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khushal singh v. Daimler India commercial vehicle pvt lt
Factual and Procedural Background
The complainant (CC) purchased a Bharat Benz 4023t truck from OP2 (authorized dealer) and was advised to insure the vehicle with OP3 (insurer) under a cashless insurance policy. The policy was in force (renewed) for the period 12.01.2018 to 11.01.2019. The CC employed a driver, Hardeep Singh, whose Driving License number is recorded as PB-1220140110244. On 24.06.2018 the insured vehicle met with an accident and sustained heavy front-end damage. The CC informed the parties and police; spot survey(s) were conducted by the insurer's surveyors.
The vehicle was taken to OP1/OP2 workshops for repair; the CC paid towing charges and was initially assured of cashless settlement. OP1/OP2 allegedly withheld delivery and demanded payment; ultimately the CC paid Rs.8,49,173 to OP2 to obtain release of the vehicle. During the claim process OP3 repudiated the claim (12.02.2019) on the ground that the driver’s license was not genuine; OP3 also relied on survey findings that the vehicle was overloaded beyond permitted carrying capacity. The CC filed a complaint under the Consumer Protection Act seeking reimbursement of amounts paid and damages. All parties filed replies and affidavits; the matter proceeded to hearing on the central question of whether OP3 was justified in repudiating the claim.
Legal Issues Presented
- Whether OP No.3 (the insurer) was justified in rejecting/repudiating the CC's insurance claim.
- Whether the alleged fake (or non-genuine) driving license of the driver and the overloading of the vehicle constituted a willful breach of the insurance policy conditions, thereby disentitling the insured to indemnity.
Arguments of the Parties
Complainant's (CC) Arguments
- The vehicle was insured under a cashless policy and the CC was assured by OP2 that he would not have to pay for repairs.
- The CC employed a driver after checking competency and relied on the driver's license as valid.
- The CC alleges OP1/OP2 improperly withheld delivery and demanded payment; the CC ultimately paid Rs.8,49,173 to secure release.
- The CC contends the insurer's repudiation (on grounds of fake license) is mala fide and arbitrary.
- The CC (through counsel) argued that the licensing authority’s records or an official from that authority were not produced by OP3, challenging admissibility of the verification relied upon by OP3.
- The CC cited Nirmala Kothari v. United India Insurance Co. Ltd. (2020) in support, asserting distinction or relevance to his case.
OP No.1 (Manufacturer) Arguments
- Raised preliminary objections on maintainability and cause of action.
- Parawise denial of the CC's allegations and sought dismissal of complaint against OP No.1.
OP No.2 (Authorized Dealer) Arguments
- Raised jurisdictional and maintainability objections, noting a prior complaint (No.132/2018 titled Khushal Singh v. Daimler India Commercial Vehicle Limited) was withdrawn on 15.03.2019 without liberty to file fresh complaint, challenging genuineness/maintainability.
- Contended the CC was in communication with the insurer regarding claim processing and was asked to take delivery after making payment; said insurer raised objections on the license veracity and could not obtain money from insurer, thereby seeking payment from CC as an alternative.
- Denied the CC's allegations as false and frivolous and prayed for dismissal.
OP No.3 (Insurer) Arguments
- Admitted existence of the policy and the accident (24.06.2018) and that initial spot survey was carried out by an IRDA-approved surveyor.
- Relied on survey reports which observed that the vehicle was loaded with Mineral Bauxite Grade Cement 36 M Ton against permitted carrying capacity of 28,000 Kg (i.e., overloading in violation of Section 113(3) of the Motor Vehicles Act, 1988).
- Contended that the driver's license presented was a renewal of an originally fake license (original bearing No.52609/SPT was sent to DTO Senapati, Manipur for verification and Manipur reported no record of issuance), and that renewal of a fake license does not cure the falsity.
