National Insurance Co. Ltd. vs Sucha Singh And Ors. on 29 September, 1993
Reliance before the Supreme Court was placed upon a decision of the Punjab and Haryana High Court in National Insurance Company Limited v. Sucha Singh and Ors., 1994 ACJ 374 (P and H), according to which if a licence was renewed, the same would stand validated and the Insurance Company would be liable to reimburse to the insured the compensation amount paid to the victim. It was argued that if a fake licence was renewed by the Licensing Authority, the renewed licence would no longer remain fake. The Court however repelled that contention and declared that a fake document remained fake even after it was renewed. The Court went on to examine whether the violation of the terms of the Insurance Policy could qua the claimant absolve the Insurance Company from paying the amount of compensation determined in his favour. It held that once the insurer has issued an Insurance Policy, it became statutorily liable to pay the amount of compensation to third parties by reason of the certificate of insurance. The Insurance Company could in the event of a breach of the policy conditions including absence of a valid driving licence with the driver recover the amount paid to the third party from the insured. The following passages from the said decision are in this regard apposite: