Judgment:
Dr. P.K. Vasudeva, Member:
1.This is an appeal filed under Section 15 of the Consumer Protection Act, 1986 (for short hereinafter referred to as the C.P. Act), against the order dated 15.3.1999 passed by the District Consumer Disputes Redressal Forum-I, U.T., Chandigarh (for short hereinafter referred to as the District Forum-I), in Complaint Case No. 673 of 1995. The District Forum-I allowed the complaint and directed the opposite party to make the payment of loss assessed by the Surveyor i.e. Rs. 34,046/- alongwith interest @ 12% per annum from 12.6.1994 till the date of payment to the complainant. Apart from it, the District Forum-I also awarded Rs. 2,000/- as compensation and costs, to the complainant.
2. Briefly, the complainant Shri Ujaggar Singh son of Late Sh. Inder Singh c/o Sewak Transport Co., Booth No. 12, Sector 26, Chandigarh was the owner of truck, bearing Registration No. PB-12A-4785 which was insured with the appellant/opposite party vide Policy No. 31121400 31787 valid from 24.2.1994 to 23.2.1995. On 13.5.1994, the truck met with an accident and it suffered extensive damage. The Surveyor assessed the loss of the vehicle to the tune of Rs. 34,046/-. Inspite of submitting of all the documents, including driving licence and other formalities, the claim was repudiated by the appellant/opposite party-Insurance Company saying that the driving licence was a fake one though later on renewed by the Competent Authority. The respondent/complainant filed a Complaint No. 673/95 in the District Forum-I, U.T., Chandigarh and prayed that the opposite party, appellant in the appeal be directed to reimburse the amount of claim along with interest @ 18% per annum from the date it became due, till the date of actual payment and further direction to the opposite party to pay a sum of Rs. 20,000/- towards harassment and litigation expenses for this uncalled for litigation.
3. Aggrieved against the order of the District Forum-I, the appellant/opposite party has filed this appeal before this Commission praying for the setting aside of the impugned order passed by the District Forum-I on 15.3.1999.
4. The respondent/complainant Shri Ujaggar Singh was the owner of the truck bearing Registration No. PB-12A-4785 which was insured with the appellant/opposite party-Insurance Company vide Policy Number 31121400 31787 which was valid from 24.2.1994 to 23.2.1995. On 13.5.1994, the truck met with an accident and suffered extensive damage. The matter was reported to the appellant/opposite party who appointed a Surveyor Sh. Surinder Singh Dhillon on 27.5.1994 who assessed the loss at Rs. 34,046/-. The respondent/complainant was asked to comply with certain formalities and submit all the documents as required by the appellant/opposite party-Insurance Company including the driving licence of the driver who was driving the vehicle at the time of accident. All the formalities were complied with including the driving licence of the driver who was driving the truck at the time of accident were submitted to the appellant/opposite party. The appellant/opposite party rejected the claim as assessed by the Surveyor aforesaid on the ground that the driver of the truck namely Shri Harpal Singh was holding a fake licence on account of which the file of the respondent/complainant was closed as âNo Claim. The respondent/complainant has averred in para 7 of his complaint that since the licence in question had been renewed by the Licensing Authority, Una, therefore, the complainant got the said licence verified from the Licensing Authority, Una and moved an application to the appellant/opposite party-Insurance Company alongwith photo-copy of the judgment dated 29.9.1993 passed by Mr. Justice A.L. Bahri and Mr. Justice N.K. Kapoor of Punjab and Haryana High Court in case National Insurance Company Limited v. Sucha Singh and Ors. It was held that if a licence is renewed though originally it was a fake licence, it gets its validity and the Insurance Company would be liable to reimburse the insured, if accident was caused by the driver and employee of the insured, possessing a licence which was duly renewed but the opposite party did not pass the claim of the complainant. The respondent/complainant Sh. Ujaggar Singh has further averred that the driver of the vehicle in question was possessing driving licence duly renewed, therefore, the Insurance Company was liable to reimburse the insured, and since the appellant/opposite party has failed to reimburse the complainant, his genuine and bona fide claim, therefore, the appellant/opposite party has been deficient in providing proper service to its customer.
