IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO No.2521 of 1997 Date of decision:01.07.2010 New India Assurance Company Limited ....Appellant versus Islamuddin and others ...Respondents CORAM: HON’BLE MR. JUSTICE K. KANNAN ---- Present: Mr. Aswani Talwar, 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 against the judgment of the MACT against the liability cast on it contending that in spite of the fact that the driver who drove the vehicle was proved to have had a fake driving licence, it had not been provided for right of recovery against the insured. 2. The liability of the Insurance Company in a case of a fake licence or a renewal of licence 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 Company Versus Swaran Singh- (2004) 3 SCC 297 and United India Insurance Versus Divinder Singh- FAO No.2521 of 1997 - 2 - (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. 3. The Tribunal has take note of the following:- “ The Insurance Company-respondent No.3 took plea that since Kishan Kumar-respondent No.1 was not holding a valid driving licence on the date of accident, it is not liable to pay any compensation arising out of the accident in question. The insurance company has examined Sh. Mange Ram Verma, Junior Assistant, Registration Authority, Una (Himachal Pardesh) who appearing as RW1 made statement that he has brought the record in respect of issue of driving licence. After seeing the photocopy of the driving licence bearing No.K-93462/Una/91 dated 25.11.1991, he testified that there is no such registration number in the record which he has brought. He further testified that on 25.11.1991 no driving licence in the name of Kishan Kumar son of Surat Singh was issued by the Licensing Authority, Una. He further proved report Ex. R1 in this regard. In this case, the insurance company at the most has not been able to establish that no driving lincence bearing No.K- 93462 was issued in the name of Kishan Kumar-respondent No.1 by the Licensing Authority, Una. That does not rule out the possibility of Kishan Kumar having got issued driving licence from other Licensing Authorities in the country........” 4. However, it has reasoned that the driving licence could have been issued from any other place in Himachal Pradesh or in India. When the driving licence produced by the driver was proved to be not genuine, it cannot be expected that the insurer could conjecture where it has been FAO No.2521 of 1997 - 3 - issued from. The reasoning is wholly untenable. 5. The owner has not given any evidence to contradict the evidence let in by the Insurance Company. 6. The owner has remained ex parte and no evidence is available about his bonafides of enquiry regarding the possession of driving licence by the driver before its entrustment to him. Consequently, the insured shall not have the benefit of indemnity under the policy. 7. 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 Hon'ble 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 Company Versus Kamla-(2001) 4 SCC 342. 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 01.07.2010 sanjeev