Motor Vehicle Accident Claim – Collision of a truck and Matador van killed nine people and injured two – Tribunal found the driver of both vehicles compositely negligent at the rate of 75:25 – Insurance companies paid the compensation to the claimants however, filed appeal – High Court issued “Pay and recovery” directions in favour of the insurer of the truck and against the appellant-insured owner of the truck, accepting the claim of the insurer that the appellant-owner of the vehicle, had colluded with its driver to obtain a fake licence – Challenge to:
Held: High Court erred in mulcting the liability on the owner of the truck – Even if the licence is fake, the insurance company is liable to pay compensation, if they fail to prove that the insured had deliberately committed breach in entrusting the vehicle to a driver who had a fake licence – The owner of a vehicle employing a driver can only look at the licence produced by the person seeking employment and is not expected to verify from the licence issuing authority whether the licence is fake or not – The insurance company from the totality of the circumstances has to bring out the absence of due diligence in the employment of the driver or the entrustment of the vehicle, to prove breach by the insured, which is totally absent in the present case – High Court erred in finding that there was collusion between the employer and the employee merely for reason of the driving licence having been produced by the employer and the driver having not contested the claim – The vicarious liability to satisfy the damages caused by the negligence of the employee is on the employer, the later of whom has to contest the matter – Not only was the driving licence, as issued to the driver produced, but, a certificate showing its further renewal was also produced – Order of the High Court set aside, insofar as the rights of recovery of the award amounts granted to the insurer. [Paras 7, 16-18]
Motor Vehicle Accident Claim – Plea of the respondentinsurance company that unlike the usual practice of the driver producing the driving licence, the owner’s representative produced it before the Tribunal which indicated a collusion: Held: No substance in the argument of the insurer that a collusion can be validly inferred since the driving licence was produced by the owner – In fact, the owner of the truck is not an individual and is a company – Undisputedly, even if the tortfeasor is the driver, the liability for any negligence of the driver rests on the owner of the vehicle, vicariously – There can be no suspicion raised merely because the owner had produced the driving licence before Court – It only indicates that the owner had been diligent enough to procure the driving licence from the driver and produce it before the Tribunal, so as to validly raise a case for indemnification by the insurer. [Para 12]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Divya Pandey. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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