5. In reply, the appellant/opposite party has averred that the claim of the respondent/complainant was rejected vide Annexure R-1 as the driving licence possessed by the driver was not a validly issued driving licence and thus is violative of the provisions of Clause 3(b) of General Exceptions provided in the terms and conditions of the policy read with relevant sections of the Motor Vehicles Act. It has been held by the Honble National Commission that even renewal of a fake licence does not make it a valid licence. In paras 5 and 6 of the reply, it has been averred by the appellant/opposite party that the driving licence of Shri Harpal Singh, driver of the truck in question, a copy of which was supplied to the appellant/opposite party revealed that the driving licence was issued by the Licensing Authority, (M.V.), Hoshiarpur (Punjab) and was valid initially for Motor Cycle/Scooter and M.T.V. only. However, vide Endst. dated 4.4.1989 it was endorsed for Heavy Transport Vehicles and Hilly Roads also. he said driving licence was further renewed upto 25.3.1993 by District Transport Officer, Hoshiarpur and thereafter upto 26.7.1996 by the District Licensing Authority, Una vide Renewal No. 930 dated 27.7.1993. The driving licence produced by the driver carried a number of 253/DUP/89-90. Copy of the said driving licence is enclosed as Annexure R-3 with the written statement.
6. Dr. Jagdeep Singh Labana, Investigator (GIC Subsidiaries), was deputed by the opposite party for verification of the particulars of the driving licence from the initial Issuing Officer of District Transport Office, Hoshiarpur. After checking the relevant records, the following remarks were given by the concerned official of the District Transport Office, Hoshiarpur :
âThe Driving Licence No. 1399/RDL/89-90 has been renewed by this office in the name of Shri Mohinder Pal son of Amolak Singh and not in the name of Sh. Harpal Singh son of Ajmer Singh as per office record. On further requesting to the office to give verification for the duplicate DC No. 253/DUP/89-90, the folowing remarks were given :
âReturned with remarks that DL No. 253/DUP/89-90 has not been issued by this office in the register containing numbers 1 to 246 for the year 1989-90 as per office record.â
From the above, it was well-established that the driving licence possessed by the driver at the time of accident was not validly issued by the District Transport Officer, Hoshiarpur, thus the driving licence was fake. Therefore, the case of the complainant was closed as âNo Claim and the complainant was accordingly informed by the appellant/opposite party-Insurance Company vide letter dated 20.7.1995 (Copy Annexure R-1 attached with the complaint case). In para 7 of the written statement, the appellant/opposite party has averred that the Division Bench Authority of Punjab and Haryana High Court stated by the respondent/complainant has no binding effect over the Consumer Forum whereas the Forum is bound to follow the ratio descendi of the judgments of National Commission. Even otherwise, the decision rendered by the Division Bench has been referred to Full Bench of the Punjab and Haryana High Court in F.A.O. No. 725 of 1994 and is yet to be adjudicated.
]7. In appeal, the appellant/opposite party has reinforced the argument that a fake licence even though renewed validly cannot be considered to be a valid licence subsequently as per the judgment of the Honble National Commission. The Honble National Commission in the case of M/s. Essma Felts Pvt. Limited v. United India Insurance Company Limited, reported as 1995 (2) CPC 153 (NC), has categorically held that in the eyes of law, a fake licence is as good as non-est licence, more so when the renewal was made without verifying the genuineness of the original licence from its Issuing Authority.
8. Notice was issued to the appellant/opposite party and the record of the District Forum-I in triplicate was summoned. We have heard the learned Counsel for both the parties and have carefully perused the record of the complaint case and the order under appeal.
