Case Note & Summary
The case arises from a motor accident claim where the Motor Accident Claims Tribunal (Main), Vadodara, in MACP No.219/2014, awarded Rs.11,28,000/- with 9% interest to the claimants. The appellant, SBI General Insurance Company Limited, challenged the award solely on the ground that the driver of the offending vehicle possessed a fake driving license. The insurance company argued that since the license was fake, it should not be liable to pay compensation. The respondents, original claimants, contended that the insurance company failed to prove that the owner had knowledge of the fake license. The court examined the record and found that the driving license produced was indeed fake, as it stood in the name of one Rajat Soni, not the driver. However, the insurance company did not adduce any evidence to show that the owner knew about the fake license. Relying on the Supreme Court judgments in IFFCO Tokio General Insurance Company Ltd. v. Geeta Devi & Ors. (SLP (C) No.19992/2023) and Hind Samachar Ltd. v. National Insurance Company Ltd. & Ors. (2025 INSC 1204), the court held that mere fake license is not enough to exonerate the insurer; the insurer must prove the owner's knowledge. Since the insurance company failed to do so, the appeal was dismissed, and the insurance company was directed to pay the award amount to the claimants and then recover it from the owner.
Headnote
A) Motor Accident Claims - Fake Driving License - Liability of Insurance Company - Section 149(2)(a)(ii) of the Motor Vehicles Act, 1988 - The insurance company challenged the award on the ground that the driver held a fake license. The court held that mere proof of fake license is insufficient to exonerate the insurer; the insurer must also prove that the owner had knowledge of the fake license and still permitted the driver to drive. In the absence of such proof, the insurer is liable to pay compensation but may recover from the owner. (Paras 5-6) B) Motor Accident Claims - Pay and Recover - Owner's Knowledge - Section 149 of the Motor Vehicles Act, 1988 - The court directed the insurance company to pay the awarded amount to the claimants and then recover the same from the owner of the offending vehicle, following the principle laid down in IFFCO Tokio General Insurance Company Ltd. v. Geeta Devi & Ors. and Hind Samachar Ltd. v. National Insurance Company Ltd. & Ors. (Paras 5-6)
Issue of Consideration
Whether the insurance company can be exonerated from its liability to satisfy the award solely on the ground that the driver of the offending vehicle was holding a fake driving license, without proving that the owner had knowledge of the fake license.
Final Decision
The appeal is dismissed. The insurance company is directed to pay the awarded amount to the claimants and then recover the same from the owner of the offending vehicle in accordance with law.
Law Points
- Insurance company cannot be exonerated from liability merely on ground of fake driving license unless it proves that owner had knowledge of the fake license and still permitted the driver to drive
- Pay and recover principle applies in absence of such proof
