ORIENTAL INSURANCE CO. LIMITEDversusPRITHVI RAJ

                        [2008] 1S.C.R.1180


               ORIENTAL INSURANCE CO. LIMITED                   A
                                 v.
                           PRITHVI RAJ
                  (Civil Appeal No. 648 of 2008)
                        JANUARY 24, 2008
                                                                 B
        (DR. ARIJIT PASAYAT AND P. SATHASIVAM, JJ.)

         Motor Vehicles Act, 1988:
          Motor accident - Damage to insured vehicle - Own
     damage claim - Repudiated by insurer for driver of vehicle c
     not having valid and operating driving licence - HELD: In view
     of categorical finding recorded by State Consumer Disputes
     Redressal Commission that licensing authority had not issued
     any licence as claimed by driver and claimant, Insurance
     Company has no liability - Consumer Protection Act, 1986. D
           Renewal of driving licence - HELD: Renewal cannot
     transform a fake licence into a genuine one.
          The respondent filed a claim petition under the
     Consumer Protection Act, 1986 before the State Consumer E
     Disputes Redressal Commission, against the appellant-
     Insurance Company claiming damages as a result of an
     aecident caused to his insured Mini Bus. The stand of the
     Insurance Company was that the driver of the vehicle did
     not have a valid and operating driving licence at the time F
     of the accident. The State Commission did not accept the
     plea of the complainant that there was a renewal of the
     driving licence, and dismissed the claim petition. On
     appeal, the National Commission held that though the
     licensing authority concerned had not issued any licence G
     as claimed, but in view of the fact that there was renewal
<t
     by a different authority, the claim could not have been
     refused by the Insurance Company.
          Allowing the appeal filed by the Insurance Company,
                                 1180                         H
    1181    SUPREME COURT REPORTS               [2008] 1 S.C.R.


A the Court
       HELD: 1.1 In the instant case, the State Commission
  has recorded a categorical finding that the evidence on
  record clearly established that the licensing authority had
  not issued any license, as was claimed by the driver and
8 the respondent-claimant. The evidence of the Junior
  Assistant of the Office of the Jt. Commissioner &
  Secretary, RTA, Hyderabad, who produced the official
  records, clearly established that no driving license was
  issued to the person concerned in order to enable and
C legally permit him to drive a motor vehicle. There was no
  cross-examination of the said witness. The National
  Commission also found that there was no defect in the
  finding recorded by the State Commission in this regard.
  [para 10] (1195-G, H; 1196-A, BJ
D
         National Insurance Co. Ltd. Vs. Laxmi Narain Dhut 2007
    (3) SCR 579 - relied on.
        National Insurance Co. Ltd. Vs. Swaran Singh & Ors.
    2004 (3) sec 297 - distinguished.
E       Lal Chand Vs. Oriental Insurance Co. Ltd. 2006 (8)
    SCALE 531; United India Insurance Co. Limited Vs. Lehru
    and Ors. 2003 (3) sec 338 - cited.
       1.2 As has been held in Laxmi Narain Dhut's case*,
F no licensing authority has the power to renew a fake
  licence and, therefore, a renewal if at all made cannot
  transform a fake licence as genuine. [para 8 (12/38)]
  [1195-D]
       *National Insurance Co. Ltd. Vs. Laxmi Narain Dhut 2007
G (3) SCR 579 - relied on.
         1.3 The appellant-Insurance Company has, thus, no
  liability. The amount deposited by the appellant pursuant
  to the order of this Court be returned to it. [para 11]
H [1196-B, CJ
ORIENTAL INSURANCE CO. LIMITED v. PRITHVI RAJ              1182
                [PASAYAT, J.]

