Chh HC | S. 66 MV Act necessitates ‘permit’ for a passenger carrying commercial vehicle to make insurance company liable for compensation; Appeal partly allowed

Chattisgarh High Court: A Division Bench of P. R. Ramchandra Menon and Parth Prateem Sahu JJ., allowed the appeal partly and modified the impugned award.

The facts of the case are such that on 04-07-2012, claimant while returning with his friend form Masturi to his village Tikari on Tata Magic (hereinafter referred to as ‘offending vehicle’), met with an accident and turned turtle wherein the claimant and other passengers suffered grievous injuries. An application was filed under Section 166 of the Motor Vehicles Act, 1988 i.e M.V. Act seeking compensation and Rs 6, 50,000 was granted vide award dated 06-01-2014 passed by the 6th Additional Motor Accident Claims Tribunal, Bilaspur, Chhattisgarh i.e. MACT. Aggrieved by the same, instant appeal was filed by the insurance company/ appellants under Section 173 challenging the impugned award.

Counsel for the appellants submitted that that on the date of accident, there was no valid and effective driving licence with driver of the offending vehicle, there was no valid permit, fitness and registration and thereby there was breach of conditions of insurance policy, hence, the Insurance Company is not liable to indemnity the injured. It was also submitted that MACT while deciding the issue with regard to breach of conditions of insurance policy has only taken into consideration the issue of driving licence and decided the issue but did not consider the ground of permit raised by appellant/Insurance Company specifically, though recorded in the impugned award.

Counsel for the respondents submitted that MACT after taking into consideration the entire pleading and evidence placed on record, has passed just and proper award, which does not call for any interference.

During investigations, permit was not produced and the owner of the offending vehicle did not present himself as witness before court though filed reply to the claim petition. It was further found on examination of other witnesses that insurance policy was issued for the offending vehicle and the vehicle was insured as ‘Passenger Carrying Commercial Vehicle’, for which, permit is necessary.

Section 66 (1) of the M.V. Act provides for the necessity for permits, which reads as under for easy reference:

“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.”

The Court observed that from perusal of aforementioned provisions of Section 166 of the M.V. Act, the requirement of permit has been made mandatory for use of the vehicle as ‘Transport Vehicle’ in any public place for carrying passengers or goods.

The Court thus held that MACT erred in not considering that non-applicants 1 and 2 i.e. driver and owner of the offending vehicle failed to produce permit of the offending vehicle and in absence of it, there will be breach of conditions of insurance policy.

In view of above, appellant/Insurance Company is exonerated from its liability to satisfy the amount of compensation and the liability to satisfy the amount of compensation shall be upon non-applicants No.1 and 2 i.e. driver and owner of the offending vehicle. The Court further directed the insurance company to pay the amount as the insurance of the vehicle is not denied, it is insured as ‘Passenger Carrying Vehicle’ and later the insurance company must recover the same amount from the owner and driver of the offending vehicle.

In view of the above, appeal allowed partly and disposed off.[Oriental Insurance Company Ltd. v. Sudhir Kumar, 2020 SCC OnLine Chh 835, decided on 23-09-2020]


Arunima Bose, Editorial Assistant has put this story together

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