Case Law Details
National Insurance Company Limited Vs Mushtaq Ahmad Kutary (Jammu and Kashmir High Court)
Held that absence, fake or invalid driving licence or disqualification of driver to drive, are not in themselves defences available to the insurer against either insured/ third parties, to avoid liability towards insured. Insurer has to prove that insured was guilty of negligence and failed to exercise reasonable care.
Facts- As the offending vehicle turned turtle, resultantly passenger travelling in the vehicle got serious injured. Thus, respondent (claimant) sought compensation of Rs. 40 Lakhs before the Motor Accident Claims Tribunal, Anantnag. Insurance Company resisted the claim petition before the Tribunal. Their stand was that the driver of offending vehicle was not holding valid and effective driving licence and without PSV endorsement thereon.
Tribunal awarded compensation of Rs. 4,13,000 along with 6% interest per annum from the date of institution of claim till realization. Being aggrieved, the insurance company filed appeal and the court allowed the appeal and gave right of recovery to insurance company. Review thereof is sought here.
Conclusion- Held that the breach of policy conditions, e.g., disqualification of driver or invalid driving licence of driver, have to be proved to have been committed by insured for avoiding liability by the insurer and that mere absence, fake or invalid driving licence or disqualification of driver to drive at the relevant time, are not in themselves defences available to the insurer against either insured or third parties, and to avoid liability towards insured, the insurer has to prove that insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by duly licenced driver or one who was not disqualified to drive at the relevant time. It has also been made clear by the Supreme Court that with a view to avoid their liability, the insurance companies must not only establish the available defence(s) raised in the proceedings but must also establish breach on the part of owner of the vehicle and that the burden of proof therefore would be on them.
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