The Supreme Court allowed civil appeals filed by Hind Samachar Ltd. (Delhi Unit) against the National Insurance Company Ltd. regarding an accident that occurred on 26.01.1993 involving the appellant's truck and a Matador van, resulting in nine deaths and two injuries. The Motor Accidents Claims Tribunal found composite negligence apportioned 75:25 between the drivers of both vehicles. The insurance company alleged the truck driver had a fake driving licence and sought 'pay and recovery' direction against the truck owner. The High Court granted this direction, but the Supreme Court reversed it, holding that the insurance company failed to prove the truck owner's deliberate breach or collusion regarding the fake licence. The Court relied on binding precedents establishing that mere possession of a fake licence by the driver does not absolve the insurer's liability unless the insured's breach is proved. The insurance company was directed to indemnify the truck owner, and the appeals were allowed.
Motor Vehicles Act, 1988-- Accident between truck and matador-- Fatal accident as 9 persons were died and two injured-- Claim for compensation-- Composite negligency apportioned betwen two vehicles at the rate of 75:25-- Breach of term of insuance policy-- High court was of the view that the driver of offending vehicle was having fake driving license-- High court awarded in favour of insurance company and granted to pay an recover in favour of insurance comapny-- Aggrieved-- Challenged by an owner of truck before Supreme court-- Case of Lehru and ors referred-- Failure to prove fake license by the insurance company-- Cases referred-- No evidence as to seizure of license-- Evidence from the office of R.T.O suggested that the driving license was issued-- Evidence as to renewal of license-- Owner of the vehicle is not expected to verify the genuineness of license produced by the driver-- Judgment of High Court set aside-- Part as to pay and recover set aside- Insurance company directed to pay an amount of compensation- Rest of the award kept intact- Appeals were allowed
Para-- 7, 11, 13, 16, 18
The Supreme Court allowed the appeals, set aside the High Court's 'pay and recovery' direction, and directed the insurance company to indemnify the truck owner
Citation: 2025 LawText (SC) (10) 49
Case Number: Civil Appeal Nos. 12442-12446 of 2024, Civil Appeal Nos. 12449-12451 of 2024, Civil Appeal Nos. 12460-12462 of 2024, Civil Appeal Nos. 12463-12464 of 2024, Civil Appeal Nos. 12455-12457 of 2024, Civil Appeal Nos. 12465-12467 of 2024, Civil Appeal Nos. 12458-12459 of 2024, Civil Appeal Nos. 12447-12448 of 2024, Civil Appeal Nos. 12452-12454 of 2024
Date of Decision: 2025-10-08
Case Title: Whether the insurance company was entitled to 'pay and recovery' direction against the truck owner based on allegation of fake driving licence
Before Judge: N.V. Anjaria J. , K. Vinod Chandran J.
Equivalent Citations: 2025 INSC 1204
Advocate(s): Mr. Gopal Shankaranarayan, Dr. Manish Singhvi
Appellant: Hind Samachar Ltd. (Delhi Unit)
Respondent: National Insurance Company Ltd. & Ors.
Nature of Litigation: Civil appeals against High Court's 'pay and recovery' direction in motor accident compensation case
Remedy Sought: Appellant truck owner sought reversal of High Court's 'pay and recovery' direction, Respondent insurance company sought recovery of compensation paid from truck owner
Filing Reason: High Court granted 'pay and recovery' direction against truck owner based on allegation of fake driving licence
Previous Decisions: Motor Accidents Claims Tribunal found composite negligence apportioned 75:25, directed compensation payment, High Court modified quantum and granted 'pay and recovery' direction against truck owner
Issues: Whether the insurance company proved the truck owner's deliberate breach or collusion regarding the fake driving licence Whether the High Court was justified in granting 'pay and recovery' direction against the truck owner
Submissions/Arguments: Appellant contended the Tribunal correctly directed insurance company to indemnify owner based on binding precedents, High Court relied on surmises and conjectures regarding collusion Respondent contended both licences were fake, owner was negligent in entrusting vehicle to driver, owner's representative produced licence indicating collusion, driver was not examined
Ratio Decidendi: The insurance company must prove the insured's deliberate breach in entrusting the vehicle to a driver with a fake licence to avoid liability -- Mere possession of a fake licence by the driver does not absolve the insurer's liability unless the insured's breach is established -- The burden of proof lies on the insurer to establish the owner's knowledge or collusion regarding the fake licence
Judgment Excerpts: 'we are thus in agreement with what is laid down in the aforementioned cases viz. that in order to avoid liability it is not sufficient to show that the person driving at the time of accident was not duly licensed. The Insurance Company must establish that the breach was on the part of the insured.' (Para 7) '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.' (Para 8)
Procedural History: Accident occurred on 26.01.1993 -- Claim petitions filed before Motor Accidents Claims Tribunal -- Tribunal found composite negligence apportioned 75:25 and determined compensation -- Appeals filed before High Court challenging liability and quantum -- High Court modified quantum and granted 'pay and recovery' direction against truck owner -- Appeals filed before Supreme Court
