FAO No.1227 of 2003 -1- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH FAO No.1227 of 2003 Date of Decision. 08.07.2010 New India Assurance Co. Ltd., SCO No.36-37, Sector 17-A, Chandigarh through its Admn. Officer .........Appellant Versus Paramjit Kaur widow of Hardam Singh son of Jaswant Singh and others .......Respondents Present: Mr. L.M. Suri, Advocate, Senior Advocate with Mr. Neeraj Khanna, Advocate for the appellant. None for the respondents. 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 Co is in appeal against the judgment of the MACT contending that in spite of the fact that the driver who drove the vehicle was proved to have had a fake driving licence, the liability is wrongly cast on it. 2. The liability of the Insurance Co 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 decisions in National Insurance Co v Swaran Singh (2004) 3 SCC 297 and United Indian Insurance v Divinder Singh (2007) 8 SCC 342 are instructive. In the latter judgment, it has been held that a renewal FAO No.1227 of 2003 -2- of a fake driving licence is no licence at all and hence the insurer shall not be liable. 3. It was even held earlier by the Hon’ble Supreme Court, while referring to the effect of a renewal of forged licence, in New India Assurance Co., Shimla v. Kamla,(2001) 4 SCC 342: “The observation of the Division Bench of the Punjab and Haryana High Court in National Insurance Co. Ltd. v. Sucha Singh that renewal of a document which purports to be a driving licence, will robe even a forged document with validity on account of Section 15 of the Act, propounds a very dangerous proposition. If that proposition is allowed to stand as a legal principle, it may, no doubt, thrill counterfeiters the world over as they would be encouraged to manufacture fake documents in a legion. What was originally a forgery would remain null and void forever and it would not acquire legal validity at any time by whatever process of sanctification subsequently done on it. Forgery is antithesis to legality and law cannot afford to validate a forgery.” 4. The judgment of the Supreme Court in Swaran Singh (supra) has an immediate relevance for us in this case for the effect of proof of fake licence in the context of the need for discharging the burden of proof on the Insurance company that the insured had committed a breach of terms of the policy. The fact that the driver had a fake licence will absolve the insurer of the liability of the FAO No.1227 of 2003 -3- insurer only, if it is established that the accident was on account of reasons where the possession of valid driving licence will have relevance for consideration of the aspect of negligence that has to be proved. If the accident was on account of say, mechanical defect in the vehicle, the issue of the validity of licence will have no relevance. 5. 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 anyway, as specifically provided by the decision of the Supreme Court while dealing with the effect of proviso to section 149(4) and section 149(5) of the M.V.Act in New India Assurance co v Kamla (2001) 4 SCC 342. 7. In this case the driver in spite of notice did not produce the licence saying that he had lost it. The insurer had taken steps to have a local commissioner appointed to verify the genuineness of the driver's licence on the basis of particulars collected by the police while criminal case was launched against the driver of the mini bus. It came through the evidence that the Licensing Authority, Cuttak had not issued any such licence and the copy of the licence, which had been produced by the police did not prove that it was a valid driving licence. The Tribunal still held that the burden of proof had not been established by examining the police. In my view, this reasoning is wrong, for if the driver would not produce the licence and the particular copy of licence, which the police had filed in a FAO No.1227 of 2003 -4- criminal case was verified by the Cuttak Licensing Authoirty that the licence number that the copy bore had not been issued by the office at Cuttak. It must only be be taken that the insurance had discharged the burden. To look for any other proof or to attribute a greater burden to be shouldered upon the insurance company is not tenable. The insurance cannot, therefore, be made liable for the claim any more than its duty to satisfy the award to the claimant with the right of recovery against the insured. 8. 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 08, 2010 Pankaj*