IFFCO TOKIO GENERAL INSURANCE CO. LTD. versus GEETA DEVI AND OTHERS

IFFCO TOKIO GENERAL INSURANCE CO. LTD. versus GEETA DEVI AND OTHERS

The insurer had no right to recover the compensation from the vehicle owners because it neither pleaded nor proved that the owner wilfully breached the policy condition by knowingly permitting a person with a fake licence to drive; the policy did not require RTO verification and, where a seemingly valid licence was produced, the insurer bears the burden to prove failure of due diligence by the owner.

Parties
Petitioner: IFFCO TOKIO GENERAL INSURANCE CO. LTD.; Respondent: Geeta Devi and Others
Jurisdiction
India
Judgment Date
30 October 2023
Procedural Posture
Special Leave Petition (c) No.19992 of 2023 / Special Leave Petition Against Delhi High Court Order Dated 11.05.2023
Outcome
Special Leave Petition dismissed
Legal Topics
Liability of Insurer, Fake Driving Licence, Right of Recovery, Breach of Policy Condition, Due Diligence by Vehicle Owner
Motor Vehicles Act, 1988 Insurance Law Liability of Insurer Fake Driving Licence Right of Recovery Breach of Policy Condition Due Diligence by Vehicle Owner

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Parties

IFFCO TOKIO GENERAL INSURANCE CO. LTD.

Petitioner

Geeta Devi and Others

Respondent

Procedural Posture

Special Leave Petition (c) No.19992 of 2023 / Special Leave Petition Against Delhi High Court Order Dated 11.05.2023

Legal Issues

  1. 1 Whether insurer can avoid liability or recover compensation from vehicle owner where the driver held a fake driving licence
  2. 2 Whether insurer had pleaded and proved willful breach by the insured/owner for denial of liability under Section 149(2)(a)(ii)
  3. 3 Whether the vehicle owner was under a duty to verify the genuineness of the driving licence with the RTO before employing the driver

Ratio Decidendi

The insurer had no right to recover the compensation from the vehicle owners because it neither pleaded nor proved that the owner wilfully breached the policy condition by knowingly permitting a person with a fake licence to drive; the policy did not require RTO verification and, where a seemingly valid licence was produced, the insurer bears the burden to prove failure of due diligence by the owner.

Court Disposition

Special Leave Petition dismissed

Orders

  • Special Leave Petition dismissed
  • The impugned order dated 11.05.2023 of the Delhi High Court is upheld to the extent it denied the petitioner-insurance company the right to recover the compensation from the vehicle owners