Delhi High Court
Icici Lombard General Insurance ... vs Bijender Singh & Ors on 21 May, 2012
Author: G.P. Mittal
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 21st May, 2012
+ MAC.APP. 385/2011
ICICI LOMBARD GENERAL INSURANCE CO LTD
..... Appellant
Through: Mr. Joy Basu, Advocate with
Ms. Ruchi Bharda Jain, Adv.
versus
BIJENDER SINGH & ORS ..... Respondent
Through: Mr. Deepak Tyagi, Advocate
for R-1 & R-2.
Mr. Manish Mannie, Advocate
for R-3 to R-5.
CORAM:
HON'BLE MR. JUSTICE G.P.MITTAL
JUDGMENT
G. P. MITTAL, J. (ORAL)
1. The Appellant ICICI Lombard General Insurance Company
Limited impugns a judgment dated 09.12.2010 whereby a
compensation of `15,22,944/- was awarded for the death of
Bhishm Tanwar, who died in a motor accident which occurred
on 01.08.2008.
2. The sole ground of challenge raised during the hearing of the
Appeal is that the offending vehicle No.UP-17C-5880 was
attached by the second Respondent with U.P. State Road
Transport Corporation (UPSRTC). The State Carriage Permit
possessed by the Second Respondent got converted into a
Contract Carriage. No permission was obtained by the Second
Respondent from the concerned Transport Authority for transfer
of the permit in favour of UPSRTC. This being in violation of
the condition of permit, the Appellant Insurance Company was
not obliged to indemnify the insured.
3. The Motor Accident Claims Tribunal (the Claims Tribunal),
argues the learned counsel for the Appellant, erred in fastening
the liability on the Appellant Insurance Company.
4. In my view, the contention raised is misconceived.
5. It may be noticed that when a certificate of Insurance has been
issued by the Insurance Company it entitles the insurer to
defend the liability of the Insurance Company only on the
grounds as mentioned in Section 149 (2) (a) of the Motor
Vehicles Act, 1988 (the Act). To appreciate the contention
raised, it would be appropriate to extract Section 149 (2) of the
Act hereunder:-
"149. Duty of insurers to satisfy judgments and awards
against persons insured in respect of third party risks-
(1) If, after a certificate of insurance has been issued
under sub-section (3) of section 147 in favour of the
person by whom a policy has been effected, judgment or
award in respect of any such liability as is required to be
covered by a policy under clause (b) of sub-section (1) of
section 147 (being a liability covered by the terms of the
policy) [or under the provisions of section 163A] is
obtained against any person insured by the policy, then,
notwithstanding that the insurer may be entitled to avoid
or cancel or may have avoided or cancelled the policy,
the insurer shall, subject to the provisions of this section,
pay to the person entitled to the benefit of the decree any
sum not exceeding the sum assured payable thereunder,
as if he were the judgment debtor, in respect of the
liability, together with any amount payable in respect of
costs and any sum payable in respect of interest on that
sum by virtue of any enactment relating to interest on
judgments.
(2) No sum shall be payable by an insurer under
sub-section (1) in respect of any judgment or award
unless, before the commencement of the proceedings in
which the judgment of award is given the insurer had
notice through the Court or, as the case may be, the
Claims Tribunal of the bringing of the proceedings, or in
respect of such judgment or award so long as execution
is stayed thereon pending an appeal; and an insurer to
whom notice of the bringing of any such proceedings is
so given shall be entitled to be made a party thereto and
to defend the action on any of the following grounds,
namely:-
(a) that there has been a breach of a specified condition
of the policy, being one of the following conditions,
namely:-
(i) a condition excluding the use of the vehicle-
(a) for hire or reward, where the vehicle is on the date of
the contract of insurance a vehicle not covered by a
permit to ply for hire or reward, or
(b) for organized racing and speed testing, or
(c) for a purpose not allowed by the permit under which
the vehicle is used, where the vehicle is a transport
vehicle, or
(d) without side-car being attached where the vehicle is a
motor cycle; or
(ii) a condition excluding driving y a named person or
persons or by any person who is not duly licensed, or by
any person who has been disqualified for holding or
obtaining a driving licence during the period of
disqualification; or
(iii) a condition excluding liability for injury caused or
contributed to by conditions of war, civil war, riot or
civil commotion; or
(b) that the policy is void on the ground that it was
obtained y the non-disclosure of a material fact or by a
representation of fact which was false in some material
particular."
6. It is not the Appellant's case that there was violation of Clause
(a) (b) (d) of Section 149 (2)(a)(i) or of Clause (ii) (iii) of
Section 149 (2) (a) of the Act.
7. To take shelter of Clause (c) of Section 149 (2) (a) (ii), the
Appellant Insurance Company must prove that the vehicle was
being used for a purpose not allowed by the permit where the
vehicle was a transport vehicle.
