Fake driving licence at the time of insurance claim

Fake driving licence at the time of insurance claim

Introduction: Number of Accident cases are increasing day by day.Whenever an accident happens the insured claims the damages or insurance money from insurance company, but in some cases the insurance company get it’s step back from its responsibility and refuses to pay by blaming the owner of the vehicle.

There are some provisions of Motor Vehicle Act, 1988 –

• Section 3 : Necessity for driving licence.—

(1) No person shall drive a motor vehicle in any public place unless he holds 

an effective driving licence issued to him authorising him to drive the 

vehicle; and no person shall so drive a transport vehicle [other than [a motor 

cab or motor cycle] hired for his own use or rented under any scheme made under 

sub-section (2) of section 75] unless his driving licence specifically entitles 

him so to do.

(2) The conditions subject to which sub-section (1) shall not apply to a 

person receiving instructions in driving a motor vehicle shall be such as may 

be prescribed by the Central Government.

• Section 4 : Age limit in connection with driving of motor vehicles.—

(1) No person under the age of eighteen years shall drive a motor vehicle in 

any public place:Provided that [a motor cycle with engine capacity not 

exceeding 50cc] out gear may be driven in a public place by a person after 

attaining the age of sixteen years.

(2) Subject to the provisions of section 18, no person under the age of twenty 

years shall drive a transport vehicle in any public place.

(3) No learner’s licence or driving licence shall be issued to any person to 

drive a vehicle of the class to which he has made an application unless he is 

eligible to drive that class of vehicle under this section

• Section 5 : Responsibility of owners of motor vehicles for contravention of 

sections 3 and 4.-

No owner or person in charge of a motor vehicle shall cause or permit any 

person who does not satisfy the provisions of section 3 or section 4 to drive 

the vehicle.

• Section 146 : Necessity for insurance against third party risk.—

(1) No person shall use, except as a passenger, or cause or allow any other 

person to use, a motor vehicle in a public place, unless there is in force in 

relation to the use of the vehicle by that person or that other person, as the 

case may be, a policy of insurance complying with the requirements of this 

Chapter 1[Provided that in the case of a vehicle carrying, or meant to carry, 

dangerous or hazardous goods, there shall also be a policy of insurance under 

the Public Liability Insurance Act, 1991 (6 of 1991).]Explanation.—A person 

driving a motor vehicle merely as a paid employee, while there is in force in 

relation to the use of the vehicle no such policy as is required by this 

sub-section, shall not be deemed to act in contravention of the sub-section 

unless he knows or has reason to believe that there is no suchpolicy in force.

(2) Sub-section (1) shall not apply to any vehicle owned by the Central 

Government or a StateGovernment and used for Government purposes unconnected 

with any commercial enterprise.

(3) The appropriate Government may, by order, exempt from the operation of 

sub-section (1) any vehicle owned by any of the following authorities, namely:—

(a) the Central Government or a State Government, if the vehicle is used for 

Government purposes connected with any commercial enterprise;(b) any local 

authority;(c) any State transport undertaking: Provided that no such order 

shall be made in relation to any such authority unless a fund has been 

established and is maintained by that authority in accordance with the rules 

made in that behalf under this Act for meeting any liability arising out of the 

use of any vehicle of that authority which that authority orany person in its 

employment may incur to third parties.Explanation.—For the purposes of this 

sub-section, “appropriate Government” means the Central Government or a State 

Government, as the case may be, and—(i) in relation to any corporation or 

company owned by the Central Government or any StateGovernment, means the 

Central Government or that State Government;(ii) in relation to any corporation 

or company owned by the Central Government and one or more State Governments, 

means the Central Government;(iii) in relation to any other State transport 

undertaking or any local authority, means thatGovernment which has control over 

that undertaking or authority.

• Section 149 , It provides for duty of insurers to satisfy judgements and 

award against persons insured in respect of third party risks.

