Owner of vehicle not expected to verify driver’s licence to know if the licence is fake or not.

Owner of vehicle not expected to verify driver’s licence to know if the licence is fake or not.

Owner of vehicle not before employing a driver not expected to verify license produced by the driver to know if the licence is fake or not.

ABCAUS Case Law Citation:
4774 (2025) (10) abcaus.in SC

In a recent judgment, Hon’ble Supreme Court has held that the owner of a vehicle employing a driver can only look at the licence produced by the driver seeking employment and is not expected to verify from the licence issuing authority whether the licence is fake or not.

In the instant case, the appellant was the owner of a truck which was involved in an accident with a Matador van in which many persons lost their lives.

The Tribunal based on the FIR, deposition of witness (an injured person in the accident) and the site plan and found that negligence was on the part of drivers of both the vehicles at the rate of 75:25.

However, the High Court directed for “pay and recovery” to the insurance company which had insured the truck. The Insurance company had complained a breach by the owner that the driver of the offending vehicle was having a fake driving licence

The High Court noted that in the DL register produced from the office of DTO a coloured photograph of the driver was found. On the ground of there being no possibility of a colour photograph in the year 1990, the High Court found collusion between the owner and the driver.

The High Court was of the view that the owner of the vehicle had colluded with its driver to obtain a fake licence based on a register produced from the office of the District Transport Officer.

Since, in this case, two licences were produced; one by the police and other one produced by the owner of the truck, were found to be fake, the Insurance company contended that the truck owner was negligent while entrusting the vehicle to the driver.

The Hon’ble Supreme Court observed that the trite law was noticed that even if the licence is fake, the insurance company is liable to pay compensation, if they fail to prove that the insured had deliberately committed breach in entrusting the vehicle to a driver who had a fake licence.

It was further observed that the Apex Court had deprecated the practice of the insurance companies blithely claiming that the deceased vehicle owner did not conduct due diligence while employing a driver; which is not a condition prescribed either in the statute or in the insurance policy.

The Hon’ble Supreme Court opined that there can be no suspicion raised merely because the owner had produced the driving licence before Court. It only indicates that the owner had been diligent enough to procure the driving licence from the driver and produce it before the Tribunal, so as to validly raise a case for indemnification by the insurer.

Further, the Hon’ble Supreme Court noted that office of the DTO had also issued a certificate indicating that the driving licence was issued in the name of the truck driver and was also renewed. However, a clerk (witness) from the office of DTO claimed that the license was not issued from their office and no amount was deposited in the name of truck driver towards driving licence fees.

On the alleged collusion on account of colour photograph of driver, the Hon’ble Supreme Court opined that the collusion at best can be only alleged for the production of the licence and not with respect to the entrustment of the vehicle. There was no pleading or substantiation of due diligence having not been employed at the time of entrustment.

The Hon’ble Supreme Court held that it has been rightly held in the precedents, the owner of a vehicle employing a driver can only look at the licence produced by the person seeking employment and is not expected to verify from the licence issuing authority whether the licence is fake or not.  

The Hon’ble Supreme Court pointed out that the insurance company from the totality of the circumstances has to bring out the absence of due diligence in the employment of the driver or the entrustment of the vehicle, to prove breach by the insured, which was totally absent in the present case. The High Court had erred in finding that there was collusion between the employer and the driver merely for reason of the driving licence having been produced by the employer and the driver having not contested the claim.

Accordingly, the Hon’ble Supreme Court set aside the order of the High Court, insofar as the rights of recovery of the award amounts granted to the insurer.

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