terms and conditions of policy and the policy is at Exh. 52. He
has given evidence that as crime was registered for offence
punishable under section 66 (1) r/w. 192 of the Act and as no
permit was there for carrying passengers, there is breach of
terms and conditions of policy. He did not give evidence that the
tempo driver was not holding valid and effective driving licence.
The cross examination of this witness shows that he has no
personal knowledge regarding the accident and Insurance
Company had not made any attempt to collect material by
appointing Investigator. He has deposed that as per the police
papers, marriage party ( o&gkM ) was travelling in tempo.
11) From the pleadings, it can be said that the first
defence about driving licence was that the driver was not
holding licence to drive heavy goods vehicle and vehicle
involved was heavy goods vehicle. The judgment delivered by
the Tribunal shows that before Tribunal, no argument was
advanced for Insurance Company on the point of absence of
such driving licence of tempo driver. It is already mentioned that
the officer of the Insurance Company also did not give evidence
of such breach. Police papers show that no crime was registered
against tempo driver for driving the vehicle without licence.
Copy of the chargesheet is not filed and it can be said that police
FA No. 14/13 & Anr.
did not file chargesheet for such offence against the respondent
No. 1, driver.
12) Copy of driving licence of respondent No. 1 - Vijay
Kharat is on the record at Exh. 36. This document shows that the
driving licence for LMV (Light Motor Vehicle) N.Tr. (non transport)
was obtained on 20.7.2005 and this licence was valid till
14.7.2022. At the cost of repetition, it needs to be mentioned
that accident took place on 20.5.2006. Copy of registration
particulars of offending vehicle, the tempo bearing No. MH-17/C-
5437 is on the record and it shows that vehicle was registered as
LCV/Van, Light carriage vehicle. The vehicle was Tata 608
vehicle, having unladen weight of 3100 k.g. and laden weight
which was allowed was 6000 k.g. A copy of insurance cover note
at Exh. 37 shows that vehicle was insured as goods truck of
6000 K.G. In view of the definition of LMV, the offending vehicle
was LMV though it was registered as transport vehicle.
13) In the latest case reported as (2015) 2 SCC 186
[Kulwant Singh Vs. Oriental Insurance Co. Ltd.], the Apex
Court has laid down that the licence in respect of LMV includes
both transport and non transport vehicles. The learned counsel
for Insurance Company submitted that this point is referred to
FA No. 14/13 & Anr.
larger bench by Apex Court in Civil Appeal No. 5826/2011 by
order dated 11.2.2016 [Mukund Vs. Oriental Insurance
Co. Ltd.). It appears that bench of two Judges of Hon'ble Apex
Court has requested the Hon'ble Chief Justice to refer this point
to larger bench. In this case, the case of Kulwant Sing cited
supra is considered and a different view expressed by another
bench of similar strength in the case reported as (2013) 7 SCC
62 [S. Iyyapan Vs. United India Insurance Company
Limited and Another] is considered. This Court holds that in
view of the latest decision of the Apex Court given in Kulwant
Singh cited supra, in the present case also, it needs to be held
that the driver, respondent No. 1 was holding licence and on this
point, no breach is proved by the Insurance Company.
14) The second defence is in respect of breach of permit
which is covered by section 66 (1) of the Act. When the court
considers such defence it is expected to consider the facts of the
case in hand. The case in which the victim was 'third party'
needs to be dealt with from different angle and different
approach is required to be taken in the case, than the case in
which defence is of such breach and the victim was present on
the offending vehicle, he was not third party. It is true that when
the claim is made by a person victim who was on offending
FA No. 14/13 & Anr.
vehicle and he wants to get compensation from Insurance
Company also, the initial burden is on him to show that he was
authorised to board the vehicle and travel in the vehicle. He can
show that he was either the owner of goods which he was
carrying in the vehicle or he was employee of the owner and he
was covered under the contract of insurance between the owner
and the Insurance Company. When there is statutory liability in
respect of the victim, when victim was driver and he was on
driver's seat for the owner, there is statutory liability to cover
such risk in view of the provision of section 147 of the Act. There
is similar statutory liability in respect of the owner of goods
under section 147 of the Act, but there is no statutory liability in
respect of gratuitous passengers. The case becomes different for
many reasons when the claimant is third party. The third party is
statutorily covered by policy in view of provision of section 147
of the Act. When the victim himself was cause of the breach of
the permit or breach of terms and conditions of policy the things
are different in view of the right of Insurance Company.
