NEW INDIA ASSURANCE CO. LTD. Vs. SHANTI DEVI

JUDGEMENT

(1.) THE appeal is by the Insurance Company contesting the award passed by the tribunal without providing for a right of recovery for the violation of terms of policy. During the trial the Insurance Company attempted to secure proof from the DTO's office which was alleged to have issued the driving license that no such license with the particulars as mentioned had been issued. The license had also been renewed subsequently and the renewal was found by the tribunal to be genuine. The tribunal therefore reasoned that since the renewal was genuine, the Insurance Company must take license to be valid and it shall provide full indemnity.

(2.) THE law has changed since the decision of the Supreme Court in National Insurance Co. v. Swaran Singh : (2004) 3 SCC 297. A renewal of a driving license even if valid or a driving license whose original issue was fake must be taken to be fake driving license. However, this cannot dispose of the issue of liability. We have to still examine whether the owner had been in any way wanting his bona fides in employment offered to his driver and whether he had also known that the driver had fabricated the original issue of license. The Insurance Company can deny an indemnity if only the insured had been guilty of breach of terms of policy. It is likely that at the time when the trial was in progress, the owner was led to believe by the state of law then prevailing that a valid renewal of a fake license is also valid. In view of the change of law, I deem it appropriate that the owner shall have a right to give evidence to disclose the circumstances under which he gave employment to his driver. This evidence will not require the presence of the claimants, for, it is essentially a dispute inter se between the insurer and the insured.

(3.) TO provide for such an opportunity the matter will be sent back to the tribunal and the Insurance Company will have a right to test the bona fides of the owner and the steps that the owner had taken at the time of granting employment to the driver.