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REPORTABLE  

IN THE SUPREME COURT OF INDIA  

CIVIL APPELLATE JURISDICTION   

 CIVIL APPEAL NO. 8145  OF  2018  (Arising out of SLP(C) No.6760/2017)  

 Ram Chandra Singh          …..Appellant(s)          

:Versus:    

Rajaram and Ors.             ....Respondent(s)    

J U D G M E N T  

A.M. Khanwilkar, J.  

1. The singular question involved in this appeal against the  

judgment and order dated 28th November, 2016 passed by the  

High Court of Judicature at Allahabad in First Appeal From  

Order No.3290 of 2016, is whether the Motor Accident Claims  

Tribunal, Firozabad, was right in holding that the insurer was  

not liable as the driver had a fake licence.   

 2. Shorn of unnecessary details, the respondent Nos.1 to 5  

filed a motor accident claim before the Motor Accident Claims

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Tribunal, Firozabad, bearing M.A.C.P. No.169 of 2012,  

consequent to the death of Sanoj Kumar on account of motor  

accident which occurred on 10th May, 2012 at 6.30 A.M., when  

he was going for his morning walk towards Mustafabad  

Chauraha.  At that time, the driver of Bolero loader bearing  

registration No.UP-71/0084 while driving the vehicle in a high  

speed and in rash and negligent manner,  hit the deceased  

from behind. The Tribunal partly allowed the claim petition  

and awarded compensation amount of Rs.6,27,000/-, but  

absolved the Oriental Insurance Company Ltd. (for short, “the  

insurer”) on the finding that the offending vehicle was driven  

by one Shivgyani (respondent No.6) who did not have a valid  

driving licence. The Tribunal, however, directed the insurer to  

pay the compensation amount as determined in terms of the  

award dated 24th August, 2016, with liberty to recover the  

same from the vehicle owner (appellant herein) and the driver  

(respondent No.6)  jointly and severally.   

 3.  The appellant, being the vehicle owner, alone filed an  

appeal before the High Court of Judicature at Allahabad which

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was dismissed on the finding that the counsel for the  

appellant did not dispute that the driving licence was found to  

be fake and no evidence was adduced before the Court to show  

that the driving licence was genuine.  This concurrent view is  

the subject matter of challenge in the present appeal.    

 4. It is contended by the appellant that even if the finding of  

the Tribunal, that the driving licence relied upon by the owner  

of the vehicle and driver  was fake, is maintained as it is, even  

then the Tribunal could not have absolved the insurer and  

made the owner of the vehicle liable,  in the absence of a clear  

finding that the owner of the vehicle was aware about the  

factum of fake licence and despite the same, he made no  

attempt to take corrective measures, including to verify the  

genuineness thereof. In absence of such a finding, the insurer  

cannot be straightaway absolved. In support of this  

proposition, reliance was placed on PEPSU Road Transport  

Corporation Vs. National Insurance Company1, and  

Premkumari and Ors. Vs. Prahlad Dev and Ors.2.   

                                                           1   (2013) 10 SCC 217  

2   (2008) 3 SCC 193

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5. The counsel for the insurer submits that the appellant  

having admitted the fact that the driving licence was fake and  

failing to produce any other evidence to prove otherwise,  

cannot be heard to make any grievance about the finding  

recorded by the Tribunal and affirmed by the High Court  

absolving the insurer from the liability to pay the  

compensation amount.   

6. We have heard Mr. S.R. Singh, learned senior counsel  

appearing for the appellant and Mr. Abhishek Gola, learned  

counsel appearing for the respondents.   

 7. We have perused the entire pleadings and the evidence  

on record as also the judgments of the Tribunal and the High  

Court. It is noticed that the insurer had taken a specific plea  

in the written statement filed before the Tribunal, that the  

driving licence of the driver was not a valid licence. In the  

alternative, it was asserted that the owner of the vehicle must  

produce the driving licence so that it can be verified from the  

licencing authority. Additionally, the insurer placed on record

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an investigation report, verification report and photocopy of  

the driving licence to establish the fact that the driving licence  

relied upon by the owner and the driver was fake and not  

valid. For, it was authenticated that no such driving licence  

was issued by the authority concerned.  

 8.  It is also noticed that in the oral evidence, the appellant  

had stated that he had seen the photocopy of the driving  

licence of Shivgyani and was also satisfied about his driving  

skills, before employing him as the driver for driving the  

vehicle.  In his cross-examination by the insurer, the appellant  

stated thus:   

“……I have not sold the vehicle. Driver Shiv Gyani was  

working with me from February 2012. He was permanent  

resident of District – Fatehpur. I never got verified the driving  

licence of Shiv Gyani. ……… This was not in my knowledge  

that he has no driving licence. This is incorrect to say that I  

provided my vehicle to him to drive despite I was aware that  

he has bogus licence. I am aware of this that licence is  

issued on the address one resides. ……………This is  

incorrect to say that I am giving  false evidence to save my  

skin.”  

