PEPSU ROAD TRANSPORT CORPORATION versus NATIONAL INSURANCE COMPANY,

Citation: [2013] 9 S.C.R. 266 · Decided: 26-08-2013 · Supreme Court of India · Bench: GYAN SUDHA MISRA · Disposal: Appeal(s) allowed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
[2013] 9 S.C.R. 266 
PEPSU ROAD TRANSPORT CORPORATION 
v. 
NATIONAL INSURANCE COMPANY 
(Civil Appeal No. 8276 of 2009) 
AUGUST 26, 2013 
[GYAN SUDHA MISRA AND KURIAN JOSEPH, JJ.] 
MOTOR VEHICLES ACT, 1988: 
c 
s. 149 (2) (a) (ii) - Plea of fake driving licence raised by 
insurer-Held: Onus is on the insurer to establish the defence 
- As far as owner of vehicle is concerned, when he hires a 
driver, he has to check whether the driver has a valid driving 
licence - Thereafter he has to satisfy himself as to the 
0 competence of the driver - If that is done, it can be said that 
the owner had taken reasonable care in employing a person 
who is qualified and competent to drive the vehicle - He is 
not expected to verify the genuineness of driving licence with 
the licensing authority- In the instant case, the driver had been 
put to a driving test and had also been imparted training by 
E the appellant employer - In view of the evidence of licensing 
authority, it cannot be absolutely held that the licence to the 
driver had not been issued by the said authority and that the 
licence was fake - Insurer is liable to indemnify the insured. 
F 
The instant appeal filed by the insured arose out of 
the order of the Motor Accidents Claims Tribunal whereby 
it awarded the dependants of a fatal accident victim a 
compensation of Rs. 11,03,404/- and absolved the insurer 
of its liability holding that the licence issued to the driver 
G was found to b~ fake. 
Allowing the appeal, the Court 
HELD: 1.1 In a claim for compensation, it is certainly 
H 
266 
.. 
PEPSU ROAD TRANSPO~T CORPORATION v. 
267 
NATIONAL INSURANCE COMPANY 
open to the insurer uls 149(2)(a)(ii) of the Motor Vehicles 
A 
Act, 1988 to take a defence that the driver of the vehicle 
involved in the accident was not duly licensed. Once 
such a defence is taken, the onus is on the insurer. As 
far as the owner of the vehicle is concerned, when he 
hires a driver, he has to check whether the driver has a 
8 
valid driving licence. Thereafter he has to satisfy himself 
as to the competence of the driver. If satisfied in that 
regard also, it can be said that the owner had taken 
reasonable care in employing a person who is qualified 
and competent to drive the vehicle. The owner cannot be 
C 
expected to go beyond that, to the extent of verifying the 
genuineness of the driving licence with the licensing 
authority before hiring the services of the driver. [para 8] 
[274-C-F] 
Un,it(3d India Insurance Company Limited vs. Lehru and 
D 
Other;{2003 (2) SCR 495 = (2003) 3 SCC 338; National 
Insurance Company Limited vs. Swaran Singh and Others 
2004 (1) SCR 180 = 2004 (3) SCC 297, National Insurance 
Company Limited vs. Laxmi Narain Dhut 2007 (3) SCR 579 
= (2007) 3 SCC 700-relied on. 
E 
1.2 In the instant case, the driver, in the process of 
employment, had been put to a driving test and he had 
been imparted training also by the employer. The 
accident took place after six years of his service. In such 
circumstances, it cannot be said that the insured is at 
fault in having employed a person whose licence has 
been proved to be fake by the insurance company before 
F 
the Tribunal. Further, on scanning the evidence of the 
licensing authority before the Tribunal, it cannot also be 
G 
absolutely held that the licence to the driver had not been 
issued by the said authority and that the licence was fake. 
The respondent - insurance company is liable to 
indemnify the appellant. [para 9-10] [275-8-E] 
H 
A 
B 
268 
SUPREME COURT REPORTS 
[2013] 9 S.C.R. 
Case Law Reference: 
2003 (2) SCR 495 
2004 (1) SCR 180 
2007 (3) SCR 579 
relied on 
relied on 
relied on 
para 5 
para 6 
para 7 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 
8276 of 2009. 
From the Judgment and Order dated 17.09.2008 of the 
C High Court of Punjab & Haryana at Chandigarh in First Appeal 
from Order No. 1477 of 2008. 
K.K. Mohan for the Appellant. 
S.L. Gupta, Vikash Chandra, Ram Ashray, lnder Mohan 
o Singh, Kamlesh Vaswani (for Shalu Sharma) for the 
Respondent. 
The Judgment of the Court was delivered by 
KURIAN, J. 1. Breach of conditions under Section 
E 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 licensed 
or by a person who has been disqualified from holding or 
F obtaining a

Excerpt shown. Read the full judgment & AI analysis in Lexace.