National Consumer Disputes Redressal
Hazara Begum vs Oriental Insurance Co. Ltd. on 11 February, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 2638 OF 2010 (Against the Order dated 25/03/2010 in Appeal No. 289/2009 of the State Commission Himachal Pradesh) 1. HAZARA BEGUM Resident of Village and Post Office GUMMA, Tehsil Kotkhai Shimla Himachal Pradesh ...........Petitioner(s) Versus 1. ORIENTAL INSURANCE CO. LTD. Through its Divisional Manager, Mythe Estate, Kaithu Shimla - 171003 Himachal Pradesh ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN, PRESIDING MEMBER
For the Petitioner : Mr. Rajesh Gupta, Advocate For the Respondent : Mr. R.S. Rana, Advocate
Dated : 11 Feb 2015 ORDER
JUSTICE V.K. JAIN, PRESIDING MEMBER
The complainant/petitioner, who owned truck bearing registration No.HP-09-A-0699, got the said truck insured with the respondent company for the period from 05.03.2003 to 04.03.2004. Therefore, the said truck met with an accident on 26.05.2003. The petitioner/complainant submitted a claim of Rs.3,50,000/- to the insurance company. The claim was rejected on the ground that the driver of the vehicle did not possess a genuine driving license and a gratuitous passenger was travelling in the truck at the time of accident. Being aggrieved from the rejection of the claim, the petitioner/complainant approached the concerned District Forum by way of a complaint.
2. The complaint was resisted by the insurance company on the ground that the driver of the truck namely Sadiq Mohammed did not have a valid driving licence at the time the truck met with an accident and an unauthorized person was travelling in the truck.
3. The District Forum vide its order dated 30.06.2009, directed the insurance company to indemnify the complainant, to the extent of Rs.1,97,000, along with interest on that amount @ 9% per annum form the date of filing of the complaint. The complainant was also awarded cost of litigation amounting to Rs.3,000/-.
4. Being aggrieved from the order of the District forum, the insurance company approached the concerned State Commission by way of an appeal.
Vide impugned order dated 25.03.2010, the State Commission allowed the appeal filed by the insurance company and dismissed the complaint solely on the ground that the driver of the vehicle did not possess a genuine driving license at the time the vehicle met with an accident.
Being aggrieved, the petitioner/complainant is before this Commission by way of this revision petition.
5. It would thus be seen that the only issue involved in this case is as to whether the insurance company is liable to reimburse the insured, for the damage caused to his vehicle, in a case where the driver of the vehicle did not possess a genuine driving licence, at the time the vehicle meets with an accident.
6. In support of his contention that even if the driver did not possess a genuine licence at the time the vehicle meets with an accident, the insurance company is liable to reimburse the insured unless it can be shown that the insured had failed to take care while employing the driver. Learned counsel for the petitioner relied upon the decisions of the Hon'ble Supreme Court in National Insurance Company Ltd., Vs. Swaran Singh & Ors. (2004) 3 SCC 297, National Insurance Company Ltd., Vs. Laxmi Narain Dhut (2007) 3 SCC 700 and Pepsu Road Transport Corporation Vs. National Insurance Company (2013) 10 SCC 217.
7. In Laxmi Narain Dhut (supra), the Hon'ble Supreme Court noted that in the judgments challenged before it, the High Court concerned had held that the principles laid down in Swaran Singh & Ors. (supra) are applicable to the claims other than third party claims. In the course of the judgment, the Hon'ble Supreme Court noted as under:
"24. In the background of the statutory provisions, one thing is crystal clear i.e. the statute is beneficial one qua the third party. But that benefit cannot be extended to the owner of the offending vehicle. The logic of fake licence has to be considered differently in respect of the third party and in respect of own damage claims.
36. The inevitable conclusion therefore is that the decision in Swaran Singh case has no application to own damage cases. The effect of fake licence has to be considered in the light of what has been stated by this Court in New India Assurance Co. V. Kamla. Once the licence is a fake one the renewal cannot take away the effect of fake licence. It was observed in Kamla case as follows: (SCC p. 347, para 12)
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 licencing 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 licence 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 case has no application to cases other than third-party risks.
2. Where originally the licence 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/Commission shall now consider the matter afresh in the light of the position in law as delineated above.
It would thus be seen that the Hon'ble Supreme Court itself inter-alia held that its earlier decision in Swaran Singh (supra) applies only to a third party loss and does not apply to a case where the claim is lodged by the insured himself and it is found that at the time the vehicle met with an accident the driver of the vehicle did not possess a genuine licence.
8. In Pepsu Road Transport Corporation (supra), the complaint was filed by the widow and two minor sons of one Gurjinder Singh Modi, who died in a motor accident on account of alleged negligent driving of a bus owned by Pepsu Road Transport. Obviously, the said Corporation would also be the insured as far as the bus involved in the accident was concerned. Thus, this also, was a case of third party claimant and does not apply to a case where the insured himself is the complainant and seeks compensation on account of damage to his vehicle.
