IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO No.165 of 1994 Date of decision:29.06.2010 The New India Assurance Company Limited ....Appellant versus Smt. Neelam and others ...Respondents CORAM: HON’BLE MR. JUSTICE K. KANNAN ---- Present: Mr. L.M.Suri, Senior Advocate, with Mr.Neeraj Khanna, Advocate, for the appellant. None for the respondents. ---- 1. Whether reporters of local papers may be allowed to see the judgment ? 2. To be referred to the reporters or not ? 3. Whether the judgment should be reported in the digest ? ---- K.Kannan, J. (Oral) 1. The Insurance Company is in appeal before this Court disputing the liability on the ground that the driver of the truck which was involved in the accident did not hold a valid driving licence. The Tribunal rejected the contention and observed that the insured had done everything in his power by engaging a driver who was shown to have a driving licence and he could not to be held responsible for the alleged fake licence which the driver was supposed to have had. At the trial, the Assistant Licencing Clerk, Solan, Hari Singh was summoned to produce the records relating to the licence. It was elicited through him that the driving licence had never been issued to Karnail Singh, who was said to be the driver, by the Licencing Authority, Solan. FAO No.165 of 1994 - 2 - 2. The issue of fake licence and the provision for exculpating the Insurance Company has been set through several decisions of the Hon'ble Supreme Court. The most important pronouncement on the issue has come through a three member Bench in National Insurance Company Limited Versus Swaran Singh-2004(3) SCC 297. The mere defence of a fake licence will not enable an Insurance Company to plead that it will not be liable. If the owner had checked for the possession of a licence and if it is shown that the driver had one, then the fact that has to be still seen is whether the owner had taken necessary precaution to ensure its genuineness. The Hon'ble Supreme Court has held in the above judgment “the owner of a motor vehicle in terms of Section 5 of the Act has a responsibility to see that no vehicle is driven except by a person who does not satisfy the provisions of Section 3 or 4 of the Act. In a case, therefore, where the driver of the vehicle, admittedly, did not hold any licence and the same was allowed consciously to be driven by the owner of the vehicle by such person, the insurer is entitled to succeed in its defence and avoid liability. The matter, however, may be different where a disputed question of fact arises as to whether the driver had a valid licence or where the owner of the vehicle committed a breach of the terms of the contract of insurance as also the provisions of the Act by consciously allowing any person to drive a vehicle who did not have a valid driving licence. In a given case, the driver of the vehicle may not have any hand in the accident at all e.g. a case where an accident takes place owing to a mechanical fault or vis major.” The Hon'ble Supreme Court has further said that if it was a forged licence but the requirement FAO No.165 of 1994 - 3 - to establish the evidence is that the owner was guilty of a willful breach of conditions of the insurance policy from the contract of insurance. The defence to the effect of the licence held by the person driving the vehicle was a fake one, is definitely available to an Insurance Company but despite the same, the plea of breach on the part of the owner has to be established. That is possible only if it is specifically brought to the attention of the Court that the owner was at fault in not ascertaining to himself the genuineness of the driving licence. It is essentially a question of fact and I do not find even in the grounds of appeal that the petitioner has contended that the owner was guilty of a breach of a contract. On the other hand, I find from the grounds of appeal that it was no body's case that the owner had given the truck to the person who did not hold a valid driving licence. If it was not the case of the owner nor was it the case of the Insurance Company, the issue of exculpating an Insurance Company from liability does not arise. The necessary factual foundation that could support a case of an Insurance Company to plead a case of non-liability is absent in this case and the award passed by the Tribunal cannot, therefore, be assailed by the Insurance Company. 3. The learned senior counsel also urges that the Tribunal had adopted a multiplier of 25 and a compensation of Rs.3 lakhs had been taken when under no situation could the multiplier be more than 18. The matter is really one of an attack on the quantum which the Insurance Company is not entitled to urge. The learned senior counsel however would contend that when the error was patent, it is the duty of the Court to interfere. The case of the petitioner who was a young widow with two FAO No.165 of 1994 - 4 - minor children was that the husband was earning at Rs.1500/- per month. The Court had assessed Rs.1,000/- as the monthly contribution to the family and arrived at a compensation of Rs.3 lakhs. The accident took place on 4th May, 1991 and when the case is taken up now after 19 years even the amount taking Rs.1,000/- as the contribution to the family, cannot be seen to be high. The overall compensation for death of a young man that has left behind his widow and two children fixed at Rs.3 lakhs cannot be said to be excessive to shock the conscience of the Court to intervene on its own motion although the quantum is not a ground of challenge in appeal. The choice of multiplier may not be correct but still I do not think it is a case where Court's intervention is called for, having regard to the peculiar circumstances of the case. The appeal is consequently dismissed. (K.KANNAN) JUDGE 29.06.2010 sanjeev