High Court reaffirms that insurers must plead and prove the insured’s awareness of licence invalidity before alleging breach—binding on all subordinate courts
Summary
| Category | Data |
|---|---|
| Case Name | CMPMO/1/2021 of RELIANCE GENERAL INSURANCE COMPANY LIMITED Vs KAMLA DEVI AND OTHERS |
| CNR | HPHC010435422020 |
| Decision Date | 01-09-2025 |
| Disposal Nature | Dismissed |
| Judgment Author | Justice Bipin Chander Negi |
| Court | High Court of Himachal Pradesh |
| Bench | Single Judge (Justice Bipin Chander Negi) |
| Precedent Value | Binding on subordinate courts of Himachal Pradesh |
| Overrules / Affirms | Affirms the trial court order |
| Type of Law | Insurance Law |
| Questions of Law | Whether an insurer can allege fundamental breach of policy due to use of a fake/invalid driving licence without pleading and proving the owner’s knowledge of its invalidity. |
| Ratio Decidendi |
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| Judgments Relied Upon | United India Insurance Co. Ltd. v. Seema Devi, 2005 LawSuit (HP) 38 = 2006 (108) FLR 467 = 2006 ACJ 1357 = 2005 (2) Shim LC 442 (HP) |
| Logic / Jurisprudence / Authorities Relied Upon by Ct |
|
| Facts as Summarised by the Court |
|
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts of Himachal Pradesh |
| Persuasive For | Other High Courts |
| Follows | United India Insurance Co. Ltd. v. Seema Devi (2005 LawSuit (HP) 38 etc.) |
What’s New / What Lawyers Should Note
- Confirms that alleging a fundamental breach due to an invalid driving licence requires pleading and proving the owner’s awareness of its invalidity.
- Clarifies that vehicle owners need only verify the presence of a driving licence, not its authenticity with the Licensing Authority.
- Emphasizes strict adherence to pleadings: insurers cannot rely on evidence beyond what they have expressly pleaded.
Summary of Legal Reasoning
- Distinguished who can commit a breach: only parties to an insurance contract, not third parties (the driver).
- Held that an owner’s duty is limited to checking for a licence’s existence; authenticity checks are not required.
- Established that a fundamental breach based on a fake or invalid licence demands a specific plea and proof that the owner knew of the licence’s invalidity.
- Relied on United India Insurance Co. v. Seema Devi to reinforce the insurer’s burden of pleading.
- Concluded that, in absence of such pleadings, the trial court rightly dismissed the application to examine the Licensing Clerk.
Arguments by the Parties
Petitioner (Insurance Company):
- Sought permission to examine the Licensing Clerk via interrogatories to prove respondent’s driving licence was fake.
- Contended driver held no valid licence, constituting a fundamental breach and exonerating insurer’s liability.
Respondents (Vehicle Owner and Dependents):
- Argued owner had no duty to verify authenticity beyond observing a licence document.
- Pointed out insurer did not plead that owner knew of invalidity; thus no breach.
- Relied on United India Insurance Co. v. Seema Devi to support dismissal.
Factual Background
- Reliance General Insurance challenged an order refusing interrogatories to examine a Licensing Authority clerk.
- The insurer sought to show the driver’s licence placed on record was fake, alleging a policy breach.
- The driver had died in the accident and allegedly never held a valid licence.
- Trial court dismissed the application, relying on United India Insurance Co. Ltd. v. Seema Devi.
- High Court dismissed the petition, affirming that no fundamental breach could be alleged without requisite pleadings.
Statutory Analysis
- The petition under Section 22 of the Employees’ Compensation Act was defended by raising a policy‐breach objection.
- Court noted that defences to compensation claims based on insurance policy breaches must follow contractual pleading norms.
Alert Indicators
- ✔ Precedent Followed
Citations
- United India Insurance Co. Ltd. v. Seema Devi, 2005 LawSuit (HP) 38 = 2006 (108) FLR 467 = 2006 ACJ 1357 = 2005 (2) Shim LC 442 (HP)