The Supreme Court of India, in a significant ruling on motor accident claims, has set aside a High Court order that allowed an insurance company to recover compensation from a vehicle owner after the driver’s license was found to be fake. The division bench of Justice K. Vinod Chandran and Justice N. V. Anjaria held that the insurer failed to prove a willful breach of policy conditions by the insured owner, Hind Samachar Ltd., at the time the vehicle was entrusted to the driver.

The Court overturned the “pay and recovery” direction, reinforcing the principle that an insurer must establish the owner’s lack of due diligence to avoid liability.

Background of the Case

The appeals arose from a motor accident that occurred on January 26, 1993, involving a truck owned by Hind Samachar Ltd. a

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