Delhi District Court
Devender Kumar Garg vs Iffco Tokio General Insurance Co. Ltd on 13 May, 2024
IN THE COURT OF SH. NARESH KUMAR MALHOTRA :
DISTRICT JUDGE (COMMERCIAL)-06
TIS HAZARI COURTS, WEST: DELHI
CS (COMM) No. 829/2023
CNR No. DLWT010088172023
13.05.2024
Devinder Kumar Garg,
S/o Sh. Radhe Shyam,
R/o D-36, Amar Colony,
Nangloi, New Delhi-110041
.....Plaintiff
Vs.
IFFCO Tokio GIC Ltd.
F.A.I. Building, 2nd Floor,
10, Shaheed Jeet Singh Marg,
Block-A, Qutab Institutional Area,
New Delhi-110067.
....Defendant
Date of filing : 31.10.2023
Date of arguments : 10.05.2024
Date of judgment : 13.05.2024
SUIT FOR RECOVERY OF Rs. 12,45,241/- AGAINST THE
DEFENDANT.
JUDGMENT:
1. Vide this judgment, I am deciding the suit for recovery of Rs. 12,45,241/- filed by the plaintiff against the defendant.
2. In the plaint, it is mentioned that plaintiff is a peace loving, law abiding citizen and resides at Amar Colony, Nangloi and engaged in the business of building material. Plaintiff is owner of vehicle having registration No. HR-63C-9903 and got his vehicle insured with the defendant. During the currency of CS (Comm.) No. 829/2023 -1- the policy, the vehicle had met with an accident on 05.03.2023. the impact of the accident was so huge that the vehicle was badly damaged. Plaintiff had lodged a complaint with the defendant for the loss suffered by him. The defendant deputed Surveyor to assess the loss, who after survey informed the plaintiff that the vehicle is damaged beyond repair and hence, it would be considered as a total loss. It is further mentioned in the plaint that the plaintiff supplied all the required documents as and when sought by the defendant but the defendant has not settled the claim of the plaintiff till date. Defendant kept on insisting on irrelevant documents which do not have any material effect on the claim in question. The defendant kept on insisting the plaintiff to submit National Permit of the said vehicle authorizing its use at the time of the accident. The defendant was informed that the vehicle was empty at the time of the accident and was not carrying any load. It was also brought to the notice of the defendant that the accident happened within the home state where the vehicle is registered hence there is no relevance of National Permit. There is no such condition/clause in the Insurance Policy which makes the National Permit a mandatory document for settlement of a claim. Thereafter, the defendant shifted its requirement from National Permit to State Permit. Defendant while exchanging e-mails with the counsel for the plaintiff mentioned Section 66 of Motor Vehicles Act, 1988. It was mentioned in the email that the document was being insisted /required upon in accordance with the provisions of above section. It is further mentioned that counsel for plaintiff replied to the email of the defendant stating that the insurance policy is a contract between the insurer and the insured.
CS (Comm.) No. 829/2023 -2-Insurance policy supplied to the plaintiff has no such clause or condition which subjects the settlement of a claim on production of any type of permit. Defendant has not provided any such clause/condition, if any, mentioned in the insurance policy till date and have rather chose to be silent on the objection raised by the plaintiff. It is mentioned that each claim should be dealt separately with keeping in view the circumstances of the incident. The defendant has no right to ask for documents beyond the entered contract. It is mentioned that vehicle in question was not carrying any load at the time of the accident. The plaintiff had valid Insurance Policy and the loss happened during the currency of the Insurance Policy. The vehicle was within the home state and being deiven by the driver for carrying out necessary repairs. Hence, there was no requirement of having a National or State Permit in light or the fact that the vehicle was not being used for any commercial activity. It is further mentioned that even otherwise permit has no nexus with the accident in question, therefore, the defendant cannot make it a basis of non-settlement of the claim of the plaintiff. The defendant has failed to point out a clause or condition or any term of the Insurance Policy which make production of Permit as pre-condition of settlement of a claim. The defendant has opted to remain mute and did not mention any clause or condition requiring permit while responding to the counsel for the plaintiff. As per the plaintiff, defendant has acted in contravention of the policy contract. Hence, the defendant is liable to make the payment to the plaintiff with interest @ 12% per annum from 04.03.2023 by which the defendant ought to have settled the claim of the plaintiff. It is prayed that a money decree of Rs.