     CIVILAPPELLATE JURISDICTION: Civil Appeal No. 648            A
of 2008.
     From the final Order dated 9.3.2005 of the National
Consumer Disputes Redressal Commission, New Delhi in F.A.
No. 823 of 2003.
                                                                  B
     Kishore Rawat and M.K. Dua for the Appellant.
     J.S. Attri for the Respondent.
     DR. ARIJIT PASAYAT, J. 1. Heard learned counsel for
the parties.                                                      c
     2. Leave granted.
      3. Challenge in this appeal is to the order passed by the
National .Consumer Disputes Redressal Commission, New
Delhi (in short 'the Commission') allowing the First Appeal filed D
by the appellant before it (the respondent herein). He is
hereinafter referred to as the complainant. Before the Himachal
Pradesh State Consumer Disputes Redressal Commission (in
short the State Commission), the complainant had filed a
complaint alleging that a Mini Bus owned by the complainant
met with an accident during the period when the Insurance Cover/ E
policy issued by the appellant-Insurance Company was in
currency. The incident was reported to the Insurance Company
but the claim was not settled on the ground that the Driver of the
offending vehicle did not have a valid and operating driving
license. The complainant took the stand that there was a renewal F
of the driving license which was valid and legal and, therefore,
the claim could not have been repudiated by the Insurance
Company. The State Commission rejected the plea,
categorically holding that there was no valid license issued by
the R.T.A, Hyderabad, as claimed by the Driver.                    G
      4. In appeal by the impugned order, a contrary view was
taken and it was held that it was accepted, as rightly noted by
the State Commission, that the licensing authority at Hyderabad
had not issued any license as claimed. Yet, in view of the fact
that there was a renewal at Tinsukhia, the claim could not have   H
    1183       SUPREME COURT REPORTS                   [2008] 1 S.C.R.


A   been refused by the insurance company. Reliance was placed
    on a decision of this Court in United India Insurance Co. Limited
    Vs. Lehru and Ors. (2003 (3) SCC 338) in support of the view.
       5. Learned counsel for the appellant-insurance company
  submitted that Lehru's case (supra) related to a third party claim
B and not an own damage claim.
        6. Learned counsel for the respondent, on the other hand,
  relied on a decision of this Court in Lal Chand Vs. Oriental
  Insurance Co. Ltd. (2006 (8) SCALE 531) to contend that the
C view taken by the National Commission was correct. Reliance
  has also been placed on a decision of this Court in National
  Insurance Co. Ltd. Vs. Swaran Singh & Ors. (2004 (3) SCC
  297).
        7. It is to be noted that Swaran Singh's case (supra) was
  rendered in the background of Section 149 of the Motor Vehicles
0
  Act, 1988 (in short the 'Act').
           8. This Court had occasion to deal with a similar issue in
    National Insurance Co. Ltd. Vs. Laxmi Narain Dhut (2007 (3)
    SCR 579). It was inter alia held as follows:
E          "8. Section 149 of the Act relates to duty of insurers to
           satis:Y judgments and awards against persons insured in
           respect of third party risks. The language of the provision
           is clear that it only relates to third party risk. The
           corresponding provision in the Old Act is Section 96.
F          Section 166 of the Act relates to application for
           compensation. The same corresponds to Section 110-A
           of the Old Act. Section 168 of the Act relates to award of
           the Claims Tribunal which corresponds to Section 110-B
           of the Old Act. Section 170 deals with impleadment of the
G          insurer in certain cases. Section 149 of the Act needs to
           be noted in full. The same reads as follows:
           "149. Duty of Insurers to satisfy judgments and awards
           against persons insured in respect of third party risks- (1)
           If, after a certificate of insurance has been issued under
H          sub-section (3) of Section 147, in favour of the person by
     ORIENTAL INSURANCE CO. LIMITED v. PRITHVI RAJ               1184
                     [PASAYAT, J.]

