NITCO LOGISTIC PVT LTD vs RAJIV KUMAR & ORS (HDFC ERGO GENERAL INSURANCE CO LTD )

* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on : 16th February, 2024
Judgment pronounced on: 20th February, 2024
+ MAC.APP. 204/2019
NITCO LOGISTIC PVT LTD ….. Appellant
Through: Ms. Sunita Hazarika, Mr.
Mayank Yadav & Mr.
Zalgoulen Kipgen, Advs.
versus
RAJIV KUMAR & ORS (HDFC ERGO GENERAL
INSURANCE CO LTD ) ….. Respondents
Through: Mr. Sunil Kumar Verma, Adv.
for R-1.
Mr. Nikhil, Adv. for Insurance
Company.
+ MAC.APP. 215/2019
NITCO LOGISTIC LTD ….. Appellant
Through: Ms. Sunita Hazarika, Mr.
Mayank Yadav & Mr.
Zalgoulen Kipgen, Advs.
versus
HARIPAL & ORS (HDFC ERGO GENERAL INSURANCE
CO LTD ) ….. Respondents
Through: Mr. Sunil Kumar Verma, Adv.
for R-1.
Mr. Nikhil, Adv. for Insurance
Company.
CORAM:
HON’BLE MR. JUSTICE DHARMESH SHARMA
J U D G M E N T

1. This common judgment shall decide the above noted appeals
preferred by the appellant/registered owner of the offending vehicle

under Section 173 of Motor Vehicle Act, 19881 assailing the
impugned common judgment-cum-award dated 03.10.2018 passed by
the learned Presiding Officer, Motor Accident Claims Tribunal2
(South-West District), Dwarka Courts, New Delhi arising out of
MACP No.1356/2016, titled „Rajiv Kumar v. Nirmal Singh & Ors.’
as also MACP No.1355/2016, titled „Haripal & Anr. v. Nirmal
Singh & Ors.’, whereby respondent No.3/Insurance Company has
been made entitled to recover the amount awarded to the claimants
from the appellant.

1 Act
2 Tribunal

FACTUAL BACKGROUND:

2. In MAC.APP. 204/2019, shorn off unnecessary details,
claimant/Rajiv Kumar met with a motor accident on 04.04.2014 when
he was driving truck bearing No. DL-1M-4988 from Manesar towards
Delhi involving another truck bearing No. HR-55J-2806, and
sustained injuries. The claimant/injured filed a claim for compensation
on 28.05.2014 against Nirmal Singh, the driver of the other vehicle,
which was registered in the name of respondent No.2/present
appellant herein and insured by respondent No.3/Insurance Company.
The claim petition was allowed vide judgment dated 03.10.2018,
whereby issue No.1 that the claimant sustained injuries towards rash
and negligent driving of vehicle bearing No. HR-38S-9138 by
respondent No.1 was decided in his favour. As regards respondent
No.2, a total compensation of Rs.13,69,000/- was awarded to the
claimant with interest @ 9% p.a. from the date of filing of the petition

i.e. 28.05.2014, till realisation. Although, the liability of payment of
the compensation was fastened on the shoulders of respondent
No.3/Insurance Company, the Insurance Company was also given the
right to recover the amount of compensation from the registered
owner i.e, respondent No.2/the present appellant.
3. In so far as MAC.APP. 215/2019 is concerned, the claimants
are parents of deceased Pitesh @ Hitesh, who succumbed to the
injuries sustained in the same motor accident that occurred on
04.04.2014, whereby the Tribunal awarded a total compensation of
Rs.12,74,000/- to the claimants with interest @ 9% p.a. from the date
of filing of the petition i.e., 28.05.2014, till realisation.
4. It is pertinent to mention here that the claimants instituted
MAC. APP. 10/2019 and MAC. APP. 15/2019 seeking enhancement
of compensation, which has since been dismissed by this Court vide a
common judgment dated 24.05.2023. Hence, the main contest is
between the appellant/registered owner and the respondent/Insurance
Company.