8. I had the occasion to deal with the conditions for grant of permit
for a TSR plying in NCT of Delhi issued by the Transport
Authority in Mahender Singh v. Oriental Insurance Co. Ltd. &
Ors. MAC APP.430/2010, decided on 10.05.2012 and extracted
22 conditions which are normally attached to the grant of
permit. The conditions for grant of permit include; keeping the
vehicle neat and clean; displaying particulars of identity of the
driver; and wearing uniform in gray colour by the driver. In
paras 6 and 7 of Mahender Singh (supra), this Court observed
as under:-
"6. Thus, a perusal of the condition for issuance of
permit, inter alia, are that the vehicle shall be kept neat
and clean at the time of operation (condition No.16); that
the vehicle must be equipped with the First Aid Box; that
the driver must display the particulars of his identity and
photograph at a prominent place inside the windscreen
(Condition No.19); that the driver must be of good
character and without any criminal record; the driver
shall wear uniform in gray colour with his/her smart
card based Public Service Vehicle (PSV) badge
prominently displaying on the uniform (Condition No.8).
7. Can it be said that the Insurance Company would be
able to avoid liability if the vehicle is not kept clean or
the driver is not wearing the uniform? It is not each and
every condition of permit contravention of which would
allow the Insurance Company to avoid the liability. On
the other hand, a close reading of the Clause (c) to
Section 149 (2) (i) (a) would show that it is only the user
of the transport vehicle for the purpose not allowed by
the permit would enable the Insurance Company to
defend the action to satisfy an award in a motor accident
where the risk is covered by a policy obtained under
Section 147 of the Act."
9. This Court relied on the judgment of the Supreme Court in State
of Maharastra and Ors. v. Nanded-Parebhani Z.L.B.M.V.
Operator Sangh (2000) 2 SCC 69 regarding interpretation of the
words "for a purpose not allowed by the permit" and held that
the TSR not been driven by the permit holder would not be a
breach of the condition envisaged under Section 149 (2) (a) (i)
(c) of the Act. Paras 8,9 and 10 of Mahender Singh (supra) are
extracted hereunder:-
"8. The interpretation of contravention of condition of
permit envisaged under Section 66 of the Act and the
contravention of condition of permit with respect to the
purpose for which the vehicle may be used came up for
consideration before the Supreme Court in State of
Maharastra and Ors. v. Nanded-Parebhani Z.L.B.M.V.
Operator Sangh (2000) 2 SCC 69 albeit in a different
context. In the said case, the police had seized certain
vehicles for carrying passengers in excess of the numbers
permitted by the condition of permit issued by the
Transport Authority. The action was challenged by the
Association of Transporters by virtue of a writ petition
before the Aurangabad Bench of Bombay High Court.
The High Court analyzed the different provisions of the
Motor Vehicles Act, 1988 and the Rules framed
thereunder and on consideration of the same came to the
conclusion that it is not each and every violation of the
condition of the permit which would authorize the seizure
and detention of the vehicle under Section 207 (1) of the
Act. It was held that it was only when the condition of
permit relating to the route on which or the area in which
or the purpose for which the vehicle was used, is violated,
the vehicle could be seized by the Authorities. The
Appeal filed by the State of Maharastra was dismissed by
the Supreme Court. The contention raised on behalf of
the State of Maharastra that carrying passengers more
than prescribed by the permit could be construed to be
violation, was rejected. The Supreme Court relied upon
the report in Kanailal Sur v. Paramnidhi Sadhu Khan
(1958) 1 SCR 360 and held as under:-
"If the words used are capable of one
construction only then it would not be open to
the Courts to adopt any other hypothetical
construction on the ground that such
construction is more consistent with the alleged
object and policy of the Act". The intention of
the legislature is required to be gathered from
the language used and, therefore, a
construction, which requires for its support
with additional substitution of words or which
results in rejection of words as meaningless has
to be avoided. Bearing in mind, the aforesaid
principles of construction of statute and on
examining the provisions of Section 207 of the
Act, which has been quoted earlier, we have no
doubt in our mind that the police officer would
be authorised to detain a vehicle, if he has
reason to believe that the vehicle has been or is
being used in contravention of Section 3 or
Section 4 or Section 39 or without the permit
required under Sub-section (1) of Section 66 or
in contravention of any condition of such
permit relating to the route on which or the
area in which or the purpose for which the
vehicle may be used. In the case in hand, we
are not concerned with the contravention of
Section 3 or Section 4 or Section 39 or Sub-
section (1) of Section 66 and we are only
concerned with the question of contravention of
the condition of permit. Reading the provisions
as it is, the conclusion is irresistible that the
condition of permit relating to the route on
which or the area in which or the purpose for
which the vehicle could be used if contravened,
would only authorise the police officer to detain
the vehicle and not each and every condition of
permit on being violated or contravened, the
police officer would be entitled to detain the
vehicle. According to the learned Counsel,
appearing for the State of Maharashtra, the
expression "purpose for which the vehicle may
be used" could be construed to mean that when
the vehicle Is found to be carrying passengers
more than the number prescribed in the permit,
the purpose of user is otherwise. We are unable
to accede to this contention as in our opinion,
the purpose would only refer to a contingency
when a vehicle having a permit of stage
carriage is used as a contract carriage or vice
versa or where a vehicle having a permit for
stage carriage or contract carriage is used as a
goods vehicle and vice versa. But carrying
passengers more than the number specified in
the permit will not be a violation of the purpose
for which the permit is granted. If the
legislature really wanted to confer power of
detention on the police officer for violation of
any condition of the permit, then there would
not have been the necessity of adding the
expression "relating to the route on which or
the area In which or the purpose for which the
vehicle may be used". The user of the aforesaid
expression cannot be ignored nor can it be said
to be a tautology. We have also seen the Form
of permit (From P.Co. T.), meant in respect of a
tourist vehicle, which is issued under Rule
72(1)(ix) and Rule 74(6) of the Maharashtra
Motor Vehicles Rules, 1989. On seeing the
different columns, we are unable to accede to
the contention of the learned Counsel
appearing for the State of Maharashtra, that
carrying passengers beyond the number
mentioned in Column 5, indicating the seating
capacity, would be a violation of the conditions
of permit relating to either the route or the area
or the purpose for which the permit is granted.
