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2015 DIGILAW 1723 (KER)

Pareed Pillai v. Oriental Insurance Co. Ltd.

2015-12-23

ANIL K.NARENDRAN, P.R.RAMACHANDRA MENON

body2015
ORDER P.R. Ramachandra Menon, J. 1. Does the law declared by a Full Bench of this Court in Augustine v. Ayyappankutty, 2015 (2) KLT 139 stand correct, in declaring that absence of Permit or Fitness Certificate to the transport vehicle is only a technical breach and not a fundamental breach, in so far as it stands contrary to the law declared by the Apex Court in National Insurance Company v. Challa Barathamma, 2004 (3) KLT 454 [name of the case has been subsequently corrected as per the Official Corrigendum No. F.3/Ed.B.J./96/2004 dated 01.12.2004 as National Insurance Company v. Challa Upendra Rao, (2004) 8 SCC 517 . For having not made even a reference to the decision of the Apex Court is not above verdict liable to be declared as per incurium? Has the Full Bench considered all the relevant provisions under the Motor Vehicles Act, 1998, as to the necessity for having a Fitness Certificate to the vehicle (in view of the public safty), the necessity to have valid Permit, necessity to have Certificate Registration, to ply a vehicle and deemed absence of registration if the vehicle is not having a valid permit/fitness certificate as envisaged under Section 56 of the M.V. Act? 2. The main point involved in these cases is with regard to the right of recovery given/ not given in favour of the Insurance Company, after meeting the liability towards the claimants, for the reason that the vehicle concerned was not having a valid Permit or Fitness Certificate, as the case may be. 3. MACA No. 2030 of 2015 has been filed by the insured/owner contending that expiry of Fitness Certificate to the goods carriage (lorry bearing No. KL 8 Z 1627) involved is not a fundamental breach on the part of the insured/owner, to have granted the right of recovery in favour of insurer. MACA No. 2641 of 2015 is filed by the very same insured/owner, raising similar contention in respect of the Award passed by the Tribunal in the connected case i.e. O.P. (M.V) No. 862 of 2007, which was jointly tried and decided along with O.P. (M.V) No. 21 of 2008 involved in the former appeal. In MACA No. 1414 of 2013, the claimants in respect of the very same accident [which was the subject matter of O.P. (M.V) No. 21 of 2008 of the MACT, Iringalakkuda] seek for enhancement of compensation. In MACA No. 1414 of 2013, the claimants in respect of the very same accident [which was the subject matter of O.P. (M.V) No. 21 of 2008 of the MACT, Iringalakkuda] seek for enhancement of compensation. MACA No 2202 of 2015 has been filed by the Insurance Company, on various grounds, challenging the liability mulcted upon them, despite the denial of existence of valid policy; that the driver was not having valid driving licence; and that the concerned autorikshaw was having no valid Permit or even a Fitness Certificate. 4. The main contention raised by the appellant in MACA No. 2020 of 2015 and MACA No. 2641 of 2015 is that, in respect of the vehicle concerned therein, the only insinuation is that there was no Fitness Certificate, which according to the said appellants is not a valid ground of defence for the Insurance Company, as provided under Section 149 (2) of the Act. The learned counsel also pointed out that the issue actually stands covered in favour of the insured/owner, by virtue of the ruling rendered by a Full Bench of this Court in Augustine Vs. Ayyappankutty (cited supra) to the effect that absence of Permit or Fitness Certificate cannot be a valid ground of defence for the Insurance Company. 5. It has come to the notice of this Court that the above judgment happened to be rendered by the Full Bench unfortunately without making a reference to the law already rendered by the Apex Court on the point, with reference to the absence of Permit and the consequences resulted there from, as per the decision reported in 2004 (3) KLT 454 (cited supra). It was a case where a contention was raised from the part of the concerned respondent to the effect that there was no permit for the transport vehicle involved therein and as such, violation of any condition of permit would not arise. The said contention was repelled by the Apex Court, observing that a person who is having no permit cannot stand on a better pedestal than a person who is having a permit, but has violated the conditions in the permit. It was held by the Supreme Court that absence of valid permit is a sufficient and valid ground for the Insurance Company to contest the matter. It was held by the Supreme Court that absence of valid permit is a sufficient and valid ground for the Insurance Company to contest the matter. Scope of contest with reference to Section 170 of the M.N Act and the eligibility of the Insurance company, was has already been made party to the proceedings, as explained by the Apex Court in United India Insurance Company Limited v. Shila Datta, 2011 (4) KLT 378 (SC) is also relevant in this context. 6. With regards to the decision rendered by the Full Bench, holding that expiry of the Permit of a vehicle will not enable the insurer to get the right of recovery from the insured; it is really sad that no effort was taken by the parties on both the sides to bring the position of law/ binding precedent as on date, to the notice of the Full Bench, when the said judgment was rendered. Way back in the year 2004 itself, the lay was laid down by the Apex Court as per the decision reported in 2004 (3) KLT 454 (cited supra ) holding that, absence of valid Permit on the date of the accident, sia valid ground of defence for the insurance company under Section 149 (2) (a) (i) (c) of the M.N. Act. The observation of the Supreme Court in paragraph 12 is relevant; hence it is extracted below: "12. High Court was of the vide that since there was no permit, the question f violation of any condition thereof does not arise. The view is clearly fallacious. A person without permit to ply a vehicle cannot by placed at a better