Case: National Insurance Co. Ltd Vs. Laxmi Narain Dhut

In each of the impugned judgments the concerned High Court held that the principles laid down by this Court in National Insurance Co. Ltd. v. Swaran Singh (2004 (3) SCC 297 ) is applicable even to claims other than third party claims. Some of these appeals also relate to orders passed by the National Consumer Disputes Redressal Commission, New Delhi (in short the Commission) where a similar view has been takenSince there has been elaborate analysis of the factual position it would be appropriate to decide the basic principles in law and ask the High Courts/Commissions to decide the cases afresh keeping in mind the view expressed in the present judgmentThe decision in Swaran Singhs case (supra) applied to claims which involved only the insurance company and the owner of the vehicle i.e. where there was no third party involved.It has been highlighted by learned counsel for the appellants that Swaran Singhs case (supra) was rendered in the background of Section 149 of the Motor Vehicles Act, 1988 (in short the Act) which has no application to cases where there is no third party involvedIn response, learned counsel appearing for the respondents have submitted that there can be no difference of approach in cases where the dispute relates to the claim relating to the insurer and the insured. According to them, purposive interpretation of provisions is called for in view of the fact that the statute itself is a beneficial piece of legislationIn order to appreciate the rival submissions, few provisions of the Act and the corresponding provisions in the Motor Vehicles Act, 1939 (hereinafter referred to as the Old Act) would be necessary.

Court's reasoning:
26. As noted above, the conceptual difference between third party right and own damage cases has to be kept in view. Initially, the burden is on the insurer to prove that the license was a fake one. Once it is established the natural consequences have to flow27. In view of the above analysis the following situations emerge:1. The decision in Swaran Singhs case (supra) has no application to cases other than third party risks2. Where originally the license was a fake one, renewal cannot cure the inherent fatality3. In case of third party risks the insurer has to indemnify the amount and if so advised to recover the same from the insured4. The concept of purposive interpretation has no application to cases relatable to Section 149 of the Act