REPORTABLE  IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.              OF 2009  (@ SPECIAL LEAVE PETITION (CIVIL) NO. 19995 OF 2007)

National Insurance Company Limited  ...Appellant(s)

- Versus -

J. Maheshwaramma  ...Respondent(s)

J U D G M E N T

GANGULY, J.

1. Leave granted.

2. This  appeal  has  been  filed  impugning  the  

judgment and order dated 3.9.2007 passed by  

the  National  Consumer  Disputes  Redressal  

Commission, New Delhi (hereinafter referred to  

as ‘the National Commission’).

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3. The said National Commission in exercise of  

its  revisional  jurisdiction  refused  to  

interfere with the concurrent findings of both  

the District Forum and the State Commission.

4. The facts which were alleged in the complaint  

filed  before  the  District  Forum,  Mehboob  

Nagar, are as follows:

5. The husband of the complainant late Beesana,  

obtained  policy  bearing  No.6200001644/2005  

from  the  National  Insurance  Company  Limited  

for Rs.1,00,000/-. The policy covers the risk  

of accidental death of insured. The legal heir  

of the insured will get Rs.1,00,000/- under  

the  policy.  The  policy  holder  died  on  

24.11.2005  in  a  road  accident  while  he  was  

proceeding on his motorcycle bearing No. AP  

22-J278 from Gadwal to Veerapoor. On the way  

in the limits of PJP Colony, where the tractor  

bearing No. AP 22 C 3422 which was coming from  

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the opposite side, came at a high speed in a  

rash and negligent manner and hit the motor  

cycle of Beesanna and Beesanna sustained fatal  

injuries. The doctors advised to shift him to  

Kurnool hospital.  While on the way to Kurnool  

hospital, Beesanna succumbed to the injuries.

6. Thereafter,  the  complainant  submitted  Claim  

Form of the appellant herein along with all  

other relevant documents.

7. The main contention raised by the appellant  

before  the  District  Forum  was  that  the  

deceased had no valid licence at the time of  

accident. The fact that late Beesanna obtained  

the  policy  to  cover  a  risk  to  the  third  

parties, own damages and personal accident is  

not disputed by the appellant.  It is also not  

in dispute that at the time of accident, the  

insurance policy was valid.

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8. It is not in dispute that as per the terms of  

the policy, the nominee will get Rs.1,00,000/-  

if the policy holder dies in a motor accident  

.

9. The stand of the appellant is that the driving  

licence  of  the  deceased  which  was  sent  for  

verification is found to be fabricated. Their  

further stand is that the policy holder had  

got driving licence to drive Tractor Trailer  

(Transport)  but  had  no  licence  to  drive  

motorcycle with gear.

10. Before the District Forum, the stand of the  

appellant was that Exhibit B-1, the licence of  

the deceased purports to be a fabricated one  

created  in  favour  of  the  deceased  for  the  

purpose of wrongful gain.  

11. The  District  Forum  observed  that  they  are  

unable to appreciate the said stand because of  

the reason that the contents of Exhibit B-2  

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have  not  been  challenged  before  it  by  the  

insurer by way of affidavit of the authority  

which issued the certificate.

12. The District Forum came to a finding that the  

burden  wholly  lies  on  insurance  company  to  

establish the defence raised by it in such a  

proceeding and also to establish the breach on  

the part of the insured.

13. In  support  of  its  contention  the  District  

Forum has quoted the judgment passed by the  

National Commission in National Insurance Co.  Ltd. Vs. Swaran Singh and Ors. –(2004) 3 SCC  297;  wherein  it  has  been  clearly  laid  down  

that the breach of policy condition  has to be  

proved by the insurance company and it is very  

clear that the burden of proof is on them.

14. In National Insurance Co. Ltd. (supra) it has  been held that the burden is on the insurer to  

prove that the insured is guilty for willful  5

breach of conditions of insurance policy or  

the contract of insurance. (See para 92, page  

337).

15. In coming to the said conclusion the learned  

Judges relied on the decision  in  the  case  

of  United India Insurance Co. Ltd. Vs. Lehru  and Ors. – (2003)  3  SCC 338  and  held  if  a   person   has been given a licence for  

driving  a  particular  type  of  vehicle,  it  

cannot be said that he has no driving licence.  

