National Insurance Company Ltd vs Smt. Anjali Sahu
2025 Latest Caselaw 174 Chatt

Chattisgarh High Court

National Insurance Company Ltd vs Smt. Anjali Sahu on 8 May, 2025

                                   1

                     Digitally signed
                     by BHOLA
                     NATH KHATAI
                     Date:
                     2025.05.12
                     17:42:28 +0530




                                          2025:CGHC:21286


                                                           NAFR

    HIGH COURT OF CHHATTISGARH AT BILASPUR

                 MAC No. 2244 of 2019

  National Insurance Company Ltd. Branch Office, Branch
  Manager Kamthi Line District Rajnandgaon Through Its T.
  P. Hub Incharge, Office- Vyapar Vihar Road, Above Canara
  Bank, Bilaspur 495001
                                                --- Appellant
                             versus

1. Hemdas Sahu S/o Late Lekharam Sahu, Aged About 45
  Years R/o Village Kesal, Police Station Gainda-Tola, Tahsil
  Chhuriya, District Rajnandgaon Chhattisgarh ... Claimant

2. Smt. Daya Bai Sahu W/o Hemdas Sahu, Aged About 43
  Years R/o Village Kesal, Police Station Gaindatola, Tahsil
  Chhuriya, District Rajnandgaon Chhattisgarh .... Claimant

3. Amjad Ali S/o Aamir Ali, Aged About 40 Years Occupation
  Driver, R/o Village Chhuriya, Police Station- Chhuriya,
  District Rajnandgaon, Chhattisgarh .............. Driver

4. Smt. Shweta Yadav C/o- Sukriti Yadav, Occupation-
  Vehicle Owner, Through Naresh Yadav, Ashirwad Travels,
  Chhuriya, District Rajnandgaon, Chhattisgarh ..... Owner
                                           --- Respondent(s)

National Insurance Company Ltd. Branch Office, Branch Manager Kamthi Line District Rajnandgaon Through Its T. P. Hub Incharge Office- Vyapar Vihar Road, Above Canara Bank, Bilaspur 495001

---Appellant Versus

1. Smt. Anjali Sahu Wd/o Late Narottam Sahu, Aged About 20 Years R/o Village Kesal, Police Station Gaindatola Tahsil Chhuriya, District Rajnandgaon, Chhattisgarh

2. Leela Das Sahu S/o Tilak Sahu, Aged About 19 Years R/o Village Kesal, Police Station Gaindatola, Tahsil Chhuriya, District Rajnandgaon, Chhattisgarh ............... Claimant

3. Amjad Ali S/o Aamir Ali, Aged About 40 Years Occupation Driver, R/o Village Chhuriya, Police Station Chhuriya, District Rajnandgaon Chhattisgarh ................ Driver

4. Smt. Shweta Yadav C/o Sukriti Yadav, Occupation Vehicle Owner, Through Naresh Yadav, Ashirwad Travels, Chhuriya, District Rajnandgaon Chhattisgarh ...... Owner

--- Respondent(s)

For Appellants : Mr. Akash Shrivastava, Advocate, on behalf of Mr. R. N. Pusty, Advocate For Respondents 1 & 2 : None For Respondents 3 & 4 : Mr. Samir Singh, Advocate

Hon'ble Shri Justice Sanjay Kumar Jaiswal Order on Board

08.05.2025

1. Since both the appeals have preferred by the Insurance

Company under Section 173 of the Motor Vehicles Act, 1988, challenging the the award dated 20.08.2019 passed by the Additional Motor Accident Claims Tribunal, Rajnandgaon, Chhattisgarh in Claim Case No.27/2018 & 35/2018, they are being disposed of by this common order.

2. The facts, necessary for disposal of the appeals, in brief, are that on the date of accident i.e. 02.11.2017, Rupesh Kumar was coming from village Tipangarh to his home in village Kesal on a motorcycle with his friend Narottam Sahu. When they reached near the field of Kumar Sai on Fafamar - Metepar road, respondent No.3 Amjad Ali driving the offending bus bearing registration No. CG 08 M 9990 rashly and negligently, hit their motorcycle, as a result of which Rupesh Kumar and Narottam Sahu suffered grievous injuries and died during treatment in the hospital. The legal representatives of both the deceased preferred two separate applications claiming compensation under various heads.

