Summary
The Supreme Court upheld denial of the insurer’s claimed recovery right against the vehicle owner’s successors. A fake driving licence alone did not establish the insured’s breach. The insurer neither pleaded nor proved knowing permission or failure of reasonable care, and could not add a mandatory RTO-verification or driving-test condition absent from the policy. No suspicious circumstance requiring further inquiry was shown on this record.
Issues
- Whether proof that the driver’s licence was fake entitled the insurer to recover compensation from the owners.
- Whether the owner invariably had to obtain RTO verification or conduct a driving test.
Provisions considered
- Section 149(2)(a)(ii), as applicable, Motor Vehicles Act, 1988Avoidance or recovery required proof of the insured’s relevant breach; mere invalidity of the driver’s licence was insufficient on these pleadings and evidence. (¶¶ 4, 9–15)
Held
- The insurer bears the burden of establishing the owner’s breach of the policy condition through the necessary pleadings and evidence; a fake licence by itself does not discharge that burden. (¶ 9–15)
- Neither the governing provision nor this policy mandated a driving-skill test before employment. The insurer could not invoke an absent contractual condition as a breach. (¶ 6)
- RTO verification is not an automatic requirement for every seemingly valid licence. A facially dubious or expired licence, or another genuine reason for doubt, may require inquiry; reasonable care remains fact-dependent. (¶¶ 7–8, 12, 15)
- Here the insurer did not plead that the owner knowingly permitted a fake-licence holder to drive, nor show circumstances requiring further verification. Its recovery claim therefore lacked the requisite pleading and proof. (¶ 14–15)
- The High Court correctly removed the recovery right granted by the Tribunal; the compensation obligation could not be shifted to the present owners on this record. (¶ 15–16)
Result
Special leave petition dismissed; High Court order denying the insurer recovery from the vehicle owners left undisturbed.