LEGAL SUBMISSIONS

5. Learned counsel for the appellant has urged that the impugned
judgment-cum-award requires interference inasmuch as it was never
the case of the Insurance Company that respondent No.1 was not
possessing a valid driving licence and that no issue was framed with
regard to such aspect, which left the appellant highly prejudiced.
Pointing out that the appellant, in its written statement had clearly
brought out that the respondent driver was possessing a valid driving

licence and that no evidence worth its salt was led by the Insurance
Company to show that the driving licence was fake or fabricated in
any manner. Heavy reliance has been placed in Rishi Pal Singh v.
New India Assurance Co. Ltd. & Ors.3
6. Per contra, learned counsel appearing for the Insurance
Company, referring to the observation made by the learned Tribunal in
paragraph (4) of the impugned common judgment-cum-award,
submitted that it was their specific defence that no information about
the accident had been given to the Insurance Company in compliance
with Section 134(C) of the Act and that it was brought out by them
during the course of evidence that no driving licence had been issued
to the respondent No.1 by the Nagaland Transport Authority.

3 2022 SCC OnLine SC 2119

ANALYSIS AND DECISION

7. Having heard the learned counsels for the parties and on perusal
of the record, it would be expedient to reproduce the relevant
observations made by the learned Tribunal while deciding the issue of
liability to pay compensation, which go as under:-

“41. LIABILITY (In both the cases bearing MACP No. 1355/16
& MACP No. 1356/16)
The offending vehicle bearing no. HR -38S-9138 was being
driven by respondent No. l-Nirmal Singh, owned by respondent no.
2-Nitco Logistics Pvt. Ltd. and was insured with respondent no.3/
HDFC Ergo General Insurance Co. Ltd at the time of accident and
as such, respondent no.3/HDFC Ergo General Insurance Co. Ltd.
being the ‘principal tortfeasor’, is liable to pay the awarded amount
in both these cases bearing MACP No. 1355/16 & MACP No.
1356/16).

Further in the present case, it is being submitted on behalf
of the R-3/Insurance company that R-1 Nirmal Singh (driver of the
offending vehicle) was not holding any valid driving licence at the
time of accident as was evident from the report/information dated
07.7.2014 of District Transport Officer, Tuensang, Nagaland and
as such , it is being, requested on behalf of R-3/Insurance company
that it may be given right to recover the awarded amount from R-1
Nirmal Singh (driver) and R-2 Nitco Logistics Pvt. Ltd. (owner of
offending vehicle).
In the instant case, the perusal of the record reveals that
report/information qua verification of driving licence from District
Transport Officer, Tuensang, Nagaland has been filed and in the
said report dated 07.7.2014, it has been stated that driving licence
no. N-19403/08 was not issued by the said office i.e. Office of
District Transport Officer, Tuensang, Nagaland, which implies that
the driving licence produced by R-1 Nirmal Singh (driver) was not
a valid or genuine licence.
In addition to above, the perusal of the record reveals that the route
permit and fitness certificate qua the offending vehicle (truck)
bearing no. HR38S-9138 have also not been filed/proved on record
by the R-1 (driver) or R-2 (owner of the offending vehicle).
Further, it is pertinent to note here that validity or genuity,
if any of the driving licence of R-1 Nirmal Singh ( driver of the
offending vehicle) or availability of route permit or fitness
certificate qua the offending vehicle (truck) bearing no. HR38S-
9138 could have been brought/proved on record by respondent no.l
Nirmal Singh ( driver) or respondent no.2 Nitco Logistics Pvt. Ltd.
(owner of offending vehicle), however, they have not led any
evidence in this regard despite opportunity being given and in
absence thereof, the R-3/ HDFC Ergo General Insurance Company
Ltd. shall be entitled to recover the compensation amount (being
payable by R-3/ Insurance company to petitioners herein in MACP
No.1355/16 & MACP No. 1356/16) from R-1 Nirmal Singh and R-
2 Nitco Logistics Pvt. Ltd., in accordance with law.
Hence, in view of the above, Issue No. 2 is decided accordingly.”

