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2014 Supreme(Online)(P&H) 488

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Nidhi Gupta, J
Sarabjit Singh – Appellant
Versus
New India Assurance Company – Respondent
FAO-4397-2014



Advocates:
For the Appellants/Petitioners: Mayank Mathur
For the Respondents: Alka Joshi

The owner of a vehicle is only obligated to verify a driver's competence and ensure they possess a licence that appears valid at the time of hiring; the owner is not required to authenticate the licence with the issuing authority to avoid liability for recovery by the insurer.

Headnote:(A) Motor Vehicles Act, 1988 - Section 149(2)(a)(ii) - Accident claim - Liability of insurer - Fake driving licence - Scope of owner’s duty - Owner expected only to verify driving skills and competence at time of employment: cannot be expected to verify genuineness of licence with licensing authority - Unless owner is specifically alerted about potential invalidity or required by insurer to verify, they cannot be held liable if licence later turns out to be fake. (Paras 12, 14)

Facts of the case:
The appellant, owner of a truck, challenged an award granting the insurer recovery rights against him on the ground that the driver’s licence was fake. The original claim arose from a 1992 accident. Following an earlier appeal, the matter was remanded to determine the licence validity. The tribunal found the licence fake and allowed the insurer to recover the compensation from the owner.

Findings of Court:
The court found that the owner had acted as a prudent person by testing the driver’s competence and visually verifying the licence at the time of hiring. It held that the owner is not required to verify the licence with the licensing authority. The reliance on Supreme Court authorities established that the insurer is liable when an owner has taken reasonable care in employing a competent driver.

Issues: Whether the owner is liable to reimburse the insurer if the driver's licence is subsequently discovered to be fake, despite the owner having verified the driver's competence at the time of employment.

Ratio Decidendi: An owner fulfills their duty by ensuring the prospective driver is skilled and possesses a licence that appears genuine; the law does not impose a burden on the owner to authenticate the document with a licensing authority unless there is prior information or suspicion that the licence is fraudulent.

Result: Appeal allowed; impugned award set aside regarding recovery rights.

202

***

NIDHI GUPTA, J.

Present appeal has been filed by the owner of the offending vehicle laying challenge to the Award dated 23.09.2013 passed by the Motor Accident Claims Tribunal, Patiala (hereinafter ‘the learned Tribunal’) in Civil Misc.No.85T dated 04.10.2011, whereby liability to pay the compensation amount of Rs.1,53,600/- has been affixed upon the appellant.

The present case has a somewhat chequered history. For better appreciation of the issue at hand, it would be helpful to peruse the facts in chronological order, as follows: -

29.04.1992: The claimants/respondents No.2 to 6 herein had filed Claim Petition No.29 dated 29.04.1992 under Section 166 of the Motor Vehicles Act (hereinafter “the Act”) before the MACT, Patiala seeking compensation on account of death of Harmesh Singh. The five claimants were the widow, two minor children and parents of deceased Harmesh Singh.

26.07.1994: Vide Award dated 26.07.1994, the MACT Patiala had allowed the said Claim Petition and awarded compensation of Rs.1,53,600/- to the claimants along with interest @ 12% per annum.

The learned Tribunal on the basis of pleadings and oral & documentary evidence adduced by the parties, concluded that the deceased Harmesh Singh had died due to the injuries suffered by him in a motor vehicular accident that took place on 08.03.1992 due to the rash and negligent driving of Truck bearing registration No.PB-11-C-1827 (hereinafter “the offending vehicle”) being driven by respondent No.7 (now deceased), owned by the appellant and insured by respondent No.1. Accordingly, Claim Petition was allowed, compensation awarded and liability to pay the compensation amount was jointly and severally affixed upon the appellant, and respondent No.1/Insurance Company, and the now deceased respondent no. 7.

06.12.2010: Against the said Award dated 26.07.1994, the respondent No.1/Insurance Company had filed FAO-2271-1994. The said FAO was allowed by this Court vide order dated 06.12.2010, which reads as follows:-

“1. The only issue for consideration in the appeal is whether the driver had valid driving licence. By an order dated 21.09.2010, I had directed the Insurance Company to take steps to summon the witness from the competent authority as regards the driving licence. I see from the records that notice has been issued but the status of service is not yet known.

2. I do not want to detain the case only for non-service of notice on the witness. The issue of driving licence will have a bearing only for settling an inter se controversy between the insurer and the insured. The award as regards the initial liability of the insurer and the quantum of compensation determined by the Tribunal are confirmed. The finding as regards the validity of the driving licence is set aside and the matter is remitted to the Tribunal at Patiala for fresh consideration on the issue regarding the validity of the driving licence. The parties shall be at liberty to adduce appropriate evidence in support of the respective contentions. The award is modified and remitted to the lower Court for disposal in accordance with law.

3. For appearance of parties before the Tribunal at Patiala on 12.01.2011.”

23.09.2013: Upon remand of the matter, the learned Tribunal had re-considered the issue in respect of the liability to pay compensation and had now passed the impugned Award dated 23.09.2013, whereby respondent No.1/Insurance Company has been granted right to recover the compensation amount from the appellant.

Aggrieved thereof, present appeal has been preferred by the owner of the offending vehicle.

It is inter alia submitted by learned counsel for the appellant that liability to pay the compensation amount has been fixed upon the appellant on the ground that the Driving Licence of respondent No.7 was fake. Therefore, recovery rights have been given to the respondent No.1 against the appellant. It is submitted that, however, indirect as above, the learned Tribunal h

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