Delhi High Court

The New India Assurance Co.Ltd. vs Mohd.Iqlam & Ors. on 24 October, 2008

Author: V.B.Gupta

*      HIGH COURT OF DELHI : NEW DELHI

    MAC App. No.379/2008 & CM No.9282/2008

%            Judgment reserved on: 25th September, 2008

             Judgment delivered on: 24th October, 2008

The New India Assurance Co. Ltd.
J-129, Kirti Nagar
New Delhi-110015                               ....Appellant

                       Through: Mr. Salil Paul, Adv.

                                Versus
1. Mohd. Iqlam
   S/o. Sh. Mohd. Sahadat
   R/o. C-37, Chandu Nagar
   Near Bihari Masjid
   Karawal Nagar Road
   Delhi

2. Mohd. Aftab Alam
   S/o. Sh. Mohd. Tasleem
   R/o. 66 B, Cement Siding
   Shakur Basti
   Delhi-110034

3. Mohd. Fahim
   S/o. Khurshid Alam
   252, T Huts, Cement Siding
   Shakur Basti
   New Delhi                              ...Respondents.

                       Through: Nemo.


Coram:
HON'BLE MR. JUSTICE V.B. GUPTA


MAC App. No.379/2008                                   Page 1 of 17
 1. Whether the Reporters of local papers may
   be allowed to see the judgment?                     Yes

2. To be referred to Reporter or not?                  Yes

3. Whether the judgment should be reported
   in the Digest?                                      Yes

V.B.Gupta, J.

The appellant/New India Insurance Company has

filed the present appeal under Section 173 of Motor

Vehicles Act, 1988 (for short as „Act‟) challenging the

award dated 1st April, 2008 passed by Sh. A.S.

Jayachandra, Presiding Officer, MACT (for short as

„Tribunal‟), Delhi.

2. Vide impugned judgment, the Tribunal has

awarded a compensation of Rs.2,56,000/- along with

7.5% interest from the date of petition till the date of

award (excepting for the periods not specifically

allowed) to the injured towards the injuries sustained

by him in a road accident.

3. Brief facts of this case are that respondent

No.1/Mohd. Iqlam, on the date of accident i.e. 31st July,

2006, was working as a labourer in vehicle No. DL-1-

ID-5300, which is a truck. This truck was overloaded

and when it reached at Wazirabad Road near Rajiv

Nagar Bus Stand, all of a sudden, the putta of kamani

of front tyre had broken and the offending vehicle fell

down and respondent No.1 received grievous injuries

on his left leg and body. He has attributed the

negligence on the part of the driver of the offending

truck.

4. Respondent No.2/Mohd. Aftab Alam, is the driver

of the offending truck, whereas respondent

No.3/Mohd. Fahim, is the owner and the offending

truck was insured with appellant.

5. The driver and owner of the offending truck filed

their common written statement in which they denied

the factum of accident stating that no accident was

caused by respondent No.2 on the given date, time and

place.

6. Appellant/Insurance Company in its written

statement has admitted the factum of insurance.

However, it is stated that it has no knowledge about

the alleged accident and the manner in which the

accident took place.

7. Further, a preliminary objection has taken by the

appellant in its written statement that at any stage of

proceedings if it appears and this court is satisfied that

there is collusion between the claimant and

owner/driver or they failed to contest the claim on

merit, then appellant shall take over the defence of the

respondents 2 & 3 herein, under Section 170 of the Act

without the prejudice to the provision of Section 149(2)

of the Act.

8. It has been contended by the learned counsel for

the appellant that the vehicle was overloaded with

rice with weight of 9000 kg whereas, as detailed in the

insurance policy, the unladen weight of the vehicle was

6800 kg. only, and thus there was violation of permit.

9. The Tribunal has discussed the provisions of

Section 66, 86 and 88 of the Act without considering

the ground of the appellant with regard to the

overloading of the vehicle.

10. Other contention is that the Tribunal has erred in

holding that inspite of the fact that there being

violation of permit as admittedly, annual authorization

fee of Rs.1,000/- has not been paid but because the

permit was not cancelled, the insurance company is

liable. It is stated that National Permit issued from

29.9.2004 to 28.9.2009 for five years is not valid

because, for a national permit to be valid it is

mandatory that the authorization fee of atleast four

states including the state for which the permit was

being issued vide Section 88 (14)(b)(c) of Motor

Vehicles Act was annually paid.

