Oriental Insurance Co. Ltd. vs Jamana & Ors.

The instant appeal has been filed by the appellant/Insurance Company, who was respondent No. 1 before the learned Motor Accidents Claims Tribunal-II, Chamba Division Chamba, H.P. (hereinafter referred to as “the learned Tribunal”) under Section 173 of the Motor Vehicles Act, 1988 (for short “the Act’) against impugned award, dated 21.10.2016, passed by the learned Tribunal, whereby Claim Petition No. 57/2013, filed by the petitioners, under Section 166 of the Act, was allowed with costs and they were held entitled for compensation in the sum of Rs. 8,08,200/- alongwith interest at the rate of 7.5% per annum from the date of filing of the petition till its realization and respondent No. 1, being insurer, was directed to indemnify the award.

The brief facts of the case are that on 11.11.2013, Bhupinder (since deceased) was travelling in vehicle bearing registration No. HP-01K-0404 (Tata Sumo), being driven by deceased Raj Kumar. When the aforesaid vehicle reached at place Kowaji Mor near Shour, its driver could not keep control over the same and it went off the road and rolled down into a gorge, as a result of which, Bhupinder died on the spot. According to the petitioners, the accident had taken place due to the rash and negligent driving of the driver of the vehicle. It has been further averred that at the time of accident, the deceased was 24 years old and used to work as agriculturist and labourer and was earning Rs. 12,000/- per month. Hence, they filed the claim petition under Section 166 of MV Act seeking compensation to the tune of Rs. 15,00,000/-.

Respondent No. 1/Insurance Company in its reply took preliminary objections qua maintainability, non-joinder of necessary parties, the driver of the offending vehicle was not holding a valid driving licence, offending vehicle was not being driven in accordance with the terms and conditions of the Insurance Policy, the vehicle was being plied without valid registration and fitness certificate and also without any valid route permit. On merits, averments made in the claim petition have been denied and it has been stated that the amount claimed is excessive and without any basis.

Respondent No. 2 contested the claim petition by filing reply and took preliminary objection qua maintainability. On merits, though he admitted the ownership of vehicle No. HP-01K-0404, however he denied that the vehicle ever met with any accident. It has been stated that as per FIR and police investigation, it was vehicle No. HP-01C-0404, which met with an accident. He also denied that the deceased was travelling in the vehicle at the relevant time. It has further been stated that vehicle No. HP-01K-0404 was duly insured with respondent No. 1 at the time of accident and in case the petitioners are held entitled to any compensation, respondent No. 1/Insurance Company would be liable to pay the same.

On 28.12.2013, the learned Tribunal below had framed the following issues for consideration and adjudication:

After the parties led evidence and after hearing the learned counsel for the parties, the petition was allowed with costs and the petitioners were held entitled for compensation in the sum of Rs. 8,08,200/- alongwith interest at the rate of 7.5% per annum from the date of filing of the petition till its realization and respondent No. 1, being insurer, was directed to indemnify the award.

Feeling aggrieved and dissatisfied, the appellant/Insurance Company preferred the instant appeal against the impugned award dated 21.10.2016.

I have heard the learned Senior counsel for the appellant, learned counsel for the respondents and carefully examined the entire record.

The learned Senior Counsel appearing on behalf of the appellant contended that the offending vehicle was being plied in violation of the terms and conditions of Insurance Policy, inasmuch as at the time of accident, the offending vehicle was not having a valid fitness certificate and route permit, therefore the learned Tribunal below has erroneously fastened the liability on the appellant/Insurance company.

Conversely, the learned counsel for the respondents supported the impugned award and prayed for dismissal of the instant appeal.

Admittedly, the vehicle in question was a transport vehicle. Therefore, the first question which arises for consideration before this Court is as to whether the owner could have plied the vehicle in question, which was registered as a transport vehicle in a public place without permit.

Any motor vehicle, as defined under Section 2(28) of the Act, requires to be registered in terms of Section 39 for putting the same on road, subject to the riders mentioned therein and the exception carved out in the proviso in the case of a dealer. If such vehicle is to be used as a 'transport vehicle' as defined under Section 2 (47) , it is mandatory that it should have a valid 'Permit' as defined under Section 2 (31) of the Act, in view of the mandate under Section 66 (stipulating the necessity for permit), subject to the exception under sub section 3.

