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An insurance company cannot repudiate the claim on ground of fake driving licence of a driver, if the owner has no knowledge about that; SC.


Supreme Court of India

Justice Krishna Murari & Justice Navin Sinha

The SC {NIRMALA KOTHARI v. UNITED INDIA INSURANCE CO. LTD.} holds that while hiring a driver the employer is expected to verify if the driver has a driving licence. It was held that if the driver produces a licence which on the face of it looks genuine, the employer is not expected to further investigate into the authenticity of the licence unless there is cause to believe otherwise. If the employer finds the driver to be competent to drive the vehicle and has satisfied himself that the driver has a driving licence there would be no breach of Section 149(2)(a)(ii) and the Insurance Company would be liable under the policy. It was also held that it would be unreasonable to place such a high onus on the insured to make enquiries with RTOs all over the country to ascertain the veracity of the driving licence. However, it was held that if the Insurance Company is able to prove that the owner/insured was aware or had notice that the licence was fake or invalid and still permitted the person to drive, the insurance company would no longer continue to be liable.

On facts, in the instant case, the Appellant/Complainant had employed the Driver, Dharmendra Singh as driver after checking his driving licence. The driving licence was purported to have been issued by the licencing authority, Sheikh Sarai, Delhi, however, the same could not be verified as the concerned officer of the licencing authority deposed that the record of the licence was not available with them. In the present case as it is not the contention of the Respondent/ Insurance Company that the Appellant/complainant is guilty of willful negligence while employing the driver. It was held that the driver had been driving competently and there was no reason for the Appellant/ Complainant to doubt the veracity of the driver’s licence. In view of above facts and circumstances, the impugned judgment was set aside. The appeals accordingly were allowed by the SC. As a sequitur,  the respondent/ Insurance Company was held liable to indemnify the appellant.

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