NATIONAL INSURANCE CO. LTD. versus SANTRO DEVI AND ORS. ETC.

Citation: [1997] SUPP. 5 S.C.R. 217 · Decided: 18-11-1997 · Supreme Court of India · Bench: M.M. PUNCHHI, M. SRINIVASAN · Disposal: Case Partly allowed

Judgment (excerpt)

NA TI ON AL INSURANCE CO. LTD. 
A 
v. 
SANTRO DEVI AND ORS. ETC. 
NOVEMBER 18, 1997 
[M.M. PUNCHHI AND M. SRINIVASAN, JJ.] 
B 
Motor Vehicles Act, 1988: accident-Compensation claimed-Tribunal 
held that driver was holding valid licence-Held, claimants were rightly 
granted compensa1ion-Observations and findings of High Court on a C 
presumed question of law regarding renewal of a forged driving licence 
struck down. 
A motor accident took place and a claim for compensation was raised 
by the respondent. Before the Tribunal a question was raised whether the 
driver of the motor vehicle was holding a valid driving licence. The Tribunal D 
held that the licence was valid and had been validly renewed. On appeal, the 
High Court affirmed the findings of the Tribunal. Before the Division Bench 
of the High court a question arose as to whether a forged or a fake licence, 
if renewed, would get validated or not for the purpose of liabilities under the 
Motor Vehicles Act, 1989 and the matter was referred to a full Bench of the E 
High Court. The Insurance Company filed the present appeal, challenging 
the observations and findings recorded by full Bench in answer to the 
question referred to it. 
Allowing the appeal in part, this Court 
F 
HELD : I. I. The claimants/respondents had rightly been granted 
compensation on account of the motor accident.1220-DI 
1.2. The observations and findings of the High Court on the question 
whether a forged or a fake licence if renewed would get validated under the 
Motor Vehicles Act is struck down because there was a concurrent finding G 
recorded by the Tribunal as well as by the High Court that the offending 
vehicle was driven by a driver who had held a valid licence and it stood 
renewed on the date of the accident. There was thus no occasion for the High 
Court to have ruled on suppositions to the contrary in order to interpret the 
law and that too on a fact situation not available to it. Thus the entire exercise H 
217 
218 
SUPREME COURT REPORTS [1997] SUPP. 5 S.C.R. 
A of the High Court was obiter, not a binding precedent. 1220-B-Cf 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7749 of 1997 
Etc. 
From the Judgment and Order dated 17.10.96 of the Punjab & Haryana 
B High Court in F.A.F. 0. No. 725of1994. 
c 
D 
P.P. Malhotra, Vineet Malhotra, Shailendra Sharma and Naresh K. Sharma 
for the Appellant. 
Prem Malhotra and Manoj Prasad for the Respondents. 
The Judgment of the Court was delivered 
Leave granted. This is an appeal against the judgment and order dated 
I 7. I 0.96 passed by a full Bench of three Hon'ble Judges of the High Court 
of Punjab and Haryana in First Appeal from order No. 75 of I 994. 
The minimal facts giving rise to this appeal are these : 
There was a motor accident which gave rise to a claim for compensation, 
duly set up the claimants/respondents. One of the questions which was 
brought to the fore was whether the offending motor vehicle was being driven 
E by a driver holding a valid driving licence. The matter was put to issue and , 
the conclusion arrived at by the Tribunal was that the driver held a valid 
licence which had validly been renewed. This finding stood affirmed in appeal 
before the High Court. Yet it was taken by the High Court that a question of 
law arose as to whether a forged or a fake licence, if renewed would get 
F 
G 
validated or not so as to work out the liabilities under the Motor Vehicles Act. 
The question gathered momentum in as much as when the cause was before 
a Division Bench of the High Court, it referred the matter to full Bench of three 
Hon 'ble Judges which in tum pronounced as follows : 
"In view of the observations made above, 1 (M. S. Liberhan, J.) 
answer the questions posed as under : 
(I) A forged driving licence though may be validly renewed, would 
not become a valid driving licence or a duly issued driving licence in 
accordance with the Motor Vehicles Act. 
(2) The insured bonafidely believing in the validity of a forged driving 
H 
licence employing the holder of a fake driving licence renewed by a 
l-
N.l.C. LTD. v. SANTRO DEVI 
219 
competent authority, would not amount to violation of the conditions A 
of contract or of the insurance policy. It would not be violating either 
conditions of indemnity or the insurance policy or the contract or 
violation of any statutory provisions. Under these circumstances, 
merely employing a driver with a forged driving licence would not 
absolve the insurer of it

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