- Argued that a fake license constitutes a breach of the driver clause/terms of policy, relieving the insurer of liability; placed reliance on Supreme Court and other authorities to support the principle that renewal cannot validate an originally fake license and that in own-damage claims renewal of a fake license does not cure the defect.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| National Insurance Company Limited v. Laxmi Narain Dhut (Supreme Court, decided 02.03.2007) | Principle: In own-damage claims the decision in Swaran Singh's case is not applicable; once insurer proves the license was originally fake, renewal cannot cure the inherent defect; terms of policy must be construed as they are. | The court relied on this precedent to support the proposition that if the original license was fake, renewal does not validate it and the insurer's repudiation is justified. |
| Swaran Singh's case (2004) 3 S.C.C. 297 | Referenced as a precedent whose principles are held by later authority not to apply to own-damage claims not involving third parties. | The court noted Swaran Singh's case has no application to own-damage claims where the license was originally fake; it was discussed in the context of Laxmi Narain Dhut. |
| United India Insurance Company Limited v. Davinder Singh (Supreme Court, decided 12.10.2007) | Renewal of a fake license cannot cure the inherent fatality; insurer not liable to indemnify where driver had fake license. | The court cited this authority to reinforce that a renewed fake license does not validate the driver’s competence for purposes of the policy and supports repudiation. |
| Amandeep Sharma & ors v. Oriental Insurance Company Limited (NCDRC, decided 17.01.2012) | Held that if the initial license was fake/forged, mere renewal by another authority does not validate the initial fake/forged license. | The court relied on this decision as an additional authority consistent with the principle that renewal does not cure a fake license. |
| Nirmala Kothari v. United India Insurance Company Limited (Supreme Court, decided 04.03.2020) | Cited by the complainant in support of his case (specific rule invoked by complainant not detailed in the opinion). | The court observed that the facts of Nirmala Kothari are different from the present case and therefore not sufficiently analogous to alter the court's conclusion here. |
Court's Reasoning and Analysis
The court framed the primary controversy as whether OP No.3 was justified in repudiating the CC's claim. The court proceeded by examining the evidentiary record and the parties' submissions:
- Evidence and surveys: OP3 had deputed IRDA-approved surveyors whose reports were on file. One surveyor reported the driver's license details and another noted that the vehicle was loaded with Mineral Bauxite Grade Cement 36 M Ton against the permitted capacity of 28,000 Kg, indicating overloading.
- License verification: OP3 caused verification to be sought from the DTO Senapati, Manipur, which reported that the original license (No.52609/SPT) was not issued by their office. OP3 reasoned that the license presented was a renewal of an originally fake license; the insurer argued that renewal does not change the original status.
- Burden and precedents: The court noted authorities (including Laxmi Narain Dhut and Davinder Singh) which hold that in own-damage claims, once the insurer establishes that the license was originally fake, renewal cannot cure the defect and insurer is not liable. The court applied these principles to the facts before it.
- Complainant's responses: The complainant challenged the admissibility of the licensing authority's verification on the basis that no official or record was produced; however, the complainant neither filed a rejoinder nor applied for calling the record. The licensing authority's categorical statement that no such license was issued remained unrefuted on the record.
- Overloading: The court relied on documentary material (invoice and electronic transit pass) on file indicating the vehicle was heavily overloaded relative to the registration/route permit and observed that such overloading constituted a breach of Section 113(3) of the Motor Vehicles Act, 1988.
- Conclusion from facts and law: Given (a) the finding that the driver’s original license was not issued by the purported licensing authority (i.e., effectively fake), (b) the overloading of the vehicle, and (c) lack of any effective rebuttal by the CC, the court found that conditions of the policy were willfully breached. The court held that, applying the cited precedents, OP3 was justified in repudiating the claim and that the insured was not entitled to reimbursement.
Holding and Implications
HOLDING: The complaint is DISMISSED.
Implications and direct effects:
- The court found a willful breach of policy conditions by the insured arising from (i) the driver's renewal of an originally fake license (or absence of a genuine license) and (ii) gross overloading of the vehicle in violation of Section 113(3) of the Motor Vehicles Act, 1988.
- As a result, the insurer's repudiation of the claim was upheld and the insured is not entitled to indemnity or reimbursement under the policy for the loss claimed in this complaint.
- The complaint was dismissed and the parties were directed to bear their own costs. Certified copies of the order were to be provided to the parties and the file consigned to the record room.
- The opinion does not purport to set out or announce any new legal precedent beyond applying established authorities; the decision addresses the dispute between the parties and its direct consequences on them.
