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Judgment
Dev Darshan, J.—These two appeals are being disposed of by a common judgment as they are arising out of the same accident. Before adverting to the facts, I must note that the learned Motor Accident Claims Tribunal has been remiss in calculating the amount of compensation payable to the claimants. He takes the earning of the injured at Rs. 3000/- per month and the annual dependency to be Rs. 36,000/- and applying the multiplier of 18 thereby calculated the future loss of earning to be Rs. 8,64,000/-. This is a mathematical error which should and ought to be corrected and it is directed that the loss of future earning is Rs. 6,48,000/- and not Rs. 8,64,000/-. The award is directed to be modified accordingly. Learned counsel appearing for the parties do not dispute this amount.
The facts with respect to the accident and injury sustained are not disputed by the parties to this appeal. Learned counsel appearing for the appellant/owner in FAO No. 456 of 2006 titled Pradeep Kumar Sharma versus Kumari Anupam and others submits that the liability, if any, is that of the Insurance Company. In FAO No. 6 of 2008, titled National Insurance Company Ltd. Versus Kumari Anupam and others learned counsel appearing for the appellant/Insurance Company submits that the learned Tribunal could not issue pay and recover orders to the Insurance Company because of the fact that the vehicle was being driven in contravention of the terms of the policy or in any event in contravention of the provisions of Section 149 (2)(c) of the Motor Vehicles Act (hereinafter referred to as Act), the liability, if any, is that of the owner The learned Tribunal on the facts fastened the liability on the owner on the ground that the driver of the bus did not possess a valid driving licence. This was based on the submission that the driver should and ought to be possessed of a "medium passenger driving licence". The learned Tribunal was in grave error as there is no such condition provided for under the provisions of the Act as applicable on the date of the accident. In fact, what the driver possessed was a licence for Light Motor Vehicle which he could ply as is evident from Ex.RW2/B certifying the vehicle to be a bus with gross weight of 6800 kilogram bringing it within the ambit of Section 2 (21) of the Act as a light motor vehicle. The licence in this case Ex.RW2/B has also been issued for LMV. The finding of the learned Tribunal in this case is clearly wrong and not sustainable and it is held accordingly.
On the second aspect learned counsel Mr. Ashwani K. Sharma appearing for the Insurance Company submits that the vehicle in question was being driven in contravention of Section 149(2)(c). He submits that the vehicle was being plied without a valid route permit for the purpose other than that for which it was permitted. In other words, it did not have valid route permit. He relies upon the judgment of this Court in Harnam Singh versus Oriental Insurance Company and others, FAO No. 548 of 2008 decided on 12.1.2012 holding:
Shri Ashwani Sharma, learned counsel for the Insurance Company submits that the owner did not have a valid route permit to ply the bus and this was a breach of the condition of the policy and as such the Insurance Company could not be held liable to pay any compensation. The policy Ext.C-1/A contains a stipulation that the policy covers use only under a permit issued within the meaning of Motor Vehicles Act, 1988. Thus there is a specific stipulation in the policy that the vehicle should have a route permit. Section 149(2) of the Motor Vehicles Act read as follows:-
(2) No sum shall be payable by an insurer under subsection (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or 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 organised 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 sidecar being attached where the vehicle is a motorcycle; or
(ii) a condition excluding driving by 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 by the non-disclosure of a material fact or by a representation of fact which was false in some material particular.
A bare perusal of sub clause (i) (a) shows that one of the defences which is open to the Insurance Company is that the vehicle has been used 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. Sub clause (i)(c) further provides that the Insurance Company can take a defence that the vehicle was being used for a purpose not allowed by the permit under which the vehicle is being used, where vehicle is a transport vehicle. The Apex Court in National Insurance Co. Ltd. Vs. Challa Bharathamma and Others, while considering the scope and ambit of Section 149(2) of the Act held as follows:-
The High Court was of the view that since there was no permit, the question of violation of any condition thereof does not arise. The view is clearly fallacious. A person without permit to ply a vehicle cannot be placed on a better pedestal vis-�-vis one who has a permit, but has violated any condition thereof. Plying of a vehicle without a permit is an infraction. Therefore, in terms of Section 149(2) defence is available to the insurer on that aspect. The acceptability of the stand is a matter of adjudication. The question of policy being operative had no relevance for the issue regarding liability of the insurer. The High Court was, therefore, not justified in holding the insurer liable.