        whom a policy has been effected, judgment or award in            A
        respect of any such liability as is required to be covered
        by a policy under clause (b) of sub-section (1) of Section
        147 (being a liability covered by the terms of the policy) or
        under the provisions of Section 163-A) is obtained against
        any person insured by the policy then, notwithstanding           B
        that the insurer may be entitled to avoid or cancel or may
        have avoid or cancelled the policy, the insurer shall, subject
        to the provisions of this section, pay to the person entitled
        to the benefit of the decree any sum not exceeding the
        sum assured payable thereunder, as if were the judgment          c
        debtor, in respect of the liability, together with any amount
        payable in respect of costs and any sum payable in respect
        of interest on that sum by virtue of any enactment relating
        to interest on judgments. (2) No sum shall be payable by
        an insurer under sub-section (1) in respect of any judgment
                                                                         0
        or award unless, before the commencement of the
        proceedings in which the judgment or award is given the
        insurer had notice through the Court or, as the case may
        be, the Claims Tribunal of the bringing of the proceedings,
        or in respect of such judgment or award so long as
        execution is stayed thereon pending an appeal; and an            E
-·      insurer to whom notice of the bringing of any such
        proceedings is so given shall be entitled to be made a
        party thereto and to defend the action on any of the following
        grounds, namely:-
                                                                         F
        (a) that there has been a breach of a specified condition
        of the policy, being one of the following conditions, namely:-
        (i)   a condition excluding the use of the vehicle-
        (a) for hire or reward, where the vehicle is on the date of G
        the contract of insurance a vehicle not covered by a permit
        to ply for hire or reward, or
        (b) for organized racing and speed testing, or
        (c) for a purpose not allowed by the permit under which          H
    1185       SUPREME COURT REPORTS                     [2008] 1 S.C.R.


A          the vehicle is used, where the vehicle is a transport vehicle,
           or
                                                                             '
           (d) without side-car being attached where the vehicle is a
           motor cycle; or

B          (ii) a condition excluding driving by a named person or
           persons or by any person who is not duly licensed, or by
           any person who has been disqualified for holding or
           obtaining a driving licence during the period of dis-
           qualification; or
c          (iii) a condition excluding liability for injury caused or
           contributed to by conditions of war, civil war, riot or civil
           commotion; or (b) that the policy is void on the ground that
           it was obtained by the non-disclosure of a material fact or
           by a representation of fact which was false in some
D          material particular.
           (3) Where any such judgment as is referred to in sub-
           section (1) is obtained from a Court in a reciprocating
           country and in the case of a foreign judgment is, by virtue
           of the provisions of section 13 of the Code of Civil
E          Procedure, 1908 (5 of 1908) conclusive as to any matter
           adjudicated upon by it, the insurer (being an insurer
           registered under the Insurance Act, 1938 (4 of 1938) and
           whether or not he is registered under the corresponding
           law of the reciprocating country) shall be liable to the person
F          entitled to the benefit of the decree in the manner and to
           the extent specified in sub-section (1 ), as if the judgment
           were given by a Court in India:
           Provided that no sum shall be payable by the insurer in
           respect of any such judgment unless, before the
G
           commencement of the proceedings in which the judgment
           is given, the insurer had notice through the Court concerned
           of the bringing of the proceedings and the insurer to whom
           notice is so given is entitled under the corresponding law
           of the reciprocating country, to be made a party to the
H
 ;
 '
              ORIENTAL INSURANCE CO. LIMITED v. PRITHVI RAJ              1186
                              [PASAYAT, J.]
                 proceedings and to defend the action on grounds similar A
-I               to those specified in sub-section (2).
                 (4) Where a certificate of insurance has been issued under
                 sub-section (3) of section 147 to the person by whom a
                 policy has been effected, so much of the policy as purports
                 to restrict the insurance of the persons insured thereby by B
                 reference to any condition other than those in clause (b)
                 of sub-section (2) shall, as respects such liabilities as are
                 required to he covered by a policy under clause (b) of sub-
                 section (1) of section 147, be of no effect:
                                                                                 c
                 Provided that any sum paid by the insurer in or towards
-4
                 the discharge of any liability of any person which is covered
                 by the policy by virtue only of this sub-section shall be
                 recoverable by the insurer from that person.

         ,,      (5) If the amount which an insurer becomes liable under D
                 this section to pay in respect of a liability incurred by a
                 person insured by a policy exceeds the amount for which
                 the insurer would apart from the provisions of this section
                 be liable under the policy in respect of that liability, the
                 insurer shall he entitled to recover the excess from that E
                 person.
                 (6) In this section the expression "material fact" and
                 "material particular" means, respectively a fact or particular
                 of such a nature as to influence the judgment of a prudent
                 insurer in determining whether he will take the risk and, if F
                 so, at what premium and on what conditions, and the
                 expression "liability covered by the terms of the policy"
                 means a liability which is covered by the policy or which
                 would be so covered but for the fact that the insurer is
                 entitled to avoid or cancel or has avoided or cancelled the G
     '           policy.
                 (7) No insurer to whom the notice referred to in sub-section
                 (2) or sub-section (3) has been given shall be entitled to
                 avoid his liability to any person entitled to the benefit of
                                                                                 H
f
    1187        SUPREME COURT REPORTS                     [2008] 1 S.C.R.


