FAO No.4273 of 2003 1 IN THE HIGH COURT OF PUNJAB & HARYANA, CHANDIGARH F. A. O. No. 4273 of 2003 Date of Decision: December 10, 2008 M/s Macmet India Limited ...........Appellant Versus Mohinder Singh and others ..........Respondents Coram: Hon'ble Mrs.Justice Sabina Present: Mr.H.S. Dhindsa,Advocate for the appellant. Mr. R.K.Bhishambu, Advocate for the New India Assurance Company Ltd. * * * Sabina, J. This is an appeal filed by the owner of the vehicle in question against the award of the Motor Accident Claims Tribunal, Ludhiana (hereinafter referred to as `Tribunal') whereby while allowing the claim petition, the learned Tribunal entitled the Insurance Company to recover the amount of compensation from respondents No. 1 and 2 (driver and owner) of vehicle. Claimants- Mohinder Singh and Joginder Kaur filed a claim petition seeking compensation on account of death of their son Harpreet Singh in the motor vehicle accident which had taken place on 16.4.1998 due to rash and negligent driving of respondent No.1 while driving Truck No. HR-38- B-1411. Vide the impugned award, the learned Tribunal awarded the amount of Rs. 2,10,050/- to claimants as compensation. The Insurance FAO No.4273 of 2003 2 Company was given liberty to recover the amount of compensation from the owner and driver of the offending vehicle. Aggrieved by the liberty given to the Insurance Company to recover the amount of compensation from the owner and driver, the owner of the offending vehicle has filed the present appeal. Learned counsel for the appellant has argued that the owner of the vehicle had seen the driving licence of the driver at the time of his employment. The licence held by the driver seemed valid on the face of it. In these circumstances, the owner could not be said to have committed any breach of condition of Insurance Policy. The Insurance Company was liable to indemnify the insurer. Learned counsel for the Insurance Company- respondent No.4, in response, has submitted that the appellant had failed to take due care and caution at the time of employment of driver-respondent No. 3. The driving licence held by respondent No.3 was found to be fake and as such, the Insurance Company was not liable to indemnify the insurer. It has been held by the Apex Court in United India Insurance Company Ltd. v. Lehru and others 2003 (2) PLR 124 as under:- "When an owner is hiring a driver, he will therefore have to check whether the driver has a driving licence. If the driver produces a driving licence which on the face of its looks genuine, the owner is not expected to find out whether the licence has in fact been issued by a competent authority or not. The owner would then take the test of the driver. If he finds that the driver is competence to drive the vehicle, he will hire the driver. FAO No.4273 of 2003 3 We find it rather strange that Insurance companies expect owners to make inquiries with RTO's, which are spread all over the country, whether the driving licence shown to them is valid or not. Thus, where the owner has satisfied himself that the driver has a licence and is driving competently there would be no breach of section 149(2)(a)(ii). The Insurance Company would not then be absolved of liability. If it ultimately turns out that the licence was fake the Insurance Company would continue to remain liable unless they prove that the owner/insured was aware or had noticed that the licence was fake and still permitted that person to drive. More importantly even in such a case the Insurance Company would remain liable to the innocent third party, but it may be able to recover from the insured. This is the law which had been laid down in Skandia's Sohan Lal Passi's and Kamla's case. We are in full agreement with the views expressed therein and see no reason to take a different view." In the present case, RW1-Suresh Chand Sharma appeared in the witness box on behalf of the owner. He deposed that Dharminder Singh, driver had a valid driving licence. He had been appointed as driver in the year 1997 and at that time, his driving licence had been seen. It was issued by the licencing authority and they were satisfied that it was a genuine licence. The owner was not expected to make a roving inquiry to find out about the validity of the driving licence which on the face of it appeared to FAO No.4273 of 2003 4 be genuine. The owner, thus, had not knowingly or intentionally handed over the vehicle in question to a driver who was not having a valid driving licence. Although the driving licence was found to be fake vide report (Exhibit R2) made by the licensing authority,since the knowledge and intention of the owner to commit breach of condition of policy cannot be attributed to the owner, in the facts and circumstances of the present case, therefore, the Insurance Company cannot be absolved of its liability to indemnify the insurer. Accordingly, the finding of the learned Tribunal on issue No.4 to the effect that the Insurance Company was entitled to claim back the amount of compensation from respondents No. 1 and 2 is set aside. Hence, issue No.5 (Relief) is modified to the extent that the part of the relief clause which reads as under is deleted:- “However, as the driving licence of Dharaminder Singh driver respondent No.1 has been found fake, the respondent No.3 Insurance Company would be entitled to recover the amount of compensation from the respondents no.1 and 2.” Appeal is allowed in the above terms. (Sabina) December 10, 2008 Judge arya