Dinesh Chandra Porwal owned a truck, insured with New India Assurance for Rs 3.15 lakh with unlimited third-party property damage cover. The truck was being driven from Sonepat to Daman by Surinder Singh, who held a licence renewed by the regional transport office (RTO), Ajmer, valid from March 30, 2000 to March 29, 2003. En route, it had an accident at Ambamana in Udaipur district on October 5, 2000. A police complaint was lodged and the insurance company intimated.
The repair charges were Rs 1.75 lakh. Porwal claimed this amount from the insurance company. A surveyor was appointed but the claim was not settled. Alleging this to be a deficiency in service, Porwal filed a complaint before the District Forum, seeking reimbursement of the repair charges along with interest.
The company contested the case, contending the claim was not payable as Surinder Singh did not hold a valid driving licence. The company stated the licence showed it had purportedly been originally issued at Guwahati in Assam but that RTO had denied having issued any such licence. It had subsequently been renewed by the Ajmer Transport Authority, Ajmer. The insurance company claimed that since the original licence was fake, its subsequent renewal would not make it genuine. So, Singh was not entitled to drive the truck. Hence the claim had been correctly rejected.
The District Forum allowed the complaint and directed the insurance company to pay Rs 1.75 lakh with nine per cent interest and Rs 10,000 towards costs. The insurance company challenged this order, but its appeal was dismissed by the Delhi State Commission.
The insurance company, then, filed a petition before the National Commission, contending the renewal of a fake driving licence would not make it genuine and the claim was rightly rejected.
The Commission observed the issue to be decided was whether renewal of fake driving licence would make it a genuine one. Also, due consideration would have to be given to whether there was any wilful breach of the policy conditions by the owner. While deciding these, the Commission considered the judgment of the Supreme Court in United India Insurance Company v/s Davinder Singh, where it had been observed that third-party insurance is mandatory as a social obligation under the Motor Vehicles Act, while insurance for own damage is optional. So, a distinction would have to be drawn between third-party claims and own damage claims.
In respect of third-party claims, the Commission held that in case of a fake licence, the insurance company has to prove the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the policy conditions regarding the use of vehicle by a duly licensed driver. This would not be applicable to own damage claims.
The Commission also considered the observations of the Supreme Court in New India Assurance Company Ltd v/s Kamla Devi that a fake licence cannot get its forgery stripped off merely because some officer renews it without knowing that it is a forged one. No licensing authority has the power to renew a fake licence. So, a renewal cannot transform a fake licence into genuine one.
Accordingly, by an order of October 20, 2015, the National Commission's Bench of V B Gupta and Prem Narain allowed the insurance company's petition and set aside the orders of the District Forum and State Commission, saying the insurance company was justified in repudiating the claim as the licence was a forged one.
The author is a consumer activist