A          any such judgment or award as is referred to in sub·s~ction
           (1) or in such judgment as is referred to in sub-section (3)
           otherwise than in the manner provided for in sub-section
           (2) or in the corresponding law of the reciprocating country,
           as the case may be.
B          Explanation: For the purposes of this section, "Claims
           Tribunal" means a Claims Tribunal constituted under
           Section 165 and "award" means an award made by that
           Tribunal under Section 168."

c            "9. In Swaran Singh's case (supra) on which learned
             counsel for the parties have placed reliance undisputedly
             related to a case under Section 149 of the Act. This Court
             elaborately dealt with the scope and ambit of Sections
             147 and 149 of the Act and after tracing the history of
             compulsory insurance and the rights of the third parties,
D
           · held that the concerned cases were mainly concerned
             with third party rights under the policy. It was held in that
             context that any condition in the policy whereby the right of
             the third party is taken away would be void, as noted in
             para 23 of the judgment.
E
            10 In paras 69 and 70 the principles were culled out in the
            following terms:
            'The Insurance Company is required to prove the breach
            of the condition of the contract of insurance by cogent
F           evidence. In the event the Insurance Company fails to prove
            that there has been breach of conditions of the policy on
            the part of the insured, the Insurance Company cannot be
            absolved of its liability. This Court did not lay down a degree
            of proof, but held that the parties alleging the breach must
G           be held to have succeeded in establishing the breach of
            the condition of the contract of insurance, on the part of
            the Insurance Company by discharging its burden of proof.
            The Tribunal, must arrive at a finding on the basis of the
            materials available on the recc1ds".
H
ORIENTAL INSURANCE CO. LIMITED v. PRITHVI RAJ               1188
                [PASAYAT, J.]

     11. In para 11 O also the summary of the findings were A
recorded which reads as follows:
    (i) Chapter XI of the Motor Vehicles Act, 1988 providing
    compulsory insurance of vehicles against third-party risks
    is a social welfare legislation to extend relief by
                                                               8
    compensation to victims of accidents caused by use of
    motor vehicles. The provisions of compulsory insurance
    coverage of all vehicles are with this paramount object
    and the provisions of the Act have to be so interpreted as
    to effectuate.the said object.
                                                                    c
     (ii) An insurer is entitled to raise a defence in a claim
   . petition filed under Section 163-A or Section 166 of the
     Motor Vehicles Act, 1988, inter alia, in terms of Section
     149(2)(a)(ii) of the said Act.
    (iii) The breach of policy condition e.g. disqualification of D
    the driver or invalid driving licence of the driver, as
    contained in sub-section (2)(a)(ii) of Section 149, has to
    be proved to have been committed by the insured for
    avoiding liability by the insurer. Mere absence, fake or
    invalid driving licence or disqualification of the driver for E
    driving at the relevant time, are not in themselves defences
    available to the insurer against either the insured or the
    third parties. To avoid its liability towards the insured, the
    insurer has to prove that the insured was guilty of
    negligence and failed to exercise reasonable care in the F
    matter offulfilling the condition of the policy regarding use
    of vehicles by a duly licensed driver or one who was not
    disqualified to drive at the relevant time.
    (iv) Insurance companies, however, with a view to avoid
    their liability must not only establish the available defence(s) G
    raised in the said proceedings but must also establish
    "breach" on the part of the owner of the vehicle; the burden
    of proof wherefore would be on them.
    (v) The court cannot lay down any criteria as to how the        H
    1189        SUPREME COURT REPORTS                     [2008] 1 S.C.R.