Capt. Yuvinder Singh Matta, Member Order The present order of ours will dispose of the above complaint filed under Consumer Protection Act, by the complainant (hereinafter referred as CC for short) against the Opposite Parties (hereinafter referred as OPs for short) on the ground that OP1 is the manufacturer of the vehicle and OP2 is the authorized dealer. It is averred that the CC went to OP2 at Ropar for the purchase of the truck and accordingly purchased the same known as Bharat Benz 4023t bearing Engine No.400950D0034551 Chassis No. MEC2621CHGP034612 from OP2. He was asked by the OP2 to get the same insured with the OP3 since the insurance policy of the OP3 was cashless and CC will not face any problem as and when the truck requires any repair etc. Accordingly, the CC subscribed the policy of the OP3 bearing No.404001/31/16/6300001616, which was valid from 12.1.2017 to 11.01.2018 by paying an amount to the tune of Rs.67,818/- as premium. CC also got the vehicle financed from HDB Financial Service Limited, on monthly installments of Rs.73,400/- per month. Accordingly, CC got registration No. PB-12-Y-4243. Insurance policy was again renewed by the CC on previous terms and conditions. Accordingly, the OP3 issued policy bearing No.404001311710000717 which was valid from 12.01.2018 to 11.1.2019 and payment of Rs.72,435/- as premium. CC also employed a driver namely Sh. Hardeep Singh son of Hardial Singh, resident of Gaddiwal of Rupnagar, who was having a valid Driving License bearing No.PB-1220140110244 issued by the Licensing Authority, SAS Nagar. Even, CC checked the competency of the driver before employing him.
2. It is averred that on 24.6.2018, the vehicle of the CC met with accident and front portion of the vehicle was badly damaged. Regarding this, he immediately informed the OPs as well as the Police and spot surveyor was conducted by the OPs through their various local branches. At the time of alleged accident, the vehicle was being driven by Sh. Hardeep Singh, the driver of the CC. On allurement from the OPs No.1 & 2, the CC took his vehicle for repair with the OPs No.1 & 2 and CC had to pay towing charges of Rs.1,00,000/- to the OPs No.1 & 2 on 4.7.2018 and was assured that he will not have to pay anything for the repairs etc. The vehicle was repaired in the workshop of the OP No.2 by 10.8.2018. The copy of the bill is dated 13.8.2018 was provided by the OP No.2 and the CC was assured that the vehicle will be released within one week as the insurance policy is cashless and he will not pay anything to the OPs. It is alleged that the O.Ps. No.1 & 2 did not hand over the vehicle to the CC and were demanding some illegal gratification and were compelling the CC to pay the bills in order to get the vehicle released from there possession. But the CC time and again averred that the insurance policy was cashless and he was not supposed to pay anything. Since, the vehicle in question was the only source of income of the CC and he was already paying a monthly installment of Rs.73,400/- but his request fell on deaf ears. A legal notice dated 15.9.2018 was also sent to the OPs to hand over the vehicle to the CC but in a reply dated 25.9.2018, was also received by the CC. The CC under compelling circumstances had to pay Rs.8,49,173/- to the OP No.2 in order to get his vehicle released as full and final payment and then to start his work again. It is alleged that during the pendency of the case on 12.2.2019, the OP3 repudiated the claim of the CC on the ground that the Driving License was not genuine. It is alleged that the OP3 has malafidly and arbitrarily has repudiated the claim of the CC. Thus, alleging deficiency in service on the part of the OPs, the CC has sought the following relief:-
1. That OPs be directed to pay Rs.8,49,173/- the repair charges Rs.1,00,000/- per month w.e.f. 13.8.2018 to 24.1.2019 and Rs.10,000/- as cost of litigation along with interest. Further, he has sought Rs.1,00,000/- as compensation for mental and physical harassment. The complaint of the CC is signed and also verified.
3. In reply, the OP No.1 has raised a number of preliminary objections on the ground of maintainability of the complaint and on the point of cause of action etc. On merits, the allegations of the CC are parawise denied by the OP No.1. Thus, by simply denying the allegations of the CC, the OP No.1 has prayed for the dismissal of the complaint against OP No.1.
