IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO No.1413 of 1992 (O&M) Date of decision:27.01.2011 The National Insurance Company Limited ....Appellant versus Shanta Rani and others ...Respondents II. FAO No.1414 of 1992 (O&M) The National Insurance Company Limited ....Appellant versus Ranjit Kaur and others ...Respondents III. FAO No.1415 of 1992 (O&M) The National Insurance Company Limited ....Appellant versus Mohinder Kaur and others ...Respondents IV. FAO No.1416 of 1992 (O&M) The National Insurance Company Limited ....Appellant versus State of Punjab and others ...Respondents V. FAO No.1417 of 1992 (O&M) The National Insurance Company Limited ....Appellant versus Smt. Jaswinder Kaur and others ...Respondents CORAM: HON’BLE MR. JUSTICE K. KANNAN ---- FAO No.1413 of 1992 (O&M) - 2 - Present: Mr. Neeraj Khanna, Advocate, for Mr.L.M.Suri, Senior Advocate, for the appellant. Mr. H.S.Bhullar, Advocate, for respondents 1 to 3 in FAO Nos.1413, 1415 and 1417 of 1992 and for respondents 1 to 4 in FAO No.1414 of 1992. Mr. H.S. Gill, DAG, Punjab, for respondent No.1 in FAO No.1416 of 1992. Mr. Madan Lal, Advocate, for Mr. Raman Mahajan, Advocate, for respondent No.4 in FAO Nos.1413, 1415 and 1417 of 1992, for respondent No.2 in FAO No.1416 of 1992 and for respondent No.5 in FAO No.1414 of 1992. ---- 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. All the five appeals are at the instance of the Insurance Company which took up a plea that the driver did not have a valid driving licence. Even at the trial, a Local Commissioner had been appointed to examine the issue of driving licence, who reported that there had been no driving licence and that it had not been issued from the office of the Licensing Authority at Hyderabad, the place from which the driver had alleged that he had obtained the driving licence. The Tribunal took this evidence to be inadequate to say that the burden of proof had been discharged. I find the assessment to be wholly wrong. The absence of a particular document can be proved to be false only by the production of the said document that will be possible only at the instance of the driver. If the particular details of the driving licence, as given by the driver, was established by the insurer as not having been issued by the licensing authority alleged to have issued the licence, the Tribunal must FAO No.1413 of 1992 (O&M) - 3 - have taken it as concluding the issue to hold that the insurer had discharged the onus. There was no possibility for the insurer to let in any better quality of evidence than what was done. I find that the owner had, therefore, been guilty of breach of terms of policy. 2. Even if there have been a violation of terms of policy, the right of claim for third parties against the insurer cannot be defeated and it is now fairly a well settled principle of law which has obtained the status of stare decisis as held by the decision of the Hon'ble Supreme Court in National Insurance Company Limited Versus Swaran Singh (2004) 3 SCC 279 in para 103 that for such violation of terms of policy, the insurer shall still become liable to satisfy the claim of third party but will have a right of recovery against the insured. The recovery principle which was enunciated in New India Assurance Company Versus Kamla-(2001) 4 SCC 342 was in the context of the Motor Vehicles Act of 1988 and in particular reference to Sections 149(4) and 149(5) but I hold the same principle to be applicable even under the Motor Vehicles Act of 1939 for even the said Act provide for compulsory insurance for third party risk and if there had been a policy of insurance, there shall be a duty for the insurer to satisfy the claim of a third party. What was essential an issue of breach of contract between the insurer and the insured ought not to impair the third parties' right in any way and to that extent, I would hold the proposition of law which was brought through Kamla dispensation must apply affortiorari to a claim emanating from Motor Vehicles Act of 1939 as well. 3. The awards of the Tribunal are modified and the Insurance FAO No.1413 of 1992 (O&M) - 4 - Company shall be bound to satisfy the claim arising out of the awards but shall have a right of recovery against the owner/insured. 4. The appeals are allowed to the above extent. (K.KANNAN) JUDGE 27.01.2011 sanjeev