The National Insurance Co. Ltd., vs Yeleti Dharmaraju 4 Others
2022 Latest Caselaw 9638 AP

                 HON'BLE SRI JUSTICE T MALLIKARJUNA RAO

                             MACMA.No.900 OF 2012
JUDGMENT :

1. Aggrieved by the order dated 12.06.2009 in MVOP No.732 of 2006

passed by the Chairman, Motor Accidents Claims Tribunal-cum -

II Additional District Judge, West Godavari District, Eluru (for

short 'the Tribunal'), the 3rd respondent has preferred this appeal

questioning the order passed by the Tribunal in fastening the

liability on the insurance company to pay the awarded

compensation amount as the lorry did not possess and valid

permit to put the vehicle in a roadworthy condition.

2. For the sake of convenience, the parties will be referred to as arrayed in

the MVOP.

3. The claimants filed a petition under section 166 of the Motor Vehicles

Act for compensation of Rs.4,00,000/- for the death of Yeliti. Veerraju.

(hereinafter referred to as deceased), who died in a motor vehicle

accident. The claimant's case is on 20.12.2015, at 5.30 p.m., after

loading sugarcane pieces into a lorry bearing No--AP 11 v 1899, the

lorry's wheels dug into the pit. At that time, the driver of the lorry was

driving his lorry at high speed in a rash and negligent manner, without

following traffic rules, blowing the horn and also giving precautionary

signals dashed against the deceased who was carrying waste sugarcane

to place the same underneath the wheels of a lorry. As a result of

which, he died on the spot.

4. The 1st respondent remained exparte. The 2nd respondent filed a

counter stating that the lorry was insured with the 2 nd respondent, and

he is not liable to pay the compensation amount.

5. The 3rd respondent filed a counter submitting that the 1 st respondent

drove the lorry without having a valid driving license. In the additional

written statement, the 3rd respondent contended that per the Motor

Vehicles Inspector's report dated 24-11-2005, the permit issued in

respect of lorry No. AP 11 V 1899 expired on 8-11-2005, i.e., much

before the alleged accident date; the owner made no renewal, and the

lorry did not possess a valid permit or fitness certificate at the time of

the accident. As per the policy's terms and conditions, the insured

vehicle should be kept in road-worthy condition by obtaining a valid

fitness certificate in respect of the vehicle. Likewise, the use of the

vehicle should be under a valid permit within the meaning of the Motor

Vehicles Act.

6. Based on the pleadings, the Tribunal formulated the necessary issues

for consideration.

7. Before the Tribunal, on behalf of petitioners, 1 to 2 got examined and

marked Exs.A1 to A5. On behalf of the 3rd respondents, RW.1 got

examined and marked Ex.B1 and B2.

8. On appreciation of evidence on record, the Tribunal finds that the

accident occurred only due to rash and negligent driving of the

offending vehicle's driver, and the deceased died due to grievous

injuries sustained in the accident. The Tribunal has granted a

compensation amount of Rs.3,69,500/- with interest against

respondents 1 to 3.

9. Learned counsel for appellants vehemently contends that the Tribunal

erred in fastening the liability in the appellant insurance company to

pay the compensation amount on as much as the offending lorry did

not possess a valid permit and fitness certificate.

10. Learned counsel for the respondent supported the observations and

findings of the learned Tribunal.

11. Now point for consideration is whether the Tribunal erred in fastening

the liability on the insurance company to pay the compensation

amount and whether pay and recovery can be ordered in the facts of

the case.

POINT :

12. After reading material on record and submissions made on behalf of

both sides and perusal of the order passed by the Tribunal, this Court

views that there is no dispute that the deceased died due to sustaining

injuries in the accident. The Tribunal's finding that the accident

occurred due to the rash and negligent offending vehicle's driver is not

disputed. The respondent/insurance company has not questioned the

said finding of the Tribunal in this appeal. The learned counsel for both

parties addressed arguments only in respect of the Tribunal's finding

regarding the fastening of liability on 3rd respondent. Either party does

not question the quantum of compensation awarded by the Tribunal.