CS (Comm.) No. 829/2023 -3-12,45,241/- be passed in favour of the plaintiff and against the defendant. The plaintiff has also claimed pendentelite and future interest @ 12% per annum from the date of filing of present suit till realization of amount.
3. The defendant has filed written statement taking preliminary objections that this court has no jurisdiction to try and entertain the present suit as policy issuing office is not situated within the territorial jurisdiction of this Court. Plaintiff has not come to the court with clean hands. The plaintiff has not supplied the required documents as demanded by letters dated 24.04.2023, 09.05.2023 and 22.05.2023, so that defendant could process the claim of the plaintiff. It is mentioned that a commercial package policy bearing no. MP438390 valid from 07.06.2022 to 06.06.2023 was issued for vehicle No. HR-63C- 9903 (goods carrying transport vehicle i.e. Truck) for a sum of Rs. 11,83,381/-. The plaintiff was required to comply with the terms and conditions of the policy. It is mentioned that the vehicle met with an accident on 05.03.2023. It is also admitted that the plaintiff lodged a claim with the respondent seeking indemnification for the own damage loss of the insured vehicle baring registration No. HR-63C-9903. The plaintiff in the claim form stated that the truck was empty at the time of accident but was going to fill building material. It is mentioned that on receiving the information of accident of said vehicle, the defendant company appointed Mr. Hemant Kumar Sharma as a Surveyor for verification of the facts related to the incident. The surveyor in his report has observed that the permit of the vehicle had expired in March, 2020. It is further mentioned that vide CS (Comm.) No. 829/2023 -4- letter dated 24.04.2023, 09.05.2023 and 22.05.2023 the plaintiff was asked to provide a valid National Permit and Authorization certificate at the time of accident. The plaintiff has neither provided the said document nor gave any response to the respondent/ defendant, therefore, the claim of the plaintiff vide letter dated 25.08.2023 was closed due to non-compliance of documents and relevant policy terms and conditions. Even till date the plaintiff has not supplied the aforesaid documents to settle the claim of the plaintiff which is violation of Condition No. 1 of the policy terms and conditions. It is mentioned that the policy is limited to the use of the insure vehicle for the purpose of carriage of goods within the meaning of Motor Vehicle Act, 1988. Section 66 of the Motor Vehicle Act specifies that a valid permit is necessary for any motor vehicle to be used as carrier of goods irrespective of whether such vehicle is carrying any goods or not. It is mentioned that without a valid permit and authorization certificate the insured vehicle could not be used as a carrier of goods and at the time of accident, the vehicle was being driven outside the limitation of use as stated in the Insurance policy due to not having a valid permit. In reply on merits, similar averments are made. Dismissal of suit is prayed by the defendant.
4. Plaintiff has filed replication and controverted the allegations made in the written statement and further reaffirmed the averments made in the plaint.
5. On the basis of pleadings of the parties, following issues are framed by me on 01.03.2024, which are as under:-
CS (Comm.) No. 829/2023 -5-1) Whether the plaintiff is entitled for recovery of Rs. 12,45,241/- from the defendant, as prayed ? (OPP)
2) Whether the plaintiff is entitled to the interest on the amount of Rs. 12,45,241/-, if yes then at what rate and for what period ? (OPP)
3) Relief.
6. In evidence plaintiff has examined himself as PW-1. This witness has filed affidavit on the lines of plaint. This witness has proved UID of the plaintiff as Ex. PW-1/2, driving licence as Ex. PW-1/3, registration certificate of Vehicle No. HR 63C 9903 as Ex. PW-1/4, certificate of Fitness of vehcile No. HR 63C 9903 as Ex. PW-1/5, copy of National Permit Part B as Ex. PW-1/6, copy of National Permit Part A as Ex. PW-1/7, authorization of National Permit as Ex. PW-1/8, request letter dated 24.04.2023 of defendant as Ex. PW-1/9, reminder letter dated 09.05.2023 of defendant as Ex. PW-1/10 and the deponent relies upon the documents marked as Ex. P-1 to Ex. P-13.