Necessity to have a 'Permit' for plying the vehicle as a 'transport vehicle' is stipulated under Section 66 of the Act, which mentions in unequivocal terms, that no owner of a motor vehicle shall use or permit the use of the vehicle as a transport vehicle in any public place, whether or not such vehicle actually carries any passengers or goods, save in accordance with the conditions of Permit granted or countersigned by a Regional or State Transport Authority or any such other authority authorising the use of vehicle in that place in the manner in which the vehicle is being used, subject to exemption carved out under sub-section (3) of Section 66 of the Act.

The issue as to the absence of a valid Permit to a transport vehicle was the subject matter of consideration before the Apex Court in National Insurance Company Ltd. Vs. Challa Bharathamma & Ors., (2004) 8 SCC 517, held that plying of a vehicle without a permit is an infraction. The relevant portion of the judgement is reproduced as under:

The question whether absence of valid Permit to a transport vehicle at the time of accident is a 'fundamental breach' or a 'technical breach' had come up for consideration again before the Apex Court in Amrit Paul Singh and Another Vs. TATA AIG General Insurance Company Limited and Others, (2018) 7 SCC 558 wherein it has been held that use of such vehicle in a public place without a permit is a fundamental statutory infraction. Relevant portion of Amrit Paul Singh’s case (supra) reads as under:-

In the instant case, in support of this plea, the respondent/Insurance Company has examined Ashok Kumar, Data Operator from the Office of RTO Kullu, as RW-1, who deposed that vehicle No. HP-01K-0404 has been registered as commercial maxi cab, the fitness whereof was valid till 06.07.2005 and its contract carriage permit was valid w.e.f. 08.08.2003 to 07.08.2008. Admittedly the date of accident was 11.11.2013. Since the vehicle in question was a transport vehicle and was being plied without permit at the time of the accident and the owner had neither pleaded nor proved the exceptions as have been carved out under Section 66 of the Act, it can safely be held that on the date of accident, the vehicle in question was being plied in violation of the terms and conditions of the Insurance Policy, as plying of a transport vehicle in a public place without permit is fundamental statutory infraction.

Now the next question which arises for consideration before this Court is as to whether the vehicle in question, which admittedly was a transport vehicle, could have been plied without a valid fitness certificate. Learned counsel for the insurance company submitted that non-availability of the fitness certificate is like non-registration of the vehicle, which disentitles the owner to permit the use of any such vehicle. As discussed above, RW-1 has deposed that the fitness certificate of the offending vehicle was valid till 06.07.2005. The date of accident was 11.11.2013, meaning thereby that the offending vehicle was being plied without fitness certificate.

At this stage, it would be relevant to reproduce Sections 39 & 56 of the Motor Vehicles Act, 1988 and the same are reproduced hereunder, for ready reference:-

Thus a conjoint reading of the aforesaid provisions as contained in the Motor Vehicles Act, 1988 makes it amply clear that in case of a transport vehicle, unless it carries a valid certificate of fitness in accordance with law, no person is entitled to drive a transport vehicle and the owner of the transport vehicle is not entitled to cause or permit the vehicle to be driven in any public place or any other place. Therefore, a transport vehicle which is registered under Section 39 can be driven or plied on road only if it possesses a valid fitness certificate; if it is not having a valid fitness certificate, it shall be deemed to be an unregistered motor vehicle. Thus, a transport vehicle which is duly registered under Section 39 of the Act is of no use, unless it carries a certificate of fitness, and as provided in sub-section (1) of Section 56, it becomes an unregistered motor vehicle.

In a judgment rendered by the full Bench of Kerala High Court in Pareed Pillai Vs. Oriental Insurance Co. Ltd., AIR 2019 Kerala 9, it has been held that when a transport vehicle is not having Permit or Fitness Certificate, nobody can drive such vehicle and no owner can permit the use of any such vehicle compromising with the lives, limbs and properties of the passengers. Relevant portion of this judgement reads as under:-

Fitness of the vehicle to be plied on the road as a 'transport vehicle' is very important, especially in relation to the lives and limbs of the persons travelling in the vehicle, the pedestrians, other vehicles and properties of persons who are also using the road. It is with this intent, that a specificprovision has been incorporated under the Statute as Section 84, prescribing the general conditions attached to all permits. Clause (a) of Section 84 reads as follows :

