ASSURANCE CO., SHIMLA versus KAMLA AND ORS. ETC. ETC.

Citation: [2001] 2 S.C.R. 797 · Decided: 27-03-2001 · Supreme Court of India · Bench: K.T. THOMAS · Disposal: Disposed off

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Judgment (excerpt)

NEW INDIA ASSURANCE CO., SHIMLA 
A 
~ 
v. 
KAMLA AND ORS. ETC. ETC. 
MARCH 27, 2001 
[K.T. THOMAS AND R.P. SETHI, JJ.] 
B 
, 
Motor Vehicles Act, 1988-Sections 15 & 149--Compensation-Third 
pany claim-Liability to pay-Denied on the ground that there was breach of 
policy as the driver of the vehicle was not holding valid licence and the licence 
produced was forged one-Plea of the insured that renewal of the licence led c 
to the presumption that the original licence was genuine-Heid, insurer is not 
liable to the insured if there is violaJion of any policy condition-Afake licence 
cannot get its forgery outfit stripped off merely on account of some officer 
"I 
renewing the same-What was originally aforgery would remain null and void 
forever and it would not acquire legal validity at any time by whatever process 
D 
of sanctijicaJion subsequently done on it-Forgery is antithesis to legality and 
law cannot afford to validate a forgery-Penal Code, 1860-Section 463. 
In a motor accident claim proceeding initiated by the respondents, 
appellant-insurance company pleaded that the company could not be held 
'r 
liable to pay compensation since the driver of the vehicle did not have valid 
E 
driving licence and thus there was a breach of policy decision. The insured 
and the driver relied on a driving licence issued and further renewed, in 
favour of the driver. The company did not admit the licence saying that it 
was fabricated one. The company filed an application for permission to 
lead evidence in order.to prove that the licence was fake, but the same was 
dismissed by the Tribunal, holding that if the licence was validly renewed 
F 
~ by a licencing authority, it cannot be presumed that the licence was a fake 
one. The Tribunal ultimately held that the company failed to prove that the 
truck driver did not have valid driving licence. 
In appeal before High Court, appellant contended thatif the original 
G 
licence was shown to be forged document, no authority has power to 
validate it and even if any validation was made on account of a mistaken 
... impression about the genuineness of the document, it would not gain any 
legitimacy. The appeal was dismissed holding that renewal of a document 
will robe even a forged document with validity on account of Section 15 of 
the Motor Vehicles Act. 
H 
797 
A 
B 
c 
D 
E 
F 
G 
H 
+ 
798 
SUPREME COURT REPORTS 
[2001] 2 S.C.R. 
In appeal to this Court, appellant contended that in view of Section 
149 of the Act the insurer will get complete exoneration from liability on } 
proof of breach of any of the conditions of the policy of insurance. Re· 
spondent contended that even if the driving licence of the driver is proved 
to be not genuine, it would not be enough for absolving the insurance 
company from liability. 
Disposing of the appeal, the Court 
HELD : 1. The insurer and insured are bound by the conditions 
~ 
enumerated in the policy and the insurer is not liable to the insured if there 
is violation of any policy condition. But the insurer who is made statutorily 
liable to pay compensaHon to third parties on account of the certificate of 
insurance issued shall be entitled to recover from the insured the amount 
paid to the third parties, if there was any breach of policy conditions on 
account of the vehicle being driven 'vithout a valid driving licence. 
(806-B-C] 
Scandia Insurance Co. lld. v. Kokilaben Chandravadan and Ors., (1987] 
2 SCC 654 and Sohan Lal Passi v. Sesh Reddy and Ors., (1996] 5 SCC 21, 
referred to. 
2. A fake licence cannot get its "forgery outfit stripped off merely on 
acco<1nt of some officer renewing the same with or without knowing it to be 
Y' 
forged. Section 15 of the Act only empowers any licensing authority to 
''renew a driving licence issued under the provisions of this Act with effect 
from the date of its expiry." No licensing authority has the power to renew 
a fake licence, and therefore, a renewal if at all made cannot transform a 
fake licence as genuine. Any counterfeit document showing that it contains 
a purported order of a statutory authority would ever remain counterfeit 
albeit the fact that other persons including some statutory authorities ~ 
would have acted on the document unwittingly on the assumption that it is 
genuine. What was originally a forgery would remain null and void for· 
ever and it would not acquire legal validity at any time by whatever 
process of sanctification subsequently done on it. Forgery is

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