1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 8145 OF 2018
(Arising out of SLP(C) No.6760/2017)
Ram Chandra Singh …..Appellant(s)
:Versus:
Rajaram and Ors. ....Respondent(s)
J U D G M E N T
A.M. Khanwilkar, J.
1. The singular question involved in this appeal against the
judgment and order dated 28th November, 2016 passed by the
High Court of Judicature at Allahabad in First Appeal From
Order No.3290 of 2016, is whether the Motor Accident Claims
Tribunal, Firozabad, was right in holding that the insurer was
not liable as the driver had a fake licence.
2. Shorn of unnecessary details, the respondent Nos.1 to 5
filed a motor accident claim before the Motor Accident Claims
2
Tribunal, Firozabad, bearing M.A.C.P. No.169 of 2012,
consequent to the death of Sanoj Kumar on account of motor
accident which occurred on 10th May, 2012 at 6.30 A.M., when
he was going for his morning walk towards Mustafabad
Chauraha. At that time, the driver of Bolero loader bearing
registration No.UP-71/0084 while driving the vehicle in a high
speed and in rash and negligent manner, hit the deceased
from behind. The Tribunal partly allowed the claim petition
and awarded compensation amount of Rs.6,27,000/-, but
absolved the Oriental Insurance Company Ltd. (for short, “the
insurer”) on the finding that the offending vehicle was driven
by one Shivgyani (respondent No.6) who did not have a valid
driving licence. The Tribunal, however, directed the insurer to
pay the compensation amount as determined in terms of the
award dated 24th August, 2016, with liberty to recover the
same from the vehicle owner (appellant herein) and the driver
(respondent No.6) jointly and severally.
3. The appellant, being the vehicle owner, alone filed an
appeal before the High Court of Judicature at Allahabad which
3
was dismissed on the finding that the counsel for the
appellant did not dispute that the driving licence was found to
be fake and no evidence was adduced before the Court to show
that the driving licence was genuine. This concurrent view is
the subject matter of challenge in the present appeal.
4. It is contended by the appellant that even if the finding of
the Tribunal, that the driving licence relied upon by the owner
of the vehicle and driver was fake, is maintained as it is, even
then the Tribunal could not have absolved the insurer and
made the owner of the vehicle liable, in the absence of a clear
finding that the owner of the vehicle was aware about the
factum of fake licence and despite the same, he made no
attempt to take corrective measures, including to verify the
genuineness thereof. In absence of such a finding, the insurer
cannot be straightaway absolved. In support of this
proposition, reliance was placed on PEPSU Road Transport
Corporation Vs. National Insurance Company1, and
Premkumari and Ors. Vs. Prahlad Dev and Ors.2.
1
(2013) 10 SCC 217
2
(2008) 3 SCC 193
4
5. The counsel for the insurer submits that the appellant
having admitted the fact that the driving licence was fake and
failing to produce any other evidence to prove otherwise,
cannot be heard to make any grievance about the finding
recorded by the Tribunal and affirmed by the High Court
absolving the insurer from the liability to pay the
compensation amount.
6. We have heard Mr. S.R. Singh, learned senior counsel
appearing for the appellant and Mr. Abhishek Gola, learned
counsel appearing for the respondents.
7. We have perused the entire pleadings and the evidence
on record as also the judgments of the Tribunal and the High
Court. It is noticed that the insurer had taken a specific plea
in the written statement filed before the Tribunal, that the
driving licence of the driver was not a valid licence. In the
alternative, it was asserted that the owner of the vehicle must
produce the driving licence so that it can be verified from the
licencing authority. Additionally, the insurer placed on record
5
an investigation report, verification report and photocopy of
the driving licence to establish the fact that the driving licence
relied upon by the owner and the driver was fake and not
valid. For, it was authenticated that no such driving licence
was issued by the authority concerned.
8. It is also noticed that in the oral evidence, the appellant
had stated that he had seen the photocopy of the driving
licence of Shivgyani and was also satisfied about his driving
skills, before employing him as the driver for driving the
vehicle. In his cross-examination by the insurer, the appellant
stated thus:
“……I have not sold the vehicle. Driver Shiv Gyani was
working with me from February 2012. He was permanent
resident of District – Fatehpur. I never got verified the driving
licence of Shiv Gyani. ……… This was not in my knowledge
that he has no driving licence. This is incorrect to say that I
provided my vehicle to him to drive despite I was aware that
he has bogus licence. I am aware of this that licence is
issued on the address one resides. ……………This is
incorrect to say that I am giving false evidence to save my
skin.”
9. The Tribunal while answering issue No.3, however, made
no attempt to analyse the pleadings and evidence on record to
ascertain whether the appellant (owner) was aware of the fake
6
driving licence possessed by the driver (respondent No.6). The
Tribunal merely adverted to the investigation and verification
report and found that the stated driving licence was invalid.
