National Consumer Disputes Redressal
New India Assurance Co. Ltd. vs Bhika Khan on 29 May, 2012
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION No. 144 of 2008 (From the Order dated 26.09.2007 in Appeal No. 255/2001 of the State Consumer Disputes Redressal Commission, Rajasthan) New India Assurance Co. Ltd. Through Branch Manager, Pali, Rajasthan .. Petitioner VERSUS Bhika Khan S/o Rafique Khan R/o Marwar Junction, District Pali Rajasthan .. Respondent BEFORE: - HONBLE MR. JUSTICE ASHOK BHAN, PRESIDENT HONBLE MRS. VINEETA RAI, MEMBER HONBLE MR. JUSTICE K.S. CHAUDHARI, MEMBER For the Petitioner : Mr. Joy Basu and Mr. Maiban N. Singh, Advocates For the Respondent : Mr. S.K. Sharma and Mr. Milan Deep Singh, Advocates PRONOUNCED ON: 29.05.2012 O R D E R
ASHOK BHAN, J., PRESIDENT The New India Assurance Co. Ltd., Petitioner herein which was the opposite party before the District Forum, has filed this Revision Petition against the judgment and order dated 26.09.07 passed by the State Consumer Disputes Redressal Commission, Rajasthan (in short, the State Commission) in appeal no. 225/01 whereby the State Commission setting aside the order of the District Forum has allowed the complaint filed by the Respondent and has directed the Petitioner Insurance Company to pay a sum of Rs.1,21,584/- to the Respondent along with interest @ 9% p.a. from the date of filing of the complaint, i.e. 09.08.99 till realization. Rs.2,000/-
were awarded as costs.
FACTS:-
Complainant/Respondent got his truck bearing registration No. RJ-19-G 4637 insured with the Petitioner for the period from 23.6.97 to 22.6.98 for a sum of Rs.5,00,000/-. During the validity of the policy, the truck met with an accident on 8.5.98 near Ajmer and sustained damage. An FIR was lodged with the Police Station, Adarsh Nagar, Ajmer and intimation was also given to the Petitioner Insurance Company. Respondent got the accidental truck repaired and incurred an expenditure of Rs.2,21,194/-. Thereafter, Respondent submitted the claim with the Petitioner Insurance Company which was repudiated on the ground that the driver of the vehicle did not have a valid driving licence at the time of accident. Respondent, being aggrieved, filed the complaint before the District Forum alleging deficiency in service on the part of the Petitioner Insurance Company.
Petitioner, on being served, filed its written statement resisting the complaint and justifying the repudiation on the ground that the driver of the vehicle, in question did not have a valid and effective driving licence at the relevant time of accident. That the driver was possessing a driving licence issued by the Motor Licencing Authority, Bharatpur and on verification from the concerned Transport Authority the same was found to be fake. That there was no deficiency in service on their part and the complaint was liable to be dismissed.
District Forum dismissed the complaint holding that the driver of the vehicle did not have a valid and effective driving licence at the time of accident.
Respondent, being aggrieved, filed an appeal before the State Commission which has been allowed by the impugned order by observing thus:-
In this case it is undisputed that the driver had been driving vehicle of the complainant H.M.V. since the year 1991. In this connection the complainant has adduced this evidence that he is an illiterate person and in the year 1997 when the vehicle driver produced before him the license, then he showed the said license to the development officer Shri Suresh, Branch Manager Shri K.C. Joshi also and on that basis they orally consented to appoint the vehicle driver. Besides it is also submitted by the complainant that he went with the license to the Licensing Authority, Faridabad also who verified the fact that they have renewed the license in question. Under the circumstances, in our opinion, in the matter under consideration the complainant took all the precautions which a person of ordinary wisdom is supposed to do upon production of driving license before him by his driver. In our opinion, the respondent insurance company by rejecting the claim of the complainant has committed error and the complainant is entitled to get compensation under the insurance policy.
We have heard the learned counsel for the parties at length.
Ld. Counsel appearing for the Respondent contends that the Respondent had exercised all due diligence and checked the license of the driver before appointing him as a driver and when a driver produces driving licence before the employer, the employer is not supposed to make a probe as to whether the licence renewed by the Competent Authority, (i.e. Faridabad Licensing Authority in this case), based on the original licence was a fake one or not.
Ld. Counsel appearing for the Petitioner, relying upon the judgment of the Supreme Court in National Insurance Co. Ltd. vs. Laxmi Narain Dhut (2007) 3 SCC 700 contends that in own damage claim, where the original licence is fake, renewal thereof cannot cure inherent fatality.
We find substance in the submission of the counsel for the Petitioner. Supreme Court, in Para-41 of Laxmi Narain Dhut's case (supra) has held that in own damage cases, the insurance company is not liable to reimburse the loss to the insured where original licence was fake. That renewal of the fake licence could not cure the inherent fatality.
Relevant observations made by the Supreme Court read as under :
36. The inevitable conclusion therefore is that the decision in Swaran Singh's case (supra) has no application to own damage cases. The effect of fake license has to be considered in the light of what has been stated by this Court in New India Assurance Co., Shimla v. Kamla and Ors. Once the license is a fake one the renewal cannot take away the effect of fake license. It was observed in Kamla's case (supra) as follows:
12. 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. Section 15 of the Act only empowers any Licensing Authority to "renew a driving licence issued under the provisions of this Act with effect from the date of its expiry". 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.
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.
37. 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 flow.
38. In view of the above analysis the following situations emerge:
1. The decision in Swaran Singh's case (supra) has no application to cases other than third party risks.
2. Where originally the license was a fake one, renewal cannot cure the inherent fatality.
3. In case of third party risks the insurer has to indemnify the amount and if so advised to recover the same from the insured.
4. The concept of purposive interpretation has no application to cases relatable to Section 149 of the Act.
The High Courts/Commissions shall now consider the matter afresh in the light of the position in law as delineated above.
Order passed by the State Commission is contrary to the law laid down by the Supreme Court in Laxmi Narain Dhut's case (supra). It is well settled law that valid renewals cannot validate a fake licence. If a fake licence is renewed, it will still remain fake. Supreme Court as well as this Commission in various judgments where the owner had engaged a driver after verifying the fact that he had a driving licence which turned out to be fake later on, has held that the Insurance Company cannot be made liable to reimburse the loss rejecting the contention raised by the Complainant that since he had appointed the driver after verifying the fact that the driver had a licence he could not be denied the benefit arising under the policy.
For the reasons stated above, the order of the State Commission is set aside and the Revision Petition is allowed. No order as to costs.
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(ASHOK BHAN J.) PRESIDENT . . . . . . . . . . . . . . . .
(VINEETA RAI) MEMBER . . . . . . . . . . . . . . . .
(K.S. CHAUDHARI.J) MEMBER Yd/