LI Network
Published on: November 01, 2023 at 13:25 IST
The Supreme Court has clarified that there is no requirement for the owner of a vehicle to verify and check the driving license of a driver with transport authorities under Section 149(2)(a)(ii) of the Motor Vehicles Act, 1988 (Act) or the insurance policy.
Therefore, the owner or employer is not liable to pay compensation in cases where an accident involves a driver with a fake license.
The Court dismissed a petition challenging the High Court’s order, which had ruled that the insurance company does not have the right to recover compensation from the vehicle owner.
The Court emphasized that it is unrealistic and unnecessary to expect every person employing a driver to verify and confirm the driver’s license with the authorities.
The Court stated that there is no statutory provision or clause in the insurance policy that mandates a driving skill test to be conducted before employing a driver. Thus, the insurance company cannot claim that the vehicle owner breached the policy by not conducting such a test.
Furthermore, the Court highlighted that no car insurance policy includes a mandatory condition that requires the owner to verify the driver’s license with the transport authorities.
It would be impractical for every person employing a driver to expect the transport authority to verify and confirm the license’s validity, as long as it is issued by a seemingly competent authority.
The Court reiterated that the burden of proof is on the insurance company to demonstrate that the vehicle owner did not conduct due diligence regarding the license’s validity before hiring the driver, especially when the driver presents a seemingly valid license.
However, if the license is clearly fake, expired, or raises doubts about its validity, inquiries should be made.
The Court concluded that the insurance company must prove a willful breach on the part of the vehicle owner. Since no evidence was presented in this case to suggest that the vehicle owner should have verified the driver’s license, the insurance company had no right to recover compensation from the owners of the vehicle.
The Court expressed concerns about insurance companies frequently raising such pleas without considering the case’s facts or available evidence, leading to unnecessary appeals to the highest court.
Case titled: IFFCO Tokyo General Insurance Co. Ltd v. Geeta Devi And Others.