15) Copy of Insurance policy is produced at Exh. 52 and
it shows that the offending vehicle was insured as goods
carrying commercial vehicle and following kinds of premiums
were paid.
FA No. 14/13 & Anr.
(A) - Minimum premium - Rs. 100.00
(B) - (a) T.P. BASIC - Rs. 3,280.00
(b) compulsory PA to Owner cum Driver - Rs. 100 (liability
limited to Rs. two lakh)
(c) W.C. to employees 7 in number - Rs. 175.00
16) Copy of Insurance policy discussed above shows that
the risk in respect of employees of the owner, though under
Workmen's Compensation Act, was covered. It is already
observed that the risk in respect of owners of goods is required
to be statutorily covered u/s. 147 of the Act.
17) The police papers show that the crime was
registered u/s. 66 (1) r/w. 192 of the Act. But only due to the
registration of a crime for such offence, inference can not be
drawn that fair paid passengers were really being carried in the
vehicle at the relevant time and there was breach of provisions
of section 66 (1) of the Act. It is already observed that the
witness of Insurance Company has no personal knowledge. No
witness like any person, who was allegedly travelling in the
vehicle, is examined by the Insurance Company to prove such
breach. Many times, such transport vehicle is taken on hire basis
for carrying marriage articles and some persons travel with the
FA No. 14/13 & Anr.
marriage articles as owners of goods. Some times the owner of
vehicle engages labour for loading and unloading goods in the
vehicle. In view of such possibility it was necessary for Insurance
Company to examine witness having personal knowledge
regarding the capacity in which some persons were travelling in
the vehicle at the relevant time. There is no such evidence and
so, it is not possible to hold that there has been breach of terms
and conditions of permit and in turn of policy.
18) In the case like present one, the defence of the
breach of permit needs to be looked from one more angle as the
victim is 'third party'. The vehicle was permitted to be used as
goods carriage and there was no prevention against the owner
to take the vehicle on the road. The accident took place due to
rash and negligent driving of the tempo driver and not due to
the circumstance that there were probably few persons on the
tempo. It cannot be said in such a case that the persons who
were present in the vehicle were cause of the accident.
19) On the aforesaid point, the learned counsel for owner
placed reliance on the case reported as AIR 2014 SC 2187
[Fahim ahmad and Ors. Vs. Oriental insurance Company
Ltd. & Ors.]. The facts of the reported case show that tractor
FA No. 14/13 & Anr.
was insured for agricultural purpose. At the relevant time, a
trolley was attached with the tractor and in the trolley, there was
sand which was allegedly being taken for irrigation purpose. The
tractor gave dash and death of third party took place. The Apex
Court held that in such a case, it cannot be presumed that there
was breach of conditions of policy. The Apex Court held that the
tractor fitted with trailer may or may not answer the definition of
'goods carriage' as contemplated in section 2 (14) of the Act. By
making such observations, the Apex court allowed the appeal
filed by the owner and the Apex Court held that the Insurance
Company was bound to indemnify the owner. It was held that the
Insurance Company had not proved that there was the breach of
terms and conditions of policy.
20) The learned counsel for owner placed reliance on the
decision of the First Appeal No. 105/2000 [New India
Assurance Co. Ltd. Vs. Smt. Asha Ghatvisave and Ors.]
decided by this Court on 8.2.2016. In this appeal, this Court has
held in similar circumstances that the so called breach of
carrying passengers in goods carriage cannot be treated as
fundamental breach to exonerate the Insurance Company from
liability to indemnify the owner. The learned counsel for owner
placed reliance on another case reported as 2013 (6) Mh.L.J.
FA No. 14/13 & Anr.
890 [National Insurance Co. Ltd. Vs. Seema] decided by
this Court. But the facts of this reported case were totally
different. Some observations are made by this Court that for
giving exoneration, the Insurance Company needs to prove that
the so called breach caused the accident.
