IN THE HIGH COURT OF MADHYA PRADESH

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AT GWALIOR

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BEFORE

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HON'BLE SHRI JUSTICE HIRDESH

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ON THE 5

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th

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OF JANUARY, 2026

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MISC. APPEAL No. 999 of 2009

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KAMALKISHORE BAGHEL

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Versus

UDAY SINGH AND OTHERS

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Appearance:

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Shri N.S.Pal - Advocate for the appellant.

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Shri Kamal S.Rochlani- Advocate for the respondent/Insurance

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Company.

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Shri Rajeev Shrivastava - Advocate for respondent.

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WITH

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MISC. APPEAL No. 1070 of 2009

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PANKAJ SHARMA

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Versus

KAMAL KISHORE AND OTHERS

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Appearance:

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Shri Yogesh Chaturvedi with Shri Rajeev Shrivastava- Advocates for

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the appellant.

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Shri N.S.Pal - Advocate for respondent.

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Shri K.S.Rochlani- Advocate for the Insurance Company.

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ORDER

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Both the appeals arise out of the common award dated 20.04.2009

passed by the Second Additional Member, Motor Accident Claims Tribunal,

Gwalior (in short "the Claims Tribunal") in Claim Case No. 02/2006,

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whereas MA No. 999/2009 has been preferred by claimant Kamal Kishore

Baghel under Section 173 of the Motor Vehicles Act on the ground of

inadequacy of compensation, seeking enhancement thereof, while MA No.

1070/2009 has been filed by appellant/owner under the same provision,

seeking exoneration from the liability fastened upon him by the Claims

Tribunal.

2. Since both the appeals challenge the same award, they were heard

analogously and are being decided by this common order.

3. Necessary facts for adjudication of both the appeals in short are that

in the intervening night of 8th and 9th August, 2004, the claimant was

travelling in the dumper bearing Registration No. MP 07 G-5684, which was

being driven by Udai Singh (driver). The said vehicle was being driven

rashly and negligently, as a result of which it turned turtle, causing an

accident. Due to the said accident, the claimant sustained injuries to his leg.

After the occurrence of the accident, the driver of the offending vehicle

absconded from the spot, leaving the vehicle at the place of occurrence. The

injured claimant was thereafter taken to Civil Hospital, Etawah, where he

was provided primary medical treatment and was subsequently admitted for

further treatment. The matter was reported to Police Station Bakewar,

District Etawah, and an offence bearing Crime No. 56/2004 was stated to

have been registered. After investigation and other formalities, the police

filed a charge sheet. Thereafter, the claimant filed a claim petition before the

Claims Tribunal seeking compensation. Non-applicants therein filed their

written statement and denied all averments. The Claims Tribunal framed

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necessary issues and after considering the evidence of both parties, awarded

compensation to the tune of Rs. 4,90,000/- in favour of the claimant.

4. Learned counsel appearing for the claimant contends that the Claims

Tribunal has committed a grave error in awarding the amount of

compensation. He further submitted that the compensation awarded by the

Claims Tribunal is on the lower side, and hence, it is prayed that the

compensation amount be enhanced and a just and reasonable amount of

compensation may be awarded.

5. Learned counsel for the owner of the offending vehicle submits that

the claimant has failed to establish the factum of the accident, and that he

was injured in the said accident, as no police report or investigation report

has been filed. On the contrary, the owner of the offending vehicle has

specifically come forward with the allegation that the claimant did not

sustain any injury in the turn down of the dumper, nor did he receive any

injury in the road accident. Even otherwise, the Tribunal has awarded

compensation which is not just and proper. The assessment of the income of

the claimant made by the Claims Tribunal is also on the higher side and

unreasonable. Hence, the award deserves to be modified. It is further

contended that the Claims Tribunal has wrongly given a finding that the

driver of the vehicle did not possess a genuine driving licence, while the said

licence was renewed four times by R.T.O. Gwalior. Additionally, the

statement of Bhagwan Singh (clerk of RTO Dholpur) is also suspicious, as

he says that there was no issuance of driving licences from serial numbers

4100 to 4999, and ultimately, the next driving licence no. 5000 was issued.