9. Thus, in none of the cases relied upon by the learned counsel for the appellant, the compensation was sought by the insured himself. On the other hand, in National Insurance Co. Ltd. Vs. Om Prakash Jain Civil Appeal No. 6248 of 2009 decided on 14.09.2009, the Hon'ble Supreme Court referring to its earlier decision in Laxmi Narain Dhut (supra) and Swaran Singh (supra) specifically held as under:
"In National Insurance Company Limited Vs. Laxmi Narain Dhut [2007 (3) S.C.C. 700], it has been clearly laid down that the decision in the case of National Insurance Company Ltd. Vs. Swaran Singh & Anr. [2004 (3) S.C.C. 297] has no application to the cases other than third-party risks and where originally licence was a fake, renewal thereof cannot validate the same. In the present case, the complaint was filed for damage of the vehicle of the insured and not the third party risk. The District Forum and State Commission have concurrently held that the original licence of the driver was fake. This being the position, the District Forum was justified in dismissing the complaint and the State Commission committed an error by awarding compensation to the respondent".
In the aforesaid case, the complaint was filed by the insured himself seeking compensation for the damage caused to his vehicle, which had met with an accident. It was found that the driving license possessed by the driver of the vehicle was a fake licence. The National Commission having decided in favour of the complainant, the matter was taken by the insurance company to the Apex Court.
10. In United India Insurance Co. Ltd. Vs. Davinder Singh (20070 8 SCC 698, the respondent owned a vehicle which he had got insured from the appellant United India Insurance Co. Ltd. The said vehicle met an accident with a truck. It was being driven by a person, who did not possess a valid license. The owner of the vehicle filed a complaint before the District Forum, seeking compensation for the damages caused to his vehicle. This Commission have ruled in his favour. The matter was taken to the Hon'ble Supreme Court by way of an appeal. Allowing the appeal filed by the insurance company, the Apex Court inter-alia held that the fora below had committed an error in holding the insurance company liable to indemnify the owner of the vehicle with regard to the losses sustained by him. During the course of the judgment, the Hon'ble Supreme Court, inter-alia observed as under:
"10. It is, thus, axiomatic that whereas an insurance company may be held to be liable to indemnify the owner for the purpose of meeting the object and purport f the provisions of the Motor Vehicles Act, the same may not be necessary in a case where an insurance company may refuse to compensate the owner of the vehicle towards his own loss. A distinction must be borne in mind as regards the statutory liability of the insurer vis-à-vis the purport and object sought to be achieved by a beneficent legislation before a forum constituted under the Motor Vehicles Act and enforcement of a contract qua contract before a Consumer Forum".
11. In Oriental Insurance Co. Ltd. V. Meena Variyal (2007) 5 SCC 428, the Hon'ble Supreme Court referring to its earlier decision in Swaran Singh (supra) held as under:
"It is difficult to apply the ratio of this decision to a case not involving a third party. The whole protection provided by Chapter XI of the Act is against third-party risk. Therefore, in a case where a person is not a third party within the meaning of the Act, the insurance company cannot be made automatically liable merely by resorting to Swaran Singh ratio. This appears to be the position. This position was expounded recently by this Court in Naitonal Insurance Co. Ltd. Vs. Laxmi Narain Dhut. This Court after referring to Swaran Singh and discussing the law summed up the position thus : (Laxmi Narain Dhut case, SCC p. 719 para 38)
38. In view of the above analysis the following situations emerge:
1. The decision in Swaran Singh case has no application to cases other than third-partly risks.
2. Where originally the licence 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...".
12. The legal proposition emerges from the above referred decisions of the Hon'ble Supreme Court is that though the insurance company is liable to a third-party even if the vehicle, at the time it meets with an accident is being driven by a person who does not possess a valid driving licence, the position would be different in a case where compensation is sought by the insured himself, for the damage caused to his vehicle. Wherever, the insured himself is the claimant, the insurance company is not liable to reimburse him for the damage caused to the vehicle, if it is found that the driver of the vehicle did not possess a valid license at the time the vehicle met with an accident. In the present case, the State Commission found that the licence possessed by the driver of the vehicle was not a genuine license. It was reported by the District Transport Officer that the aforesaid driving license had not been issued by their office and was a fake licence. An official from the office of the District Transport Officer, Hoshiarpur was also examined by the State Commission and he proved the above referred endorsement. He also stated on the basis of the original record brought by him that the driving license in question had not been issued by their office. We find no ground to interfere with the aforesaid finding recorded by the State commission, which is based upon the report and the deposition of an official from the office of the Licensing Authority, Hoshiarpur. Since the licence possessed by the driver of the vehicle owned by the petitioner/complainant was a fake licence, the insurance company was not liable to reimburse the petitioner/complainant for the damage caused to his vehicle. Consequently, no ground for interfering with the order passed by the State Commission is made out. The revision petition is consequently dismissed with no order as to costs.
......................J V.K. JAIN PRESIDING MEMBER