13. The respondent insurance company relied on Ex.B2 MVI report to show

that the vehicle's permit expired on 06-09-2005. It can be seen from the

record that Ex B 1 insurance policy was issued on 29.09.2005. Thus,

as the policy was issued, the vehicle's permit expired. This Court views

that the insurance company, having not taken any objection to issue an

insurance policy without noticing the vehicle's permit was expired, is

not open to the insurance company to raise such an objection. It is not

the stand of the insurance company that it need not verify whether to

permit the vehicle to be in force at the time of the insurance policy. The

other contention raised is that the fitness certificate also expired on 08-

11-2005. The accident in question occurred on 20-12-2005. as such, it

is clear that the vehicles insured have not obtained a fitness certificate

subsequent to the Ex B1 policy. The Tribunal observed that, as per the

MVI report, the vehicle was in fit condition at the time of the accident.

Thus, it is established that lack of fitness is not the reason for the

accident.

14. Learned counsel for the insurance company argued that there had no

fitness certificate. No defences shall be allowed for the exclusion of total

liability under the terms of Section 149 of the Motor Vehicles Act. When

the insurer can prove a breach of policy, but the breach is not a

fundamental breach, or the breach did not contribute to the cause of

the accident, what could be termed an innocent breach? In such an

event, the insurer can only mitigate its liability, and the insured would

be liable to satisfy the Judgment vis-à-vis the insurer who would have

satisfied the claim of the third party in the first instance. Therefore, the

insurer cannot defeat a third-party claim by an exclusion in the policy

regarding the four corners of Section 149 (2)(a) of the MV Act. This

Court views that where the insured vehicle did not possess a fitness

certificate as of the date of the accident that the policy was in force, and

the insurance company cannot disown its liability.

15. The issue of whether the insurance company can be made liable to

indemnify the award amount and recover it subsequently has already

been considered in the case of National Insurance Co., Ltd., v. Challa

Bharathamma1 wherein it has been held:

A person without a permit to ply a vehicle cannot be placed on a better pedestal vis-à-vis one who has a permit but has violated any condition thereof. Plying on a vehicle without a permit is an infraction.

16. In the light of the judgments passed by the Supreme Court in the cases

of Amrit Paul Singh v. Tata AIG General Ins. Co. Ltd., 2 and

Shamanna v. Divisional Manager, Oriental Insurance Co, Ltd.,3and

In Rani v. National Insurance Co. Ltd.,4the Supreme Court has partly

allowed the appeal filed by the claimants, keeping in mind the

exposition in Singh Ram v. Nirmala, 5 and Pappu v. Vinod Kumar

Lamba6, and directed the respondent No.1/insurance company first to

pay the compensation amount to the respective claimants as

determined by the High Court and the Tribunal, as the case may be,

with liberty to recover the same from the owner of the offending

vehicle/respondent No.2.

2004 ACJ 2094 (SC)

2018 ACJ 1768 (SC)

2018 ACJ 2163 (SC)

2018 ACJ 2430 (SC),

2018 ACJ 1264 (SC)

2018 ACJ 690 (SC)

17. In view of the above-settled law, this Court views that the Tribunal

should have directed the insurance company first to pay the

compensation amount to the respective claimants and permit the

insurance company and recover the same from the owner of the

offending vehicle.

18. As a result, the appeal is partly allowed without costs by modifying the

award passed by the Tribunal and directing the insurance company

first to pay the compensation amount to the claimants as apportioned

by the Tribunal by depositing the same before the Tribunal, if it already

has not been deposited and permitted to recover the same from the

owner of the offending vehicle by filing execution petition.

19. Miscellaneous Petitions, if any, pending in these appeals shall stand

closed.

__________________________________ JUSTICE T MALLIKARJUNA RAO Date : 15.12.2022.

BV/KGM HON'BLE SRI JUSTICE T MALLIKARJUNA RAO

MACMA.No.900 OF 2012

BV/KGM