Insurance news update:
The High Court of Jammu and Kashmir and Ladakh has determined that an insurance company cannot be held accountable to compensate an insured individual unless the vehicle owner fulfills the initial obligation of proving the validity of the driver’s license.
In rejecting a review petition and affirming its decision to absolve the insurance company from liability for indemnification, Justice Javed Iqbal Wani noted,
”Given the failure of the owners to discharge their initial onus, the insurance company could not have been saddled with the liability to indemnify the insured, more so, when the insurance company had proved with clinching and credible evidence that the driving license possessed by the driver was fake/invalid”.
The case originated from an incident in which Tariq Ahmad Mir, aged 22, tragically lost his life in a vehicular accident while riding a motorcycle. Subsequently, the legal heirs of Tariq Ahmad Mir filed a claim petition under the Motor Vehicles Act, 1988, before the Motor Accident Claims Tribunal (MACT), Anantnag, seeking compensation.
The claimants, in their pursuit of compensation, named both the owner(s) and the driver of the offending vehicle, as well as the insurance company, United India Insurance, as respondents. Notably, the Tribunal addressed several issues, with a pivotal question revolving around the validity of the driver’s license at the time of the accident.
During the proceedings, the insurance company presented compelling evidence, including testimony from witnesses and documentation. However, the owners of the offending vehicle failed to meet their initial burden regarding the driver’s license’s validity. Consequently, the Tribunal awarded compensation to the claimants, holding the insurance company liable to pay.
However, the insurance company appealed this decision before the High Court, arguing that without the owners discharging their initial onus regarding the driver’s license validity, they couldn’t be held responsible. The High Court, concurred with the insurer’s argument and set aside the award as a consequence of which a review petition came to be filed.
After carefully scrutinizing the case, Justice Wani emphasized the crucial role of the owner in establishing the validity of the driver’s license. The Court emphasized that without such evidence, insurance companies cannot be held responsible for indemnifying the insured.
While observing that neither the first owner (who appeared before MACT) nor the second owner (who failed to appear) provided any evidence regarding the validity of the driver’s license, the bench referred to the Supreme Court judgment in “Pappu and others vs. Vinod Kumar Lamba and another” (2018 ACJ 690). The Court held that the burden of proving the validity of the driver’s license rests with the owner.
Additionally, the bench recognized the compelling evidence provided by the insurance company, establishing the driver’s license as fake or invalid. Consequently, the bench concluded that the failure of the owners to fulfill their initial obligation releases the insurance company from its responsibility to indemnify the insured.
Regarding the use of the power of review, the bench clarified that it cannot be employed to contest the accuracy of a judgment based on legal or factual grounds, stating,
“Doctrine of review that same cannot be treated as an appeal in disguise nor can the power of review be exercised as an inherent power inasmuch as an order or decision or judgment under review cannot be corrected merely because it is erroneous in law or a different view could have been taken by the court on a point of fact or law”.
