Delhi High Court: In an appeal arising from a dispute concerning repudiation of an insurance claim on the alleged ground of breach of policy conditions, i.e., insured vehicle’s driver was holding driving the licence in a booklet form, which was deemed “fake”, and was not converted into a smart card in terms of a subsequent notification, the Single Judge Bench of Neena Bansal Krishna*, J., affirmed the District Court’s decree granting recovery of ₹13,77,500 along with interest, holding that driving licence cannot be deemed fake and insurance claim cannot be repudiated merely because driving licence was in booklet form prior to smart card conversion deadline.
In the instant matter, the plaintiff-respondent was engaged in the transport business and owned a Tata LPT truck which was duly insured with the defendant-appellant for the period 16 September 2013 to 15 September 2014. During the subsistence of the policy, the vehicle met with an accident on 11 July 2014, resulting in total damage to the truck and the death of its driver. An FIR was registered in Karnataka, and the appellant-insurer was duly intimated.
The plaintiff complied with all formalities and submitted the requisite documents. However, the appellant company repudiated the claim on the ground that the driver was holding a fake driving licence, allegedly in violation of policy conditions.
The plaintiff contended that the driving licence had been verified from the competent authority and was valid on the date of the accident. It was asserted that the repudiation was arbitrary and contrary to the terms of the policy, especially when the premium had been accepted. Consequently, a suit for recovery of the insured amount was instituted.
The District Court by judgment and decree dated 2 July 2022 decreed the suit for recovery of ₹13,77,500 along with interest at 12 per cent per annum in favour of the respondent. Aggrieved, the appellant company preferred an appeal under Section 96, Civil Procedure Code, 1908 (CPC) challenging the District Court’s order.
At the outset, the Court noted that the factum of insurance, accident, and total loss was undisputed. Therefore, the only ground for repudiation was the alleged invalidity of the driving licence.
The Court examined the notification dated 1 August 2014 and observed that it did not render booklet licences immediately invalid but provided a time window until 1 December 2014 for their conversion into smart cards. Since the accident occurred on 11 July 2014, the licence could not be termed invalid merely because it was in booklet form.
Importantly, the Court emphasised that the licence had been verified by the competent authority and found to be genuine and the appellant company failed to produce any witness from the transport authority to establish that the licence was fake. Mere reliance on internal investigation reports was insufficient to discharge the burden of proof.
Further, on the issue of age, the Court found that the driver was above 20 years at the time of the accident based on the date of birth recorded in the licence. Similarly, the allegation regarding non-residency in Nagaland was unsupported by evidence.
The Court concurred with the District Court that no breach of policy conditions had been proved. It was held that the repudiation of the insurance claim was unjustified and that the appellant company had failed to prove that the driving licence was fake or invalid.
Accordingly, the Court dismissed the appeal and upheld the decree passed by the District Court for ₹13,77,500 along with interest at 12 per cent per annum.
[New India Assurance Co. Ltd. v. Kapoor Diesels Garage (P) Ltd., 2026 SCC OnLine Del 1380, decided on 30-3-2026]
*Judgment by Justice Neena Bansal Krishna
Advocates who appeared in this case:
Mr. J.P.N. Shahi and Mr. Divyanshu Kumar, Counsel for the Appellant
Mr. Daljeet Singh, Counsel for the Respondent