9. The learned Counsel for the respondent cited before us judgment of the Honble Supreme Court of India in the case of National Insurance Co. Ltd. v. Santro Devi and Ors., VI (1998) SLT 11=I (1998) ACC 600 (SC)=AIR 1998 Supreme Court 1485. The Honble Supreme Court was deciding civil appeal arising out of judgment of a Full Bench of the Honble Punjab and Haryana High Court which is dated 17.10.1996. The Honble Supreme Court took notice of the minimal facts giving to the appeal in para 3 of the judgment, which reads as under :
â3. The minimal facts giving rise to this appeal are these :
There was a motor accident which gave rise to a claim for compensation, duly set up by the claimants/respondents. One of the questions which was brought to the Fora was whether the offending motor vehicle was being driven by a driver holding a valid driving licence. The matter was put to issue and the conclusion arrived at by the Tribunal was that the driver held a valid licence which had validly been renewed. This finding stood affirmed in appeal before the High Court. Yet it was taken by the High Court that a question of law arose as to whether a forged or a fake licence, if renewed would get validated or not so as to work out the liabilities under the Motor Vehicles Act. The question gathered momentum inasmuch as when the cause was before a Division Bench of three Honble Judges which in turn pronounced as follows :
âIn view of the observations made above, I (M.S. Liberhan, J.) answer the questions posed as under :
(1) A forged driving licence though may be validly renewed, would not become a valid driving licence or a duly issued driving licence in accordance with the Motor Vehicles Act.
(2) The insured bonafidely believing in the validity of a forged driving licence employing the holder of a fake driving licence renewed by a Competent Authority, would not amount to violation of the conditions of contract or of the insurance policy. It would not be violating either conditions of indemnity or the insurance policy or the contract or violation of any statutory provisions. Under these circumstances, merely employing a driver with a forged driving licence would not absolve the insurer of its liability.
(3) In the absence of mens rea or knowledge or intention to violate the terms of policy or the provisions of the Act by the insured, the Insurance Company would not be discharged of its liability from indemnifying the insurer of its statutory liability to third party.
(4) The Insurance Company cannot refuse to meet its liability quo third party for any act or omission bonafidely or otherwise committed by the insured or its liability inasmuch as third party for whose benefit the insurance has been provided, is not a privity to any breach as being not in control of the act or conduct of the insured or its employee or insurer. Thus, the Insurance Company cannot refuse to meet its liability quo third party.
(5) The insurer is duty bound and liable, statutorily as well as contractually to reimburse third party claim, for the tortuous act committed by the insured or his employee as well as the liability incurred by insurer or his employee under the Motor Vehicles Act.
(6) The Insurance Company can neither refuse to indemnify nor is discharged from its liability to the insurer or the claimants for an act of fraud committed by the third party quo the insured though it has a right to recover any loss suffered by it from the person, who committed the fraud or from any other Authority, as permissible either under tort or any other Statute, and
(7) The Insurance Company would be entitled to recover the amount, which it was paid to the claimant from the insured or his driver or employee who has perpetuated fraud and the Insurance Company was made to reimburse third party who suffered loss because of the tortuous act of the insured or his employee. The insurer would not be left without remedy to reimburse itself. It would be at liberty to approach under tort in accordance with law for the failure of the State to discharge common duty care as well as the insured for not observing due care of an ordinary prudent person, expected from the insured, as a duty towards the insurer as well as the person who has committed the fraud. Remedy as available to the insurer is not a decision by this Court while dealing with the question, rather it is left open to be determined as and when a question arises in the facts and circumstances of a particular case.â
In para 4 of the judgment, the Honble Supreme Court observed, inter alia, as under :
â...As has been said above, there was a concurrent finding recorded by the Tribunal as well by the High Court that the offending vehicle was driven by a driver who had held a valid licence and it stood renewed on the date of the accident. There was thus no occasion for the High Court to have ruled on suppositions to the contrary in order to interpret the law and that too on a fact situation not available to it. Thus, we are constrained to intervene and hold that the entire exercise of the High Court in that direction was obiter, not at all a binding precedent. In that sense, we strike off from the impugned order, observations and findings pertaining thereto. Yet at the same time, we are required and do hereby affirm the substantive part of the order, in holding that the claimants/respondents had rightly been granted compensation on account of the motor accident on the basis of the recorded finding of fact...â    (Emphasis supplied by us)
It is evident from the judgment of the Honble Apex Court that the observations and findings pertaining to seven questions posed by the Full Bench were not only held to be obiter and also not a binding precedent but were further ordered to be struck off from the impugned order.