A          said burden would be discharged, inasmuch as the same
           would depend upon the facts and circumstances of each
           case.
            (vi) Even where the insurer is able to prove breach on the
            part of the insured concerning the policy condition
B           regarding holding of a valid licence by the driver or his
            qualification to drive during the relevant period, the insurer
            would not be allowed to avoid its liability towards the insured
            unless the said breach or breaches on the condition of
           .driving licence is/are so fundamental as are found to have
c           contributed to the cause of the accident. The Tribunals in
            interpreting the policy conditions would apply "the rule of
            main purpose" and the concept of "fundamental breach"
            to allow defences available to the insurer under Section
            149(2) of the Act.
D
           (vii) The question, as to whether the owner has taken
           reasonable care to find out as to whether the driving licence
           produced by the driver (a fake one or otherwise), does not
           fulfil the requirements of law or not will have to be
           determined in each case.
E
           (viii) If a vehicle at the time of accident was driven by a
           person having a learner's licence, the insurance companies
           would be liable to satisfy the decree.
           (ix) The Claims Tribunal constituted under Section 165
F          ;ead with Section 168 is empowered to adjudicate all
           claims in respect of the accidents involving death or of
           bodily injury or damage to property of third party arising in
           use of motor vehicle. The said power of the Tribunal is not
           restricted to decide the claims inter se between claimant
G          or claimants on one side and insured, insurer and driver
           on the other. In the course of adjudicating the claim for
           compensation and to decide the availability of defence or
           defences to the insurer, the Tribunal has necessarily the
           power and jurisdiction to decide disputes inter se between
H          the insurer and the insured.
ORIENTAL INSURANCE CO. LIMITED v. PRITHVI RAJ          1190
                [PASAYAT, J.]

   (x) The decision rendered on the claims and disputes A
   inter se between the insurer and insured in the course of
   adjudication of claim for compensation by the claimants
   and the award made thereon is enforceable and executable
   in the same manner as provided in Section 174 of the Act
   for enforcement and execution of the award in favour of B
   the claimants.
   (x) Where on adjudication of the claim under the Act the
   Tribunal arrives at a conclusion that the insurer has
   satisfactorily proved its defence in accordance with the
   provisions of Section 149(2) read with sub-section (7), as C
   interpreted by this Court above, the Tribunal can direct
   that the insurer is liable to be reimbursed by the insured
   for the compensation and other amounts which it has been
   compelled to pay to the third party under the award of the
   Tribunal. Such determination of claim by the Tribunal will D
   be enforceable and the money found due to the insurer
   from the insured will be recoverable on a certificate issued
   by the Tribunal to the Collector in the same manner under
   Section 174 of the Act as arrears of land revenue. The
   certificate will be issued for the recovery as arrears of E
   land revenue only if, as required by sub-section (3) of
   Section 168 of the Act the insured fails to deposit the
   amount awarded in favour of the insurer within thirty days
   from the date of announcement of the award by the Tribunal.
   (xi) The provisions contained in sub-section (4) with the F
   proviso thereunder and sub-section (5) which are intended
   to cover specified contingencies mentioned therein to
   enable the insurer to recover the amount paid under the
   contract of insurance on behalf of the insured can be taken
   recourse to by the Tribunal and be extended to claims and G
   defences of the insurer againstthe insured by relegating
   them to the remedy before regular court in cases where
   on given facts and circumstances adjudication of their
   claims inter se might delay the adjudication of the claims
   of the victims".                                            H
    1191       SUPREME COURT REPORTS                      [2008] 1 S.C.R.


A          12. At this juncture, it would be necessary to test the logic      r
           behind Section 149 of the Act. The conditions under the
           said provision relate only to third party risks and claims.
           17. Section 149 is part of Chapter XI which is titled
           "Insurance of Motor Vehicles against Third Parties". A
B          significant factor which needs to be noticed is that there
           is no contractual relation between the insurance company
           and the third party. The liabilities and the obligations
           relatable to third parties are created only by fiction of
           Sections 147 and 149 of the Act.
c
           18. It is also to be noted that the terms of the policy have
           to be construed as it is and there is no scope for adding
           or subtracting something. However liberally the policy may
           be construed, such liberalism cannot be extended to permit
           substitution of words which are not intended. (See United
D
           India Insurance Co. Ltd. V Harchand Rai Chandan Lal
           (2004 (8) SCC 644 and Polyrriat India (P) Ltd. V. National
           Insurance Company Ltd. and Ors. (2005 (9) SCC 174).
           19. The primary stand of the insurance company is that
E          the person driving the vehicle did not have a valid driving
           license. In Swaran Singh's case (supra) the following
           situations were noted:
                 (i) the driver had a license but it was fake;

