IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.6248 OF 2009 (Arising out of S.L.P. (C) No.680 of 2008)

National Insurance Co. Ltd.                ...Appellant(s)

Versus

Om Prakash Jain                    ...Respondent(s)

O  R  D  E  R

Leave granted.

Respondent Om Prakash Jain filed a complaint before  

the  District  Consumer  Disputes  Redressal  Forum,  Bundi,  

Rajasthan,  [for  short,  “the  District  Forum”]  claiming  

compensation in lieu of the damage caused to the vehicle  

(truck  bearing  registration  No.  RJ08/G-0023),  which  was  

purchased  in  the  name  of  firm,  namely,  M/s.  Jain  Oil  

Industries.   According  to  him,  the  truck  met  with  an  

accident on 20th September, 1995 when he was going from Dei  

to Jaipur with wheat loaded in the truck.  The complainant  

pleaded that driver of the truck Shri Taufiq Ahmad had  

valid  driving  licence.   The  appellant  contested  the  

complaint by alleging that the wheat did not belong to the  

complainant;  that  the  truck  was  being  used  as  public  

carrier  for  transporting  the  passengers  and  that  the  

driver did not have valid and effective driving licence.   

...2/-

- 2 -  

On the issue of driving licence, the District Forum  

noted that the original licence of Shri Taufiq Ahmad was  

issued in Assam on 22.1.1997 and was renewed by District  

Transport Officer, Bundi  for the period from 21.12.1992  

to 19.1.1996.  The District Forum further noted that as  

per the report of District Transport Officer, Guwahati,  

the driving licence possessed by Shri Taufiq Ahmad was not  

issued by his office and held that the original licence of  

the driver was fake.  The District Forum then referred to  

the evidence produced by the parties and concluded that  

the  insured  was  guilty  of  violating  the  conditions  of  

policy, inasmuch as, it had transported goods belonging to  

others and allowed the use of vehicle for transportation  

of  passengers.   On  that  premise,  the  District  Forum  

dismissed  the  complaint.   The  State  Consumer  Disputes  

Redressal Commission (for short, “the State Commission”)  

before  which  the  respondent  filed  appeal,  made  the  

following observations on the issue of validity of driving  

licence of Shri Taufiq Ahmad:

“There is also no dispute on the point that  on  verification  of  DL  No.  19598  of  belonging to the driver Tofiq Mohd.  It was  not found genuine one and later on District  Transport Officer, Gauhati had found that  it  was  not  issued  from  their  office,  meaning thereby it was a forged licence.”

Notwithstanding  the  aforesaid  observation,  the  

State Commission held that the insurance company cannot be  

absolved of its  liability to compensate the owner of the  

vehicle, who cannot possibly be aware of the fact that the  

driver did not have valid driving licence.   

...3/-

- 3 -  

On  the  issue  of  use  of  transport  vehicle  for  

carrying passengers, the State Commission observed:

“In  our  considered  opinion,  merely  some  passengers  were  sitting  in  the  vehicle,  this  fact  itself  would  not  exonerate  the  Insurance  Co.  unless  and  until  it  was  proved that the passengers sitting in the  vehicle  had  attributed  to  the  cause  of  accident.  This aspect is missing in this  case  and  thus  on  that  ground  also  the  second  point  of  repudiation  stands  rejected.”

Accordingly,  the  State  Commission  allowed  the  

appeal  and  directed  the  Insurance  Company  (appellant  

herein) to pay compensation of Rs.61,255/- with interest  

at the rate of nine per cent from the date of filing the  

complaint.   The  National  Commission  dismissed  the  

appellant’s revision by a rather short order and held that  

the  State  Commission  was  right  in  observing  that  the  

insured  was  not  in  a  position  to  verify  whether  the  

original licence issued in 1987 was fake.

We have heard learned counsel for the parties at  

length.   In  our  view,  the  orders  passed  by  the  State  

Commission and National Commission are liable to be set  

aside because the findings recorded by them on the issue  

of validity of driving licence are legally untenable.  In  

National Insurance Company Limited vs.  Laxmi Narain Dhut  

[2007 (3) S.C.C. 700], it has been clearly laid down that  

the  decision in  the case  of  National Insurance  Company  

Limited vs. Swaran Singh & Anr. [2004 (3) S.C.C. 297] has  

no application to the cases other than third-party risks  

and where  originally licence was a fake, renewal  thereof

...4/-

- 4 -  

cannot  validate  the  same.   In  the  present  case,  the  

complaint  was  filed  for  damage  of  the  vehicle  of  the  

insured and not the third party risk.  The District Forum  

and  State  Commission  have  concurrently  held  that  the  

original licence of the driver was fake.  This being the  

position, the District Forum was justified in dismissing  

the complaint and the State Commission committed an error  

by awarding compensation to the respondent.  

Accordingly, the appeal is allowed, impugned orders  

passed by the State Commission as well as the National  

Commission  are  set  aside  and  the  order  passed  by  the  

District Forum is restored.

No costs.

......................J.            [B.N. AGRAWAL]

......................J.            [G.S. SINGHVI]

New Delhi, September 14, 2009.