Summary
The Supreme Court set aside the High Court's 'pay and recover' direction against the owner of an offending truck. Even assuming the driver's licence was fake, the insurer had neither pleaded nor proved a lack of due diligence by the owner in employing the driver or entrusting the vehicle, and the owner's production of the licence did not by itself show collusion.
Issues
- Whether the insurer was entitled to recover the compensation paid to third-party claimants from the owner of the truck on the ground that the driver held a fake driving licence.
- Whether collusion between the owner and the driver could be inferred because the owner, rather than the driver, produced the licence before the Tribunal and the driver did not contest the claim.
- Whether the evidence relied on by the High Court (a licence said to have been seized, and an interpolated licence register of the DTO, Gurdaspur) established the insured's breach.
Held
- A fake driving licence is a defence available to the insurer, but to avoid liability or recover from the insured it is not enough to show that the driver was not duly licensed; the insurer must establish that the breach was on the part of the insured, and whether the owner was at fault is to be decided on the facts of each case. (¶¶ 7, 8, 9, 10)
- An owner employing a driver can only look at the licence the person produces and is not expected to verify with the licensing authority whether it is fake; the insurer must show, from the totality of circumstances, absence of due diligence in employing the driver or entrusting the vehicle. Here there was neither pleading nor proof of this, and the owner's witness was not even questioned about the engagement of the driver or the entrustment of the vehicle. (¶¶ 16, 17)
- No inference of collusion arises merely because the owner, which was a company vicariously liable for the driver's negligence, produced the licence before the Tribunal; that only shows diligence in obtaining it so as to claim indemnity. The driver's non-appearance was explicable by fear of self-incrimination as a prosecution was pending against him. (¶¶ 12, 17)
- The licence said to have been seized at the accident spot was produced by a record room clerk of the civil court, with no evidence of seizure or seizure mahazar; and the DTO register relied upon was full of interpolations, while the DTO's own certificate showed the licence issued in 1991 and later renewed. At most collusion could be alleged as to production of the licence, not as to entrustment of the vehicle. (¶¶ 11, 13, 14, 15, 17)
Result
Appeals allowed; the High Court's grant of a right to the insurer to recover the award amounts from the truck owner set aside; the other directions of the Tribunal as modified by the High Court, including the award amounts, left undisturbed.