The Gauhati High Court, in United India Insurance Company Limited v. Smt. Damyanti Lahkar and Anr, observed and reiterated that the mere possession of the fake license by the driver at the time of the accident does not absolve the insurance company of its liability for paying compensation to the third party. , , The bench led by Justice Arun Dev Choudhury, in the cases Ram Chandra, Singh v. Rajaram and Ors., and Shamanna v. The Oregon Insurance Company, Limited and Ords, held that the mere fact that a driving license is fake, per se, would not absolve the insurer and that, in that case, the principle of “pay and recover” would apply. , , In the present case, the judgment has been challenged by the insurance company, and the award has been granted by the Motor Accident Claims Tribunal on the ground that the award ought to have been made payable by the owner or driver of the vehicle as it was established that the driver was in possession of a fake driving license. The case being that on April 12, 2011, when she was walking by the side of the road, she was also knocked down by the offending vehicle, which was coming in a rash and negligent manner from her back side, causing her grievous harm. The court also relied on the case court’s report in PEPSU Road Transport Corporation v. National Insurance Company, wherein the Apex Court stated that it is open to the insurer, under Section 149 (2) (a) (ii), to take a defense that the driver of the vehicle was involved in the accident and was not duly licensed. If such a defense is being taken, the onus is upon the insurer to prove the same. However, when the owner of a vehicle hires a driver, the owner has to check the validity of the driving license and satisfy himself as to the competence of the driver. Therefore, the said owner cannot be expected to go beyond that to the extent of verifying the genuineness of the driving license with the licensing authority before hiring the driver’s services. In the event that, despite having information about a fake license, the owner does not take appropriate action to verify the matter, the insured is not at fault, and the insurance company is not liable for compensation in certain circumstances. Furthermore, the court cited National Insurance Co. Ltd v. Swaran Singh, and Ors, in which the court held that mere absence, a fake or invalid driving license, or disqualification of the driver for driving at the relevant time are not in themselves, and where the insurer’s defenses are against either the insured or third parties. As a result, the court determined that this is an appropriate case to determine whether the principle of pay and order can be rescinded while upholding the tribunal’s impugned judgment.