21) The Insurance Company placed reliance on many
cases. In the case reported as (2009) 8 Supreme Court Cases
785 [National Insurance Company Limited Vs.
Parvathneni and Anr.], the circumstance like absence of
coverage of risk to the victim in policy is considered and in that
case, the power of the Court to give direction to Insurance
Company to pay compensation is discussed. There cannot be
dispute that when there is no coverage in respect of particular
risk, there is no question of fastening liability on the Insurance
Company and so, the Courts are not expected to give direction
to Insurance Company to pay the compensation and then allow
it to recover it from the owner. In the case reported as 2004 AIR
SCW 663 [National Insurance Co. Ltd. Vs. Swarn Singh
and Ors.] decided by three Hon'ble Judges, the Apex Court has
made one proposition regarding the breach of penal provision of
the Act vis-a-vis, the provisions which are made for the benefit of
'third party' under the Act. The Apex Court has laid down that
FA No. 14/13 & Anr.
the provision made for benefit of third party need to be
interpreted differently. There cannot be dispute over this
proposition. The liability of Insurance Company in respect of
third party risk is discussed by the Apex Court and the Apex
Court has laid down that when breach of conditions of policy is
proved, the Insurance Company can be asked to satisfy the
award first in view of the provision of section 149 (4) and (5) of
the Act. The breach in that matter was in respect of licence. In
the case reported as 2004 ACJ 428 [National Insurance Co.
Ltd. Vs. Baljit Kaur and ors.], the Apex Court has given
meaning of the term 'any person' used in section 147 of the Act.
There is no dispute over this proposition but that point is not
involved in the present matter. In the case reported as 2008 ACJ
2654 [Ram Babu Tiwari Vs. United India Insurance Co.
Ltd. and Ors.] decided by two Hon'ble Judges of the Apex
Court, view was taken that the owner cannot ask the Insurance
Company to indemnify him when the breach of terms and
conditions with regard to licence is proved. There cannot be
dispute over the proposition made in this case also. The Court is
expected to consider the right of third party and when the owner
comes, such order cannot be made when there is breach of
terms of conditions of policy. In the case reported as 2008 (1)
Mh.L.J. 73 BOMBAY HIGH COURT [United India Insurance
FA No. 14/13 & Anr.
Co. Ltd. Vs. Anubai Gopichand Thakare and Ors.], the point
involved was totally different. This Court (the other Hon'ble
Judge) has discussed the power of Apex Court given under
Article 142 of Constitution of India. This Court has observed that
when such power is used in a particular case, the decision of
that case cannot be used as precedent by High Court. On this
point, there is one case decided by other Hon'ble Single Judge of
this Court viz. (Nagpur Bench) reported as 2009 (Supp.)
Bom. C.R. 949 [New India Assurance Company Limited Vs.
Yuvraj Shalikram Rewde & Ors.]. Different view is expressed
by the learned Single Judge and it is laid down that the law laid
down by the Apex Court needs to be followed as binding
precedent, unless it is made clear by the Apex Court that the
decision will not be followed as precedent. In the case reported
as 2009 (1) Mh.L.J. 898 [Traders Pvt. Ltd., Ahmedabad
and Anr. Vs. Sunanda wd/o Krishna Machivale and Ors.]
decided by the Division Bench of this Court, the facts were
totally different.
22) In view of the discussion already made, this Court
holds that the Insurance Company has failed to prove that there
was breach of terms and conditions of policy both as regards
permit and licence. The Tribunal has committed error in
FA No. 14/13 & Anr.
exonerating the Insurance Company, though it is asked to pay
the compensation first and then recover it from the owner. Such
decision cannot sustain in law. In the result, following order is
made.
25) First Appeal No. 14/2013 of Insurance Company
stands dismissed. First Appeal No. 502/2014 filed by owner is
allowed. The judgment and award of the Tribunal, exonerating
the Insurance Company is hereby set aside. The compensation
awarded in favour of the claimants is to be paid jointly and
severally by the owner and Insurance Company and the order
made that Insurance Company is allowed to recover the
compensation amount from the owner is hereby set aside. Award
is to be prepared accordingly. Amount, if any, deposited by the
Insurance Company is to be disbursed as per the award of the
Tribunal.
[ T.V. NALAWADE, J. ]
ssc/
