Delhi High Court: In a case wherein an appeal had been filed challenging the Award passed by the Motor Accident Claims Tribunal, Rohini, Delhi (‘Tribunal’), wherein the liberty was granted by the Tribunal to Respondent 1, to recover compensation paid by Respondents 2 to 5, from the appellant, Navin Chawla, J.*, held that non-possession of a valid and effective Permit shall entitle the Insurance Company to seek a right to recover the compensation paid to the claimants from the owner of the offending vehicle and such a right would also be available to the Insurance Company where the offending vehicle was being operated at the time of the accident at a place for which it did not have a valid Permit.
Background
The Tribunal passed an award which granted the right to recovery to Respondent 1, New India Assurance Co. Ltd. on the grounds that the appellant, as on the date of the accident, did not have a Permit for plying the truck, i.e., offending vehicle, within Delhi. It was submitted by the appellant that under the Motor Vehicles Act, 1988 (‘Act’), mere plying of the Offending Vehicle at a place beyond the route for which the Permit had been granted was not a fundamental breach of the conditions of policy for which the insured could claim a right to recover the compensation paid to the claimants from the owner/insured.
Analysis, Law, and Decision
The primary issue that the Court took under consideration was, “whether the Insurance Company was entitled to a right to recover the compensation paid to the claimants arising out of a motor vehicular accident from the owner of the motor vehicle involved in such accident, where the accident occurs at a place which is beyond the route for which the vehicle has been granted a Permit under Section 66 of the the Motor Vehicles Act, 1988?”
The Court noted that it was a condition under the Policy, which was issued by Respondent 1 to the appellant, that the vehicle must be used only under a Permit. The Court observed that under Section 149 of the Act, duty was cast on the Insurance Company to satisfy a judgment and Award against the persons insured in respect to the third-party risks, and the Insurance Company was entitled to defend the claim inter-alia on the ground that there had been a breach of a condition of the policy, as the transport vehicle was being used for a purpose that was not allowed by the Permit under which the vehicle was used.
The Court considered Sections 2(31), 66, 69, 77, 79, 80(3), 86, and 88 of the Act and observed that a Permit was granted in relation to a particular route/area/region, therefore, the said route/area/region was a prime consideration and an essential condition of a permit. The Court opined that the same was sacrosanct, functional, and fundamental, with various provisions of the Act emphasising on the same. The Court further opined that driving of the offending vehicle in an area or on a route which was not permitted by a Permit would, therefore, amount to driving the motor vehicle without a valid Permit and shall be a fundamental breach of the conditions of an insurance policy.
Reliance was placed on National Insurance Co. Ltd. v. Challa Upendra Rao, (2004) 8 SCC 517, wherein the mandate of Section 66 of the Act was considered by the Supreme Court and it was held that where a person was found to be driving a transport vehicle without a Permit, the defence under Section 149(2) of the Act shall be available to the insurer, however, the insurer would have to satisfy the Award and then seek recovery of the compensation amount from the insured/owner of the offending vehicle. Additionally, it was reiterated in Amrit Paul Singh v. Tata AIG General Insurance Co. Ltd., (2018) 7 SCC 558, that where the vehicle was being used in a public space without a Permit, it was a fundamental statutory infraction, and the insured would be liable to reimburse the compensation amount paid to the claimants by the Insurance Company. The Court also relied on Gohar Mohammed. v. Uttar Pradesh State Road Transport Corporation, (2023) 4 SCC 381, wherein the Supreme Court held that even assuming that there was a valid and effective Permit to ply the offending vehicle, the same was not valid for the place where the accident took place, therefore, the liability to pay the compensation was to be of the owner of the offending vehicle.
The Court concluded that where a person was found driving a vehicle beyond the route or area or region for which the Permit had been granted, it would be a case of driving the offending vehicle without a valid permit. The Court held that non-possession of a valid and effective Permit shall entitle the Insurance Company to seek a right to recover the compensation paid to the claimants from the owner of the offending vehicle and such a right would also be available to the Insurance Company where the offending vehicle was being operated at the time of the accident at a place for which it did not have a valid Permit.
The Court found no infirmity in the impugned Award by the Tribunal, and accordingly held that the offending vehicle had a valid Permit for plying only in Uttar Pradesh and, there was no Permit for the offending vehicle to be driven in Delhi, where the accident took place and this would, therefore, be a case of the offending vehicle being driven without a valid Permit at the time of the accident.
[Gurmeet Singh v. New India Assurance Co. Ltd., 2023 SCC OnLine Del 6269, Judgement dated 06-10-2023]
*Judgement authored by — Justice Navin Chawla
Advocates who appeared in this case :
For the Appellant: Mr. Rachit Mittal, Ms. Megha Tyagi, Mr. Parish Mishra, Mr. Adarsh Srivastava, Advocates
For the Respondents: Mr. Sahil Paul, Mr. Mayank Jain, Advocates