3. In Claim Case No.27/2018 preferred by the parents of deceased Rupesh Kumar Sahu, the Tribunal has awarded a total compensation of Rs.9,85,000 and in Claim Case No. 35/2018 preferred by the legal representatives i.e. wife and younger brother of deceased Narottam Sahu, the Tribunal has awarded compensation of Rs.8,86,000. While passing the impugned awards, the Tribunal has saddled the liability of payment of compensation upon the Insurance Company against which both the appeals have been filed by the Insurance Company.

4. Learned counsel for the appellant/insurance company argues that the vehicle in question was a passenger carrying commercial vehicle which required fitness certificate to

operate but it did not have fitness certificate at the time of accident. This fact is also proved from the statements of the driver Amjad Ali, owner Shweta Yadav and Insurance Company witness C. Toppo. Since there has been a breach of policy condition on the ground of not having fitness certificate, the insurance company cannot be held liable for payment of compensation. Hence, prayed for allowing the appeals by exonerating the insurance company from its liability.

5. None appeared on behalf of Respondents 1 & 2/claimants.

6. Learned counsel for the respondents 3 & 4 i.e. vehicle driver & owner argues that the insurance company cannot escape its liability even in the absence of fitness certificate. Lack of fitness certificate is not a fundamental breech but merely a technical breach and the insurance company cannot be relieved of its liability on the basis of the said breach.

7. Heard learned counsel for the parties and perused the record.

8. It is an undisputed fact that the vehicle in question was a passenger bus which was being driven by respondent No.3 Amjad Ali at the time of accident. The registered owner of the said bus was respondent No.4 Shweta Yadav and it was insured by the appellant-insurance company.

9. Assistant Manager, C. Toppo has been examined on behalf of Insurance Company, who has stated that on the date of incident, the vehicle in question was being plied without a valid fitness certificate. This fact has also been admitted by the driver of the offending vehicle, Amjad Ali. The owner Shweta Yadav herself has admitted the fact before the JMFC

that at the time of accident, the bus did not have a valid and effective fitness certificate. As such, the statements of the driver and the owner clearly establish that on the date of accident, the vehicle in question did not have a valid and effective fitness certificate.

10. So far as the vehicle in question was not having any valid fitness certificate on the date of accident is concerned, this issue also stands settled by the Division Bench of this Court as well as by Kerala High Court in Pareed Pillai Vs. Oriental Insurance Company Ltd., AIR 2019 Kerala 6.

11. The fitness of a vehicle, which is a transport vehicle, is having great importance. Section 56 of the MV Act provides that a transport vehicle {subject to the provisions of Section 59 (power to fix the age limit of motor vehicle) and Section 60 (registration of vehicle belonging to the Central Government)} shall not be deemed to be validly registered for the purpose of Section 39, unless it carries a certificate of fitness as prescribed. For the purposes of valid permit of a transport vehicle, as provided under Section 34 of the MV Act, a certificate of fitness is required necessarily and in absence of the same, the situation automatically lead to the stage that a vehicle did not have valid permit. Using a vehicle without any fitness certificate would be violation of policy condition.

12. Requirement of certificate of fitness is envisaged under Section 56 of the MV Act. Section 56(1) is reproduced below for ready reference.

"Subject to the provisions of sections 59 and 60, a transport vehicle shall not be deemed to be validly registered for the purposes of section 39, unless it carries a

certificate of fitness in such form containing such particulars and information as may be prescribed by the Central Government, issued by the prescribed authority, or by an authorised testing station mentioned in sub-section (2), to the effect that the vehicle complies for the time being with all the requirements of this Act and the rules made thereunder:

Provided that where the prescribed authority or the authorised testing station refuses is issue such certificate, it shall supply the owner of the vehicle with its reasons in writing for such refusal."