In this view of the matter, we see no infirmity
with the conclusion arrived at by the High
Court in the impugned judgment and the
detention of the vehicles has rightly been held
to be unauthorised and consequently, the
compensation awarded cannot be said to be
without jurisdiction........."
9. Although, the interpretation of Section 207 was done
by the Supreme Court in a different context, yet, the same
would apply to Clause (c) to Section 149 (2) (a) (i) of the
Act.
10. Thus, the user of a transport vehicle for the purpose
not allowed by the permit would be using a goods vehicle
as a passenger vehicle, a passenger vehicle as a goods
vehicle, etc. and not each and every contravention of the
condition of permit issued by the concerned Transport
Authority. Thus, simply because the vehicle was driven by
a person other than the permit holder cannot be said to
be a user of the transport vehicle for the purpose not
allowed by the permit under which the vehicle was used".
10. Admittedly, bus no.UP-17C-5880 was simply attached to the
UPSRTC and was being used for carrying passengers. Hence,
there will not be any violation under Section 149(2)(a)(i)(c) of
the Act.
11. Similar question came up for consideration before the Supreme
Court in Uttar Pradesh State Road Transport Corporation v.
Kusum & Ors. III (2011) ACC 460 (SC). In that case, the mini
bus No.UP-32T-7344 was attached with UPSRTC by the owner
of the bus. Instead of owner, the UPSRTC was held liable to
pay the compensation. The Supreme Court held that it was the
insured who was liable to pay the compensation and the
Insurance Company was under obligation to indemnify the
insured. The Supreme Court made four queries from the
counsel for the Insurance Company and observed that the
Insurance Company was trying to evade the liability on flimsy
grounds or under misconception of law. Paras 30 and 31 of the
report are extracted hereunder:-
"30. During the course of hearing, we had asked the
following pertinent questions to Mr. Kishore Rawat,
learned Counsel for the Insurance Company:
(i) Since the Insurance Company had admittedly
received the amount of premium for the period
when the mini bus had met with the accident then
why should it not be made liable to make the
payment of compensation? According to him, in
normal circumstances, if the said vehicle would
not have been attached with the Corporation for
being plied by it on the route of permit granted to
it, then of course, the Insurance Company would
have no option but to make the payment.
(ii) We had also enquired if there exists different
tariffs of premium for the vehicle insured at the
instance of owner or for the vehicle which is being
attached with the Corporation for being plied by it.
He categorically admitted that there is no such
difference in the tariff in either of the aforesaid
situation and it is same for both.
(iii) We further enquired from him that if an
intimation would have been given to the Insurance
Company that the vehicle is being attached with
the Corporation then what would have been the
position? He again informed us that in that case,
the Insurance Company would have met the
liability of compensation, in case of an accident.
(iv) Lastly, we enquired from him as to under
which provision of the Act or the Rule, any
statutory duty or otherwise is cast on the owner to
seek permission or give an intimation to the
Insurance Company in case the vehicle is attached
with the Corporation for being plied by it? He
candidly conceded that there is neither any
statutory duty cast on the owner under the Act or
under any Rules to seek permission from the
Insurance Company nor it is under any of the
orders issued by the Company. According to him,
it would have been desirable for the insured to
have informed about such a contract.
31. Thus, in the light of the aforesaid, it is clear that
Insurance Company is trying to evade its liability on
flimsy grounds or under misconception of law."
12. The present case is squarely covered by the report of the
Supreme Court in Kusum (supra).
13. The Appellant Insurance Company cannot avoid its liability to
pay the compensation.
14. The Appeal is devoid any merit; the same is accordingly
dismissed.
15. The statutory amount of `25,000/- shall be refunded to the
Appellant Insurance Company.
(G.P. MITTAL)
JUDGE
MAY 21, 2012
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