Case Title: IFFCO Tokio General Insurance Co. Ltd. V. Geeta Devi and others., Special Leave Petition (C) No. 19992 of 2023
Summary
The Supreme Court has ruled that an insurance company cannot be exempt from liability in a car accident claim simply because the owner failed to confirm the driver’s validity. The court ruled that the insurance company must demonstrate that the owner failed to use reasonable diligence in verifying the driver’s license. The Insurance Company filed a petition with the Apex Court, contesting the Delhi High Court’s ruling that set aside the Motor Accident Claims Tribunal’s decision awarding the insurance company the right to claim damages. The Court noted that no evidence had been filed to support the claim that the owner should have obtained the driver’s license from the relevant transport authorities.
About the case
On Monday, October 30, the Supreme Court ruled that an insurance company cannot argue that it is exempt from liability in a car accident claim simply because the owner of the vehicle failed to confirm the validity of the driver who was hired. According to the Court, the insurance company bears the burden of demonstrating that the owner of the vehicle failed to use reasonable diligence in verifying the driver’s license. It would be impractical to ask every individual hiring a driver to check that the driver’s license is valid and authentic, according to a bench comprising Justices CT Ravikumar and Sanjay Kumar.
The Appellant Insurance Company filed a petition with the Apex Court in this case, contesting the Delhi High Court’s ruling that set aside the Motor Accident Claims Tribunal’s decision awarding the Insurance Company the right to claim damages. Angry after being denied the ability to recoup from the car owner, the insurance company appealed the decision to the Supreme Court. The incident in question included a Tempo driven rashly and negligently, resulting in an accident where a victim sustained fatal injuries. The injured person’s dependents filed a compensation claim with the Motor Vehicle Claims Tribunal. The Tribunal determined that the car owner’s violation of the insurance policy’s terms and conditions would release the insurance company from liability.
Before the Apex Court, the insurance company contended that it was exempt from liability because the car’s owner had neglected to confirm the validity of the driver’s license, which turned out to be a fake. The Motor Vehicle Act, 1988’s Section 149(2)(a)(ii) and the relevant insurance policy’s “Driver Clause” do not require the owner of an insured vehicle to typically obtain the driver’s license from the relevant transport authorities and have it verified. This was noted by the Court.
The Court noted that no evidence had been filed to support the claim that the owner of the car should have had the relevant transport authority verify the driver’s license. The Court noted that because the insurance company was unable to demonstrate a deliberate violation by the car owner, it would not be able to collect the full amount of compensation from the owners of the vehicle.