13. Perusal of above provision would show that unless and until there is valid certificate of fitness, transport vehicle shall not be deemed to be validly registered. Requirement of certificate of fitness is mandatory and fundamental for its registration. Section 39 of the MV Act envisages for registration of vehicle, which reads as under:

"39. No person shall drive any motor vehicle and no owner of a motor vehicle shall cause or permit the vehicle to be driven in any public place or in any other place unless the vehicle is registered in accordance with this Chapter and the certificate of registration of the vehicle has not been suspended or cancelled and the vehicle carries a registration mark displayed in the prescribed manner:

Provided that nothing in this section shall apply to a motor vehicle in possession of a dealer subject to such conditions as may be prescribed by the Central Government."

14. It prescribes that no person shall drive any motor vehicle in public or other places unless the vehicle is registered. Conjoint reading of provisions of Section 39 and 56 of the MV Act makes it clear that if the transport vehicle is plied

on public road or any place without certificate of fitness will be in breach of policy condition and such breach will be a fundamental breach.

15. This issue has been considered by the five judges Bench of Kerala High Court (five Judges Bench) in case of Pareed Pillai Vs. Oriental Insurance Company Ltd., AIR 2019 Kerala 6 and held as under:

"17. 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 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."

16. Division Bench of this High Court also has applied the same analogy in case of Adesh Kumar & Another Vs. Smt. Satarupa Bai Yadav & Others (MAC No.1289 of 2014 and other connected matters, decided on 19.11.2020) and held that absence of fitness certificate of the offending vehicle is a fundamental breach of policy condition. It is not a technical breach.

17. The principal held by the Kerala High Court in Pareed Pillai (Supra) is effective which has been applied by this Court also. Therefore, in light of that it is found that absence of fitness certificate is a fundamental breach and the appellant/insurance company is not liable for payment of compensation on account of this fundamental breach.

18. However, the Hon'ble Supreme Court in the matter of Amrit Paul Singh and another Vs TATA AIG General Insurance Company Limited and others, reported in 2018(3) KHC 197 considered the issue with respect to violation of

conditions of Insurance Policy on the ground that offending vehicle was not having a valid permit and held that Insurance Company first to satisfy the award and thereafter to recover the same from the insured. In the case in hand also there is a clear breach of policy condition as the offending vehicle did not have a valid and effective 'fitness certificate' on the date of accident.

19. Accordingly, in the light of the principle laid down by the Supreme Court in the case of Amrit Paul Singh (Supra), the appellant/insurance company is directed to first pay the amount of compensation fixed by this Court and then recover the same from the owner & the driver of the offending vehicle by filing execution petition before the concerned Claims Tribunal.

20. Thus, both the appeals of the Insurance Company are partly allowed to the extend indicated herein-above.

Cross Appeals

21. Two cross appeals have been filed by the claimants for enhancement of the compensation whereas the contention of learned counsel for the Insurance Company is that excessive compensation has been awarded in favour of the claimants.

22. The cross-appeals were considered in the absence of learned counsel for the claimants. The parties present were heard.

23. Now this Court shall examine as to whether the compensation awarded by the Tribunal is just and proper compensation in the given facts and circumstances of the case.

Cross-Appeal filed by the parents of deceased Rupesh

24. From the evidence produced by the claimants side it is clear that deceased Rupesh Kumar was an unmarried young man of 22 years at the time of accident. He was working as a mason. Hence, the Tribunal has assessed the income of deceased at Rs.6,000 per month as no documentary evidence regarding his income has been brought on record. The accident occurred on 02.11.2017 and the minimum wages of even an unskilled labour at that time was Rs.7930. Hence, the income of the deceased is assessed at Rs.7930 per month instead of Rs.6,000 as minimum wages. Taking into account the age of the deceased, his marital status and the number of claimants (two), the future prospects would be 40%, the deduction towards personal expenses would be half of the income and not 1/3rd as wrongly held by the Tribunal and the multiplier would be18.

