The Supreme Court Bench consisting Justice Navin Sinha and Justice Krishna Murari have held that an insurance company cannot repudiate the claim of the owner of a vehicle merely by reason of the driver possessing a fake licence.
The Court was considering an appeal in the matter of Nirmala Kothari v. United India Insrance C. Ltd. (2020) against the order of the National Consumer Disputes Redressal Commission (NCDRC) which had absolved the Insurance Company of its liability as no record of the driver was found with the appropriate licencing authority.
The Court relied on previous judgements and noted that an Insurance Company cannot be allowed to avoid its liability entirely, simply on the reason that the person driving the vehicle at the time of the accident was not duly licenced.
They also observed that the burden of proving that the insured person failed to take adequate care in verifying the authenticity of the licence and was guilty of wilfully breaching the conditions of the insurance policy lies solely on the insurer.
However, the Court also noted that in the scenario where the Insurance Company is able to prove that the insured person was completely aware of the fact that his licence was fake or invalid and was still found to be driving the vehicle, then the Insurance Company would be well within its right to shrug of any liability with regard to the same.
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Link for the Judgement: Nirmala Kothari v. United India Insurance Co. Ltd.