The High Court also made no attempt to enquire into the
relevant aspect, as has been consistently expounded by this
Court and restated in PEPSU Road Transport Corporation
(supra). Even in the case of Premkumari (supra), the Court
after considering the judicial precedents opined as follows:
“It is clear from the above decision when the owner after
verification satisfied himself that the driver has a valid
licence and was driving the vehicle in question competently
at the time of the accident there would be no breach of
Section 149(2)(a)(ii), in that event, the insurance company
would not then be absolved of liability. It is also clear that
even in the case that the licence was fake, the insurance
company would continue to remain liable unless they prove
that the owner was aware or noticed that the licence was
fake and still permitted him to drive.”
10. The decision in PEPSU Road Transport Corporation
(supra) was relied upon by the appellant before the High Court
which, however, distinguished the same by observing that it
was on the facts of that case, where the Court opined that
there was no evidence to prove that the driving licence
produced by the authorities was fake. That approach, in our
7
opinion, is manifestly wrong. Whereas, even in that case, the
Court was called upon to deal with the similar question as is
involved in this appeal. In that case, the Court first adverted to
the decision in United India Insurance Co. Ltd. Vs. Lehru
and Ors.3, and then to the three-Judge Bench decision in
National Insurance Co. Ltd. Vs. Swaran Singh & Ors.4.
Paragraphs 99-101 of Swaran Singh (supra) have been
extracted, which read thus:
“99. So far as the purported conflict in the judgments of
Kamla and Lehru is concerned, we may wish to point out
that the defence to the effect that the licence held by the
person driving the vehicle was a fake one, would be available
to the insurance companies, but whether despite the same,
the plea of default on the part of the owner has been
established or not would be a question which will have to be
determined in each case.
100. This Court, however, in Lehru must not be read to
mean that an owner of a vehicle can under no circumstances
have any duty to make any enquiry in this respect. The
same, however, would again be a question which would arise
for consideration in each individual case.
101. The submission of Mr Salve that in Lehru case, this
Court has, for all intent and purport, taken away the right of
an insurer to raise a defence that the licence is fake does not
appear to be correct. Such defence can certainly be raised
but it will be for the insurer to prove that the insured did not
take adequate care and caution to verify the genuineness or
otherwise of the licence held by the driver.”
3
(2003) 3 SCC 338
4
(2004) 3 SCC 297
8
The Court then went on to advert to a two-Judge Bench
decision of this Court in National Insurance Co. Ltd. Vs.
Laxmi Narain Dhut,
5 before dealing with the facts of the case
before it.
11. Suffice it to observe that it is well established that if the
owner was aware of the fact that the licence was fake and still
permitted the driver to drive the vehicle, then the insurer
would stand absolved. However, the mere fact that the driving
licence is fake, per se, would not absolve the insurer.
Indubitably, the High Court noted that the counsel for the
appellant did not dispute that the driving licence was found to
be fake, but that concession by itself was not sufficient to
absolve the insurer.
12. As aforementioned, in the present case, neither the
Tribunal nor the High Court has bothered to analyse the
pleadings and evidence adduced by the parties on the crucial
matter. Be that as it may, in this appeal, the limited grievance
5
(2007) 3 SCC 700
9
of the appellant-owner of the vehicle is about unjustly
absolving the insurer merely on the finding that the driving
licence of the driver (respondent No.6) was fake. No other
aspect has been raised by the appellant nor do we intend to
analyse or consider the same.
13. We, therefore, deem it appropriate to relegate the parties
before the High Court for fresh consideration of the appeal
filed by the appellant (owner) only on the question of liability of
the owner or of the insurer (respondent No.7) to pay the
compensation amount.
14. We make it clear that the High Court shall not examine
any other issue in the remand proceedings. For, the
compensation amount, as determined and directed by the
Tribunal, has already been made over to the claimants.
15. Accordingly, we set aside the impugned judgment and
order passed by the High Court of Judicature at Allahabad
and restore the First Appeal From Order No.3290 of 2016, to
the file of the High Court to its original number for being
10
decided afresh, on the limited question of whether the liability
to pay compensation amount, is cast upon the appellant
(owner of the vehicle) or respondent No.7 (insurer). That aspect
be decided on its own merits in accordance with law. We may
not be understood to have expressed any opinion, either way,
on the efficacy of the pleadings and the evidence produced by
the parties adverted to in this judgment or in any other
evidence on record. All questions in that behalf are left open.
16. The appeal is allowed in the aforementioned terms with
no order as to costs.
.………………………….CJI.
(Dipak Misra)
…………………………..….J.
