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TMI Blog2018 (5) TMI 2189X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 66. The said situations cannot be equated with absence of licence or a fake licence or a licence for different kind of vehicle, or, for that matter, violation of a condition of carrying more number of passengers.
Nothing has been brought on record by the insured to prove that he had a permit of the vehicle. In such a situation, the onus cannot be cast on the insurer. Therefore, the tribunal as well as the High Court had directed the insurer was required to pay the compensation amount to the claimants with interest with the stipulation that the insurer shall be entitled to recover the same from the owner and the driver. The said directions are in consonance with the principles stated in Swaran Singh (supra) and Ors. cases pertaining to pay and recover principle.
Conclusion - i) The insurer was not liable to indemnify the insured due to the absence of a valid permit. ii) The insurer is directed to pay the compensation amount to the claimants and subsequently recover it from the owner and driver.
There are no merit in the appeal - appeal dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... of the vehicle. A further direction was given for attachment of the truck in question till the award was satisfied. 4. The award dated 20.11.2014 passed by the tribunal was challenged in FAO No. 1702 of 2016 before the High Court of Punjab and Haryana at Chandigarh. It was contended in appeal that the Appellant No. 2, the owner of the offending vehicle, had deposited the necessary fees along with application on 19.02.2013 for issue of route permit and the same was issued on 27.02.2013. It was further urged that when the owner of the vehicle had already submitted the documents in the transport office for grant of permit along with the requisite fees, the tribunal was in error in holding that the vehicle was being plied without a valid permit. In support of the submissions, reliance was placed upon Ashok Kumar Khemaka v. Oriental Insurance Co. Ltd. and Ors. 2014 (3) RCR (Civil) 1018, National Insurance Company Limited v. Kamlesh Kaur and Ors. 2006 (3) RCR (Civil) 634 and Moti Ram v. ICICI Lombard and Ors. 2015 ACJ 1793. 5. The High Court scrutinized Annexure A-1 which was filed to justify the stand that the application for issue of the route permit was made to the competent authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r vehicle shall use or permit the use of the vehicle as a transport vehicle in any public place, whether or not such vehicle is actually carrying any passengers or goods save in accordance with the conditions of a permit granted or countersigned by a Regional or State Transport Authority or any prescribed authority. Various provisos have been appended to the main provision stipulating conditions for use of the vehicle and purpose of carriage of goods vehicle. Sub-section (2) states that the holder of a goods carriage permit may use the vehicle for the drawing of any trailer or semi-trailer not owned by him, subject to such conditions as may be prescribed. It is necessary to mention here that a proviso has been added by Act 54 of 1994 with effect from 14.11.1994 allowing the holder of a permit of any articulated vehicle to use the prime-mover of that articulated vehicle for any other semi-trailer. Section 2(2) defines "articulated vehicle" to mean a motor vehicle to which a semi-trailer is attached. 9. It is apt to note here that Sub-section (3) of Section 66 carves out certain exceptions to Sub-section (1). The relevant part of Sub-section (3) is extracted below: (3) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able such motor vehicle to reach its destination; or (p) to any transport vehicle while proceeding empty to any place for purpose of repair. 10. In the case at hand, the findings would show that the Appellant No. 2 did not have a permit for the vehicle. There is no dispute that the vehicle initially had a temporary registration and eventually the permanent registration. It is the stand of the Appellants that the tribunal and the High Court did not appreciate that the chasis of the vehicle was sent to the body where the body of the truck was fabricated and when the vehicle was driven out of the work shop at which point of time it met with an accident. A contention has been made that the insurance policy was in force at the relevant time and, hence, the insurer is legally obliged to indemnify the insured. A distinction has to be made between "route permit" and "permit" in the context of Section 149 of the Act. Section 149(2) provides the grounds that can be taken as defence by the insurer. It enables the insurer to defend on the ground that there has been breach of a specific condition of the policy, namely, (i) a condition that excludes the use of the vehicle, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue centrally pertained to the necessity of having a driving licence. After adverting to various provisions, the Court also delved into the fundamental concept of third party right. Regard being had to the nature of the beneficial legislation, the Court observed: 39. The question as to whether an insurer can avoid its liability in the event it raises a defence as envisaged in Sub-section (2) of Section 149 of the Act corresponding to Sub-section (2) of Section 96 of the Motor Vehicles Act, 1939 had been the subject-matter of decisions in a large number of cases. 13. The Court posed the question as to whether an insurer can avoid its liability in the event it raised the defence as envisaged in Sub-section (2) of Section 149 of the Act corresponding to Sub-section (2) of Section 96 of the Motor Vehicles Act, 1939. The Court analysed the language employed in Sub-section (2) of Section 149, specifically Clause (a), and, after scrutinizing the same and referring to various authorities, opined: 69. The proposition of law is no longer res integra that the person who alleges breach must prove the same. The insurance company is, thus, required to establish the said breach by cogent evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 149 of the Act, to which pointed attention of the Court has been drawn by the learned Counsel for the Petitioner, which is in negative language may now be noticed. The said provision must be read with Sub-section (1) thereof. The right to avoid liability in terms of Sub-section (2) of Section 149 is restricted as has been discussed hereinbefore. It is one thing to say that the insurance companies are entitled to raise a defence but it is another thing to say that despite the fact that its defence has been accepted having regard to the facts and circumstances of the case, the Tribunal has power to direct them to satisfy the decree at the first instance and then direct recovery of the same from the owner. These two matters stand apart and require contextual reading. 14. We may fruitfully note that the three-Judge Bench adverted to situations where the driver does not have a licence and the same has been allowed to be driven by the owner of the vehicle by such person, the insurer would be entitled to succeed in defence and avoid liability, but the position would be different where the disputed question of fact arises as to whether the driver had a valid licence and where the owner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duly licensed driver or one who was not disqualified to drive at the relevant time. xxxx (vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards the insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply "the Rule of main purpose" and the concept of "fundamental breach" to allow defences available to the insurer Under Section 149(2) of the Act. (vii) The question, as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case. 17. Learned Counsel for the Appellants would submit that there has been no fundamental breach of the policy conditions. In this context, we may profitably refer to the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner' a person in possession of a vehicle either under an agreement of lease or agreement of hypothecation or under a hire-purchase agreement to the effect that a person in control and possession of the vehicle should be construed as the 'owner' and not alone the registered owner. The High Court further failed to appreciate the legislative intention that the registered owner of the vehicle should not be held liable if the vehicle was not in his possession and control. The High Court also failed to appreciate that Section 146 of the 1988 Act requires that no person shall use or cause or allow any other person to use a motor vehicle in a public place without an insurance policy meeting the requirements of Chapter XI of the 1988 Act and the State Government has violated the statutory provisions of the 1988 Act. 20. Be it noted, in the said case, the liability was fixed on the State keeping in view the legislative intention behind Section 146 of the Act, no person shall use or cause or allow any other person to use a motor vehicle in a public place without an insurance policy as that is the mandatory statutory requirement under the Act. Emphasis was laid on possession and c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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