25. In the light of the judgments of the Hon'ble Supreme Court in Sarla Verma (Smt.) and others vs. Delhi Transport Corporation and another reported in (2009) 6 SCC 121, National Insurance Company Ltd., Vs. Pranay Sethi and Others, (2017) 16 SCC 680 and Magma General Insurance Co. Ltd. v. Nanu Ram @ Chuhru Ram & Ors; (2018) 18 SCC 130, the compensation is being recomputed as below:-

                    Particulars                          Calculation
     Monthly income of the deceased                                7,930
     Yearly income                                                95,160
     Future       prospects(40%       of     the                  38,064
     income)
     Total                                                       1,33,224


     Personal expenses          (half of the                      66,612
     income)
     Annual loss of dependency                                    66,612

Total loss of dependency (applying 66612 x 18 = 11,99,016 multiplier of 18) Funeral Expenses 15,000 Loss of estate 15,000 Spousal & filial consortium and 40000 x 2 = 80,000 love & affection (Rs.40,000 to each claimant) Total compensation Rs.13,09,016

26. Thus, the total compensation is recomputed as Rs.13,09,016/- from which after deduction of Rs.9,85,000/- awarded by the Tribunal, the enhancement would be Rs.3,24,016/-.

27. Accordingly, the parents/claimants of deceased Rupesh Kumar Sahu are entitled for the enhanced amount of Rs.3,24,016/- in addition to what is already awarded by the Tribunal.

Cross-Appeal filed by the legal representatives of deceased Narottam Sahu in MAC No.2240/2019

28. It is clear from the evidence produced by the claimants side that deceased Narottam Sahu was aged about 26 years at the time of accident. He was working as a mason. Hence, the Tribunal has assessed the income of deceased at Rs.6,000 per month as no documentary evidence regarding his income has been brought on record. Taking into account the minimum wages of an unskilled labour at that point of time, the income of the deceased is assessed at Rs.7930 per

month instead of Rs.6,000, as minimum wages. There are total two claimants who are the wife and younger brother of the deceased. Therefore, considering the age of the deceased and the number of claimants, the future prospects would be 40%, the deduction towards personal expenses would be 1/3rd of the income and the multiplier would be 17, as rightly held by the Tribunal.

29. In the light of the judgments of the Hon'ble Supreme Court in Sarla Verma (Smt.) and others vs. Delhi Transport Corporation and another reported in (2009) 6 SCC 121, National Insurance Company Ltd., Vs. Pranay Sethi and Others, (2017) 16 SCC 680 and Magma General Insurance Co. Ltd. v. Nanu Ram @ Chuhru Ram & Ors; (2018) 18 SCC 130, the compensation is being recomputed as below:-

                    Particulars                       Calculation
     Monthly income of the deceased                             7,930
     Yearly income                                             95,160
     Future prospects(40% of the income)                      38,064
     Total                                                   1,33,224
     Personal expenses          (1/3rd of the                  44,408
     income)
     Annual loss of dependency                                 88,816

Total loss of dependency (applying 88816 x 17 =15,09,872 multiplier of 17) Funeral Expenses 15,000 Loss of estate 15,000 Spousal & filial consortium and love 40000 x 2 = 80,000 & affection (Rs.40,000 to each claimant) Total compensation Rs.16,19,872

30. Thus, the total compensation is recomputed as Rs.16,19,872/- from which after deduction of Rs.8,86,000/- awarded by the Tribunal, the enhancement would be Rs.7,33,872/-.

31. Accordingly, the legal representatives/claimants of deceased Narottam Sahu are entitled for the enhanced amount of Rs.7,33,872/- in addition to what is already awarded by the Tribunal.

32. The enhanced amount in both the cross-appeals will carry interest @ 6% per annum from the date of enhancement of the award till its realization. The impugned awards stand modified to the above extent and rest of the conditions shall remain intact.

33. In the result, both the appeals, preferred by the Insurance Company stand partly allowed as considering the breach of policy condition, an order of "pay and recover" has been passed. Both the cross appeals filed by the claimants stand allowed to the extent indicated herein above.

34. The Registry is directed to communicate the claimants in writing "the enhanced amount" in both the cross- appeals as against the award made by the Tribunal. The said communication be made in Hindi Deonagri language and the help of paralegal workers may be availed with a co- ordination of Secretary, Legal Aid of the concerned area wherein the claimants reside.

Sd/-

(Sanjay Kumar Jaiswal) Judge Khatai