Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(Bom) 280

HIGH COURT OF BOMBAY
HON'BLE SHRI JUSTICE R. M. JOSHI
RELIANCE GENERAL INSURANCE CO.LTD. MUMBAI – Appellant
Versus
LAXMI MANIKRAM PASWAN AND ORS. – Respondent
FA/2462/2025

Advocates:
For the Appellants/Petitioners: Shalini Shankar
For the Respondents: T. J. Mendon, T. R. Kale

The burden of proof rests on the insurance company to establish that a vehicle owner knowingly hired a driver possessing a fake license or failed to exercise due diligence in its verification. Absent such proof, the insurer cannot avoid liability for compensation.

Headnote:(A) Compensation for Motor Accidents - Liability of Insurer - Fake driving license - Evidentiary burden - Where an insurer raises the defense of a fake driving license, the burden lies upon the insurer to affirmatively prove that the vehicle owner was aware of the invalidity of the license or failed to exercise due diligence in its verification prior to employment. (Paragraphs 3, 5)

(B) Appellate Jurisdiction - Scope of interference - An appellate court is not expected to interfere with a lower court’s findings of fact unless the decision is perverse, based on an incorrect application of law, or fails to consider the absence of essential evidence regarding the owner’s knowledge of the documentary invalidity.

Facts of the case:
The appellant challenged an order holding it jointly and severally liable to pay compensation for a motor accident. The insurer contended that it should be discharged from liability because the driver of the offending vehicle possessed a fake driving license. The insurer relied on evidence from a licensing authority to substantiate the invalidity of the document.

Findings of Court:
The court held that the insurer failed to produce evidence showing the vehicle owner had actual knowledge of the fake license or that the owner was negligent in verifying the document at the time of hiring. Mere proof that a license is fake is insufficient to absolve the insurer without demonstrating a lack of due diligence by the owner.

Issues: Whether the insurer is entitled to be absolved of liability on the ground that the driver held a fake driving license, and whether the owner breached the policy conditions by failing to perform professional due diligence in verifying the driver's credentials.

Ratio Decidendi: Unless a driving license is demonstrably fake on its face, the burden of proving that the vehicle owner failed to conduct due diligence in its verification rests with the insurer. As the insurer failed to establish willful breach or knowledge on the part of the owner, the insurer remains liable to satisfy the compensation award.

Result: Appeal dismissed.

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2026:BHC-AS:4984 20 FA 2462-25-C.DOC

Priya Soparkar

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CIVIL APPELLATE JURISDICTION

FIRST APPEAL NO. 2462 OF 2025

Reliance General Insurance Company Limited, …Appellant

Mumbai.

Versus

Laxmi Manikaram Paswan and ors. …Respondents

Ms. Shalini Shankar, for the Appellant.

Mr. T. J. Mendon with Mr. T. R. Kale, for the Respondents.

CORAM: R. M. JOSHI, J.

DATED: 30^th JANUARY, 2026.

PC:-

1. By consent of both sides, heard finally at the stage of

admission.

2. This appeal involves short question as to whether the

Tribunal was justified in not discharging the Insurer from the

liability to pay compensation. In view of the fact that the Insurer

was able to prove the fake driving license of the driver of the

offending vehicle.

3. The learned counsel for the Appellant submits that the

Insurer has taken specific plea with regard to the fake driving

license of the driver of the offending vehicle, and the same has

been substantiated by examining clerk from RTO, Andheri. It is

Digitally

signed by

PRIYA

PRIYA RAJESH

RAJESH SOPARKAR

SOPARKARDate:

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20 FA 2462-25-C.DOC

submitted that the said evidence was sufficient to conclude that

the driving license of the driver of the vehicle was fake. It is her

contention that once breach of terms of conditions of policy is

proved, the Insurer would not be liable for payment of any

compensation. He seeks setting aside of impugned order and in

alternative pay and recover order.

4. Learned counsel for the Claimants opposed the said

contention by drawing attention of the Court to the fact that

neither in the written statement his claim by the Insurer about fake

driving license, the driver was engaged by the owner of the

vehicle, and hence, by following judgment of the Hon’ble Supreme

Court in case of Iffco-Tokio General Insurance Company Limited

Vs. Geeta Devi and ors. reported in 2023 ACJ 2701, there is no

interference required in the impugned judgment. No doubt the

Insurer filed written statement taking up a plea of fake driving

license, however, there is no specific plea in the written statement

that owner inspite of knowledge of fake driving license of driver,

permitted him to drive the vehicle.

5. At this stage, it would be relevant to refer to the judgment of

the Hon’ble Supreme Court in case of Geeta Devi (supra), the

relevant portion of the said judgment was produced:-

“15. As already pointed out supra, once

a seemingly valid driving license is

produced by a person employed to drive

a vehicle, unless such license is

demonstrably fake on the face of it,

warranting any sensible employer to

make inquiries as to its genuineness, or

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20 FA 2462-25-C.DOC

when the period of the license has

already expired, or there is some other

reason to entertain a genuine doubt as to

its validity, the burden is upon the

insurance company to prove that there

was a failure on the part of the vehicle

owner in carrying out due diligence

apropos such driving license before

employing that person to drive the

vehicle. Presently, no evidence has been

placed on record whereby an inference

could be drawn that the deceased vehicle

owner ought to have gotten verified Ujay

Pal’s driving license. Therefore, it was for

the petitioner-insurance company to

prove willful breach on the part of the

said vehicle owner. As no such exercise

was undertaken, the petitioner-insurance

company would have no right to recover

the compensation amount from the

present owners of the vehicle. The

impugned order passed by the Delhi High

Court holding to that effect, therefore,

does not brook interference either on

facts or in law.

16. These legal propositions being so well

settled, it is indeed shocking that

insurance companies deem it appropriate

to raise such pleas as a matter of course,

without reference to the facts of the

given case and/or the ev

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2026 Supreme(Online)(Bom) 280

HIGH COURT OF BOMBAYHON'BLE SHRI JUSTICE R. M. JOSHIRELIANCE GENERAL INSURANCE CO.LTD. MUMBAI – AppellantVersusLAXMI MANIKRAM PASWAN AND ORS. – RespondentFA/2462/2025

The burden of proof rests on the insurance company to establish that a vehicle owner knowingly hired a driver possessing a fake license or failed to exercise due diligence in its verification. Absent such proof, the insurer cannot avoid liability for compensation.

HIGH COURT OF BOMBAY
HON'BLE SHRI JUSTICE R. M. JOSHI
RELIANCE GENERAL INSURANCE CO.LTD. MUMBAI – Appellant
Versus
LAXMI MANIKRAM PASWAN AND ORS. – Respondent
FA/2462/2025