FAO No.2461 of 1998 -1- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH FAO No.2461 of 1998 Date of Decision.01.07.2010 The New India Assurance Co. Ltd. through its Assistant Manager, Regional Office, SCO 36-37, Sector 17, Chandigarh ........Appellant Versus Itwari son of late Parbhu son of Chhote Lal and others ...Respondents Present: Mr. V. Ramswaroop, Advocate for the appellant. Mr. B.S. Verma, Advocate for respondent No.6. CORAM:HON'BLE MR. JUSTICE K. KANNAN 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 against the judgment of the MACT against the liability cast on it, in spite of the fact that the driver who drove the vehicle was proved to have had a fake driving licence. 2. The liability of the Insurance Company in a case of a fake licence or a renewal of a licence which was a fake one have been considered by the Hon'ble Supreme Court in several cases and the decision in National Insurance Company Ltd. Vs. Swaran Singh (2004) 3 SCC 297 and United India Insurance Company Ltd. VS. Divinder Singh (2007) 8 SCC 342 are instructive. In the latter judgment, it has been held that a renewal of a fake driving licence is no licence at all and hence the insurer shall not be liable. FAO No.2461 of 1998 -2- 3. Having regard to the fact that the insurance company had examined a staff from the Licensing Authority RW-1 to show that the particular licence No.10137 dated 13.11.1992, which was produced by the driver did not stand in the name of the driver but it was in the name of yet another person by name Naresh. The driver did not examine himself and the owner remained ex parte. In spite of that the insurance company was made liable that no provision for right of recovery against the insured is available. The insured cannot have the benefit of indemnity under the policy when he had failed to avail the opportunity to explain the circumstances under which he was led to believe that the driver had a valid driving licence. 4. Even if the insurance company is not liable, the duty to satisfy the award for the claimants cannot be doubted. In such a situation, the liability to satisfy the award will be accompanied with a right of recovery from the owner/insured. This cannot be doubted in any way, as specifically provided by the decision of the Hon'ble Supreme Court while dealing with the effect of proviso to Section 149(4) and Section 149(5) of the Motor Vehicles Act in New India Assurancy Co. Ltd. Vs. Kamla (2001) 4 SCC 342. 5. Under the circumstances, the insurance company shall not be liable to indemnify the insured. The liability is to satisfy the claim under the award with a right of recovery against the insured. The award of the Tribunal is modified and the appeal allowed to the above extent. (K. KANNAN) JUDGE July 01, 2010 Pankaj*