Back
2022 Supreme(Ori) 758
IN THE HIGH COURT OF ORISSA AT CUTTACK
B.P. Routray, J.
Divisional Manager, The Oriental Insurance Company Ltd. - Appellant
Versus
Smt. Subasha Naik and Others - Respondents
MACA No.887 of 2007
Decided On : 12-12-2022
For the Appellant :Mr. N.B. Das, Advocate
For the Respondent: Mr. Abhaya Kumar Parida
The insurer must prove the owner's negligence to avoid liability for claims, and employment of a driver with a genuine-looking license does not impose further verification duties unless cause arises.
Headnote:(A) Motor Vehicles Act, 1988 - Section 149 - Insurance liability - Insurer challenged the tribunal's ruling on insurance validity; however, no evidence was presented to dispute the claimant's insurance policy. Tribunal found driver's licence to be fake, but insurer failed to prove negligence by the vehicle owner. Validity of insurance remains established despite alleged infractions. Rate of interest reduced to 6%. (Paras 4, 5, 11, 12)
(B) Insurance liability - Employer's duty regarding driver's licence - Employer is not liable to verify the authenticity of a driving licence unless there is cause to believe it is not genuine. (Paras 8, 9, 10)
Facts of the case:
Insurer appealed against compensation awarded for the death of a passenger in a vehicular accident. Claimant's insurance policy was not contested, while the driver's credentials were disputed.
Findings of Court:
The appeal is dismissed, with a directive to the insurer to deposit the awarded compensation of Rs.1,72,700/- at 6% interest.
Issues: The main issues addressed were the validity of the insurance policy and the legitimacy of the driver’s licence.
Ratio Decidendi: The court stated that the insurer failed to prove any negligence on the part of the vehicle owner and that the insurer must disprove liability instead of merely asserting license infractions.
Result: Appeal dismissed; insurer ordered to deposit compensation amount.
| Table of Content |
|---|
| 1. overview of case and context of appeal (Para 1 , 3) |
| 2. insurer's argument regarding policy validity and driving license (Para 4 , 5 , 6) |
| 3. supreme court rulings on insurer's liability criteria (Para 7 , 8 , 9 , 10) |
| 4. tribunal's findings upheld on insurer’s liability (Para 11) |
| 5. final order for compensation payment and legal procedures (Para 12 , 13 , 14 , 15 , 16) |
ORDER :
B. P. ROUTRAY, J.
1. The matter is taken up through hybrid mode.
2. Heard Mr. N.B. Das, learned counsel for the insurer –Appellant and Mr. A.K. Parida, learned counsel for claimant – Respondents 1 &3.
3. Present appeal by the insurer is against the impugned judgment dated 4th July, 2007 of the learned 1st MACT, Keonjhar passed in MAC No.24 of 1996, wherein compensation to the tune of Rs.1,72,700/- has been granted on account of death of deceased Bharat in the motor vehicular accident dated 13th July, 1995.
4. Mr. Das submits that the offending vehicle, i.e. dumper bearing registration number ORJ 6219 did not have a valid insurance policy and its driver did not possess a valid driving licence on the date of accident.
5. Upon perusal of the impugned judgment it reveals that a copy of the insurance policy was produced from the side of the claimants and marked as Ext.5. The insurance company did not dispute the same before the tribunal nor produced any material before this court to dispute said copy of insurance policy under Ext.5. Therefore the contention raised by Mr. Das at this stage to dispute the validity of the insurance policy in respect of the offending vehicle on the date of accident is without merit and hence rejected.
6. As per the finding of the tribunal, the driving licence produced by the accused driver, namely Kalusingh Purty is found a fake one. So taking note of Ext.A and Ext.B as adduced from the side of the insurer the tribunal while holding that the driver had a fake lincense, has further opined that the incompetency of the accused to drive the vehicle was never questioned by the insurer and no evidence was also adduced in that regard.
7. In the case of National Insurance Co. Ltd. v. Swaran Singh , (2004) 3 SCC 297 the Hon’ble Supreme Court has held as follows:-
“110. (iii) The breach of policy condition e.g. disqualification of the driver or invalid driving licence of the driver, as contained in sub-section (2)(a)(ii) of Section 149 , has to be proved to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards the insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by a duly licensed driver or one who was not disqualified to drive at the relevant time.”
8. Relying on the decision rendered in the case of Swaran Singh (supra), the Supreme Court further in the case of Lal Chand v. Oriental Insurance Co. Ltd. , (2006) 7 SCC 318 , held that, the insurer has the onus to prove that the owner of the vehicle was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicle by a duly licensed driver or one who was not disqualified to drive at the relevant point of time.
9. Again in the case of Nirmala Kothari vs. United India Insurance Company Limited , (2020) 4 SCC 49 it is held by Supreme Court that the owner while hiring a driver is though expected to verify that the driver has a driving licence, if the driver produces a licence which on the face of it looks genuine, the employer is not expected to further investigate into the authenticity of the licence unless there is cause to believe otherwise and if the employer finds the driver to be competent to driv