8. First things first, the proceedings before the Tribunal being in
the nature of a “summary” one, there was no legal necessity to frame
any specific issue as to whether or not the driver of the offending

vehicle was possessing a valid driving licence.4 Possession of driving
licence by the driver of the offending/insured vehicle is the
fundamental requirement of law to be proven in accordance with
provisions of the Act. It is borne out from the digitized Trial Court
record that PW-2/Rajiv Kumar, in his evidence, produced a copy of
the driving licence seized from the respondent No.1/Nirmal Singh
during the course of investigation by the Police into the accident,
which is Ex. PW-2/12, besides registered cover of the offending
vehicle which is Ex. PW-2/11. The initial burden of proving that the
offending vehicle was being driven by its driver with a forged and
fabricated driving licence was upon the Insurance Company, which
was not discharged, since neither such plea was taken in the written
statement nor any witness was produced from the Transport Authority
to substantiate such defence.
9. Assuming for the sake of convenience that there was an issue
regarding the validity of the driving licence, the appellant/Insurance
Company cannot be granted the recovery rights in view of the decision
in the cited case Rishi Pal Singh (supra), wherein although the
driving licence of the driver of the offending vehicle had been found
to be not having been issued by Nagaland Transport Authority, the
Court observed as under:-

4 169. Procedure and powers of Claims Tribunals. – (1) In holding any inquiry under section
168, the Claims Tribunal may, subject to any rules that may be made in this behalf, follow such
summary procedure as it thinks fit.

“7. If the owner has stated that driver had produced the driving
license from Nagaland but no such license was produced on record,
it is obviously a mistake on the part of the owner. However, such

aspect cannot be used to grant liberty to the Insurance Company to
recover the amount from the owner when the driving license
actually produced by the claimant themselves was from Una,
Himachal Pradesh. It may be stated that falsus in uno, falsus in
omnibus is not the principle applicable in India. Therefore, even if
a part of the statement that the driver has produced the license from
Nagaland is not correct, it is wholly inconsequential.”

10. In the cited case, the Supreme Court has referred to the decision
in United India Insurance Co. Ltd. v. Lehru5 and to a three judge”s
bench judgment in National Insurance Co. Ltd. v. Swaran Singh6.
Further, it was pointed out that a larger bench in Swaran Singh
(supra) resolved the difference of opinion or conflicting judgment in
the case of New India Assurance Co. v. Kamla7
and Lehru (supra),
wherein it was held as under:-

5 (2003) 3 SCC 338
6 (2004) 3 SCC 297
7 (2001) 4 SCC 342

“92. It may be true as has been contended on behalf of the
petitioner that a fake or forged licence is as good as no licence but
the question herein, as noticed hereinbefore, is whether the insurer
must prove that the owner was guilty of the wilful breach of the
conditions of the insurance policy or the contract of insurance.
In Lehru case [(2003) 3 SCC 338 : 2003 SCC (Cri) 614] the matter
has been considered in some detail. We are in general agreement
with the approach of the Bench but we intend to point out that the
observations made therein must be understood to have been made
in the light of the requirements of the law in terms whereof the
insurer is to establish wilful breach on the part of the insured and
not for the purpose of its disentitlement from raising any defence or
for the owners to be absolved from any liability whatsoever. We
would be dealing in some detail with this aspect of the matter a
little later.
xxxxxxxxx

99. So far as the purported conflict in the judgments of Kamla
[(2001) 4 SCC 342 : 2001 SCC (Cri) 701] and Lehru [(2003) 3
SCC 338 : 2003 SCC (Cri) 614] is concerned, we may wish to
point out that the defence to the effect that the licence held by the

person driving the vehicle was a fake one, would be available to
the insurance companies, but whether despite the same, the plea of
default on the part of the owner has been established or not would
be a question which will have to be determined in each case.”