This witness is duly cross examined by Ld. Counsel for defendant. During cross examination this witness has stated that he had read the contents of Ex. P-1. He has admitted that in this policy at point- A "limitation as to use is mentioned". This witness has stated that he has not filled the claim form at the time of submitting his claim. This witness has voluntarily stated that the surveyor had conveyed him to sign on the documents and he will himself fill the form. This witness has admitted his signature on motor claim form at point- A. this witness has stated that he had never mentioned in Ex. PW-1/DX-1 that vehicle was going to fill building materials. He has admitted that on the date of CS (Comm.) No. 829/2023 -6- accident i.e. on 05.03.2023 the vehicle No. HR63C 9903 was not having any permit. He has admitted that permit of vehicle was already expired in March, 2020. He has admitted that the defendant company had sent letter dated 24.04.2023 which is Ex. P-2 and letter dated 09.05.2023 which is Ex. P-3. He has stated that he has received the letter dated 22.05.2023 which is Ex. PW- 1/DX-2. He has admitted that he had received a letter dated 25.08.2023 from the defendant, which is Ex. PW-1/DX-3. This witness has admitted that the defendant company had appointed Mr. Hemant Kumar as Surveyor. He has stated that he had not gone through the report of the Surveyor. This witness has admitted that his vehicle met with an accident at Jhajhar Haryana.
7. On the other hand, defendant has examined Sh. Pradeep Singh, Manager as DW-1. This witness has filed affidavit on the lines of written statement. This witness has proved copy of policy already exhibited as Ex. P-1, copy of claim form already exhibited as Ex. PW-1/DX-1 and copy of surveyor report as Ex. DW-1/1. This witness is duly cross examined by Ld. Counsel for plaintiff. This witness has admitted that he has not placed on record any authority letter to depose in the present case. This witness has produced that authorization letter in his favour as Ex. DW-1/PX1. This witness has stated that he is fully conversant with the facts of the present case. He has admitted that claim form was not filled in his presence. He has voluntarily stated that it is generally filed by the insured i.e. the plaintiff. This witness has admitted that plaintiff had also supplied the permit. He has voluntarily stated that permit was obtained by the plaintiff after CS (Comm.) No. 829/2023 -7- the accident in question. He has admitted that the copy of permit given by the plaintiff was valid from 29.03.2023. This witness has stated that he cannot admit or deny if the copy of survey report was sent to the plaintiff or not. This witness has stated that the survey report has assessed the value of the loss as Rs. 4,81,450.86 and this amount is including GST. This witness has stated that he is not in a position to explain the amount of Rs. 8,33,619.16 mentioned by the surveyor at point- A of Ex. DW- 1/1. He has admitted that in the policy Ex. P- 1, there is no mention of requirement of permit specifically. This witness has voluntarily stated that as per policy schedule it is mentioned "Limitation as to use; Goods carrying vehicles- Class A: use only in carriage of goods within the meaning of Motor Vehicle Act". This witness has stated that he is aware about the Section 66 of Motor Vehicle Act as the same is mentioned in para no. 6 of his affidavit. This witness has stated that he had not read the Section 81 of Motor Vehicle Act. This witness has admitted that the claim of the plaintiff was rejected when the defendant received notice from Ld. Secretary DLSA of pre mediation litigation. He has admitted that there is no letter on the record to show that the rejection letter of the claim was supplied to the plaintiff. This witness has stated that he had mentioned in para no. 6 of affidavit in evidence that even if vehicle is empty, it must have permit as per Section 66 of Motor Vehicle Act. This witness has stated that the surveyor had prepared the report on 25.05.2023 and forwarded the same to the office.
8. I have heard Ld. Counsels for both the parties at length and perused the record carefully.
CS (Comm.) No. 829/2023 -8-9. My issue-wise findings are as under:-
10. Issue No. 1- Whether the plaintiff is entitled for recovery of Rs. 12,45,241/- from the defendant, as prayed ? (OPP) The burden to prove this issue is upon the plaintiff.
11. At the very Outset, I may observe that the provisions of Section 2 (1) (c)(xviii) of Commercial Courts Act, 2015 are very clear which reads as under:-
(c) "commercial dispute" means a dispute arising out of-
(i) ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents;
(ii) export or import of merchandise or services;
(iii) issues relating to admiralty and maritime law;
(iv) transactions relating to aircraft, aircraft engines, aircraft equipments and helicopters, including sales, leasing and financing of the same;
(v) carriage of goods;
(vi) construction and infrastructure contracts, including tenders;
(vii) agreements relating to immovable property used exclusively in trade or commerce.
(viii) franchising agreements;
(ix) distribution and licensing agreements;
(x) management and consultancy agreements;
(xi) joint venture agreement;
(xii) shareholders agreements;
(xiii) subscription and investment agreements pertaining to the services industry including outsourcing services and financial services;
(xiv) mercantile agency and mercantile usage;
(xv)partnership agreements;
(xvi) technology development agreements;CS (Comm.) No. 829/2023 -9-
(xvii) intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits;
(xviii) agreement for sale of goods or provision of services;
(xix) exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum; (xx) insurance and re-insurance;
(xxi) contracts of agency relating to any of the above; and (xxii) such other commercial disputes as may be notified by the Central Government.
