FAO-2331-2000(O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO-2331-2000 (O&M) NATIONAL INSURANCE CO. LTD. ......... Appellant VERSUS LAJJO DEVI AND OTHERS ..... Respondents 1. Judgment reserved on 11.05.2026 2. Judgment pronounced on 01.08.2026 3. Judgment uploaded on 01.08.2026 4. Whether only operative part of the judgment is pronounced or whether the full judgment is pronounced. Full 5. The delay, if any of the pronouncement of full judgment and reason thereof. Nil CORAM: HON'BLE MR. JUSTICE YASHVIR SINGH RATHOR Argued by : Mr. Maninder Jit Singh, Advocate for Mr. Amit Jaswal, Advocate for the appellant. Mr. G.S. Rawat, Advocate for respondent No.1. Mr. Deepak Arora, Advocate for respondent No.2. Mr. S.K. Bawa, Advocate for LRs of respondent No.3-Owner. Service of notice upon respondent No.4 dispensed with vide order dated 08.09.2015. **** YASHVIR SINGH RATHOR , J. 1. This appeal has been instituted by the Insurance Company against the Award dated 19.08.2000 decided by MACT, Patiala (for PRIYANKA THAKUR 2026.08.01 17:39 I attest to the accuracy and integrity of this document FAO-2331-2000(O&M) -2- short “Tribunal”) in Claim Petition No.15 of 22.04.1998 in a petition under Section 166 of the Motor Vehicles Act, 1988 (for short ‘Act’) vide which a sum of Rs.2,00,000/- has been awarded as compensation to the claimant (respondent No.1) on account of injuries suffered by her, along with interest @ 12% per annum from the date of filing of the claim petition till realization in a motor vehicular accident which took place due to rash and negligent driving on the part of respondent No.1 (respondent No.2 in the present appeal) while driving the Truck bearing No. HR-03- 8826 (for short ‘offending vehicle’), owned by respondent No.2 (respondent No.3 (since deceased) through her LRs in the present appeal), which was insured with respondent No.3 (appellant in the present appeal) and the Insurance Company has been held liable to pay the compensation to the claimant along with driver and owner of the offending vehicle, jointly and severally. 2. From the pleadings of parties, following issues were framed by the learned Tribunal:- “1. Whether Jasbir Singh respondent while driving truck No.HR-03-8826 rashly and negligently on 19.10.1997 caused the injuries to Lajjo Devi? OPP 2. Whether the claimant is entitled to the grant of compensation? If so, to what extent and from which of the respondents? OPP 3. Whether Jasbir Singh respondent was not holding a valid driving licence at the time of alleged accident? If so, its effect? OPR 4. Relief.” 3. Thereafter, the parties led evidence in support of their case. PRIYANKA THAKUR 2026.08.01 17:39 I attest to the accuracy and integrity of this document FAO-2331-2000(O&M) -3- 4. After hearing the parties and going through the material on the file, learned Tribunal awarded a sum of Rs.2,00,000/- as compensation to the claimant along with interest @ 12% per annum from the date of filing of the claim petition till realization, payable by respondents No. 1 to 3 jointly and severally. 5. Feeling aggrieved, the appeal in hand has been preferred by the Insurance Company. The material on file has been perused and parties have been heard. 6. Learned counsel for the Insurance Company argued that the impugned award is based on conjectures and surmises. The pleadings of the parties and material on file have not been appreciated in the correct perspective while fastening liability upon the Insurance Company despite the fact that there was breach of terms and conditions of the Insurance Policy on account of the fact that the driving licence produced by the driver was proved to be fake. Learned counsel further contended that the Tribunal has wrongly placed reliance upon the judgment of Hon’ble Supreme Court reported as 1987 ACJ 411, Skahola Insurance Co. Ltd. Vs. Kokilaben Chandravadan, while holding the Insurance Company liable to indemnify the insured despite coming to the conclusion that the driving licence produced by the driver was fake. Learned counsel contended that once the licence is proved to be fake, the Insurance Company should be exonerated of its liability to indemnify the insured. As such, the Award passed by the Tribunal is wrong in law and the same is liable to be set aside. Learned counsel prayed that the appeal in hand be PRIYANKA THAKUR 2026.08.01 17:39 I attest to the accuracy and integrity of this document FAO-2331-2000(O&M) -4- accepted and the Insurance Company be exonerated of its liability to indemnify the insured. 