11. The decision in Pappu v. Vinod Kumar Lamba8 was also
cited with approval, wherein it was held that :-

8 (2018) 3 SCC 208

“12. This Court in National Insurance Co. Ltd. [National
Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297 : 2004 SCC
(Cri) 733] has noticed the defences available to the insurance
company under Section 149(2)(a)(ii) of the Motor Vehicles Act,
1988. The insurance company is entitled to take a defence that the
offending vehicle was driven by an unauthorised person or the
person driving the vehicle did not have a valid driving licence. The
onus would shift on the insurance company only after the owner of
the offending vehicle pleads and proves the basic facts within his
knowledge that the driver of the offending vehicle was authorised
by him to drive the vehicle and was having a valid driving licence
at the relevant time.
xxxxxxxxx
17. This issue has been answered in National Insurance Co.
Ltd. [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC
297 : 2004 SCC (Cri) 733] In that case, it was contended by the
insurance company that once the defence taken by the insurer is
accepted by the Tribunal, it is bound to discharge the insurer and
fix the liability only on the owner and/or the driver of the vehicle.
However, this Court held that even if the insurer succeeds in
establishing its defence, the Tribunal or the court can direct the
insurance company to pay the award amount to the claimant(s) and,
in turn, recover the same from the owner of the vehicle. The three-
Judge Bench, after analysing the earlier decisions on the point, held
that there was no reason to deviate from the said well-settled
principle. In para 107, the Court then observed thus :

“107. We may, however, hasten to add that the Tribunal and
the court must, however, exercise their jurisdiction to issue such a
direction upon consideration of the facts and circumstances of each
case and in the event such a direction has been issued, despite
arriving at a finding of fact to the effect that the insurer has been
able to establish that the insured has committed a breach of
contract of insurance as envisaged under sub-clause (ii) of clause

(a) of sub-section (2) of Section 149 of the Act, the insurance
company shall be entitled to realise the awarded amount from the
owner or driver of the vehicle, as the case may be, in execution of
the same award having regard to the provisions of Sections 165 and
168 of the Act. However, in the event, having regard to the limited
scope of inquiry in the proceedings before the Tribunal it had not
been able to do so, the insurance company may initiate a separate
action therefor against the owner or the driver of the vehicle or
both, as the case may be. Those exceptional cases may arise when
the evidence becomes available to or comes to the notice of the
insurer at a subsequent stage or for one reason or the other, the
insurer was not given an opportunity to defend at all. Such a course
of action may also be resorted to when a fraud or collusion
between the victim and the owner of the vehicle is detected or
comes to the knowledge of the insurer at a later stage.”

12. Therefore, what follows is that the only legal requirement which
is expected from the owner of a vehicle is to verify the driving skills
and not to run to the Licencing Authority to verify the genuineness of
the driving licence before appointing a driver. In the instant matter,
merely by placing of a report from the Transport Authority that the
driving licence was fake, would not ipso facto lead to an inference that
the appellant/registered owner of the offending vehicle and employer
of the offending driver would be presumed to know that the driving
licence of the latter was a fake. In the absence of any tangible
evidence, that the respondent No.1/Nirmal Singh was not competent
to drive the vehicle, it was not expected from the registered owner
thereafter to verify the genuineness of the driving licence issued to the
driver from the Licencing Authority.
13. Further, in so far as non-production of the permit and fitness
certificate of the offending vehicle, the observation made by the
learned Tribunal that respondents No.1 and 2 should have produced
the permit as well as fitness certificate in their evidence cannot be

sustained either. Evidently, the respondent/Insurance Company never
served any notice upon respondent No.1. Further notice was not issued
upon respondent No.2 to produce such documents on the record soon
after the accident or for that matter during the course of long trial
before the learned Tribunal. There was no specific averment in the
written statement of the respondent/Insurance Company that there was
any violation of the insurance policy since the registered owner was
not having any valid permit and/or fitness certificate so as to absolve
them from indemnifying the insured.
14. In view of foregoing discussion, the present instant appeals are
allowed. The common impugned judgment-cum-award dated
03.10.2018 is hereby partly set aside to the effect that the liability to
pay compensation is fastened upon the respondent No.3/Insurance
Company and the respondent No.3/Insurance Company shall not be
entitled to any recovery rights as against the appellant/registered
owner.
15. The appeals are disposed of accordingly along with all the
pending applications.

DHARMESH SHARMA, J.
FEBRUARY 20, 2024/ck