LAW LAID DOWN BY SUPREME COURT ON
INSURANCE
Laxmi
Narain Dhutt V/S National Insurance Co. Ltd Sc 2007
DRIVING LICENCE
“A fake licence cannot get its forgery outfit stripped off merely
on account of some officer renewing the same with or without knowing it to be
forged. Section 15 of the Act only empowers any Licensing Authority to
"renew a driving licence issued under the provisions of this Act with
effect from the date of its expiry". No Licensing Authority has the power
to renew a fake licence and, therefore, a renewal if at all made cannot
transform a fake licence as genuine. Any counterfeit document showing that it
contains a purported order of a statutory authority would ever remain
counterfeit albeit the fact that other persons including some statutory
authorities would have acted on the document unwittingly on the assumption that
it is genuine".
The effect of fake license has
to be considered in the light of what has been stated by this Court in New
India Assurance Co., Shimla v. Kamla and Ors. (2001 (4) SCC 342). Once the
license is a fake one the renewal cannot take away the effect of fake license.
It was observed in Kamla's case (supra) as follows:
"12. As a point of law we
have no manner of doubt that a fake licence cannot get its forgery outfit
stripped off merely on account of some officer renewing the same with or
without knowing it to be forged. Section 15 of the Act only empowers any
Licensing Authority to "renew a driving licence issued under the
provisions of this Act with effect from the date of its expiry". No
Licensing Authority has the power to renew a fake licence and, therefore, a
renewal if at all made cannot transform a fake licence as genuine. Any
counterfeit document showing that it contains a purported order of a statutory
authority would ever remain counterfeit albeit the fact that other persons
including some statutory authorities would have acted on the document
unwittingly on the assumption that it is genuine".
In view of the above analysis the following situations emerge:
1. The decision in Swaran Singh's case (supra) has no application
to cases other than third party risks. [The decision in Swaran Singh's case
(supra) applied to claims which involved only the insurance company and the
owner of the vehicle i.e. where there was no third party involved. It has been
highlighted by learned counsel for the appellants that Swaran Singh's case
(supra) was rendered in the background of Section 149 of the Motor Vehicles
Act, 1988 (in short the 'Act') which has no application to cases where there is
no third party involved.]
2. Where originally the license was a fake one, renewal
cannot cure the inherent fatality.
3. In case of third party risks the insurer has to indemnify the
amount and if so advised to recover the same from the insured.
4. The concept of purposive interpretation has no application to
cases relatable to Section 149 of the Act.
5. The conceptual difference between third party right and own
damage cases has to be kept in view. Initially, the burden is on the insurer to
prove that the license was a fake one. Once it is established the natural
consequences have to flow
INTERPRETATION OF STATUTE
“A statute is an edict of the Legislature and in construing a
statute, it is necessary to seek the intention of its maker. A statute has to
be construed according to the intent of those who make it and the duty of the
court is to act upon the true intention of the Legislature. If a statutory
provision is open to more than one interpretation the Court has to choose that
interpretation which represents the true intention of the Legislature
Nonetheless, the function of the Courts is only to expound and not to
legislate…
It is also well settled that to arrive at the intention of the
legislation depending on the objects for which the enactment is made, the Court
can resort to historical, contextual and purposive interpretation leaving
textual interpretation aside. ”
Francis Bennion in his book "Statutory Interpretation"
described "purposive interpretation" as under:
"A purposive construction of an enactment is one which gives
effect to the legislative purpose by-
(a) following the literal meaning of the enactment where that
meaning is in accordance with the legislative purpose, or
(b) applying a strained meaning where the literal meaning is not
in accordance with the legislative purpose."
More often than not, literal interpretation of a statute or a
provision of a statute results in absurdity. Therefore, while interpreting
statutory provisions, the Courts should keep in mind the objectives or purpose
for which statute has been enacted.