General conditions attaching to all permits-

The following shall be conditions of every permit-

that the vehicle to which the permit relates carries valid certificate of fitness issued under Section 56 and is at all times so maintained as to comply with the requirements of this Act and the rules made thereunder;

xxx xxx xxx

Importance of the fitness/road worthiness of a vehicle, right from the time of registration of the vehicle, is further discernible from Rule 47 of the Central Motor Vehicles Rules 1989 [referred to as Central Rules]. The said Rule deals with application for registration of motor vehicles, which, among other things, stipulates that it shall be accompanied by various documents. Under sub-rule (1) (g), it is mandatory to produce road worthiness certificate in Form 22 from the manufacturers [Form 22A from the body builders]. On completing the formalities/procedures, 'Certificate of Registration' is to be issued in terms of Rule 48 of the Central Rules in Form 23/23A, as the case may be. The said Rule contains a proviso, insisting that, when Certificate of Registration pertains to a transport vehicle, it shall be handed over to the registered owner only after recording the Certificate of Fitness in Form 38. Validity of the Certificate of Fitness is only to the extent as envisaged under Rule 62 of the Central Rules, which mandates, as per the proviso, that the renewal of a Fitness Certificate shall be made only after the Inspecting Officer or MACA No. 2030 of 2015 and connected cases authorised Testing Station as referred to in sub Section 1 of Section 56 of the Act has carried out the test specified in the table given therein.

The stipulations under the above provisions clearly substantiate the importance and necessity to have a valid Fitness Certificate to the transport vehicle at all times. The above prescription converges on the point that Certificate of Registration, existence of valid Permit and availability of Fitness Certificate, all throughout, are closely interlinked in the case of a transport vehicle and one requirement cannot be segregated from the other. The transport vehicle should be completely fit and road worthy, to be plied on the road, which otherwise may cause threat to the lives and limbs of passengers and the general public, apart from damage to property. Only if the transport vehicle is having valid Fitness Certificate, would the necessary Permit be issued in terms of Section 66 of the Act and by virtue of the mandate under Section 56 of the Act, no transport vehicle without Fitness Certificate will be deemed as a validly registered vehicle for the purpose of Section 39 of the Act, which stipulates that nobody shall drive or cause the motor vehicle to be driven without valid registration in public place or such other place, as the case may be. These requirements are quite 'fundamental' in MACA No. 2030 of 2015 and connected cases nature; unlike a case where a transport vehicle carrying more passengers than the permitted capacity or a goods carriage carrying excess quantity of goods than the permitted extent or a case where a transport vehicle was plying through a deviated route than the one shown in the route permit which instances could rather (15 of 16) be branded as 'technical violations'. In other words, when a transport vehicle is not having a Fitness Certificate, it will be deemed as having no Certificate of Registration and when such vehicle is not having Permit or Fitness Certificate, nobody can drive such vehicle and no owner can permit the use of any such vehicle compromising with the lives, limbs, properties of the passengers/general public. Obviously, since the safety of passengers and general public was of serious concern and consideration for the law makers, appropriate and adequate measures were taken by incorporating relevant provisions in the Statute, also pointing out the circumstances which would constitute offence; providing adequate penalty. This being the position, such lapse, if any, can only be regarded as a fundamental breach and not a technical breach and any interpretation to the contrary, will only negate the intention of the law makers."

In the instant case also the offending vehicle was being plied without permit as well as fitness certificate. Accordingly, it is held that since the offending vehicle was not having permit and fitness certificate on the date of the accident, therefore, the terms and conditions of the insurance policy were violated. Therefore, the tribunal below has erroneously fastened the liability on the appellant/Insurance Company, whereas the owner of the offending vehicle should have been made liable to make the payment of compensation. However, in the light of the judgments passed by the Supreme Court in the cases of Amrit Paul Singh Vs. TATA AIG General Insurance Co. Ltd., reported in (2018) 7 SCC 558 and Shamanna and another Vs. Divisional Manager, the Oriental Insurance Co. Ltd. and others, reported in (2018) 9 SCC 650, it is held that the Insurance Company shall pay the compensation amount to the petitioners with liberty to recover the same from the owner.

Consequently, in view of detailed discussion made here-in-above and the law laid down by the Hon'ble Apex Court, the present appeal is partly allowed and the impugned award dated 21.10.2016, passed by the learned Tribunal below, is modified to the extent that the owner shall be liable to make payment of compensation to the petitioners. However, the amount of compensation shall be first paid to the petitioners by the appellant/Insurance Company, who shall be entitled to recover the same from respondent No. 2/owner of the offending vehicle bearing registration No. HP-01K-0404, in accordance with law. The remaining part and terms of the impugned award, including the interest component, shall remain the same.

The appeal stands disposed of in the above terms, so also the pending application(s), if any.