FAO No. 165 of 1997 (1) In the High Court of Punjab & Haryana at Chandigarh FAO No. 165 of 1997 (O&M) Date of decision : 18.1.2011 New India Assurance Company Limited ... Appellant vs Pritam Singh and others .... Respondents Coram: Hon'ble Mr. Justice Rajesh Bindal Present: Mr. Inderjit Sharma, Advocate, for the appellant. Rajesh Bindal J. The present appeal has been filed by the New India Assurance Company Limited disputing the liability to indemnify the insured on the ground that the deceased driver of the vehicle was not holding a valid driving licence. Briefly the facts of the case are that Tarlochan Singh, aged 23 years, was working as driver on truck bearing No. PAT-5336, owned by respondent Madan Gopal Thakur. When he was going on the aforesaid truck from Qadian to Hoshiarpur, the steering of the truck got free and accident took place. He was admitted in Civil Hospital, Gurdaspur, where he died on 31.12.1992. The deceased was getting ` 2,000/- per month as salary from respondent Madan Gopal Thakur. When no compensation was received by the claimants, they filed petition for claim before the Commissioner for Workmen's Compensation, Hoshiarpur (for short, 'the Commissioner'). After considering the evidence led by the parties, the Commissioner allowed the petition and the claimants were awarded ` 87,980/- as compensation. It is this award which is impugned by the Insurance Company in the present appeal. Learned counsel for the appellant referred to certificate, Ex. R- 1, produced by RW1 S. M. Sharma, a clerk from D. T. O. office., Hoshiarpur, who stated that driving licence bearing no. 1850 DL/92-93 was issued in the name of Jaswant Singh son of Shri Virsa Singh and not in the name of Tarlochan Singh deceased. The submission was that once it had FAO No. 165 of 1997 (2) been proved on record that the driving licence held by the deceased Tarlochan Singh had not been issued in his name by the licencing authority, the insurance company cannot be made liable to pay the compensation. No one has appeared for the respondent at the time of hearing. Heard learned counsel for the appellant and perused the relevant referred record. No doubt the evidence in the form of certificate, Ex. R-1, from the licencing authority shows that the driving licence had not been issued in the name of Tarlochan Singh, however, the insured in the present case had produced on record the driving licence held by Tarlochan Singh, photo copy of which is on record as Ex. R-1. A perusal thereof shows that it was duly signed by the officer concerned and had been issued under his seal, which apparently looked genuine. In addition to this, RW3 Suresh Chander son of Arjan Singh, resident of village Hajipur, submitted that he knew Tarlochan Singh as he had worked as driver on his truck during 1990-91. He was an efficient driver. Even Madan Gopal Thakur (RW-2), the owner of the offending vehicle has also stated that the deceased was a perfect driver. The issue regarding liability for payment of compensation under the Motor Vehicle Act, whereby the driver was found to be not holding a genuine driving licence though he was having the licence which apparently looks genuine, has been considered earlier by Hon'ble the Supreme Court and by this court. In United India Insurance Co. Ltd. vs Lehru and others, 2003 (2) RCR (Civil) 278, Hon'ble the Supreme Court observed 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 it looks genuine, the owner is not expected to find out whether the licence has in fact been issued by the competent authority or not. The owner would then take the test of the driver. If he finds that the driver is competent to drive the vehicle, he will hire the driver. We find it rather strange that insurance companies expect owners to make enquiries with-RTOs which are spread all over FAO No. 165 of 1997 (3) 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, 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 person, but it may be able to recover from the insured.” In National Insurance Co. Ltd. v. Swaran Singh and others, 2004(3) SCC 297, the Hon'ble Supreme Court considered the entire scheme of the Motor Vehicles Act and the scope and purport of Section 149(2) (a) (ii) of the Motor Vehicles Act, 1988 and held as under: “(iii) The breach of policy condition e.g., disqualification of driver or invalid driving licence of the driver as contained in sub-section 149, have to be proved to have been “committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. To avoid its liability towards insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the conditions of the policy regarding use of vehicle by duly licensed driver or one who was not disqualified to drive at the relevant time. (iv) The Insurance companies are, however, with a view to avoid their liability must not only establish FAO No. 165 of 1997 (4) the available defence (s) raised in the said proceedings but must also establish “breach” on the part of the owner of the vehicle, the burden of proof wherefor would be on them. (vi) Even where the insurer is liable to prove breach on the part of the insured concerning the policy condition regarding holding of a valid driving licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards insured unless the said breach or breaches on the condition of driving licence is/ are so fundamental as are found to have contributed to the cause of the accident. The Tribunal in interpreting the policy conditions would apply “the rule of main purpose” and the concept of “fundamental breach” to allow defence available to the insured under Section 149(2) of the Act.” In Lal Chand vs Oriental Insurance Co. Ltd. 2006 Accident Claim Journal 2161, Hon'ble the Supreme Court observed thus: “In the instant case, the owner has not only seen and examined the driving licence produced by the driver but also took the test of the driving of the driver and found that the driver was competent to drive the vehicle and thereafter appointed him as driver of the vehicle in question. Thus, the owner having satisfied himself that the driver had a licence and was driving competently, there would be no breach of Section 149(2) (a) (ii) and the Insurance Company would not then be absolved of its liability.” The aforesaid judgments were relied upon by this court in FAO No. 1496 of 2008- Suresh Chand vs National Insurance Co. Ltd. and others, decided on 5.4.2010. If the facts of the present case are considered in the light of the law referred to above, it has come in the evidence that the driver of the truck was having a driver licence which apparently looked genuine as it was duly stamped and signed by the competent authority. It FAO No. 165 of 1997 (5) has also come on record that he knew driving very well. It is not only the owner of the offending vehicle stated so, even a witness, who had engaged the deceased as a driver on his vehicle earlier also stated so. Under the circumstances the insured is not expected to find out whether the driving licence has in fact been issued by the competent authority or not. Accordingly, for the reasons stated above, the present appeal is dismissed. 18.1.2011 ( Rajesh Bindal) vs. Judge