4. In reply, the OP No.2 has also raised a number of preliminary objections on the ground of jurisdiction and maintainability etc. It is averred that earlier the CC filed a complaint bearing No.132/2018 titled as Khushal Singh Vs Daimler India Commercial Vehicle Limited and the same was withdrawn on 15.3.2019 without seeking any liberty to file fresh complaint. As such, the OP No.2 has challenged the genuineness of the present complaint on the ground of maintainability. It is further averred that the CC was himself in touch with the OP3 regarding the completion of documentation, formalities and processing of his claim etc. and was asked to take the delivery of the vehicle in question after making the payment towards the OP2. Since, the OP3 was raising the objections on the veracity of the license of the driver and they were not getting the money from the insurance, as such, claiming the amount from the CC directly was the only alternative left with them. Thus, alleging the allegations of the CC against OP2 are false and frivolous, OP NO.2 also prayed for dismissal of the complaint.
5. The OP No.3 has also raised a number of objections in the reply but has admitted the subscription of the policy bearing No.404001311710000717 of the truck bearing No.PB-12-Y-4243 which was valid from 12.01.2018 to 11.01.2019. It is admitted that the truck met with accident on 24.6.2018 in Satna (MP)., accordingly, the OP3 deputed IRDA approved surveyor Sh. Arun.K.Jagiasi for spot survey, who submitted his report that at the time of accident, the vehicle driven by Hardeep Singh having Driving License No.PB1220140110244 issued by Licensing Authority, Mohali, was valid upto 23.11.2020. Thereafter, one Ravinder Kumar was appointed as surveyor for final survey, who submitted his report and observed that at the time of accident, the vehicle was loaded with Mineral Bauxite Grade Cement
36 M ton against the permitted carrying capacity as per Registration Certificate and Route Permit of 28,000/- Kg, which means that the vehicle was driven in gross violation of Section 113(3) of Motor Vehicle Act, 1988. It was further alleged that the Driving License issued by the Licensing Authority, Mohali, pertains to the renewal only and as per the verification report dated 18.7.2018, the original license was issued bearing No.52609/SPT, which was sent to Manipur Office, for verification and it was found that the same was not issued by that licensing authority. It is specifically alleged that the driver got the fake license renewed, as such, the claim was repudiated on this ground. Lastly prayed for dismissal of the complaint.
6. The learned counsel for the complainant has tendered into evidence affidavit of complainant Ex.CW1/A along with documents Ex.C1 to Ex.C22. On the other hand, the learned counsel for the OP. No.1 has tendered affidavit of Sh. Jagadheesh Kumar Ex.OP1/A along with documents Ex.OP1/B & Ex.OP1/C. The learned counsel for the OP No.3 has tendered affidavits of Sh. Sanjeev Khurana, Deputy Manager, National Insurance Company Ex.OP3/1 and Sh. Ravinder Kumar Goyal, Surevyoer and Loss Assessor Ex.OP3/2 along with documents Ex.OP3/3 to Ex.OP3/11
7. We have heard the learned counsel for the parties and have gone through the record file with written submission filed by the learned counsel for the OP No.3, carefully and minutely.
8. The main point of controversy before us is whether the OP No.3 is justified in rejecting the claim of the CC. It is important to mention here that as per the version of OP3, the vehicle was loaded with Mineral Bauxite-Grade Cement 36 M Ton, against the permitted carrying capacity as per the Registration Certificate and Route Permit, which allowed only 28,000/- Kg., it means that the vehicle was driven in gross violation of Motor Vehicle Act, 1988.
