NATIONAL INSURANCE COMPANY LTD. versus GEETA BHAT & ORS.

Citation: [2008] 5 S.C.R. 734 · Decided: 31-03-2008 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed
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Judgment (excerpt)

[2008] 5 S.C.R. 734 
A 
NATIONAL INSURANCE COMPANY LTD. 
II. 
GEETA BHAT & ORS. 
(Civil Appeal No. 2257 of 2008) 
B 
MARCH 31, 2008 
[S.B. SINHA AND V.S. SIRPURKAR, JJ.] 
Motor Vehicles Act, 1988 - s. 166 - Motor accident -
Death caused - Third party claim - Driver of offending vehicle 
c holding fake driving licence - Liability of insurance company 
to pay compensation amount - Held: Where third party claim 
is concerned, factum of holding of fake licence by the driver, 
would not absolve the insurer to reimburse the insured - In 
the interest of justice insurance company directed to pay the 
D compensation amount, with liberty to recover the same from 
the insured and the driver of the vehicle. 
One person died in an motor accident. Respondents-
his legal heirs filed claim petition. Insurance company 
took the plea that the driver of the offending vehicle did 
E not hold a valid licence and therefore the Company was 
not liable to pay the compensation. Motor Accident Claims 
Tribunal awarded the compensation discarding the plea 
of the insurer. High Court dismissed the appeal. Hence 
the present appeal. 
F 
Dismissing the appeal, the Court 
HELD: 1. In a case where the terms of the contract of 
insurance are found to have been violated by the insured, 
the insurer may not be held to be liable for reimbursing 
G the insured. So far as a driving licence of a professional 
driver is concerned, the owner of the vehicle, despite 
taking reasonable care, might have not been able to find 
out as to whether the licence was a fake one or not. He is 
not expected to verify the genuineness thereof from the 
~-
H 
734 
NATIONAL INSURANCE COMPANY LTD. v. GEETA 
735 
BHAT & ORS . 
... 
Transport Offices. It is, therefore, assumed that the licence A 
possessed by the driver was a fake one.[Paras 8 and 13) 
[738-8-C; 742-C-D] 
1.2 Only because the licence held by the driver of 
the offending vehicle was fake, the same; would not 
B 
absolve the insurer to reimburse the owner of a vehicle in 
.. 
respect of the amount awarded in favour of a third party, 
by the Tribunal in exercise of its jurisdiction under Section 
166 of the Motor Vehicles Act, 1988. [Para 13) [742-D] 
1.3 Interest of justice shall be subserved if the 't 
appellant is directed to pay the awarded amount .in favour 
of the claimants with liberty to recover the same from the 
owner and the driver of the vehicle, in an appropriate · 
proceeding in accordance with law. [Para 15) [742-F]. 
National Insurance Co. Ltd. v. Swaran Singh 2004 (3) 
D 
sec 297- relied on. 
J. 
, 
National Insurance Co. Ltd. v. Laxmi Narain Dhut 2007 . 
(3) SCC 700; The Oriental Insurance Co. Ltd. v. Meena Variyal 
and Ors. 2007 (5) SCALE 269; Smt. Yallawwa and Ors. v. 
E· 
National Insurance Co. Ltd. and Anr. 2007 (8) SCALE 77 -
distinguished. 
United India Insurance Co. Ld. v. Lehru and Ors. 2003 
(3) SCC 338; Oriental Insurance Co. Ltd. v. Brij Mohan and 
Ors. 2007 (7) SCALE 753; United India Insurance Co. Ltd. v. 
F 
Davinder Singh 2007 (8) SCC 698; Prem Kumar and Ors. v. 
,. 
Prahlad Dev and Ors. 2008 (1) SCALE 531; Oriental 
Insurance Co. Ltd. v. Prithvi Raj 2008 (1) SCALE 727 - referred 
to. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. G 
2257 of 2008 
From the final Judgment and Order dated 30.10.2003 of 
·-~ 
the High Court of Punjab and Haryana at Chandigarh in F.A.O. 
No. 4413 of 2003. 
H 
736 
SUPREME COURT REPORTS 
[2008] 5 S.C.R. 
A 
B.K. Satija and Dr. Sushi Balwada for the Appellant. 
K.S. Rana for the Respondents. 
The Judgment of the Court was delivered by 
B 
S.B. SINHA, J. 1. Leave granted. 
2. On 14.11.2000, lshwar Dutt Bhat was traveling in a three 
• 
wheeler. It met with an accident having been hit by a truck bearing 
registreation No.HR 38 9179. The said vehicle was insured with 
the appellant. 
c 
Respondents, being the heirs and legal representatives 
of the said Shri lshwar Dutt, filed a claim petition. Appellant, in 
its written statement, raised a contention that the driving licence 
possessed by the driver of the truck was a fake one. 
D 
3. In the proceedings before the Motor Vehicles Accident 
Claims Tribunal (the Tribunal), it prayed for examination of the 
concerned clerk of the Motor Vehicles Department. The said 
,, 
prayer was allowed. The concerned Clerk of the Licencing 
Authority, Alwar was summoned. The said summons were 
E served in the office of the Transport Authority. The Transport 
Authority, however, did not depute any officer to produce the
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