12. The provisions of Section 2 (1) (c) (xviii) of Commercial Courts Act as above are very much clear. Sale of goods are governed by Sale of Goods Act, they pertain to movable properties, any dispute of sale or agreement to sale of goods of specified value do come within the jurisdiction of Commercial Courts Act. The clause also includes the services and guarantee given for the goods sold. The service or guarantee may be oral or written. Therefore, the facts which alleged in the plaint comes under the Commercial disputes.
13. Secondly, now the question arises whether this Court has the pecuniary jurisdiction to adjudicate the matter which is dispute. In this regard, the provisions of Section 3 of Commercial Courts Act, 2015 provides that:
Section 3 : Constitution of Commercial Courts:
(1) The State Government, may after consultation with the concerned High Court, by notification, constitute such number of Commercial Courts at District level, as it may deem necessary for the purpose of exercising the jurisdiction and powers conferred on those Courts under this Act:CS (Comm.) No. 829/2023 -10-
[Provided that with respect to the High Courts having ordinary original civil jurisdiction, the State Government may, after consultation with the concerned High Court, by notification, constitute Commercial Courts at the District Judge level:
Provided further that with respect to a territory over which the High Courts have ordinary original civil jurisdiction, the State Government may, by notification, specify such pecuniary value which shall not be less than three lakh rupees and not more than the pecuniary jurisdiction exercisable by the District Courts, as it may consider necessary. ] 3[1A) Notwithstanding anything contained in this Act, the State Government may, after consultation with the concerned High Court, by notification, specify such pecuniary value which shall not be less than three lakh rupees or such higher value, for whole or part of the State, as it may consider necessary.]
14. Admittedly, the Commercial Court Act was amended on 03.05.2018 and by virtue of the amendment and by virtue of the notification, the pecuniary value of the Commercial Courts Act shall not be less than Rs. 3,00,000/-. In the present case, the claim amount which is shown in the plaint is of Rs. 12,45,241/-. So, the present suit falls in the category of Commercial Suit.
15. It is contended by Ld. Counsel for plaintiff that vehicle of the plaintiff bearing registration No. HR 63C 9903 insured with the defendant met with an accident on 05.03.2023 and plaintiff was also having permit and this permit was expired in March,2020. Thereafter, permit was renewed so defendant has wrongly rejected the claim of the plaintiff. On the other hand, CS (Comm.) No. 829/2023 -11- Ld. Counsel for defendant contends that vehicle was not having any valid permit. Ld. Counsel for defendant has relied on the Insurance Policy wherein, it is mentioned that vehicle be used only in carriage of goods within the meaning of Motor Vehicle Act. It is also contended by Ld. Counsel for defendant that as per Section 66 of Motor Vehicle Act as the plaintiff was not having valid permit so claim of the plaintiff was rightly rejected by the defendant. In rebuttal, it is submitted by Ld. Counsel for plaintiff that as per Section 81(5) of the Motor Vehicles Act, where a permit has been renewed under this section after the expiry of the period thereof, such renewal shall have effect from the date of such expiry irrespective of whether or not a temporary permit has been granted under clause (d) of section 87, and where a temporary permit has been granted, the fee paid in respect of such temporary permit shall be refunded. It is also contended by Ld. Counsel for plaintiff that Section 66 of Motor Vehicles Act is not applicable as per exception clause (p) wherein, it is mentioned that Section 66 is not applicable to any transport vehicle while proceeding empty to any place for purpose of repair. It is vehemently contended by Ld. Counsel for plaintiff that at the time of accident vehicle was going for repair.
16. In the present case, it is admitted fact that the vehicle of the plaintiff was insured with the defendant for the period from 07.06.2022 to 06.06.2023. It is also admitted fact that vehicle bearing No. HR 63C 9903 met with an accident on 05.03.2023. I have perused the document Ex. PW-1/1 (colly) i.e. Insurance Policy. In the Insurance policy, it is mentioned that use only in carriage of goods within the meaning of Motor Vehicle Act. As CS (Comm.) No. 829/2023 -12- per this Clause the plaintiff was required to fulfill the provisions of Motor Vehicles Act and Section 66 of the Motor Vehicles Act provides for necessity of the permit. Section 66 of Motor Vehicles Act reads as under:-
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. In the exception clause 3(p), it is mentioned that this provision is not applicable to any transport vehicle while proceeding empty to any place for purpose of repair.
