest. As the driving licence of the 2nd respondent was found fake, the Insurance Company was permitted to recover the compensation amount deposited by them from respondents 1 and 2 i.e. the owner and driver of the offending vehicle. That order is challenged by the 1st respondent/owner in this appeal.

4. Admittedly, KL-7/AL 5804 stage carriage was owned by the 1st respondent/appellant, and it was driven by the 2nd respondent. That vehicle was duly insured with the 3rd respondent-Insurance Company. It was proved before the Tribunal that, the accident occurred due to the rash and negligent driving of the offending bus by the 2nd respondent. He was charge-sheeted for an offence punishable under Section 3(1) read with Section 181 of the Motor Vehicles Act also, on the presumption that, he had no driving licence to drive the vehicle, as he failed to produce the driving licence for perusal of the Investigating Officer, in spite of service of notice.

5. In the written statement, the 3rd respondent/insurer contended that, the 2nd respondent had no valid and effective driving licence and since the 1st respondent/owner entrusted the vehicle to the 2nd respondent, he violated the terms and conditions of the policy, and so, the Company is not liable to indemnify the real owner.

6. In the written statement filed by respondents 1 and 2, it was specifically averred that, the 2nd respondent had driving licence No.40/251/07 which was valid from 01.12.2006 upto 30.11.2009. The accident occurred on 22.12.2006. But, it was brought out before the Tribunal through the testimony of RWs 1 and 2 that, the driving licence and badge referred were not issued from the Regional Passport Officer, Red Hill, Chennai, Tamil Nadu and so, the renewal of that licence from Regional Transport Office, Perumbavoor will not make it genuine, as no licencing authority has the power to renew a fake licence.

7. Learned Tribunal relied on the decision of the Apex Court in National Insurance Co. Ltd vs. Laxmi Narain Dhut (2007 (2) KLT 470) to hold that, once the licence is found to be a fake one, the renewal cannot take away the effect of a fake licence.

8. The 2nd respondent did not adduce any evidence to show that, the licence he allegedly obtained from the Regional Passport Office, Red Hill, Chennai was a genuine one. So much so, renewal of that licence from RTO office, Perumbavoor will not convert that fake document into a genuine one. The 2nd respondent is not challenging the finding of the Tribunal, that his driving licence was a fake one.

9. Learned counsel Sri.P.G.Ganappan appearing for the 3rd respondent/insurer submitted that, since the driving licence of the 2nd respondent was a fake one, and the owner permitted him to drive the offending vehicle without verifying the validity of the driving licence, the insurer has no liability to indemnify the insured.

10. In the appeal, the appellant/owner is not disputing the finding of the Tribunal that, the driving licence of the nd respondent was a fake one. But, according to her, since the driver produced driving licence, which was renewed from a local RTO, and she was satisfied with the competency of the driver to drive the vehicle properly, she did not enquire whether the original licence issued from the Regional Transport Office, Chennai was genuine or not, as there was nothing to doubt the genuineness of that