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National Insurance Co. Ltd. vs Abdul Gaffar Pandith on 11 August, 2004
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tune of Rs. 4.50 lakhs and Rs. 1,25,221/- respectively. The respondent informed the Divisional Office of the Insurance Company i.e. National Insurance Co. (hereinafter referred to as the appellant). On intimation, the appellant appointed surveyor to verify the incident. Later Surveyors were appointed to assess the quantum of loss. The loss was assessed at Rs. 3,08,500/- and Rs. 1,25,221/- for the diesel. The Divisional Office approved the claim as assessed by the surveyors and sent it to the Regional Office. The Regional Office made certain queries relating to validity of the driving license of the driver about which survey report was silent. The claim was later forwarded to the Head Office. According to the appellant, the surveyors could not verify the validity of the driving license as relevant records of the Jammu Regional Transport Office had been seized by the Vigilance Organization in connection with some investigation. It may be mentioned that the driver of the tanker Gull Mohammad had died in the accident on the spot. As the claim remained pending, the respondent filed complaint before the Commission.

4. Mr. Javid Ahmad Kawoosa, counsel for the appellant submitted that as held by the Apex Court in New India Insurance Co. v. Kamla and Ors., AIR 2001 SC 1419, the renewal of a fake driving license can not make it genuine and where the owner of the vehicle allows a person not holding a valid driving license to drive the vehicle, he commits a breach of contract which disentitles him to indemnity and compensation from the insurance company. On behalf of respondent, it was submitted that even in the case of a. fake license, the insurance company is statutorily liable to pay compensation as held in New India Insurance Company v. Kamla (supra) itself. Mr. Kawoosa on behalf of the appellant submitted that the decisions of the Supreme Court have been rendered in the context

5. Mr. Kawoosa appears to be right in his submission that the decision referred to above deals with cases of third party claim. As a matter of fact, Section 149 of the Motor Vehicles Act itself deals with third party risk. Mr. Kawoosa also is right in his submission that renewal of a fake driving license can not transform it into a genuine or valid license. A license which is forged like any other like document is to be regarded as non existent in the eye of law. Merely because it gets a new wrapper in the shape of so-called renewal by the competent authority can not inject life into it and make it legal. Thus in case of so-called renewal of a fake driving license, the Insurance Company can not be held liable to pay compensation in respect of motor accident when the vehicle is driven by a person holding such license. That

vehicle. The very concept of infringement or violation of the promise that the expression 'breach' carries within itself induces an inference that the violation or infringement on the part of the promisor must be a willful infringement or violation. If the insured is not at all at fault and has not done anything he should not have done or is not amiss in any respect how can it be conscientiously posited that he has committed a breach? It is only when the insured himself places the vehicle in charge of a person who does not hold a driving license that it can be said that he is 'guilty' of the breach of the promise that the vehicle will be driven by a licensed driver. It must be established by the Insurance Company that the breach was on the part of the insured and that it was the insured who was guilty of violating the promise or infringement of the contract, Unless the insured is at fault and is guilty of a breach, the insurer cannot escape from the obligation to indemnify the insured and successfully contend that he is exonerated having regard to the fact that the promisor (the insured