************************************************************
SWARAN SINGH &OTHERS V/S NATIONAL
INSURANCE CO. LTD SC 2004
“ Even where the insurer is able to prove breach on the part of
the insured concerning the policy condition regarding holding of a valid
licence by the driver or his qualification to drive during the relevant period,
the insurer would not be allowed to avoid its liability towards insured unless
the said breach or breaches on the condition of driving licence is/ are so
fundamental as are found to have contributed to the cause of the accident. The
Tribunals in interpreting the policy conditions would apply "the rule of
main purpose" and the concept of "fundamental breach" to allow
defences available to the insured under section 149(2) of the Act.”
“ The question as to whether the owner has taken reasonable care
to find out as to whether the driving licence produced by the driver, (a fake
one or otherwise), does not fulfil the requirements of law or not will have to
be determined in each case.”
‘ If a vehicle at the time of accident was driven by a person
having a learner's licence, the insurance companies would be liable to satisfy
the decree”
“The said power of the tribunal is not restricted to decide the
claims inter se between claimant or claimants on one side and insured, insurer
and driver on the other. In the course of adjudicating the claim for
compensation and to decide the availability of defence or defences to the
insurer, the Tribunal has necessarily the power and jurisdiction to decide
disputes inter se between insurer and the insured. The decision rendered on the
claims and disputes inter se between the insurer and insured in the course of
adjudication of claim for compensation by the claimants and the award made
thereon is enforceable and executable in the same manner as provided in Section
174 of the Act for enforcement and execution of the award in favour of the
claimants.”
. “Mere absence, fake or invalid driving licence or
disqualification of the driver for driving at the relevant time, are not in
themselves defences available to the insurer against either the insured or the
third parties. To avoid its liability towards insured, the insurer has to prove
that the insured was guilty of negligence and failed to exercise reasonable
care in the matter of fulfilling the condition of the policy regarding use of
vehicles by duly licensed driver or one who was not disqualified to drive at
the relevant time.”
“The insurance companies are, however, with a view to avoid
their liability must not only establish the available defence(s) raised in the
said proceedings but must also establish 'breach' on the part of the owner of
the vehicle; the burden of proof wherefor would be on the Insurance co.”
RUBI(CHANDRA) DUTTA VS
M/S UNITED INDIA INSURANCE ..
ON 18 MARCH, 2011
DUPLICATE LICENCE
In the instant case, the deposition of the Court witness, namely,
the authorized officer of the RTA, states that the said procedure had been
adopted by head office at the time of issuance of duplicate license. In view of
the admission made by him, there remains no doubt that the duplicate licence
was issued by the office after checking the previous credentials of the driver
and following the normal procedure by the Licensing Authority. On close
scrutiny of the licence bearing No. 676/96 issued by Licensing Authority, it is
found that the noting categorically states that the said duplicate license was
issued only after verification from the original Even if the original
application was not available but since the duplicate licence was issued by the
same Licensing Authority, it cannot be challenged that the original licence was
fake, forged, manufactured or engineered document. This unequivocal admission
made by the witness of RTO fully establishes this fact. Besides, the reports of
both the Surveyors have mentioned that the driver was holding a driving licence
bearing No. 676/96 issued by Licensing Authority. [para 17- 20] [985-E-H;
986-A-E]
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Under the insurance policy the benefits do not ‘perse’ transferred to the new buyer. The original owner seizes all the benefits of the insurance policy the day he sells his vehicle to the new buyer. Mere intimation from the side of new buyer or through broker/dealer regarding sale of the vehicle and transfer of the insurance policy in favour of the new buyer is not sufficient. The new buyer is expected to make formal request for transfer of the policy in his favour and a fresh agreement is to be executed between the insurer and the new owner after pay-ment of the requisite fee. The new owner/purchaser has to apply in writing within a period of 14 days from the date of transfer to the insurer. General Regulation 17 of Indian Motor Tariff Act provides that a fresh proposal form duly com-pleted is to be obtained from the transferee. Transfer of package policy in the name of the transferee can be done only on getting the acceptable evidence of sale and fresh proposal from duly filled and signed. The old certificate of the insurance for the vehicle is required to be sur-rendered and a fee of Rs.50/- is to be collected for issue of fresh certificate in the name of the transferee.
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