NIRMALA KOTHARI versus UNITED INDIA INSURANCE CO. LTD.

Citation: [2020] 3 S.C.R. 1189 · Decided: 04-03-2020 · Supreme Court of India · Bench: NAVIN SINHA · Disposal: Appeal(s) allowed
cites 3 · see the full citation network in Lexace
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

A
B
C
D
E
F
G
H
1189
NIRMALA KOTHARI
v.
UNITED INDIA INSURANCE CO. LTD.
(Civil Appeal Nos. 1999-2000 of 2020)
MARCH 04, 2020
[NAVIN SINHA AND KRISHNA MURARI, JJ.]
Motor Vehicles Act, 1988 – s.149(2)(a)(ii) – Fatal accident –
Insurance claim – Repudiation of claim on the ground that driver
did not possess proper driving licence at the time of accident which
amounted to breach of conditions under s.149(2)(a) – Plea of
insurance company that the driving licence purported to have been
issued by the licencing authority, Sheikh Sarai, Delhi could not be
verified as the concerned officer of the licencing authority deposed
that the record of the licence was not available with them – Held:
While hiring a driver, an employer is expected to verify if the driver
has a driving licence – If the driver produces a licence which on
the face of it looks genuine, the employer is not expected to further
investigate into the authenticity of the licence unless there is a cause
to believe otherwise – If the employer finds the driver to be competent
to drive the vehicle and has satisfied himself that the driver has a
driving licence, there would be no breach of s.149(2)(a)(ii) and the
Insurance Company would be liable under the policy – It would be
unreasonable to place a high onus on the insured to make enquiries
with RTOs all over the country to ascertain the veracity of the driving
licence – If, however, Insurance Company is able to prove that the
owner/insured was aware or had notice that the licence was fake
or invalid and still permitted the person to drive, the insurance
company would no longer continue to be liable – In the instant
case, complainant employed the driver after checking his driving
licence – It was not the contention of the Insurance Company that
the complainant is guilty of wilful negligence while employing the
driver – The driver had been driving competently and there was no
reason for the complainant to doubt the veracity of the driver’s
licence –  Insurance company is liable to indemnify the appellant-
owner of vehicle.
[2020] 3 S.C.R. 1189
1189
A
B
C
D
E
F
G
H
1190
SUPREME COURT REPORTS
[2020] 3 S.C.R.
Allowing the appeals, the Court
HELD: 1.1 Breach of conditions under Section 149(2)(a)
of the Motor Vehicles Act, 1988 absolves the insurer of its liability
to the insured. Section 149(2)(a)(ii) deals with the conditions
regarding driving licence. In case the vehicle at the time of
accident is driven by a person who is not duly licenced or by a
person who has been disqualified from holding or obtaining a
driving licence during the period of disqualification, the insurer
is not liable for compensation. In the instant case it is a matter of
fact that no record of the licence bearing no. P03041288753070
was found with the licensing authority. [Para 7][1192-H;
1193-A-B]
1.2 While the insurer can certainly take the defence that
the licence of the driver of the car at the time of accident was
invalid/fake however the onus of proving that the insured did not
take adequate care and caution to verify the genuineness of the
licence or was guilty of willful breach of the conditions of the
insurance policy or the contract of insurance lies on the insurer.
[Para 9][1194-D-E]
National Insurance Co. Ltd. v. Swaran Singh & Ors.
(2004) 3 SCC 297 : [2004] 1 SCR 180 – relied on.
Pepsu RTC v. National Insurance Co. (2013) 10 SCC
217 : [2013] 9 SCR 266 – held inapplicable.
United India Insurance Co. Ltd. v. Lehru & Ors. (2003)
3 SCC 338 : [2003] 2 SCR 495 – referred to.
Case Law Reference
[2003] 2 SCR 495
referred to
Para 8
[2013] 9 SCR 266
held inapplicable
Para 8
[2004] 1 SCR 180
relied on
Para 10
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1999-
2000 of 2020.
From the Judgment and Order dated 06.02.2018 of National
Consumer Dispute Redressal Commission in Revision Petition No. 2835
of 2015 and Revision Petition No. 3053 of 2016.
A
B
C
D
E
F
G
H
1191
Jasmeet Singh, Ms. Rusheet Saluja, Saif Ali, Satyendra Mani
Tripathi and Pushpendra Singh Bhadoriya, Advs. for the Appellant.
Ms. Suman Bagga, Ms. Manjeet Chawla and Karri Venkata Reddy,
Advs. for the Respondent.
The Judgment of the Court was delivered by
KRISHNA MURARI, J.
1. Leave granted.
2. The Appellant/Complainant, Nirmala Kothari’s husband, Vinod
Ray Kothari was owner of a Hyundai Elantra vehicle, registration no.
RJ36CA 0111, which was insured with the Insurance Company for a
sum of Rs.5,00,000/- .
3. The said vehicle met with an accident with a tractor bearing
no. HR38K 3216,
Excerpt shown. Read the full judgment & AI analysis in Lexace.