PETITIONER:
NATIONAL INSURANCE CO. LTD.
Vs.
RESPONDENT:
SANTRO DEVI & ORS. ETC.
DATE OF JUDGMENT: 18/11/1997
BENCH:
M.M. PUNCHHI, M. SRINIVASAN
ACT
HEADNOTE
JUDGMENT
THE 18TH DAY OF NOVEMBER, 1997 Present:
Hon’ble Mr. Justice M.M. Punchhi
Hon’ble Mr. Justice M. Srinivasan P.P. Malhotra, Sr. Adv., Vineet Malhotra, Shalendra Sharma, Naresh K. Sharma, Advs. with him for the appellant. Prem Malhotra and Manoj Prasad, Advs. for the Respondents.
JUDGMENT
The following Judgment of the Court was delivered: (with SLP(C) No. 6262/97) Leave granted.
This is an appeal against the judgment and order dated 17.10.96 passed by a full Bench of three Hon’ble judges of the High court of Punjab and Haryana in First Appeal From Order No. 75 of 1994.
The minimal facts giving rise to this appeal are these:
There was a motor accident which gave rise to a claim for compensation, duly set up by the claimants/respondents. One of the questions which was brought to the fore was whether the offending motor vehicle was being driven by a driver holding a valid driving licence. The matter was put to issue and the conclusion arrived at by the Tribunal was that the driver held a valid licence which had validly been renewed .
This finding stood affirmed in appeal before the High Court.
Yet it was taken by the High Court that a question of law arose as to whether a forged or a fake licence, if renewed would get validated or not so as to work out the liabilities under the Motor Vehicles Act. The question gathered momentum in as much as when the cause was before a Division Bench of the High Court, it referred the matter to a full Bench of three Hon’ble judges which in turn pronounced as follows:
"In view of the observations made
above, I (M.S.Liberhan, J.) answer
the questions posed as under:
(1) A forged driving licence though
may be validly renewed, would not
become a valid driving licence or a
duly issued driving licence in
accordance with the Motor Vehicles
Act.
(2) The insured bonafidely
believing in the validity of a
forged driving licence employing
the holder of a fake driving
licence renewed by a competent
authority, would not or of the
insurance policy. It would not be
violating either conditions of
indemnity or the any statutory
provisions. Under these
circumstances, merely employing a
driver with a forged driving
licence would not absolve the
insurer of its liability.
(3) In the absence of Mensrea or
knowledge or intention to violate
the terms of police or the
provisions of the Act by the
insured, the insurance company
would not be discharged of its
liability from indemnifying the
insurer or of its statutory
liability to third party.
(4) The insurance company cannot
refuse to meet its liability quo
third party for any act or omission
bonafidely or otherwise committed
by the insured or its liability
inasmuch as third party for whose
benefit the insurance has been
provided, is not a privity to any
breach as being not in control of
the act or conduct of the insured
or its employee or insurer. Thus,
the insurance company cannot refuse
to meet its liability quo third
party.
(5) The insurer is duty bound and
liable, statutorily as well as
contractually to reimburse third
party claim, for the tortuous act
committed by the insured or his
employee as well as the liability
incurred by insured or his employee
under the Motor Vehicles Act.
(6) the insurance company can
neither refuse to indemnify nor is
discharged from its liability to
the insured or the claimants for an
act of fraud committed by the third
party quo the insured though it has
a right to recover any loss
suffered by it from the person, who
committed t he fraud or from any
other authority, as permissible
either under tort or any other
statute; and
(7) The insurance company would be
entitled to recover the amount,
which it has paid to the claimant
from the insured or his driver or
employee who has perpetuated fraud
and the insurance company was made
to reimburse third party who
suffered loss because of the
tortuous act of the insured or his
employee. The insurer would not be
left without remedy to reimburse
tort in accordance with law for the
failure or the State to discharge
common duty care as well as the
insured for not observing due care
of an ordinary prudent person,
expected from the insured, as a
duty towards the insurer as well as
the person who has committed the
fraud. Remedy as available to the
insurer is not a decision by this
Court while dealing with the
question, rather it is left open to
be determined as and rather it is
left open to be determined as and
when a question arises in the facts
and circumstances of a particular
case."
We do not approve of the High Court having gone on to endeavour streamlining the law when its ratio on the fact situation was likely to be rendered totally obiter. As has been said above, there was concurrent finding recorded by the Tribunal as well by the High Court that the offending vehicle was driven by a driver who had held a valid licence and it stood renewed on the date of the accident. There was thus no occasion for the High Court to have ruled on suppositions to the contrary in order to interpret the law and that too on a fact situation not available to it. Thus, we are constrained to intervene and hold that the entire exercise of the High Court in that direction was obiter, not at all a binding precedent. In that sense, we strike off from the impugned order observations and findings pertaining thereto. Yet at the same time, we are required and do hereby affirm the substantive part of the order, in holding that the claimanants/respondents had rightly been granted compensation on account of t he motor accident, on the basis of the recorded finding of fact. We cannot help remarking that the High Court instead could have well have spent its time on other priorities.
The appeal thus would have to be and is hereby allowed in part to the extent and in the manner afore-indicated.
SLP (Civil) No.. 6262/97
This Special Leave Petition was tagged on with the above case on the assumption that the fate of the said case would govern the fate of this SLP. We find that the question as such was never raised before the High Court. The finding of fact recorded by the Motor Accidents’ Claim Tribunal does not positively indicate that the licence of the driver of the offending vehicle was fake or forged. All the same, the licence was got renewed which reinforced the impression of the High Court that it was not proved substantially that the said licence to begin, was fake or forged. The Special Leave Petition is, therefore, dismissed.