Delhi Transport Corporation vs United India Insurance Company ...
2014 Latest Caselaw 5916 Del

$~13
*      IN THE HIGH COURT OF DELHI AT NEW DELHI
                                        Date of decision:18.11.2014
+      MAC.APP. 485/2013

       DELHI TRANSPORT CORPORATION           ..... Appellant
                    Through: Ms.Meenakshi Midha, Advocate

                   versus

       UNITED INDIA INSURANCE COMPANY
       LTD. & ORS.                       ..... Respondents
                     Through: Mr.K.L.Nandwani with Mr.Manish
                              Kaushik, Advocates

       CORAM:
       HON'BLE MR. JUSTICE JAYANT NATH

JAYANT NATH, J.(ORAL)
1.     By the present appeal, the appellant Delhi Transport Corporation
seeks to impugn the Award dated 13.12.2012
2.     The brief facts which led to filing of the DAR before the Tribunal is
that on 10.10.2012, a DTC bus was plying on route No.463. When it reached
Batra Hospital, the driver collided the bus with a tree. Due to the accident,
various passengers suffered injuries.
3.     Based on the evidence on record, the Tribunal granted a compensation
totalling Rs.2,72,600/- to 13 claimants. Various different amounts were
awarded to different persons.
4.     The Tribunal, however, noted that the Fitness Certificate given to the
appellant's vehicle had been withdrawn or suspended and hence directed the




MAC.APP.485/2013                                   Page 1 of 5
 Insurance Company i.e. respondent No.1 to pay the award amount but
granted recovery rights against the appellant through respondent
No.1/Insurance Company.
5.    Learned counsel appearing for the appellant relies upon the judgment
of the High Court dated 23rd April, 2012 titled `Delhi Transport
Corporation & Ors. vs. National Insurance Company Limited and Anr.' in
MAC.APP. 361/2010 where this Court held that the only defence available
to the Insurance Company is limited to the one as provided under Section
149(2) of the Motor Vehicles Act (the Act) and that non-possession of
Fitness Certificate was not one of the grounds. He further submits that there
is no breach of the terms and conditions of the Insurance policy.
6.    Learned counsel appearing for the respondent No.1/Insurance
Company has submitted that the judgment relied upon by the learned
counsel for the appellant, namely D.T.C. vs. National Insurance
Company(supra) is per incurium and has ignored various judgments of the
Supreme Court. He further submits that the Certificate of Fitness having
lapsed in terms of Section 56 of the Act, the permit under Section 80 as
provided for under Section 24 of the Act would also lapse and in terms of
the policy, the appellant did not have a valid permit on the date of the
accident.
7.    I may first look at the evidence on record. The accident in the present
case took place on 10th October, 2012.       The photocopy of the Fitness
Certificate is on the record of the trial court and shows that the Fitness
Certificate expired on 03.10.2012 i.e. about a week prior to the accident.
8.    The respondent No.1 has led the evidence of R3W1 Shri Vikas Negi.
In his affidavit by way of evidence (Ex.R3W1/A) he has stated that the



MAC.APP.485/2013                                   Page 2 of 5
 Investigating Officer verified the certificate of fitness of the insured vehicle.
As per the certificate, this fitness was not valid on the date of the accident.
He has exhibited the report of the authority as Ex.R3W1/2. Ex.R3W1/2 is a
document without a heading. The registration of the bus is mentioned as DL
1P B-6765 which is the offending vehicle. At the bottom of this document,
a stamp is affixed which reads as follows:-
              "VEHICLE FAILED
              Produce the vehicle after rectifying defects within 60
              days of fresh receipt (fees) date vehicle not fit to ply on
              road"

9.    In my view, the onus to prove that the fitness certificate had lapsed is
on the respondent No.1/insurance company. Reference in this context may
be had to the judgment of the Supreme Court in the case of National
Insurance Company Limited vs. Swaran Singh & Ors, (2004) 3 SCC 297.
There in para 110, the Supreme Court held as follows:-

      "110 The summary of our findings to the various issues as
      raised in these petitions are as follows:-

      (i)     ...

      (ii)    ...

      (iii)   The breach of policy condition e.g. disqualification
              of the driver or invalid driving licence of the
              driver, as contained in sub-section (2)(a)(ii) of
              Section 149, has to be proved to have been
              committed by the insured for avoiding liability by
              the insurer. Mere absence, fake or invalid driving
              licence or disqualification of the driver for driving
              at the relevant time, are not in themselves defences




MAC.APP.485/2013                                     Page 3 of 5
              available to the insurer against either the insured or
             the third parties. To avoid its liability towards the
             insured, the insurer has to prove that the insured
             was guilty of negligence and failed to exercise
             reasonable care in the matter of fulfilling the
             condition of the policy regarding use of vehicles
             by duly licensed driver or one who was not
             disqualified to drive at the relevant time.
             .....

(vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards insured unless the said breach or breaches on the condition of driving licence is/ are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply "the rule of main purpose" and the concept of "fundamental breach" to allow defences available to the insured under Section 149(2) of the Act."

10. In view of the said judgment, the burden of proof is on respondent No.1/Insurance Company. The Insurance Company had not summoned the concerned officer from the Transport Authority to prove the lapse of the Fitness Certificate. The document Ex.R3W1/2 is a photocopy and cannot be relied upon. The stamp affixed says that the vehicle is to be produced within 60 days after removing the defects.

11. Neither of the parties know as to what happened after this so called document, if any, was generated. Further, doubt is thrown on the whole thing as the document is signed by Ashok Kumar, ATI on 10.10.2012 i.e.

the date of the accident as well. In the absence of material facts on record, onus of which was on the respondent No.1/Insurance Company, in my view, there is no sufficient evidence on record to hold that there is a breach of the terms and conditions of the policy by the appellant.

12. In view of my finding on facts I see no need to go into the issue of the legal submission made by learned counsel for the parties in respect of the effect of a valid fitness certificate.

13. In the light of the facts, I modify the award of the Tribunal and hold that respondent No.1 would not be entitled to recovery rights against the appellant.

14. The appeal stands disposed of.

JAYANT NATH, J NOVEMBER 18, 2014 ks