In this case it is an admitted fact that the  

victim  had  licence  to  drive  a  tractor  with  

trailer, but the allegation of the appellant  

is  that  victim’s  licence  to  drive  the  

motorcycle with gear is fabricated.  In any  

event it cannot be said that the victim had no  

driving licence.  In such a case, it has to be  

found on the basis of evidence laid before the  

fact finding body whether the driver licenced  

to  drive  one  type  of  vehicle  but  driving  

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another type of vehicle was the main or the  

contributory cause of the accident.

16. If such a case is not made out, the insurance  

company cannot avoid its liability merely on  

the  basis  of  technical  breach  of  licencing  

conditions.  [See  para  89,  page  336  of  the  

report in National Insurance (supra)].

17. In view of the aforesaid legal position, the  

District Forum held that the insurance company  

before it failed to establish valid grounds on  

which they can repudiate the claim. As such  

the repudiation of the claim by the insurance  

company was held arbitrary and unreasonable.  

18. On this finding the District Forum held that  

the  complainant-wife  of  the  deceased  is  

entitled for the sum assured of Rs.1,00,000/-  

together with interest thereon @ 9% per annum  

from the date of repudiation of the claim i.e,  

28.2.2006.

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19. Against  the  said  judgment  of  the  District  

Forum, an appeal was filed by the appellant  

before  the  State  Commission.  The  State  

Commission also accepted the finding of the  

District Forum in view of the fact that there  

is no dispute with regard to the complainant’s  

husband having a valid insurance policy and  

also in view of the fact that there is no  

dispute  that  the  accident  occurred  and  the  

insured died during the validity of the said  

policy.

20. In  view  of  such  concurrent  finding,  the  

National Commission did not interfere with the  

same.  The  State  Commission  also  came  to  a  

finding that the burden is on the Insurance  

Company to show that the driving licence of  

the  deceased  was  fabricated  and  the  said  

burden has not been discharged.

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21. The basic issue in the case was whether the  

deceased had a valid driving licence to drive  

the vehicle i.e. motor cycle with gear which  

was involved in the accident.  The District  

Forum,  State  Commission  and  National  

Commission  were  of  the  view  that  since  the  

deceased  had  a  valid  insurance  policy  and  

there  was  no  dispute  that  the  accident  had  

taken place and the insured died during the  

validity of said policy, the stand that the  

driving licence of the deceased was fabricated  

was of no consequence.  It was held that the  

insurance  company  had  not  discharged  the  

burden to prove that the driving licence of  

the  deceased  was  fabricated.   The  District  

Forum  observed  that  no  affidavit  of  the  

authority who issued the certificate (Ex.B-2)  

has been filed.  The view was endorsed by the  

State  Commission  and  by  the  National  

Commission.   Additionally,  the  National  

Commission  held  that  the  licence  produced  

clearly indicated that the deceased was having  

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licence  to  drive  motor  cycle  also.   This  

finding cannot be maintained because there was  

a dispute about the genuineness of the licence  

failed to show that the deceased had licence  

to drive motor cycle.  Additionally after Exh.  

B-2 was filed, there was no material brought  

on record by the complainant to show that the  

certificate  dated  27.2.2006  issued  by  

transport  authorities  was  not  authentic.  

Therefore  the  question  of  the  insurance  

company having not discharged the burden, does  

not arise.  In addition the decision in Swaran  Singh’s case (supra)  was  considered  in  National Insurance Co. Ltd. Vs.  Laxmi Narain  Dhut [2007 (4) SCALE 36].  In  Laxmi Narain’s  case (supra) this Court observed that the said  decision  is  applicable  to  only  third  party  

claim cases and even had no application to own  

damage  cases  i.e.  cases  of  contractual  

liability.  The present case is not a third  

party  case  and  is  a  case  of  contractual  

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liability  and  therefore  Swaran  Singh’s  case  (supra) was not applicable.  

22. In the circumstances we think that it would be  

appropriate  to  remit  the  matter  to  the  

National  Commission  to  consider  the  matter  

afresh  in  the  light  of  Laxmi  Narain’s  case  (supra).  The National Commission shall permit  

the  parties  to  place  material  on  record  

regarding the authenticity or otherwise of the  

driving licence.

23. The appeal is disposed of.

.......................J. (Dr. ARIJIT PASAYAT)

.......................J. New Delhi (ASOK KUMAR GANGULY) May 08, 2009

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