The residual question is what would be the appropriate direction. Considering the beneficial object of the Act, it would be proper for the insurer to satisfy the award, though in law it has no liability. In some cases the insurer has been given the option and liberty to recover the amount from the insured. For the purpose of recovering the amount paid from the owner, the insurer shall not be required to file a suit. It may initiate a proceeding before the executing court concerned as if the dispute between the insurer and the owner was the subject-matter of determination before the Tribunal and the issue is decided against the owner and in favour of the insurer. Before release of the amount to the claimants, owner of the offending vehicle shall furnish security for the entire amount which the insurer will pay to the claimants. The offending vehicle shall be attached, as a part of the security. If necessity arises the executing court shall take assistance of the Regional Transport Authority concerned. The executing court shall pass appropriate orders in accordance with law as to the manner in which the owner of the vehicle shall make payment to the insurer. In case there is any default it shall be open to the executing court to direct realisation by disposal of the securities to be furnished or from any other property or properties of the owner of the vehicle i.e. the insured. In the instant case, considering the quantum involved, we leave it to the discretion of the insurer to decide whether it would take steps for recovery of the amount from the insured.
The then Hon''ble Chief Justice of this Court in J.B. Pipes Vs. Madan Lal and Others, following the judgement of the Apex Court in Challa Bharathamma''s case held as follows:-
Section 149(2) is very clear on the subject. It clearly lays down that it is open to an insurer to defend a claim on the ground of the breach of a policy condition excluding the use of vehicle for hire or reward where the vehicle is not covered by a permit to ply for hire or reward. The expression, "where the vehicle is not covered by a permit to ply for hire or reward", includes a situation where the vehicle is being plied in an area which is outside the coverage of the route permit.
It is thus clear that not only the defence of absence of permit but also that the vehicle is being used in violation of the terms of the permit and thus in violation of the provisions of the policy, is available to the insurer.
A Division Bench of the Madhya Pradesh High Court in Ram Sujan Tiwari Vs. Sita Gupta and Others, held as follows:-
Since the vehicle was being driven on the route for which the permit was not granted, hence contravened the conditions of permit. In such circumstances, the insurance company cannot be held liable to pay compensation. The Tribunal has rightly exonerated the insurance company from its liability of payment.
The Apex Court in Kamala Mangalal Vayani and Others Vs. United India Insurance Co. Ltd. and Others, held that it is for the Insurance Company to prove the violation of the policy.
There is no dispute on this proposition of law. But what I find from the evidence on record is that the vehicle in question was a bus and was having a valid route permit. The insurance company did not lead any evidence to show that the accidented vehicle did not possess any valid route permit. In Oriental Insurance Co. Ltd. Versus Sony Cheriyan (1996) 6 SCC 451 the Court holds:
The Insurance policy between the insurer and the insured represents a contract between the parties. Since the insurer undertakes to compensate the loss suffered by the insured on account of risks covered by the insurance policy, the terms of the agreement have to be strictly construed to determine the extent of liability of the insurer. The insured cannot claim anything more that what is covered by the insurance policy. That being so, the insured has also to act strictly in accordingly with the statutory limitations or terms of the policy expressly set out therein.
(p.455)
In Kamala Mangalal Vayani and Others Vs. United India Insurance Co. Ltd. and Others, the Court holds:
In this case, the insurer produced a certified copy of the proceedings of the Registering Authority and Assistant Regional Trnasport Authority, Bangalore dated 7.7.1990 to show that the application for registration of the vehicle filed by the third respondent was rejected with an observation that it was open to the applicant to apply for registration in the appropriate class. But that only proved that on 7.7.1990, the vehicle did not have a permit. But that does not prove that the vehicle did not have a permit on 27.7.1990, when the accident occurred. It was open to the insurer to apply to the transport authority concerned for a certificate to show the date on which the permit was granted and that as on the date of the accident, the vehicle did not have a permit, and produce the same as evidence. It failed to do so.
(p.489)
These two judgments have been noticed for the reasons that the in insurance policy Ex. RW 3/A there is no clause excluding the liability of the Insurance Company in case the vehicle does not possess a permit. Secondly, what I find from the record is that the Insurance Company has not made any efforts to summon the route permit etc and prove this fact on the record. In this view of the matter, the submission made by learned counsel appearing for the Insurance Company cannot be accepted. Both these appeals are disposed of with following directions:
(a). That the amount of Rs. 8,64,000/- as awarded by the learned Tribunal be read as Rs. 6,48,000/- and the interest awarded shall be reduced proportionately.
(b) That the liability be that of the Insurance Company and not of the order. No order as to the costs.