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SOMETIMES judicial pronouncements can really put consumers in a spot. Take the issue of repudiation of motor insurance claims by insurance companies on the ground that the licence of the person at the wheel was fake. Now legally speaking, there is nothing wrong with that as the terms and conditions governing motor insurance clearly say that the person driving the vehicle should have a valid licence to drive that vehicle. It is also illegal to have anything but a genuine licence issued by the competent authority. However, the problem arises when you are hiring a driver. You may check his driving skills and also examine his driving licence to see whether it is valid, but you have no way of finding out whether it is genuine or fake. Some licensing authorities put a hologram to identify a genuine licence, but unfortunately such a system is not followed by the licensing authority in every state. Besides, one cannot rule out the possibility of even the hologram being duplicated. There are also cases where even the licensing authorities have failed to detect a fake one and have renewed the same, particularly when the original (the fake) is issued in another state. So if the driver that you have hired is dishonest and has secured for himself a fake driving licence, then you, as the owner of the vehicle, will pay the price. The apex court, however, is more understanding and in tune with the ground realities. It sees reason in the argument of the owners that they cannot be expected to determine the genuineness of a licence and that so long as they have taken ‘reasonable care’ in ascertaining that the driver had a licence and drove well, the insurer cannot repudiate the claim. Besides, in two of these cases decided in 2005 and 2006, the original licence, as it turned out, was fake, but the renewal was genuine and valid at the time when the accident had happened. The national commission also accepted the argument that when the transport authority had not detected the fake one or had ignored it and renewed the licence, it was unreasonable to expect the owner to identify the fake licence. However, both these orders were challenged by the insurers and the Supreme Court in both the cases held that the insurer was not liable to pay. In the case of Oriental Insurance vs Prithviraj (decided on Jan 24, 2008), for example, the Supreme Court quoted an earlier case where it had observed: “A fake licence cannot get its forgery outfit stripped off merely on account of some officer renewing the same with or without knowing it to be forged.” If you consider the issue purely from the point of view of the validity of the licence, the Supreme Court is right in holding that once a fake, is always a fake. Besides, if the driver is not good, he not only puts those in the vehicle at risk, but also those on the road. However, when it comes to an insurance claim, my own view is that the repudiation on the basis of a fake licence can be upheld only when the state creates an ideal situation for such a rejection. That is, all licensing authorities in the country should provide licences with holograms that cannot be duplicated, and they should also put out on the web or the Internet, details of every person who has been issued a driving licence, so that anyone hiring a driver can cross-check the genuineness of the licence online. Once such a system is in place, it makes sense for the insurer to repudiate a claim on the basis of the licence being fake, not otherwise. As of now, the Supreme Court’s verdict puts an unfair burden on the consumer, who, for no fault of his, has to forego his insurance claim in case the driver he has hired has or had a fake licence. So the next best thing is to put pressure on the government to provide for online checks of licences and also eliminate fake licence rackets flourishing in the country.
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