7. On the other hand, learned counsel for respondents argued that the award in question is well reasoned and justified. The material on file has been appreciated in the correct perspective while holding the Insurance Company liable to indemnify the owner and no interference in the same is thus called for. 8. Before proceeding further, it is pertinent to mention that the Insurance Company had examined RW1 Kulwant Singh who produced the record of the criminal case showing the original licence, RW2 Gobind Singh, Surveyor-cum-Investigator of the Insurance Company and RW3 Himat Singh. They produced the relevant record of the driving licence and deposed that as per their record, no driving licence bearing No. 22291/R/1970 was ever issued in the name of Jasbir Singh @ Jai Singh S/o Tarlochan Singh. Instead, the said licence number was issued/renewed in the name of Sukhdev Singh and that too was for driving scooter and car only. As such, the driving licence produced by the driver was found to be fake and invalid. However, the Tribunal while holding the Insurance Company liable to indemnify the insured and while placing reliance upon the judgment of the Hon’ble Supreme Court in Skahola Insurance Co. Ltd.s case (supra) held as under: “An owner normally at the time of employing a driver is required to see whether he holds a driving licence or not. The owner has no way of knowing that the said driving PRIYANKA THAKUR 2026.08.01 17:39 I attest to the accuracy and integrity of this document FAO-2331-2000(O&M) -5- licence is a fake driving licence. The owner normally believes it to be a genuine driving licence. Thus, in the present case since the driver was holding a driving licence, the owner cannot be said to be guilty of deliberate breach of the insurance policy. It is not a case where the driver of the offending vehicle was not holding any driving licence. Thus, the Insurance Company cannot be absolved from its liability from indemnifying the owner. This issue is disposed of accordingly.” 9. In my considered opinion, the view taken by the Tribunal is reasonable and is not contrary to the settled law. Hon’ble Supreme Court in 2022 ACJ 1868, Rishi Pal Singh Versus New India Assurance Company Limited and others, has held that owner of the vehicle is expected to check driving skills of the driver and not to run to the licensing authority to verify genuineness of the driving licence before appointing a driver and therefore, once the owner is satisfied that driver is competent to drive the vehicle, it is not expected from him to verify genuineness of the driving licence issued to the driver and the direction of ‘pay and recover’ given by the High Court was set aside and it was held that Insurance Company is liable to indemnify the insured and it cannot recover the amount from the owner/insured. Recently, Hon’ble Supreme Court in Law Finder Doc ID # 2790918, Hind Samachar Ltd. (Delhi Unit) Versus National Insurance Company Ltd. And others, has also held that owner of the vehicle is not expected to verify the authenticity of the driving licence from the licensing authority and he can only rely upon the licence produced by the prospective driver seeking employment. In PRIYANKA THAKUR 2026.08.01 17:39 I attest to the accuracy and integrity of this document FAO-2331-2000(O&M) -6- case, Insurance Company seeks to avoid liability or to get “pay and recover rights” against the insured/owner on the ground of driving licence being fake, the Insurance Company must establish that the breach was on the part of the insured, meaning thereby, the insured had deliberately committed a breach by entrusting the vehicle to a driver who had a fake driving licence or that the owner did not employ due diligence at the time of handing over the vehicle. It has been further held that in the absence of pleading or substantiation that owner allowed the driver to drive a vehicle knowing the licence to be fake, or failed to employ due diligence in the driver’s employment/entrustment, the High Court erred in issuing pay and recover directions against the insured-owner. It has been further held that Insurance Company must prove the willful breach of the policy condition i.e. entrusting the vehicle to a driver without a valid licence by the insured in case it wants right of recovery against the insured, even if the driver’s licence is fake. 10. In the present case also, the driver was possessing a driving licence when he was employed by the insured/owner which must have been seen by the owner. On the other hand, Insurance Company has failed to establish that there was any willful default on the part of the insured and the breach of terms and conditions of the Insurance policy. In these circumstances, Insurance Company cannot be absolved of its liability to indemnify the insured and there is thus no reason to interfere with the finding returned by the Tribunal on issue No.3 and same is accordingly affirmed. PRIYANKA THAKUR 2026.08.01 17:39 I attest to the accuracy and integrity of this document FAO-2331-2000(O&M) -7- 11. Resultantly, the appeal filed by the Insurance Company stands dismissed. 12. Pending misc. application(s), if any, shall also stand disposed of. 01.08.2026 (YASHVIR SINGH RATHOR) Priyanka Thakur JUDGE Whether speaking/reasoned Yes/No Whether Reportable Yes/No PRIYANKA THAKUR 2026.08.01 17:39 I attest to the accuracy and integrity of this document