pedestal vis-Ã -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 S. 149 (2) defence is available to the insurer on that aspect. The acceptability of the stand is a matter of jurisdiction. The question of policy being operative had no relevance for the issue regarding liability of insurer. High Court was therefore, not justified in holding the insurer liable". Therefore, in terms of S. 149 (2) defence is available to the insurer on that aspect. The acceptability of the stand is a matter of jurisdiction. The question of policy being operative had no relevance for the issue regarding liability of insurer. High Court was therefore, not justified in holding the insurer liable". The contention put up for the Supreme Court, that no violation of any of the conditions of the Permit was involved (as no permit was in existence), was rejected by the Apex Court, holding that person having no permit could never be placed above a person who is having permit could never be placed above a person who is having permit, but has violated some of the conditions contained in the permit, but was violated some of the conditions contained in the permit. The said decision was never brought to the notice of the Full Bench by either side, leading to miss declaration of law already by the Apex Court, 7. The Motor Vehicles Act 1988, of course, is a beneficial statute which requires wider interpretation, as made clear by the Apex Court in Paragraph 65 of the judgment rendered in National Insurance Co. Ltd Vs. Swaran Singh, 2004 (1) KLT 781 (SC). But the question is whether such wider interpretation is intended for extending benefits to the victim or to provide any unlawful gain to wrong doer/owner or driver who operates/drives the vehicle in violation of the relevant provisions of law. The question whether absence of Fitness Certificate or Valid Permit is a technical breach or a fundamental breach has to be considered in the above background. 8. Taking a cue from the observations made by the Apex Court in Swaran Singh case (cited supra) in dealing with the effective driving license as discussed in paragraphs 81 and 82 of the said judgment, it can be said that there is an ocean of difference between a technical breach and a fundamental breach. The pints raised by the appellants/insurers before the Apex Court in Swaran Singh case (cited supra), the objection raised by the opposite side the finding given by the Apex Court and the circumstances under which judgment was rendered etc. The pints raised by the appellants/insurers before the Apex Court in Swaran Singh case (cited supra), the objection raised by the opposite side the finding given by the Apex Court and the circumstances under which judgment was rendered etc. have been discussed in detail in the order of reference [doubting the correctness of the decision of the Full Bench of this Court in National Insurance Company Ltd. v. Jisha K.P. and others, 2015 (1) KLT 1 as reported in 2016 (1) KLT 1 (Shaji v. Pradeesh). An observation has been made by the Apex Court in the above verdict [in Swaran Singh case (cited supra)], in relation to the effective and valid licence, pointing out that, if the person concerned is having driving licence to drive a light motor vehicle/car, he can drive any other light motor vehicle/jeep, for which no separate licence is necessary. Similarly, if the person concerned is having a valid permit to operate the transport vehicle in a particular route and he operates the vehicle beyond the route not covered by permit and there occurs an accident while in such operation, it may be contended as a technical breach and not fundamental breach. Almost similar will be the position, if the insured carries more passengers in the transport vehicle than the seating capacity mentioned in the permit or more goods in a goods carriage, than the load permitted to be carried; when it may be contended as a technical breach. But if the person concerned does not have any permit at all or if he violates mandatory conditions in permit in using the vehicle (Carries passengers in a goods vehicle) or uses goods carriage for transporting passengers, it is a clear breach of Section 149 (2) (a) (i) (c) of the Motor Vehicles Act, more so in view of the law declared by the Apex Court as per the decision reported in 2004 (3) KLT 454 (cited supra). 9. Coming to the question of Finess Certificate, the matter assumes more significance and it is to be more stringent, in so far as public safety of the passengers and pedestrians/other persons using the road is put to stake, more so, since the vehicle, unless fit enough, is not supposed to be put on road, merely to fulfil the greed for money, of the owner or workers. A reference to the relevant provisions of the law in this regard is necessary, to have a clear picture. 10. Section 2 (31) of the Motor Vehicles Act 1988 defines the term Permit, which means a permit issued by a State or Regional Transport Authority or an authority prescribed in this behalf under this Act authorising the use of a motor vehicles as a transport vehicle. 11. Necessity to have registration for a vehicle is stipulated under Section 39 of the Motor Vehicles Act 1988; by virtue of which no person shall drive any motor vehicle and no owner of the motor vehicle shall cause or permit the vehicle to be driven in any public place or any other place, unless the vehicle is registered in accordance with Chapter IV of the Act. 12. The registration is liable for suspension under Section 53 of the Act. If the registering authority has reason to believe� that if the condition of the vehicle is such that its use in public place would constitute a danger to the public or that it fails to comply with the requirements of this Act/Rules or has been or is being used without giving valid permit�. Cancellation of registration suspended under Section 53 is stipulated under Section.54. 13. Necessity for Permit is stipulated under Section 66 of the Act coming under Chapter V, which declares that no owner of a motor vehicle shall use or permit to use of the vehicle in a 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 such other authority authorizing the use of the vehicle in that place and in the manner as sanctioned. 