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However, there was no explanation as to why the said numbers of licences

were not issued. The Claims Tribunal gave a finding that the driving licence

is fake, which is not supported by law. Hence, the amount of compensation

deserves to be shifted towards the insurance company. Witness Sajal Pandey,

Clerk of RTO Gwalior, very specifically stated that the driving licence of

driver Udai Singh is genuine and he endorsed the change of address in the

licence. Thereafter, it was renewed from 22.1.1994 to 29.4.2007. Hence, it is

prayed for the setting aside of the impugned award. It is further submitted

that when the owner appointed the driver, he saw the driving licence, which

was renewed by Gwalior. So, the owner of the offending vehicle/appellant

has proved his duties. Therefore, the impugned award passed by the Claims

Tribunal against the owner deserves to be set aside.

6. Learned counsel for the Insurance Company supported the

impugned Award and submitted that no interference is warranted by this

Court and there is no need to enhance the compensation amount. Hence, it is

prayed for the dismissal of both the misc. appeals filed by the claimant as

well as the owner of the offending vehicle.

7. Heard learned counsel for the parties and perused the entire record.

8. On perusal of the impugned record, it is found that claimant Kamal

Kishore filed a claim petition and pleaded that the driver of the offending

vehicle was driving the vehicle in a rash and negligent manner, and the

vehicle overturned by which he sustained permanent disability. The owner of

the offending vehicle has also filed his written statement and admitted that

Udai Singh was the driver of the offending vehicle and that he appointed him

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as a driver. He adduced evidence before the Claims Tribunal and stated that

he appointed Udai Singh as the driver of the offending vehicle and that Udai

Singh had a valid and effective driving licence (Ex.D-3), the particulars of

the same are Ex.D-4. The driving licence of Udai Singh was regularly

renewed by RTO, Gwalior.

9. Sajal Pandey (NAW-2), clerk of RTO, Gwalior, admitted that the

original record of the licence is Ex.D-3, and the photocopy of the document

is Ex.D-6. According to Ex.D-6, the original licence of driver Udai Singh

bearing No. 4817/1989, dated 05.02.1989, was issued by Dholpur, Rajasthan,

for heavy goods vehicle and was renewed by Gwalior RTO. So, considering

the evidence of the owner of the offending vehicle and the evidence of Sajal

Pandey, it is clear that when the owner of the offending vehicle appointed

the driver, he saw the driving licence, which was regularly renewed by RTO,

Gwalior.

10. So far as the contention of the Insurance Company is concerned

that in the absence of a valid and effective driving licence of the driver, there

was a fundamental breach of the terms and conditions of the Insurance

Policy in question, hence, the claim made by the claimant was not payable

by the Insurance Company. It is argued by the owner that at the time of

employing the driver, documents like the driving licence, etc. were checked,

but no one usually verifies the genuineness of the same. Breach of

conditions under Section 149(2)(a) of the Motor Vehicles Act, 1988 absolves

the insurer of its liability to the insured. Section 149(2)(a)(ii) deals with the

conditions regarding driving licences. In case the vehicle at the time of the

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accident is driven by a person who is not duly licensed or by a person who

has been disqualified from holding or obtaining a driving licence during the

period of disqualification, the insurer is not liable for compensation. In the

instant case, it is a matter of fact that no record of licence bearing No.

4817/1989 exists.

11. In the case of Nirmala Vs. United India Insurance Company

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reported in 2020 (4) MPLJ 250,

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Hon'ble Supreme Court in Paras 8, 9,10 and

11 held as under:-

8.

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Having set forth the facts of the present case, the question

of law that arises for consideration is what is the extent of

care/diligence expected of the employer/insured while

employing a driver? To answer this question, we shall advert

to the legal position regarding the liability of the Insurance

Company when the driver of the offending vehicle possessed

an invalid/fake driving licence. In the case of United India

Insurance Co. Ltd. vs. Lehru & Ors.1 a two Judge Bench of

this court has taken the view that the Insurance Company

cannot be permitted to avoid its liability on the ground that

the person driving the vehicle at the time of the accident was

not duly licenced. It was further held that the willful breach

of the conditions of the policy should be established. The law

with this respect has been discussed in detail in the case of

Pepsu RTC vs. National Insurance Co.2 We may extract the

relevant paragraph from the Judgment: (Pepsu case, SCC pp.

