National Consumer Disputes Redressal
Suresh Kumar vs Iffco Tokio General Insurance Co. Ltd. on 23 April, 2018
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 520 OF 2018 (Against the Order dated 11/10/2017 in Appeal No. 1081/2016 of the State Commission Haryana) 1. SURESH KUMAR S/O. SH. JAI SINGH, R/O. VILLAGE SEEDPUR, TEHSIL NOLOKHERI, DISTRICT-KARNAL HARYANA ...........Petitioner(s) Versus 1. IFFCO TOKIO GENERAL INSURANCE CO. LTD. SCO NO. 19-20, PART I, SECTOR 12, DISTRICT-KARNAL HARYANA ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN,PRESIDING MEMBER
For the Petitioner : Mr. Jeevesh Mehta, Advocate
Ms. Shivani Tandon, Advocate For the Respondent :
Dated : 23 Apr 2018 ORDER
The complainant/petitioner owned a Harvester Combine which he got insured with the respondent. The said Harvester Combine met with an accident and got damaged. An FIR was lodged in this regard and intimation of the accident was also given to the insurer. The claim lodged by the petitioner/complainant, however, was rejected vide letter dated 22.11.2013 which to the extent it is relevant, reads as under:-
"On perusal of the documents, we have observed that-
* On careful perusal of the documents on record, we verified from SDM, Solan that they have not issued Driving License No.(S55709.01) in the name of Mr. Subhash S/o Mr. Teka Ram. Hence the same has been found to be fake.
* The registered searing capacity of vehicle as per Registration Certificate is 1 but as per FIR 5 passengers were seated at the material time of accident.
* This is a violation of the insurance policy terms and condition as well as relevant provisions of Motor Vehicle Act 1988.
In this regard your kind attention is invited to general exception no.3(b) of the policy which states that the company shall not be liable for any accidental loss/damage while the vehicle insured is being driven by any person other than a driver as stated in the drivers clause.
The driver clause is given in the schedule of the policy which defines the driver as any person including insured provided that the person holds an effective driving licence at the time of accident."
2. Being aggrieved from the rejection of the claim, complainant/petitioner approached the concerned District Forum by way of a consumer complaint. The complaint was resisted by the insurer primarily on the ground on which the claim had been repudiated.
3. The District Forum having allowed the complaint, the insurer approached the concerned State Commission by way of an appeal. Vide impugned order dated 11.10.2017, the State Commission allowed the appeal and dismissed the complaint. Being aggrieved, the petitioner/complainant is before this Commission, by way of this revision petition.
4. It is not in dispute that the person who was driving the Harvester Combine at the time it met with an accident did not hold a valid driving licence and the driving licence possessed by him was found to be fake and forged. Therefore, in view of the General Exception No.3(b) of the Insurance Policy, the insurer is not liable to reimburse the complainant/petitioner for the loss to the vehicle.
5. The learned counsel for the petitioner relies upon the decision of the Hon'ble Supreme Court in Amalendu Sahoo Vs. Oriental Insurance Co. Ltd. [Civil Appeal No.2703 of 2010] decided on 25.3.2010. In Amalendu Sahoo (supra), a private vehicle was being run on hire at the time the accident happened. The Hon'ble Supreme Court held that the claim could not be repudiated in toto and, therefore, allowed the same to the extent of half of the amount claimed in the complaint. The aforesaid judgement, in my view, is of no help to the petitioner/complainant. It was not a case of the vehicle being driven by a person who did not hold a valid and subsisting driving licence.
6. In National Insurance Co. Ltd. Vs. Laxmi Narain Dhut (2007) 3 SCC 700, 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."
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 licence 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.
In United India Insurance Co. Ltd. Vs. Davinder Singh (2007) 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 licence. 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".
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, 2004(3) SCC 297 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) 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 licence at the time the vehicle met with an accident."
7. In "National Insurance Co. Ltd. vs. Jarnail Singh & Ors." [JT 2001 (Supp. 2) SC 218], the driving licence of the driver, who drove the vehicle had expired on 16.05.94. The vehicle met with an accident on 20.10.94 and the driving licence was renewed only with effect from 28.10.96. It was held that the proviso of subsection (1) of section 15 became applicable to the case and since the driver had no effective licence to drive the vehicle on the date of the accident, the policy condition was violated and the insurance company was not liable to pay any amount to the insured. The aforesaid decision was quoted and applied by the Hon'ble Supreme Court in "New India Assurance Co. Ltd. vs. Suresh Chandra Aggarwal" [AIR 2009 SC 2987]. In Suresh Chandra Aggarwal (supra), the driver of the vehicle was not holding an effective licence at the time it met with an accident since the said licence had already expired on 25.10.91, whereas the accident took place on 29.02.92. The policy condition applicable in that case required that the person entitled to drive the vehicle should hold or should have held a driving licence and should not be disqualified from holding an effective driving licence. It was noted that though the driving licence had expired on 25.10.91, 4 months prior to the accident it was got renewed only with effect from 23.03.1992 and the driver had not applied for the renewal of the licence within 30 days of its expiry. Referring to the proviso of section 15 sub-section (1) of the Motor Vehicles Act, it was held that in such a case, the licence could be renewed only from the date of its renewal and in the interregnum period between expiry of the licence and the date of its renewal, there was no effective licence in existence. The decision of this Commission holding the Insurance Company liable was, therefore, set aside by the Hon'ble Supreme Court.
8. For the reasons stated hereinabove, I find no merit in the revision petition and the same is hereby dismissed with no order as to costs.
......................J V.K. JAIN PRESIDING MEMBER