11. In the present case authorization fee was

deposited on 29.9.2004 which is valid from 1.10.2004

to 30.9.2005 vide authorization report Ex. R3W1/B

which does not cover the date of accident, i.e., 31.7.06.

12. Even the owner has admitted in his cross

examination that he has not deposited the

authorization fee after 30.9.2005.

13. Relevant provisions in this case are Section 2(31),

66 & 88 of the Act which read as under;

Section 2(31) "permit" means a permit issued by a State or Regional Transport Authority or an authority prescribed in this behalf under this Act authorising the use of a motor vehicle as a transport vehicle."

             "Section         66   -     Necessity   for
             permits

(1) 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 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 authorising him the use of the vehicle in that place in the

manner in which the vehicle is being used:

Provided that a stage carriage permit shall, subject to any conditions that may be specified in the permit, authorise the use of the vehicle as a contract carriage:

Provided further that a stage carriage permit may, subject to any conditions that may be specified in the permit, authorise the use of the vehicle as a goods carriage either when carrying passengers or not:

Provided also that a goods carriage permit shall, subject to any conditions that may be specified in the permit, authorise the holder to use the vehicle for the carriage of goods for or in connection with a trade or business carried on by him.

             (2)       x     x          x          x

             (3)       x     x          x          x

(4) Subject to the provisions of sub- section (3), sub-section (1) shall, if the State Government by rule made under section 96 so prescribes apply to any motor vehicle adapted to carry more than nine persons excluding the driver."

"Section 88- Validation of permits for use outside region in which granted

(1) Except as may be otherwise prescribed, a permit granted by the Regional Transport authority of any one region shall not be valid in any other region, unless the permit has been countersigned by the Regional Transport Authority of that other region, and a permit granted in any one State shall not be valid in any other State unless countersigned by the State Transport Authority of that other State or by the Regional Transport Authority concerned.

Provided that a goods carriage permit, granted by the Regional Transport Authority of any one region, for any area in any other region or regions within the same State shall be valid in that area without the counter-signature of the Regional Transport Authority of the other region or of each of the other regions concerned:

Provided further that where both the starting point and the terminal point of a route are situate within the same State, but part of such route lies in any other State and the length of such part does not exceed sixteen kilometers, the permit shall be valid in the other State in respect of that part of the route which is in that other State notwithstanding

that such permit has not been countersigned by the State Transport authority or the Regional Transport Authority of that other State:

Provided also that-

(a) where a motor vehicle covered by a permit granted in one State is to be used for the purposes of defence in any other State, such vehicle shall display a certificate, in such form, and issued by such Authority, as the Central Government may, by notification in the Official Gazette, specify, to the effect that the vehicle shall be used for the period specified therein exclusively for the purposes of defence; and

(b) any such permit shall be valid in that other State notwithstanding that such permit has not been countersigned by the State Transport authority or the Regional Transport Authority of that other State.

(2) Notwithstanding anything contained in sub-section (1), a permit granted or countersigned by a State Transport Authority shall be valid in the whole State or in such regions within the State as may be specified in the permit.

(3) A Regional Transport Authority when countersigning the permit may attach to

the permit any condition which it might have imposed if it had granted the permit and may likewise vary any condition attached to the permit by the authority by which the permit was granted.

(4) The provisions of this Chapter relating to the grant, revocation and suspension of permits shall apply to the grant, revocation and suspension of countersignatures of permits.

(5 to 8) x x x

(9) Notwithstanding anything contained in sub-section (1) but subject to any rules that may be made by the Central Government under sub-section (14), any State Transport Authority may, for the purpose of promoting tourism, grant permits in respect of tourist vehicles valid for the whole of India, or in such contiguous States not being less than three in number including the State in which the permit is issued as may be specified in such permit in accordance with the choice indicated in the application and the provision of sections 73, 74, 80, 81, 82, 83, 84, 85, 86, [clause

(d) of sub-section (1) of section 87 and section 89] shall, as far as may be, apply in relation to such permits.

