Pay insured accident victim who had fake licence: HC

The Bombay high court, in a recent order, held that insurance companies are liable to pay compensation to victims of road accidents even if they possessed a fake or unauthorised drivers’ license at the time of the accident.

The order came while the court was hearing an appeal filed by the Oriental Insurance Company against a 1998 order of the Motor Accidents Claims Tribunal.

The incident occurred in May 1990 when the victim, Shivaji Dabhade, 25, a Nashik resident, was riding a tractor with his colleague. An accident upturned the vehicle. While the colleague sustained only minor injuriers, Dabhade was crushed to death. His wife approached the tribunal seeking compensation. The tribunal held that the insurance company with which the tractor was insured, and Dabhade’s employer, who owned the vehicle, were both liable to jointly pay Rs96,000 as compensation.

The insurance company appealed against the order, stating that only the vehicle’s owner must be held liable. It contended that Dabhade’s colleague possessed a fake driving licence, which meant that he was inept at driving and had thus caused the accident. It added that since the owner had hired a driver with a fake licence, it forfeited their insurance contract.

Justice Sadhana Jadhav, who was presiding over the matter, dismissed the company’s arguments. He said the very reason third party insurance was compulsory while getting one’s vehicle insured was to ensure that the insurance company would compensate third party victims of road accidents.

“Even after it was proved that the driver’s licence was fake, a moot question to ask whether the insurer is liable. When the owner of a vehicle hires a driver, he has to check whether the driver has a valid driving licence and if he is competent enough to drive. The owner cannot be expected to go beyond that and check with the licensing authority if the licence is genuine,” Justice Jadhav said.

“The situation would be different if, at the time of the vehicle being insured, the insurance company requires the owner to have the licence of its drivers duly verified from the licensing authority, or, if the owner finds out that the license is fake and yet fails to take action,” she said.

She added that as this was not the case, the court found no error in the tribunal’s ruling.