PREMKUMARI AND ORS. versus PRAHLAD DEV AND ORS.

Citation: [2008] 1 S.C.R. 874 · Decided: 18-01-2008 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Disposed off
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Judgment (excerpt)

[2008) 1 S.C.R. 874 
A 
PREMKUMARI AND ORS. 
¥-
v. 
PRAHLAD DEV AND ORS. 
(C.A. No. 490 of 2008) 
B 
JANUARY 18, 2008 
[DR. ARIJIT PASAYAT AND P. SATHASIVAM,JJ.] 
Motor Vehicles Act, ~ 988 : 
c 
s.149(2)(a)(ii) - Breach of conditions of contract of 
insurance - Driver of offending vehicle not holding valid and 
effective licence - Claim for compensation - Liability of 
it;1surance company - Held : Not liable - On facts, claimants 
being widow and minor children of deceased, need not refund 
amount paid to them by insurance company - However, 
D insurance company can recover such amount from the owner 
of the offending vehicle. 
The question which arose for consideration in the 
instant appeal is : Whether the Insurance Company would 
E be absolved of liability to pay compensation to the 
claimants-appellants on the ground that driver of the 
offending vehicle was not holding valid and effective 
driving licence on the date of accident? 
Disposing of the appeal, the Court 
F 
;.-
HELD: 1. When the owner after verification sat!sfied 
himself that the driver has a valid licence and driving the 
vehicle in question competently at the time of the accident 
there would be no breach of s.149(2)(a)(ii) of Motor 
Vehicles Act, 1988. In that event, the Insurance Company 
G would not be absolved of liability. Even in case the licence 
~ 
< 
was fake, the Insurance Company would continue to 
remain liable unless they prove that the owner was aware 
or noticed that the licence was fake and still permitted him 
to drive. [Para 6) (880-E, F] 
H 
874 
PREMKUMARI AND ORS. v. PRAHLAD DEV AND 
875 
ORS. [SATHASIVAM, J.] 
National Insurance Co. Ltd. vs. Kusum Rai and Ors. .A 
(2006) 4 sec 250 - relied on. 
National Insurance Co. Ltd. v. Swaran Singh and Ors. 
(2004) 3 SCC 297; United India Insurance Co. Ltd. v. Lehru 
and Ors. (2003) 3 SCC 338; National Insurance Co. Ltd. v. 
Laxmi Narain Dhut, (2007) 3 SCC 700; Oriental Insurance B 
Co. Ltd. v. Meena Variyal and Ors. (2007) 5 SCC 428 -
referred to. 
· 2. In the light of the various principles, the factual 
finding of the tribunal that the driver was not holding a c 
valid licence on the date of the licence and also of the fact 
that the appellants are none other than widow and minor 
children of the deceased, it is ordered that the appellants 
need not' repay said amount of Rs.50,0001· inspite of 
conclusion in favour of the insurance company. However, ·o 
the Insurance company would recover the said amount 
from the owner of the vehicle. The appellants are permitted 
to proceed and recover the rest of the amount from the 
owner and driver of the vehicle in accordance with law. 
[Para 11) [885-G; 886-A, B, CJ 
Oriental Insurance Co. Ltd. v. Nanjappan (2004) 13 
sec 224 - relied on. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 490 
~ 
of 2008. 
· 
From the final Judgment and Order dated 22.04.2004 of 
the High Court of Madhya Pradesh, Bench at Indore in review 
application M.C.C. No. 41 of 2004. 
Vikrant Singh Bais and Ni~aj Sharma for the Appellants. 
ManjeetChawla and P.K. Seth for the Respondents. 
The Judgment of the Court was deliyered by 
P. SATHASIVAM, J. 1) Leave granted. 
E 
F 
G 
2) Whether the Tribunal was right in holding that the insurer H 
876 
SUPREME COURT REPORTS 
[2008] 1 S.C.R. 
A was not liable as the driver had a fake licence is the question to 
r-
be decided in this appeal? 
3) BACKGROUND FACTS: 
One Ramdhan, who was husband of appellant No.1 and 
B father of appellant Nos. 2 and 3 who were minor children, died 
in a motor vehicle accident while he was going on his bicycle 
and hit by a truck bearing Registration No. CPW 7344 which 
was being driven in a rash and negligent manner by respondent 
No.2 herein, owned by respondent No.1 herein and was insured 
c by respondent No.3 herein -
National Insurance Company. 
According to the appellants/claimants at the time of accident, 
the deceased was aged about 36 years and working as a 
carpenter and he was getting an income of Rs.125/- to Rs.150/ 
- per day. The claimants filed claim case No. 154 of 1997 before 
D the Motor Accident Claims Tribunal, Indore claiming a total 
compensation of Rs. 7 lacs under Sections 166A and 140 of 
the Motor Vehicles Act, 1988. Respondent No.3 filed a written 
statement denying the claim and also pleaded that the driver of 
the offending vehicle did not have a valid and effective driving 
E 
licence on the date of the accident. The Tribunal based on the 
materials placed and the evide
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