Declining Claim due to fake driving licences, owner unknown

There is general principle that ignorance of law is not an excuse.

Hence, claim will not be payable.In all such cases owner may take refuge under this pretext.

Insurance policy is a contract and its terms and conditions are binding. The obligation on the owner is that the vehicle shall be driven by licensed driver. To comply with policy condition is responsibility of the owner. Unless policy provides for such fraudulent circumstances, the insurer is not bound by the same. If terms and conditions are violated the insurer is not under obligation to pay. In your case the said defence is available to the insurer.

From the query it is not clear.  If a third party is involved the claim will have to be paid by Insurance Company and can claim such amount from the owner of vehicle.  However, if the owner acted with all reasonable care and exercised due diligence while appointing the driver  that he has proper licence.  The famous case is Swaran sing's case where Apex court held that Insurer canot avoid liability to third parties.  Basic requirement is there is should valid subsisting policy between underwriter and the owner of vehicle.

Thier is no third party damage in this case. However Owner took due care by seeing the license and he has no idea that license is fake. It looks original and I am sure even police will issue challan against the license. Their is no way for owner to check the legality of the license as their is nothing available on-line.

Under this circumstances, even none of has any way to know that our license is valid. What actions owner should take to say that he has taken enough care that driver has driving license except by seeing it. Thanks

You can approach a consumer court for redressal of your grievance.  In all fairness you should get relief.

What is legal stand....

Owner must verify the driving license of the driver through Licensing authority before recruiting him. I am sure even this job can not be left on driver to get this validation done... because this validation itself could be fake because stamp has no meaning in such circumstances. I am thinking what is the message to all citizen as no one is creating awareness about it.

Or for the owner, verifyuing the license is enough. Their is a need to differentialte the commercial operation and private operation.

Thanks for all, who responded to this query. Trying to find a meesageon this legal issue so that we should take care before handing over the vehicle to any one.

There are various judgements delivered by High Courts.... Some say that the insurance company should pay and recover, some say insurance is not liable and owner is liable etc etc.. So far there is no clear cut picture on the issue.. Even the Supreme in its last judgement on this issue has said that this is a complex matter and the same needs to be reviewed, discussed and analysed with a larger bench... To some extent, it has opined that, insurance company cannot be saddled with the third party liability.. In toto, the issue is still under cover and nothing crystal clear has come out, as yet.. Till then, this kind of confusion will prevail.. Let us wait and hope for the best. I am of the opinion that under no circumstances poor and aggreived third party should be affected.. The victims have not violated any policy norms nor are they to be punished for somenone else's fault....