Recently, Hon’ble Justice Alok Mathur of the High Court of Allahabad at Lucknow ruled that in cases where the insurance company takes the stand that the license of the insured was either fake or invalid, the burden of proof lies on the insurer.
The High Court held that the burden of proof lies on the Insurance Company in cases where validity of license is in question.
As per the petition, the incident took place on 15.10.2015 when one Smt Rajrani was hit by the motorcycle driven Sarvesh Kumar Kumar. She was admitted to the Galaxy Hospital where she passed away due to injuries sustained during the accident.
A claim petition was filed by the legal heirs of the deceased in which the insurance company and the driver of the motorcycle were arrayed as parties.
The respondent in the claim petition, The National Insurance Company Ltd Lucknow, took the stand that the driver of the bike did not possessed a valid or effective license at the time of the accident and therefore, they should be absolved of the liability to indemnify the deceased.
The Tribunal rejected the claim of the insurance company and held that the driver of the motorcycle has obtained information through the RTI Act and has placed it on the record. It was mentioned that the license was valid from 30.5.2008 to 29.5.2028.
Based on the information gathered through RTI, the Tribunal held that the driving license of the driver was valid and effective at the time of the accident and directed the insurance company to pay Rs.4,73,200/- along with interest to the opposite parties.
Aggrieved by order of the Tribunal, The National Insurance Company Ltd Lko moved the Allahabad High Court.
Proceedings before the High Court
The argument raised by the Appellant( The insurance company)
The counsel for the appellant informed the Court that an investigating officer of the company went to the Regional Transport Officer to inquire about the license of the respondent. He was informed that the license was not in their records. The clerk in the RTO refused to give anything in writing.
The reasoning of the Court
The Hon’ble Judge observed that the insurance company did not object to the RTI application filed by the respondent nor did they file an application to set aside the findings mentioned in the reply of RTI application before the Tribunal.
Further the Court observed that through this instant appeal, the insurance company sought to set aside the finding recorded by the Tribunal because the findings were perverse and they were not given a suitable opportunity to prove that the license was fake.
The Court agreed with the judgment of the Tribunal that the license placed on record was valid, and the reply of the RTI sufficiently proved it.
Court opined that the onus of proving the license was fake lied with the insurance company. If they thought the license was fake or invalid, then they should have placed on record some evidence to enable the Tribunal to take a contrary stand.
The Court referred to National Insurance Co. Ltd. Vs. Swarna Singh reported in (2004) 3 5 SCC 297 where the Hon’ble Court held that mere absence, fake or invalid driving license or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third parties. It was also stated in the judgement that if the insured want to get absolved of its liability, then they have to prove that the insured was negligent and did not take reasonable care to fulfil the conditions of the insurance policy.
Further the Court referred to the Judgment of Rakesh Kumar Vs. United Insurance Company Ltd., 2016 (17) SCC 219 and Nirmala Kothari Vs. United India Insurance Company Limited, 2020 (4) SCC 49 where the apex court has reiterated the fact that if an insurance company thinks the license was fake, then they should have led sufficient evidence to prove the same.
In the present case, the Court held that the whole argument of the insurance company is based on the findings of its investigating officer and all the evidence is based on hearsay. No documentary proof has been submitted to the Court to support the claim of the insurance company.
The Court opined that in its overwhelming zeal to avoid payment of compensation has acted in the most irresponsible manner in the present case by firstly not producing any evidence in support of their contention before the Tribunal and secondly persisting with their untenable stand in the present appeal.
The Decision of the Court
The Court refused to interfere with the judgement of the Tribunal and the appeal was dismissed at the admission stage.
Title: The National Insurance Company Ltd Lko. vs Sri Ram Prakash And Ors
Case No. First Appeal No. – 171 of 2020
Date of Order: 21.09.2020
Quorum: Hon’ble Justice Alok Mathur
Advocates: Counsel for Appellant:-Satyajit Banerji