(A.M. Khanwilkar)
New Delhi;
August 14, 2018.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 8145 OF 2018
(Arising out of SLP(C) No.6760/2017)
Ram Chandra Singh …..Appellant(s)
:Versus:
Rajaram and Ors. ....Respondent(s)
J U D G M E N T
A.M. Khanwilkar, J.
1. The singular question involved in this appeal against the
judgment and order dated 28th November, 2016 passed by the
High Court of Judicature at Allahabad in First Appeal From
Order No.3290 of 2016, is whether the Motor Accident Claims
Tribunal, Firozabad, was right in holding that the insurer was
not liable as the driver had a fake licence.
2. Shorn of unnecessary details, the respondent Nos.1 to 5
filed a motor accident claim before the Motor Accident Claims
2
Tribunal, Firozabad, bearing M.A.C.P. No.169 of 2012,
consequent to the death of Sanoj Kumar on account of motor
accident which occurred on 10th May, 2012 at 6.30 A.M., when
he was going for his morning walk towards Mustafabad
Chauraha. At that time, the driver of Bolero loader bearing
registration No.UP-71/0084 while driving the vehicle in a high
speed and in rash and negligent manner, hit the deceased
from behind. The Tribunal partly allowed the claim petition
and awarded compensation amount of Rs.6,27,000/-, but
absolved the Oriental Insurance Company Ltd. (for short, “the
insurer”) on the finding that the offending vehicle was driven
by one Shivgyani (respondent No.6) who did not have a valid
driving licence. The Tribunal, however, directed the insurer to
pay the compensation amount as determined in terms of the
award dated 24th August, 2016, with liberty to recover the
same from the vehicle owner (appellant herein) and the driver
(respondent No.6) jointly and severally.
3. The appellant, being the vehicle owner, alone filed an
appeal before the High Court of Judicature at Allahabad which
3
was dismissed on the finding that the counsel for the
appellant did not dispute that the driving licence was found to
be fake and no evidence was adduced before the Court to show
that the driving licence was genuine. This concurrent view is
the subject matter of challenge in the present appeal.
4. It is contended by the appellant that even if the finding of
the Tribunal, that the driving licence relied upon by the owner
of the vehicle and driver was fake, is maintained as it is, even
then the Tribunal could not have absolved the insurer and
made the owner of the vehicle liable, in the absence of a clear
finding that the owner of the vehicle was aware about the
factum of fake licence and despite the same, he made no
attempt to take corrective measures, including to verify the
genuineness thereof. In absence of such a finding, the insurer
cannot be straightaway absolved. In support of this
proposition, reliance was placed on PEPSU Road Transport
Corporation Vs. National Insurance Company1, and
Premkumari and Ors. Vs. Prahlad Dev and Ors.2.
1
(2013) 10 SCC 217
2
(2008) 3 SCC 193
4
5. The counsel for the insurer submits that the appellant
having admitted the fact that the driving licence was fake and
failing to produce any other evidence to prove otherwise,
cannot be heard to make any grievance about the finding
recorded by the Tribunal and affirmed by the High Court
absolving the insurer from the liability to pay the
compensation amount.
6. We have heard Mr. S.R. Singh, learned senior counsel
appearing for the appellant and Mr. Abhishek Gola, learned
counsel appearing for the respondents.
7. We have perused the entire pleadings and the evidence
on record as also the judgments of the Tribunal and the High
Court. It is noticed that the insurer had taken a specific plea
in the written statement filed before the Tribunal, that the
driving licence of the driver was not a valid licence. In the
alternative, it was asserted that the owner of the vehicle must
produce the driving licence so that it can be verified from the
licencing authority. Additionally, the insurer placed on record
5
an investigation report, verification report and photocopy of
the driving licence to establish the fact that the driving licence
relied upon by the owner and the driver was fake and not
valid. For, it was authenticated that no such driving licence
was issued by the authority concerned.
8. It is also noticed that in the oral evidence, the appellant
had stated that he had seen the photocopy of the driving
licence of Shivgyani and was also satisfied about his driving
skills, before employing him as the driver for driving the
vehicle. In his cross-examination by the insurer, the appellant
stated thus:
“……I have not sold the vehicle. Driver Shiv Gyani was
working with me from February 2012. He was permanent
resident of District – Fatehpur. I never got verified the driving
licence of Shiv Gyani. ……… This was not in my knowledge
that he has no driving licence. This is incorrect to say that I
provided my vehicle to him to drive despite I was aware that
he has bogus licence. I am aware of this that licence is
issued on the address one resides. ……………This is
incorrect to say that I am giving false evidence to save my
skin.”
9. The Tribunal while answering issue No.3, however, made
no attempt to analyse the pleadings and evidence on record to
ascertain whether the appellant (owner) was aware of the fake
6
driving licence possessed by the driver (respondent No.6). The
Tribunal merely adverted to the investigation and verification
report and found that the stated driving licence was invalid.