10. It is suffice to say that the judgment of the Honble Apex Court in the case of National Insurance Co. Ltd. v. Santro Devi and Ors. (supra), mainly rested on the concurrent finding of fact that the offending vehicle was driven by a driver who had held valid licence and it stood renewed on the date of accident.
11. Now coming to the facts involved in the complaint case which is involved in this appeal before us, the plea of the Insurance Company/appellant regarding the validity or otherwise of the driving licence held by the driver of the vehicle involved in the accident, the District Forum observed in the last para at page 2 as under :
âThe learned Counsel for opposite party has submitted that driver of the vehicle was not having valid driving licence at the time of accident, but the learned Counsel for complainant submitted that the driving licence was renewed one and that that too was valid when the accident had taken place. There are a plethora of judgments wherein their lordships have observed that when there is renewal of driving licence by a Competent Authority, then Insurance Company cannot be absolved from its liability. The learned Counsel for complainant referred to a case titled National Insurance Company Ltd. v. Sucha Singh and Ors. In these premises in view of the admitted factual aspect and legal position, opposite party is required to make the payment of loss whatever complainant has suffered. The Surveyor of the Company has assessed the loss to the tune of Rs. 34,046/- to which complainant has agreed to, so opposite parties are directed to make payment of Rs. 34,046/- to the complainant.â
From perusal of the record, we find that the District Forum-II, U.T., Chandigarh has failed to appreciate that a fake licence though renewed by a Comptent Authority yet cannot be considered to be valid under the Motor Vehicles Act as a fake driving licence in the eyes of law remains invalid under all circumstances.
12. The learned Counsel for the appellant placed reliance on the judgment of the Honble National Commission reported in the case of M/s. Essma Felts Pvt. Limited v. United India Insurance Company Limited (supra), wherein it was held in para 4 as under :
â4. In the eyes of law, a fake licence is as good as non-est and renewal of a non-est also amounts to a non-est licence, more so, when the renewal was made without verifying the genuineness of the original licence from its Issuing Authority. After hearing the Counsel and going through the record, we see no force in the argument of the learned Counsel for the appellant that the renewal had made this licence valid or that M/s. Essma Felts Pvt. Ltd. should not suffer because the driver on the fateful date held a fake licence. We are, therefore, not convinced that there is any error in the order of the State Commission and hence we dismiss the appeal. There will be no order as to costs.â
13. Since in the instant case, the driving licence was initially not genuine and was rather fake and forged, its renewal by the Competent Authority would not convert it into a valid and legal driving licence as provided by the Motor Vehicles Act. In the instant case, the concerned parties trying to seek enforcement of the terms and conditions of the insurance policy, is the owner of the vehicle itself who is none else but the insured under the insurance policy. He cannot take advantage of the fact that he was not at fault if his driver held a driving licence which was initially fake and forged but was renewed by Competent Authority later on.
14. In our considered view, the District Forum-I did not notice this flaw in the case of the respondent and the District Forum-I committed an error in allowing the complaint and awarding compensation with interest @ 12% per annum. Resultantly, the appeal has considerable merit and is allowed. The order of the District Forum-I, U.T., Chandigarh is set aside and the complaint is dismissed with no order as to costs.
Copies of this judgment be supplied to the parties free of charges.