9. The Tribunal while answering issue No.3, however, made  

no attempt to analyse the pleadings and evidence on record to  

ascertain  whether the appellant (owner) was aware of the fake

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driving licence possessed by the driver (respondent No.6). The  

Tribunal merely adverted to the investigation and verification  

report and found that the stated driving licence was invalid.  

The High Court also made no attempt to enquire into the  

relevant aspect, as has been consistently expounded by this  

Court and restated in PEPSU Road Transport Corporation  

(supra). Even in the case of Premkumari (supra), the Court  

after considering the judicial precedents opined as follows:   

“It is clear from the above decision when the owner after  verification satisfied himself that the driver has a valid  

licence and was driving the vehicle in question competently  at the time of the accident there would be no breach of  Section 149(2)(a)(ii), in that event, the insurance company  would not then be absolved of liability. It is also clear that  even in the case that the licence was fake, the insurance  

company would continue to remain liable unless they prove  that the owner was aware or noticed that the licence was  fake and still permitted him to drive.”  

10. The decision in PEPSU Road Transport Corporation  

(supra) was relied upon by the appellant before the High Court  

which, however, distinguished the same by observing that it  

was on the facts of that case, where the Court opined that  

there was no evidence to prove that the driving licence  

produced by the authorities was fake. That approach, in our

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opinion, is manifestly wrong. Whereas, even in that case, the  

Court was called upon to deal with the similar question as is  

involved in this appeal. In that case, the Court first adverted to  

the decision in United India Insurance Co. Ltd. Vs. Lehru  

and Ors.3, and then to the three-Judge Bench decision in  

National Insurance Co. Ltd. Vs.  Swaran Singh & Ors.4.  

Paragraphs 99-101 of Swaran Singh (supra) have been  

extracted, which read thus:  

“99. So far as the purported conflict in the judgments of  Kamla and Lehru is concerned, we may wish to point out  that the defence to the effect that the licence held by the  person driving the vehicle was a fake one, would be available  

to the insurance companies, but whether despite the same,  the plea of default on the part of the owner has been  established or not would be a question which will have to be  

determined in each case.  

100. This Court, however, in Lehru must not be read to  mean that an owner of a vehicle can under no circumstances  

have any duty to make any enquiry in this respect. The  same, however, would again be a question which would arise  for consideration in each individual case.  

101. The submission of Mr Salve that in Lehru case, this  Court has, for all intent and purport, taken away the right of  an insurer to raise a defence that the licence is fake does not  

appear to be correct. Such defence can certainly be raised  but it will be for the insurer to prove that the insured did not  

take adequate care and caution to verify the genuineness or  otherwise of the licence held by the driver.”   

                                                           3   (2003) 3 SCC 338  

4   (2004) 3 SCC 297

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The Court then went on to advert to a two-Judge Bench  

decision of this Court in National Insurance Co. Ltd. Vs.  

Laxmi Narain Dhut,5 before dealing with the facts of the case  

before it.    

 11. Suffice it to observe that it is well established that if the  

owner was aware of the fact that the licence was fake and still  

permitted the driver to drive the vehicle, then the insurer  

would stand absolved.  However, the mere fact that the driving  

licence is fake, per se, would not absolve the insurer.  

Indubitably, the High Court noted that the counsel for the  

appellant did not dispute that the driving licence was found to  

be fake, but that concession by itself was not sufficient to  

absolve the insurer.  

 12. As aforementioned, in the present case, neither the  

Tribunal nor the High Court has bothered to analyse the  

pleadings and evidence adduced by the parties on the crucial  

matter. Be that as it may, in this appeal, the limited grievance  

                                                           5   (2007) 3 SCC 700

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of the appellant-owner of the vehicle is about unjustly  

absolving the insurer merely on the finding that the driving  

licence of the driver (respondent No.6) was fake. No other  

aspect has been raised by the appellant nor do we intend to  

analyse or consider the same.    

 13. We, therefore, deem it appropriate to relegate the parties  

before the High Court for fresh consideration of the appeal  

filed by the appellant (owner) only on the question of liability of  

the owner or of the insurer (respondent No.7) to pay the  

compensation amount.    

14. We make it clear that the High Court shall not examine  

any other issue in the remand proceedings. For, the  

compensation amount, as determined and directed by the  

Tribunal, has already been made over to the claimants.  

 15. Accordingly, we set aside the impugned judgment and  

order passed by the High Court of Judicature at Allahabad  

and restore the First Appeal From Order No.3290 of 2016, to  

the file of the High Court to its original number for being

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decided afresh, on the limited question of whether the liability  

to pay compensation amount, is cast upon the appellant  

(owner of the vehicle) or respondent No.7 (insurer). That aspect  

be decided on its own merits in accordance with law. We may  

not be understood to have expressed any opinion, either way,  

on the efficacy of the pleadings and the evidence produced by  

the parties adverted to in this judgment or in any other  

evidence on record. All questions in that behalf are left open.    

 16. The appeal is allowed in the aforementioned terms with  

no order as to costs.      

.………………………….CJI.        (Dipak Misra)   

…………………………..….J.                (A.M. Khanwilkar)  

New Delhi;  

August 14, 2018.