            (10) Omitted

            (11) x     x         x          x


             (12) Notwithstanding              anything

contained in sub-section (1), but, subject to the rule that may be made by the Central Government under sub-section (14), the appropriate authority may, for the purpose of encouraging long distance inter-State road transport, grant in a State, national permits in respect of goods carriages and the provisions of sections 69, 77, 79, 80, 81, 82, 83, 84, 85, 86, [clause (d) of sub- section 1 of section 87 and section 89] shall, as far as may be, apply to or in relation to the grant of national permits.

(13) Omitted

(14)(a)The Central Government may make rules for carrying out the provisions of this section.

(b) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:-

(i) the authorization fee payable to the issue of a permit referred to in sub- sections (9) and (12);

(ii) the fixation of the laden weight of the motor vehicle;

(iii) the distinguishing particulars or marks to be carried or exhibited in or on the motor vehicle‟

(iv) the colour or colours in which the motor vehicle is to be painted;

(v) such other matters as the appropriate authority shall consider in granting a national permit.

Explanation.- In this section,-

(a) "appropriate authority", in relation to a national permit, means the authority which is authorized under this Act to grant a goods carriage permit;

(b) "authorization fee" means the annual fee, not exceeding one thousand rupee, which may be charged by the appropriate authority of a State to enable a motor vehicle, covered by the permit referred to in sub-sections (9) and (12) to be used in other States subject to the payment of taxes or fees, if any, levied by the States concerned;

(c) "national permit" means a permit granted by the appropriate authority to goods carriage to operate throughout the territory of India or in such contiguous States, not being less than four in number, including the State in which the permit is issued as may be specified in such permit in accordance with the choice indicated in the application."

14. Regarding non-payment of authorisation fee, the

appellant examined R3W1 a witness from State

Transport Authority who produced the permit details

Ex.R3W1/A and stated that as per record, national

permit is issued on 29.9.2004 to 28.9.2009. The

authorisation fee was deposited on 29.9.2004 valid

from 1.10.2004 to 30.9.2005. Thereafter, no

auhorisation fee was deposited in their authority as per

records. The authorisation report is ExR3W1/B.

15. In the cross examination by the owner, he denied

the suggestion that no permit authorization is required

for running the vehicle in the local area of NCT.

16. The Tribunal held in this regard that;

"The opening words of Section 88 in the Act, reads "violation of permits for use outside region in which granted." The opening key words of this particular section shows that the Section deals with the validation of permits outside the region in which it is granted. It is not the case of the Ins. Co. that that the accident occurred outside the region from which the permit was issued.

I am not convinced with the argument of the Ld. Counsel of the Ins. Co. that the permit was a non-est as on the date of accident so as to repudiate the policy for the following reasons.

a) it is also clear from the record that the permit is not cancelled;

b) the cancellation of permits are dealt under Section 86. No proceedings were initiated against the permit holder for cancellation of the permit on the ground of non payment of authorization fee as per the procedure under law;

c) just because the validation or authorization fee is not paid, in so far as no proceedings under Section 86 having been initiated by the authority concerned, it cannot be said that the permit has become invalid within the region of its issuance;

d) considering that Section 88 only deals with the situations of validation of permits outside the region, the intention of legislature is to be understood. In JK Cotton Spinning & Weaving Mills Co.vs. State of UP AIR 1961 SC 1170, it was held that "the Courts always presume that the legislature inserted every part thereof for a purpose and the legislature‟s intention is that every part of the statute should have effect." The proper construction of this particular provision connotes that the authorization fee is required only for the purposes of validation of the

permits outside the region from where it was issued as the opening key words of this Section introduce themselves. The accident occurred within the region from where the permit was issued. Thereafter, the non-validation of the permit as on the date of accident becomes immaterial for the purposes of indemnifying the third party risk in the policy.

e) the non payment of authorization fee is a fact which concerns the issuing authority and the holder of the permit. In so far as the permit having not been cancelled properly by the authority, the Insurance Company cannot be allowed to take umbrage under the lapses of the permit holder to deny the obligation for which the premium was collected."

17. The objections with regard to non-payment of

annual authorisation fee of permit or overloading, were

nowhere, taken by appellant in its written statement. I

fail to understand as to under what provisions of law,

the Tribunal allowed the appellant to take such pleas,

which has not been specifically taken by appellant in

its written statement.

18. Section 88 of the Act deals with the validation of

permits "for use outside the region" in which it is

granted. Thus the authorisation fee is required only

for the purposes of validation of the permits "for use

outside the region".