F                (ii) the driver had no license at all;
                 (iii) the driver originally had a valid license but it had
                 expired as on the date of the accident and had not
                 been renewed;

G                (iv) the license was for a class of vehicles other than
                 that which was the insured vehicle;
                 (v) the license was a learner's license.
                 Category (i) may cover two types of situations. First,
                 the license itself was fake and the second is where
H
     ORIENTAL INSURANCE CO. LIMITED v. PRITHVI RAJ              1192
                     [PASAYAT, J.]

             originally that license is fake but there has been a A
             renewal subsequently in accordance with law.
        20. Chapter II contains Sections 3, 4 and 5 of the Act
        relating to licensing of drivers driving the motor vehicles.
        24. In the background of the statutory provisions, one thing    8
        is crystal clear i.e. the statute is beneficial one qua the

~'
        third party. But that benefit cannot be extended to the owner
        of the offending vehicle. The logic of fake license has to
        be considered differently in respect of third party and in
        respect of own damage claims.                                   c
        25. It would be appropriate to take note of what was stated
        in Complete Insulations (P) Ltd. v. New India Assurance
        Co. Ltd. (1996 (1) SCC 221). In paras 9 and 10 it was
        observed as follows:
                                                                     D
             "9. Section 157 appears in Chapter XI entitled
             "Insurance of Motor vehicles against Third Party
             Risks" and comprises Sections 145 to 164. Section
             145 defines certain expressions used in the various
             provisions of that Chapter. The expression
             "Certificate of Insurance" means a certificate issued
                                                                     E
             by the authorised insurer under Section 147(3).
             "Policy of Insurance" includes a certificate of
             insurance. Section 146(1) posits that "no person shall
             use except as a passenger, or cause or allow any
             other person to use, a motor vehicle in a public place, F
             unless there is in force in relation to the use of the
             vehicle by that person or that other person, as the
             case may be, a policy of insurance complying with
             the requirements of this chapter". Of course this
             provision does not apply to vehicles owned by the G
             Central or State Government and used for
             Government purposes not connected with any
             commercial enterprise. This provision corresponds
             to Section 94 of the old Act. Section 147 provides
             that the policy of insurance to be issued by the H
    1193   SUPREME COURT REPORTS                     [2008] 1 S.C.R.


A          authorized insurer must insure the specified person
           or classes of persons against any liability incurred in
           respect of death of or bodily injury to any person or
           damage to any property of a third party as well as
           against the death of or bodily injury caused to any
B          passenger of a public service vehicle caused by or
           arising out of the use of the vehicle in a public place.
           This provision is akin to Section 95 of the old Act. It
           will be seen that the liability extends to damage to
           any property of a third party and not damage to the
c          property of the owner of the vehicle, i.e., the insured.
           Sub-section (2) stipulates the extent of liability and in
           the case of property of a third party the limit of liability
           is Rupees six thousand only. The proviso to that sub-
           section continues the liability fixed under the policy
           for four months or till the date of its actual expiry,
D
           whichever is earlier, Sub-section (3) next provides
           that the policy of insurance shall be of no effect unless
           and until the insurer has issued a certificate of
           insurance in the prescribed form. The next important
           provision which we may notice is Section 156 which
E          sets out the effect of the certificate of insurance. It
           says that when the insurer issues the certificate of
           insurance, then even if the policy of insurance has
           not as yet been issued the insurer shall, as between
           himself and any other person except the insured be
F          deemed to have issued to the insured a policy of
           insurance conforming in all respects with the
           description and particulars stated in the certificate.
            It is obvious on a plain reading of this provision that
           the legislature was anxious to protect third-party
G          interest. Then comes Section 157 which we extracted
           earlier. This provision lays down that when the owner
           vehicle in relation whereto a certificate of insurance
            is issued transfers to another person the ownership
            of the motor vehicle, the certificate of insurance
H          together with the policy described therein shall be
J
             ORIENTAL INSURANCE CO. LIMITED v. PRITHVI RAJ              1194
                             [PASAYAT, J.)