• Section 149(2)(a) : that there has been a breach of a specified condition of 

the policy, being one of the followingconditions, namely:— (i) a condition 

excluding the use of the vehicle—(a) for hire or reward, where the vehicle is 

on the date of the contract of insurance avehicle not covered by a permit to 

ply for hire or reward(b) for organised racing and speed testing, or (c) for a 

purpose not allowed by the permit under which the vehicle is used, where the

vehicle is a transport vehicle, or(d) without side-car being attached where the 

vehicle is a motor cycle; or(ii) a condition excluding driving by a named 

person or persons or by any person who is notduly licensed, or by any person 

who has been disqualified for holding or obtaining a drivinglicence during the 

period of disqualification; or(iii) a condition excluding liability for injury 

caused or contributed to by conditions of war,civil war, riot or civil 


• Section 165 : It provides for constitution of Motor Accidents Claims 

Tribunals for the purpose of adjudicating upon claims for compensation in 

respect of accidents involving the death of, or bodily injury to, persons 

arising out of the use of motor vehicles, or damages to any property of third 

party arising, or both.

• Arguments : In the cases of accident claims most of the times Insurance 

companies tries to move out their liability by blaming the owner of fake, 

invalid and no licence.Further Arguments of Insurance Company may be as follows 


That There has been a breach of a specified condition of the policy in terms of

Section 149(2) of Motor Vehicle Act for following reasons:

1. Driver license of driver or owner of vehicle is fake2. Driver had no 

license to drive3. License expired but not renewed4. License granted to driver 

being for one class or description of vehicle but the vehicle involved in the 

accident was of different class or description5. The vehicle in a question was 

driven by a person having learner’s license.

• Result : Once such arguments by insurance company or such defence plea, If 

proved then The Tribunal or Court cannot direct the insurance company to pay 

the awarded amount to the claimant and in turn recover the same from the owner 

and the driver of the vehicle.

• Burden of proof : Breach on the part of the insured must be willful one 

being of fundamental condition by the insured himself and burden of proof, 

therefore, would be on the insurer.

• Point to be established : With a view to avoid it’s liability it is not 

sufficient for insurer to show that the person driving at the time of Accident 

was not duly licenced but it must further be established that there was a 

breach on part of insured.

• Supreme Court Ruiling : On the fake driving licence but bonafidely employed.

– United India insurance Co. Ltd. v Lehru and Ors. (2003)Held that if driver 

produces a driving licence which on the face looks genuine the owner is not 

expected to find out whether has in fact been issued by a competent authority 

or not.The owner would take the test of driver and ultimately hire him.If it 

ultimately turns out that licence was fake the Insurance company would continue 

to remain liable unles they prove that owner was aware of had noticed that 

licence was fake and still permitted that person to drive.

– National Insurance Co. Ltd. V. Swaran Singh (2004) Held that the insurance 

company to avoid liability must prove that insured was guilty of negligence and 

failed to exercise reasonable care in matter concerned.

Fake driving licence at the time of insurance claim.
Fake driving licence at the time of insurance claim.

– National Insurance Co. Ltd. V. Geeta Bhat (2008) Held that despite taking 

reasonable care owner failed to find out as to whether licence was fake or not 

he is not expected to verify the genuiness thereof from the transport authority.

– Skandia Insurance Co. Ltd. V. Kokilaben Chandravandan (1987)Held that owner 

not liable for negligence of the driver on the waywithout knowledge of owner.

– Sohan Lal Passi V. P. Shesh Reddy (1966)Held that owner has not taken stand 

that it was not in his knowledge that driver has instructed the cleaner to 

drive the bus.The owner as master of driver shall be deemed to liable to pay 

compensation applying the principle of vicarious liability.If the onwer had 

pleaded that it was not in his known then perhaps the judgement could have been 


• Conclusion : Mere absence, fake or invalid 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 party.

– To avoid it’s liability towards insured, the insurer has to prove that the 

insured was guilty of negligence and failed to exercise reasonable care 

regarding use of vehicles by duly licenced driver or one who was not 

disqualified to drive at the relevant time.

– The question as to whether the owner has taken reasonable care to find out 

as to whether the driving licence produced by driver (a fake one or otherwise) 

will have to be determined in each case.

Author : Bhawna , a student of 3rd year B.A.LL.B at Punjabi University, Patiala 

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