Madras High Court: No Need to Summon RTO When Owner Withholds Licence Details — Major Relief to Insurers

 Madras High Court: No Need to Summon RTO When Owner Withholds Licence Details — Major Relief to Insurers

In a landmark ruling offering significant relief to insurance companies, the Madras High Court has held that insurers are not required to summon or examine the Regional Transport Officer (RTO) when a vehicle owner fails to disclose the driving‑licence details, even after receiving notice. The Court ruled that once the insurer issues notice seeking licence particulars and receives no reply, this silence is enough to draw an adverse inference against the owner that the driver had no valid licence.

The Bench observed that insurers cannot be forced into proving an “impossible negative,” such as establishing that the driver had no licence anywhere in the country when not even basic details are provided. The Court reasoned that calling the RTO in such circumstances is a futile exercise, as any RTan simply state that the licence might exist outside their jurisdiction.

The judgment further clarifies that the Motor Vehicles Inspector’s finding that no licence was produced, coupled with the insurer’s notice to the owner, is sufficient to discharge the insurer’s burden. When the owner withholds information exclusively within their knowledge, adverse inference must follow, and insurers cannot be compelled to undertake unnecessary and meaningless RTO examinations.

Additionally, the Court confirmed that after paying compensation, the insurer is entitled to recover the amount directly from the owner without filing a separate suit, with the recovery treated as though an award had been passed in the insurer’s favour.