                     deemed to have been transferred in favour of the A
         ~
                     new owner of the vehicle with effect from the date of
                     transfer. Sub-section (2) requires the transferee to
                     apply within fourteen days from the date of transfer
                     to the insurer for making necessary changes in the
                     certificate of insurance and the policy described B
                     therein in his favour. These are the relevant provisions
                     of Chapter XI which have a bearing on the question
                     of insurer's liability in the present case.
                     10. There can be no doubt that the said chapter
                     provides for compulsory insurance of vehicles to cover      c
                     third-party risks. Se.ction 146 forbids the use of a
                     vehicle in a public place unless there is in force in
                     relation to the use of that vehicle a policy of insurance
                     complying with the requirements of that chapter. Any
                     breach of this provision may attract penal action. In       D
                     the case of property, the coverage extends to property
                     of a third party i.e. a person other than the insured.
                     This is clear from Section 147(1)(b)(i) which clearly
                     refers to "damage to any property of a third party"
                     and not damage to the property of the 'insured'             E
                     himself. And the limit of liability fixed for damage to
                     property of a third party is Rupees six thousand only
                     as pointed out earlier. That is why even the Claims
                     Tribunal constituted under Section 165 is invested
                     with jurisdiction to adjudicate upon claims for             F
                     compensation in respect of accidents involving death
                     of or bodily injury to persons arising out of the use of
t
                     motor vehicles, or damage to any property of a third
I                    party so arising, or both. Here also it is restricted to
I                    damage to third-party property and not the property
                     of the insured."
                                                                                 G
l   ..
                26. The restrictions relating to appeal in terms of Section
                173 (2) does not apply to own damage cases.
                38. The inevitable conclusion therefore is that the decision
                                                                                 H
    ' 1195       SUPREME COURT REPORTS                     (2008) 1 S.C.R.


A            in Swaran Singh's case (supra) has no application to own
             damage cases. The effect of fake license has to be
             considered in the light of what has been stated by this
             Court in New India Assurance Co., Shimla v. Kamla and                 ....'
             Ors. (2001 (4) SCC 342). Once the license is a fake one               I


B            the renewal cannot take away the effect of fake license. It
             was observed in Kamla's case (supra) as follows:




c
                  "12. As a point of law we have no manner of doubt
                  that 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. Section
                                                                               -
                                                                               '



                  15 of the Act only empowers any Licensing Authority
                  to "renew a driving licence issued under the
                  provisions of this Act with effect from the date of its
                  expiry". No Licensing Authority has the power to renew
D                 a fake licence and, therefore, a renewal if at all made
                  cannot transform a fake licence as genuine. Any
                  counterfeit document showing that it contains a
                  purported order of a statutory authority would ever
                  remain counterfeit albeit the fact that other persons
E                 including some statutory authorities would have acted
                  on the document unwittingly on the assumption that
                  it is genuine".
             39. As noted above, the conceptual difference between
             third party right and own damage cases has to be kept in
F            view. Initially, the burden is on the insurer to prove that the
             license was a fake one. Once it is established the natural
             consequences have to flow."
             9. The above aspects were highlighted recently in Laxmi
     Narain Dhut case (supra).
G
        10. In the instant case, the State Commission has
  categorically found that the evidence on record clearly
  established that the licensing authority had not issued any
  license, as was claimed by the Driver and the respondent. The
H evidence of Shri A.V.V. Rajan, Junior Assistant of the Office of
 ORIENTAL INSURANCE CO. LIMITED v. PRITHVI RAJ            1196
                 [PASAYAT, J.]

the Jt. Commissioner & Secretary, RTA, Hyderabad who A
·produced the official records clearly established that no driving
license was issued to Shri Ravinder Kumar or Ravinder Singh
in order to enable and legally permit him to drive a motor vehicle.
There was no cross examination of the said witness. The ·
National Commission also found that there was no defect in the B
finding recorded by the State Commission in this regard.
       11. It appears that pursuant to the orders dated 14.07.2005
passed by this Court, the entire amount awarded was deposited
in this Court. Since, we have held that the appellant-Insurance
Company has no liability, the amount deposited be returned to C
the appellant-Insurance Company with accrued interest, if any.
       12. The appeal is allowed. No costs.
R.P.                                          Appeal .allowed.
                                                                 D