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2025 Supreme(Online)(Del) 6106
IN THE HIGH COURT OF DELHI AT NEW DELHI
Tara Vitasta Ganju, J
UNITED INDIA INSURANCE CO LTD – Appellant
Versus
VINOD KUMAR & ORS – Respondent
MAC.APP. 796/2013
For the Appellants/Petitioners: Ms. Shikha Sapra
For the Respondents: Mr. S.N. Parashar, Mr. Ritik Singh
Insurance liability is upheld when the owner has exercised due diligence in hiring a competent driver, despite the driver holding an invalid license.
Headnote:(A) Motor Vehicles Act, 1988 - Section 173 - Appeal against MACT award - Compensation ordered by the Tribunal found justified; Insurance company’s liability not absolved due to driver’s license being fake unless owner was aware. (Paras 3, 12, 17)
(B) Insurance Liability - The owner cannot be held liable if due diligence in checking driver’s license was exercised; Insurer must prove negligence attributable to the owner to evade liability. (Paras 15, 16)
Facts of the case:
An accident occurred on 12.12.2006, leading to injuries to the claimant while establishing owner’s diligence in hiring an apparently competent driver with a valid driving license.
Findings of Court:
The learned Tribunal determined that the insurance company remains liable under the compulsive insurance provisions of the Motor Vehicles Act, 1988, affirming that the claimant is entitled to compensation and that the insurer cannot deny liability based on subsequent invalidation of the driving license.
Issues: The main issue addressed was whether the insurance company can deny liability based on questions concerning the validity of the driver’s license and the owner’s due diligence.
Ratio Decidendi: The court reasoned that mere absence or invalidity of the driving license does not discharge the insurance company from its liability unless the owner displayed negligence in hiring.
Result: Appeal dismissed.
| Table of Content |
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| 1. accident details and initial compensation awarded are outlined. (Para 1) |
HON’BLE MS. JUSTICE TARA VITASTA GANJU TARA VITASTA GANJU, J.: (Oral)
1. At the outset, learned Counsel for the Respondent No.1/Claimant points out that the sum of Rs.2.77 lacs, that was set out in paragraph 2 of the order dated 29.07.2025, was paid to the Respondent No.2/Owner of the vehicle and was not paid to the Respondent No.1/Claimant.
1.1 Learned Counsel for the Appellant/Insurance Company concurs with this contention and submits that Rs.2.77 lacs was paid by the Appellant to Respondent No.2/Owner.
2 Paragraph 2 of the order dated 29.07.2025 is accordingly corrected.
3. The present Appeal has been filed under Section 173 of the Motor Vehicles Act, 1988 impugning the award dated 24.09.2012 passed by the learned Presiding Officer, MACT, South-01, Saket Courts, New Delhi [hereinafter referred to as “Impugned Award”]. By the Impugned Award, the compensation amount in the sum of Rs. 1,14,930/- along with interest at Signature Not Verified Digitally Signed the rate of 7.5% per annum was awarded to the Respondent No. 1/Claimant. 4. Briefly the facts are that on 12.12.2006, an accident took place between two cars, one bearing No. DL2CM-7380 being driven by the Respondent No.1/Claimant and one bearing No. DL9CC-6557 being driven by Mr. Aman Puri, which is owned by the Respondent No.2/Owner. While the driver of the first car, Mr. Aman Puri expired, the Respondent No.1/Claimant sustained injuries as a result thereof, and Respondent No.2 filed a claim for an ‘own damage’ claim in respect of the vehicle which was insured with the Appellant/Insurance Company.
4.1 The Respondent No.1/Claimant also filed a claim, which was contested by the Respondent No.2/Owner as well as the Appellant/Insurance Company. At the time of filing this claim dated 11.09.2007, the driving licence was made available to the Appellant/Insurance Company. The investigation conducted by the Insurance Company however revealed that the driving licence was not issued by the licensing authority.
5. As stated above, the learned Tribunal awarded compensation to the Respondent No.1/Claimant and gave a finding that the Respondent No.2/Owner exercised due diligence while hiring the driver and thus the Insurance Company cannot be absolved of its liability.
6. The challenge in the present Appeal is in view of the fact that the Appellant/Insurance Company has not been granted recovery rights against the Respondent No.2/Owner. Learned Counsel for the Appellant/Insurance Company submits that there is no challenge on the quantum of the Impugned Award but only to the non-grant of recovery rights against the Respondent No.2/Owner of the vehicle.
Signature Not Verified Digitally Signed
7. By an order dated 02.05.2014, the service of Respondent No.2/Owner was effected by publication. There has been no appearance thereafter on behalf of the Respondent No.2/Owner, the Respondent No.2/Owner.
8. None appears for the Respondent No.2/Owner today as well.
9. Learned Counsel for the parties submit that the matter has been pending for the last several years and it would be in the interest of the justice that if the matter is taken up for hearing today. According, the matter is taken up for hearing and disposal today.
10. Learned Counsel for the Appellant submits that thew challenge by the Appellant/Insurance Company is limited to the fact that the driver was not holding a valid driving licence [Ex. R1W1/3] and thus the Insurance Company is not liable to pay compensation or to indemnify the Respondent No.2/Owner.
11. Learned Counsel for Respondents on the other hand submit that this aspect has already been settled in the judgments of the Supreme Court in National Insurance Co. Ltd. v. Swaran Singh & Ors., [(2004) 3 SCC 297] and United India Insurance Co. Ltd. v. Lehru & Ors., [AIR 2003 SC 1292] It is submitted that the obligation of an owner qua a driver would be limited to the extent that is referred to in these