The High Court also made no attempt to enquire into the
relevant aspect, as has been consistently expounded by this
Court and restated in PEPSU Road Transport Corporation
(supra). Even in the case of Premkumari (supra), the Court
after considering the judicial precedents opined as follows:
“It is clear from the above decision when the owner after
verification satisfied himself that the driver has a valid
licence and was driving the vehicle in question competently
at the time of the accident there would be no breach of
Section 149(2)(a)(ii), in that event, the insurance company
would not then be absolved of liability. It is also clear that
even in the case that the licence was fake, the insurance
company would continue to remain liable unless they prove
that the owner was aware or noticed that the licence was
fake and still permitted him to drive.”
10. The decision in PEPSU Road Transport Corporation
(supra) was relied upon by the appellant before the High Court
which, however, distinguished the same by observing that it
was on the facts of that case, where the Court opined that
there was no evidence to prove that the driving licence
produced by the authorities was fake. That approach, in our
7
opinion, is manifestly wrong. Whereas, even in that case, the
Court was called upon to deal with the similar question as is
involved in this appeal. In that case, the Court first adverted to
the decision in United India Insurance Co. Ltd. Vs. Lehru
and Ors.3, and then to the three-Judge Bench decision in
National Insurance Co. Ltd. Vs. Swaran Singh & Ors.4.
Paragraphs 99-101 of Swaran Singh (supra) have been
extracted, which read thus:
“99. So far as the purported conflict in the judgments of
Kamla and Lehru is concerned, we may wish to point out
that the defence to the effect that the licence held by the
person driving the vehicle was a fake one, would be available
to the insurance companies, but whether despite the same,
the plea of default on the part of the owner has been
established or not would be a question which will have to be
determined in each case.
100. This Court, however, in Lehru must not be read to
mean that an owner of a vehicle can under no circumstances
have any duty to make any enquiry in this respect. The
same, however, would again be a question which would arise
for consideration in each individual case.
101. The submission of Mr Salve that in Lehru case, this
Court has, for all intent and purport, taken away the right of
an insurer to raise a defence that the licence is fake does not
appear to be correct. Such defence can certainly be raised
but it will be for the insurer to prove that the insured did not
take adequate care and caution to verify the genuineness or
otherwise of the licence held by the driver.”
3
(2003) 3 SCC 338
4
(2004) 3 SCC 297
8
The Court then went on to advert to a two-Judge Bench
decision of this Court in National Insurance Co. Ltd. Vs.
Laxmi Narain Dhut,
5 before dealing with the facts of the case
before it.
11. Suffice it to observe that it is well established that if the
owner was aware of the fact that the licence was fake and still
permitted the driver to drive the vehicle, then the insurer
would stand absolved. However, the mere fact that the driving
licence is fake, per se, would not absolve the insurer.
Indubitably, the High Court noted that the counsel for the
appellant did not dispute that the driving licence was found to
be fake, but that concession by itself was not sufficient to
absolve the insurer.
12. As aforementioned, in the present case, neither the
Tribunal nor the High Court has bothered to analyse the
pleadings and evidence adduced by the parties on the crucial
matter. Be that as it may, in this appeal, the limited grievance
5
(2007) 3 SCC 700
9
of the appellant-owner of the vehicle is about unjustly
absolving the insurer merely on the finding that the driving
licence of the driver (respondent No.6) was fake. No other
aspect has been raised by the appellant nor do we intend to
analyse or consider the same.
13. We, therefore, deem it appropriate to relegate the parties
before the High Court for fresh consideration of the appeal
filed by the appellant (owner) only on the question of liability of
the owner or of the insurer (respondent No.7) to pay the
compensation amount.
14. We make it clear that the High Court shall not examine
any other issue in the remand proceedings. For, the
compensation amount, as determined and directed by the
Tribunal, has already been made over to the claimants.
15. Accordingly, we set aside the impugned judgment and
order passed by the High Court of Judicature at Allahabad
and restore the First Appeal From Order No.3290 of 2016, to
the file of the High Court to its original number for being
10
decided afresh, on the limited question of whether the liability
to pay compensation amount, is cast upon the appellant
(owner of the vehicle) or respondent No.7 (insurer). That aspect
be decided on its own merits in accordance with law. We may
not be understood to have expressed any opinion, either way,
on the efficacy of the pleadings and the evidence produced by
the parties adverted to in this judgment or in any other
evidence on record. All questions in that behalf are left open.
16. The appeal is allowed in the aforementioned terms with
no order as to costs.
.………………………….CJI.
(Dipak Misra)
…………………………..….J.
(A.M. Khanwilkar)
New Delhi;
August 14, 2018.
