Fundamental Breach 

Source: The Hitavada      Date: 18 Jun 2018 12:34:36











The insurer’s plea states that vehicle in question had no permit. It does not require the wisdom of the ‘Tripataka’, that it is a matter of documentary evidence. There is no record by the insured to prove that he had a permit of the vehicle. In such a situation, the onus cannot be cast on the insurer. Therefore, the HC had directed that the insurer was required to pay the compensation amount to the claimants with interest.


IN THE judgement of the case – Amrit Paul Singh and another v. TATA AIG General Insurance Co. Ltd. and Others, delivered on May 17, 2018, CJI Dipak Misra and Justice A.M. Khanwilkar, at the Supreme Court, have held that plying a vehicle without a statutory permit is a fundamental infraction and insurer is not liable (in the event of accident).The legal representatives of the deceased Jagir Singh, the husband of the second
respondent, had filed a claim petition under Section 166 of the Motor Vehicles Act, 1988, before the Motor Accident Claims Tribunal (MACT), Pathankot, claiming compensation to the tune of Rs. 36 lakh. The claim petition was filed on the basis that on February 19, 2013, Jagir Singh was travelling to Pathankot on his motor cycle and at that juncture, the offending truck bearing temporary registration No.PB-06-6894 belonging to the appellant -2 driven in a rash and negligent manner hit the motor cycle of the deceased as a result of which he sustained multiple injuries, and eventually succumbed to them when being taken to the hospital.

The claim put forth was sought to be sustained on many a basis. The insurer - the first respondent, opposed the claim on the ground that the vehicle in question was driven in violation of the terms of the insurance policy and further the driver was not having a valid and effective driving license and, therefore, it was not obliged to indemnify the insured. That apart, a stand was taken that the vehicle did not have the permit on the date of the accident. On behalf of the owner of the vehicle and driver, assertions were made that the vehicle was insured with the first respondent as per the insurance policy, that the vehicle was registered and the driver had the requisite driving licence. Additionally, copy of the route permit of the offending truck was brought on record. The Tribunal had noted that the vehicle was purchased in September, 2012 and insured on December 20, 2012.

It was registered on February 26, 2013. The accident occurred on February 19, 2013.
Placing reliance on the decision in the case- National Insurance Company Ltd. v. Challa Bharathamma and Others – (2004) 8 SCC 517, the Tribunal held that the insurer was not liable and proceeded to quantify the amount of compensation and determined the same at Rs. 15,63,120/-. The Tribunal directed the amount to be paid by the insurer along with interest at the rate of 9 pc from the date of award till its realisation and recover the same from the owner and driver of the vehicle. A further direction was given for attachment of the truck in question till the award was satisfied.

The award passed by the Tribunal on November 20, 2014 was challenged before the Punjab and Haryana High Court at Chandigarh. It was contended in appeal that the appellant -2, the owner of the offending vehicle, had deposited the necessary fee along with application on February 19, 2013 for issue of route permit and the same was issued on February 27, 2013.The HC held that the owner had not been able to establish that he had submitted the application for issue of permit before the accident.Referring to Section 66 of the Act and placing reliance on Challa Bharathamma decision, the HC opined that even assuming that the owner had already applied for grant of the permit before the accident, the same would not entitle the owner to ply the vehicle. It is worth to note that the Single Judge at the HC distinguished the decisions cited before him and, resultantly confirmed the award of the Tribunal.

On a perusal of the definitions of “motor vehicle” or “vehicle” and “permit”, it is quite clear that a permit has to be issued by the competent authority under the Act for use of a motor vehicle as a transport vehicle. The emphasis is on the words “use” as well as transport vehicle”.
In the case at hand, it is clearly demonstrable from thematerials brought on record that the vehicles at the time of the accident did not have a permit. The appellants had taken the stand that the vehicle was not involved in the accident. That apart, they had not stated whether the vehicle had temporary permit or any other kind of permit.
The exceptions that have been carved out under Section 66 of the Motor Vehicles Act, 1988, needless to emphasise, are to be pleaded and proved. The exceptions cannot be taken aid of in the course of an argument to seek absolution from liability. Use of a vehicle in public place without a permit is a fundamental statutory infraction. The court was disposed to think so in view of series of exceptions carved out in Section 66. The said situations cannot be equated with absence of licence or a fake licence or a licence for different kind of vehicle, or, for that matter, violation of a condition of carrying more number of passengers.

Therefore, the principles laid down in the decisions – National Insurance Co. Ltd. v. Swaran Singh and Others – (2004) 3 SCC 297 and Lakhmi Chand v. Reliance General Insurance – (2016) (3) SCC 100 , in that regard would not be applicable to case at hand.That apart, the insurer had taken the plea that the vehicle in question had no permit. It does not require the wisdom of the ‘Tripataka’, that the existence of a permit of any nature is a matter of documentary evidence. Nothing has been placed on record by the insured to prove that he had a permit of the vehicle. In such a situation, the onus cannot be cast on the insurer.Therefore, the Tribunal as well as the HC had directed that the insurer was required to pay the compensation amount to the claimants with interest with the stipulation that the insurer shall be entitled to recover the same from the owner and the driver. The said directions are in consonance with the principles stated in the Swaran Singh decision and other judgements pertaining to pay and recover principle.In view of this analysis, according to the Supreme Court, there was no merit in the appeal, which it has dismissed.