The Hindu : National : No insurance compensation if driver licence is fake

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Friday, Oct 19, 2007
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No insurance compensation if driver licence is fake

Legal Correspondent

Renewal cannot make a forged document genuine licence, rules Supreme Court; order set aside

‘Couldn’t ascertain if licence was issued or not’
‘Forum erred in holding insurance firm liable’

New Delhi: An insurance company is not liable to pay compensation if the licence granted to the driver of a vehicle involved in an accident was found forged, though it was subsequently renewed by authorities, the Supreme Court has held.

“As a point of law, we have no manner of doubt that a fake licence cannot get its forgery outfit stripped off merely on account of some officer renewing the same with or without knowing it to be forged. No licensing authority has the power to renew a fake licence and, therefore, a renewal, if at all made, cannot transform a fake licence as genuine,” said a Bench consisting of Justices S.B. Sinha and H.S. Bedi.

Once fake, ever fake

“Any counterfeit document showing that it contains a purported order of a statutory authority would ever remain counterfeit albeit the fact that other persons including some statutory authorities would have acted on the document unwittingly on the assumption that it is genuine.”

In the instant case, Davinder Singh (respondent) employed Kulbir Singh as the driver of a transport vehicle, which met with an accident. Investigation found that the licensing authority did not issue the licence held by Kulbir Singh, though the fake licence was subsequently renewed.

On a complaint from Davinder Singh, the District Consumer Disputes Redress Forum in the capital directed the United India Insurance Co. Ltd to pay Rs.1,23,412 towards damages and Rs. 20,000 under other heads. The State Commission upheld the order.

Appealing against this order, the insurance company said that on the date of the accident the driver did not have a valid licence and hence it was not liable to pay compensation. The vehicle owner, however, contended that it was not possible for him to ascertain from the original licensing authority whether it had issued any licence or not.

Justice Sinha, writing the judgment, rejected the respondent’s contention, and said “Section 3 of the Motor Vehicles Act casts an obligation on a driver to hold an effective driving licence for the type of vehicle he intends to drive. Where originally the licence was a fake one, renewal cannot cure the inherent fatality.”

The Bench said: “The Commission committed an error in holding the appellant liable to indemnify the owner of the vehicle in regard to losses sustained by him.” It set aside the order and allowed the insurance company’s appeal.

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