223-24, para10)

“In a claim for compensation, it is certainly open to the

insurer under Section 149(2)(a)(ii) to take a defence that

the driver of the vehicle involved in the accident was

not duly licensed. Once such a defence is taken, the

onus is on the insurer. But even after it is proved that the

licence possessed by the driver was a fake one, whether

there is liability on the insurer is the moot question. As

far as the owner of the vehicle is concerned, when he

hires a driver, he has to check whether the driver has a

valid driving licence. Thereafter he has to satisfy

himself as to the competence of the driver. If satisfied

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in that regard also, it can be said that the owner had

taken reasonable care in employing a person who is

qualified and competent to drive the vehicle. The owner

cannot be expected to go beyond that, to the extent of

verifying the genuineness of the driving licence with

the licensing authority before hiring the services of the

driver. However, the situation would be different if at

the time of insurance of the vehicle or thereafter the

insurance company requires the owner of the vehicle to

have the licence duly verified from the licensing

authority or if the attention of the owner of the vehicle

is otherwise invited to the allegation that the licence

issued to the driver employed by him is a fake one and

yet the owner does not take appropriate action for

verification of the matter regarding the genuineness of

the licence from the licensing authority. That is what is

explained in Swaran Singh’s case (supra). If despite

such information with the owner that the licence

possessed by his driver is fake, no action is taken by the

insured for appropriate verification, then the insured

will be at fault and, in such circumstances, the

insurance company is not liable for the compensation.”

9.

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While the insurer can certainly take the defence that the

licence of the driver of the car at the time of accident was

invalid/fake however the onus of proving that the insured did

not take adequate care and caution to verify the genuineness

of the licence or was guilty of willful breach of the

conditions of the insurance policy or the contract of

insurance lies on the insurer.

10.

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The view taken by the National Commission that the law

as settled in the Pepsu case (Supra) is not applicable in the

present matter as it related to third-party claim is erroneous.

It has been categorically held in the case of National

Insurance Co. Ltd. vs. Swaran Singh & Ors.3 (SCC pp.341,

para 110) that,

“110. (iii)…Mere absence, fake or invalid driving

licence 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. To avoid its liability towards the insured,

the insurer has to prove that the insured was guilty of

negligence and failed to exercise reasonable care in the

matter of fulfilling the condition of the policy regarding

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use of vehicles by a duly licenced driver or one who

was not disqualified to drive at the relevant time.”

11.

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While hiring a driver the employer is expected to verify if

the driver has a driving licence. If the driver produces a

licence which on the face of it looks genuine, the employer is

not expected to further investigate into the authenticity of the

licence unless there is cause to believe otherwise. If the

employer finds the driver to be competent to drive the

vehicle and has satisfied himself that the driver has a driving

licence there would be no breach of Section 149(2)(a)(ii) and

the Insurance Company would be liable under the policy. It

would be unreasonable to place such a high onus on the

insured to make enquiries with RTOs all over the country to

ascertain the veracity of the driving licence. However, if the

Insurance Company is able to prove that the owner/insured

was aware or had notice that the licence was fake or invalid

and still permitted the person to drive, the insurance company

would no longer continue to be liable.

12. The facts of the present case revolve around the Pankaj Sharma,

the owner of the offending vehicle, who had employed the driver, Udai

Singh. The driver was hired after the owner checked his driving licence,

which was purported to have been issued by the licensing authority and

regularly renewed by the Gwalior RTO four times. This fact was proven by

Sajal Pandey, the Clerk of RTO, through his evidence. Furthermore, it was

not the contention of the Insurance Company that the owner was guilty of

willful negligence while employing the driver. There is also no evidence to

suggest that the driver failed to drive competently, and there was no reason

for the owner to doubt the veracity of the driver's driving licence.

13. In view of the above facts and circumstances of the case, the

impugned award is not liable to be sustained and is accordingly set aside.

The Miscellaneous Appeal (MA No. 1070/2009) filed by the owner is hereby

allowed

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. The Insurance Company is liable to indemnify the claimant, and the

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(HIRDESH)

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JUDGE

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owner of the offending vehicle is exonerated from liability.

14. The alleged accident occurred on 08.08.2004, and the Claims

Tribunal assessed the income of the claimant as Rs. 2,000/- per month,

which is just and proper. There is no need for any interference in this regard.

Upon reviewing the impugned award, it is found that the Tribunal awarded a

fair and just amount of compensation. Therefore, there is no need to alter the

amount. Accordingly, the Miscellaneous Appeal (MA No. 999/2009) filed

by the claimant is hereby dismissed.

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15. Let a copy of this order be kept in connected MA No.1070/2009.

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*AVI*

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