14. Coming to the certificate of fitness of transport vehicle, the necessity in this regard is stipulated under Section 56 of the Act, which in crystal clear terms specifies (subject to provisions of Sections 56 and 60) that a transport vehicle shall not be deemed to be validly registered for the purpose of Section 39, Unless it carries a certificate of fitness as prescribed. 15. 15. Section 84 of the act deals with the general conditions attaching to all permits and Clause (a) stipulates a condition that the permit relates, shall carry valid certificate of fitness issued under Secrtion 56 and shall at all times so maintained. 16. Section 86 (1) of the Act confers power upon the transport authority who has granted the permit to cancel the permit or suspend the same, on same specified grounds; amongst which clasuse (a) is in respect of breach involving any conditions specified under Section 84 or of any condition contained in the permit. 17. Using the vehicle in an unsafe condition is an offence under Section 190 of the Act, wherein the penalty has also been prescribed. Separate penalty is prescribed under Section 192 of the Act, if anybody drives a motor vehicle or causes or allows a motor vehicle to be used in contravention of Section 39 i.e. without registration. Similarly, if anyone drives the motor vehicle or causes or allows a motor vehicle to be4 used in contravention of Section 66 (1) (using without permit) contravenes any of the conditions of permit, separate penalty is provided. 18. Rule 48 of the Central Motor Vehicles Rule 1989 deals with the issue of certificate of Registration, which contains a proviso to the effect that Certificate of Registration pertaining to a transport vehicle shall be handed over to the registered owner only after recording the certificate of fitness in Form 39. The validity of the Fitness Certificate is provided under Rule 62 of the Central Motor Vehicles Rules, 1989. 19. Drom the above discussions, it is quite evident that the registration of a vehicle, existence of valid permit and availability of fitness certificate all through out [if the vehicle is a transport vehicle] are closely interlinked and one cannot be segregated from the other. The vehicle should be completely fit to be plied on the road, which otherwise will cause threat to the lives and limbs of passengers and the general public. The vehicle should be completely fit to be plied on the road, which otherwise will cause threat to the lives and limbs of passengers and the general public. Only if the vehicle is having valid Fitness Certificate, necessary Permit will be issued, and by virtue of Section 56 of the Act, no transport vehicle without valid Fitness Certificate will be deemed as a validly registered vehicle, for the purpose of Section 39 of the Act and by virtue of section 39, nobody shall drive or cause the motor vehicle to be driven valid registration in public place or in any other such place. Similar is the provision with regard to Section 66 as well, where the necessity for Permit is stipulated. Crux of the legal prescriptions is that, when the vehicle us not having a Fitness Certificate, it will deemed as having no certificate of registration and when the vehicle is not having Permit of Fitness Certificate, nobody can drive such vehicle and no owner can permit use of any such vehicle compromising with lives and limbs of the passengers and the general public. Since the safety of passengers and the general public was of much concern and consideration of the law makers, adequate provisions have been incorporated under the Statues, providing the circumstances which constitute offence, also prescribing penalty. This being the position, such lapse, if any, can only be regarded as a fundamental breach and not a technical breach. We respectfully disagree with the declaration made by the Full Bench without making a reference to the above provisions especially Sections 84 & 86 of the Act and Rules 48 and 62 of the Central Motor Vehicles Rules, but for making a reference to Rule 82 of the Central Motor Vehicle Rules, which in fact deals only with Tourist Permits. This is more so, since the law declared by the Full Bench stands diametrically opposite to the law declared by the Apex Court as per the decision reported in 2004 (3) KLT 454 (cited supra) in relation to the violation of condition / absence of valid permit. 20. This is more so, since the law declared by the Full Bench stands diametrically opposite to the law declared by the Apex Court as per the decision reported in 2004 (3) KLT 454 (cited supra) in relation to the violation of condition / absence of valid permit. 20. In view of the law declared by the Supreme Court, which is the law of the land by virtue of Article 141 of the Constitution of India, we are bound to follow the said verdict passed by the Supreme Court, instead of the one rendered by the Full Bench of this Court (cited supra), which may have to be declared as per incurium. But in so far as the judgment rendered by the full Bench stands, notwithstanding the verdict to the contrary passed by the Apex Court much earlier, and if the decision is liable to be declared as per incurim, the question is whether the full Bench decision could be followed by the Tribunals and other courts. The position has to be made clear by Bench of appropriate strength, in the light of the relevant provisions of law and the verdict passed by the light of the relevant provisions of law and the verdict passed by the Apex Court as mentioned above. So as to caused the matter to be considered accordingly, it has become essential to have the matter placed before the Honble Chief Justice, to be dealt with in accordance with law. It is ordered accordingly. In view of the nature of contentions raised by the parties, particularly the appellants in MACA No. 2030 and 2202 of 2015, the steps for recovery at the instance of the Insurance Company, if any, shall be kept in abeyance for a period of three months.