9. Another point is raised by the OP3 is that the Driving License of the driver, who was driving the vehicle on that relevant time was renewed by the Licensing Authority, Mohali, but the original license was of Licensing Authority, Manipur office bearing No.52609/SPT. It is specifically the case of the OP3 that for the purpose of verification from the Licensing and Registering Authority, DTO Senapati, Manipur, where it was sent for verification and received the report that this license had no concern with this office, which shows that the license was fake. It is further argued by the learned counsel for the Insurance Company that the fake license will remain a fake license and renewal of the same will not allow the driver to change its nature by getting it renewed from any other office. As such, it is a clear violation of driver clause terms and conditions of the policy. The learned Advocate has brought our attention on the judgment of the Honble Supreme Court of India, titled as National Insurance Company Limited Vs Laxmi Narain Dhut, decided on 02.03.2007, where it is mentioned that Motor Vehicle Act, 1988 (Central Act 59 of 1988)- Section 147 and 149. The principles laid down in Swaran Singhs case (2004) 3 S.C.C. 297, held not applicable in an own damage claim not involving any third party. In an own damage claim, once the insurer discharges the initial burden to prove that the license was originally a fake one, the natural consequences will follow. It is also held that the it is also to be noted that the terms of the policy have to be construed as they are and there is no scope for adding or subtracting something. However, liberally the policy may be construed, such liberalism cannot be extended to permit substitution of words, which are not intended. The decision in Swaran Singhs case has no application to own damage ceases. Once the license is a fake one the renewal cannot take away the effect of fake license. As noted above, the conceptual difference between third party right and own damage cases has to be kept in view. Initially, the burden is on the insurer to prove that the license was a fake one. Once it is established the natural consequences have to follow. In view of the above analysis, it held that where originally the license was a fake one, renewal cannot cure the inherent fatality.
10 . He has brought our attention on another judgment of the Honble Supreme Court of India, case titled as United India Insurance Company Limited Vs Davinder Singh, decided on 12.10.2007, wherein it is held that Renewal of fake license cannot cure the inherent fatality. Liability to indemnify, in case driver has fake license, insurance company will not be liable to indemnify the owner of the vehicle for the loss sustained by him.
11. We feel, that the claim filed by the injured himself as far as the claim filed by the injured himself is concern the same would not be payable where the driver of the vehicle was not holding a valid Driving License at the time of meeting with an accident. Since, the driver did not have a valid Driving License authorizing him to drive on roads at the time of when the accident took place. We feel, that the insured is not entitled to any reimbursement from the insurer. We are also equiped with another judgment of the Honble National Consumer Disputes Redressal Commission, New Delhi, case titled as Amandeep Sharma and ors Vs Oriental Insurance Company Limited, decided on 17.01.2012, wherein it is held that since initial license was fake/forged one then mere fact that the same has been renewed by some other authority would not validate the initial fake/forged license.
12. However, the learned counsel for the complainant has argued that no official of office of the concerned licensing authority along with record produced to prove report as such, the report or the version relying on such report is not admissible, despite the fact that insurance company is claiming that the license was fake. It is important to mention here that the complainant has not rebutted this contention of the OP3 by filing rejoinder. Neither the complainant had moved any application for calling of the record. It is pertinent to mention here that the licensing authority, Manipur, has categorically mentioned that no such license was issued by their department. Under this situation, we feel that there is no requirement from the side of the OP3 when no such record was available there.
13. The learned counsel for the complainant has cited the judgment of the Honble Supreme Court of India, titled as Nirmala Kothari Vs. United India Insurance Company Limited, decided on 04.03.2020. We feel, that the facts of the present case are different from the facts mentioned in the judgment cited by the learned counsel for the complainant. It is important to mention here that besides having a fake license by the driver of the CC, it was also a case where he overloaded the vehicle. He was only permitted to load 28,000/- Kg. Probably due to that reason met with an accident.
14. We feel, that it is definitely a willful breach of the conditions of the policy established against the CC. We also feel, that the driver of the CC has committed two different offences one is that he got renewed a fake license rather he had no license to drive secondly he overloaded the vehicle. There is nothing any rebuttal against these two allegations from the side of the CC. It is also on the file that at the time of accident, the vehicle was very heavily loaded. Insured vehicle as per invoice No.51 dated 22.6.2018 of Maheshwari Lime Works and Electronic Transit Part No.1801323687 dated 22.6.2018, issued by the Mineral Resources Department, Government of Madhya Pradesh that at the time of accident the vehicle was loaded with Mineral Bauxite Grade Cement 36 M Ton against the permitted carrying capacity as per the Registration Certificate and Route Permit of 28000 Kg, which means that the vehicle was definitely driven in gross violation of Section 113(3) of Motor Vehicle Act, 1988. In view of our above discussions, we do not find any merit in the present15. complaint and the same is dismissed. The parties shall bear their own cost Free . certified copies of this order be sent to the parties, as per rules. The files be consigned to record room. February 19, 2021 (Sanjiv Dutt Sharma) (Capt. Y.S. Matta)
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