17. Now, the question arises vehicle of the plaintiff was going for the repair or not.
Plaintiff has heavily relied on the claim form which is proved in the cross examination of witness PW-1 as Ex. PW- 1/DX-1 and witness has admitted his signature at point-A. It is admitted by the plaintiff that claim form is only signed by him. During cross examination, PW-1 has stated that he has not filled the claim form at the time of submitting his claim. This witness has voluntarily stated that the surveyor had conveyed him to sign on the document and stated that he will himself fill the form. The document Ex. PW-1/DX-1 was signed by the plaintiff in Hindi. Perusal of file reveals that plaintiff has signed all the CS (Comm.) No. 829/2023 -13- pleadings in Hindi. As per alleged claim form the truck collided with another truck coming from opposite side. In the claim form it was also mentioned that truck was going to fill building material and it was empty at the time of accident. This claim is not disputed by the defendant. As per this claim form the vehicle was empty at the time of accident. I am of the view that it is immaterial whether the vehicle was going for repair or going to fill the material. The plaintiff has not adduced any evidence to show that vehicle was going for repair. I am of the view that it can be infer that vehicle was empty at the time of accident.
18. It is contention of Ld. Counsel for plaintiff that permit of the vehicle was renewed after the accident and as per Section 81(5) of Motor Vehicles Act and if permit has been renewed even after the expiry, such renewal shall have effect from the date of expiry. It is also contended that Section 66 of the Motor Vehicles Act cannot be read in isolation.
19. Section 81(5) of Motor Vehicles Act reads as under:-
"Where a permit has been renewed under this section after the expiry of the period thereof, such renewal shall have effect from the date of such expiry irrespective of whether or not a temporary permit has been granted under clause (d) of section 87, and where a temporary permit has been granted, the fee paid in respect of such temporary permit shall be refunded."
20. It is admitted fact that permit of the vehicle No. HR-63C- 9903 was expired in the year, 2020 and thereafter, plaintiff has applied for renewal permit and permit was renewed in respect of CS (Comm.) No. 829/2023 -14- vehicle No. HR-63C-9903 by the Transport Department for the period from 29.03.2023 to 28.03.2024. Copy of national permit Part-A and Part -B of the vehicle shows that permit was renewed from 29.03.2023 to 28.03.2024 and authorization of national permit is also proved on record as Ex. PW-1/8 (colly). The defendant has not denied that permit of the vehicle was not renewed. The document Ex. PW-1/6 shows that permit of the vehicle was renewed on 03.04.2023.
21. Ld. Counsel for defendant has placed reliance on judgment titled as "National Insurance Co. Ltd. Vs. Chella Bharathamma & Ors." (2004) SCC 292 (SC). In this judgment Section 66 of Motor Vehicles Act has been discussed. In this judgment, it is held that "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 insurer. High Court was, therefore, not justified in holding the insurer liable". Ld. Counsel for defendant has also placed reliance on judgment of Hon'ble National Commission in the case titled "New India Assurance Co. Ltd. Vs. Deepak Jyoti Sharma" II (2016) CPJ 326 NC, wherein, it is held that "Permit is defined in Section 2(31) of the Act as under:-
"Permit means a permit issued by a State or Regional Transport Authority or an authority prescribed in this behalf under this Act authorizing the use of a motor vehicle as a transport vehicle."CS (Comm.) No. 829/2023 -15-
Omitting three provisions, Sub-section (1) of Section 66 which is material, reads thus;
"No owner of a motor vehicle shall use or permit the use of the vehicle as transport vehicle in any public place whether or not such vehicle is carrying any passenger or goods save in accordance with the conditions of a permit granted or countersigned by Regional or State Transport Authority or any prescribed authority authorizing the use of the vehicle in that place in the manner in which the vehicle is being used."
In this judgment, it is also held that "Bare reading of this provision would show that it creates a total bar on use of a vehicle in any public place whether or not such vehicle is carrying any passenger or goods unless the owner thereof holds a permit as defined in Section 2 (31). It is not in dispute that respondent was not possessing a permit of the said vehicle on the date of accident. Said sub-section would, thus, be applicable even if vehicle in question was used by the respondent for his personal work i.e. to return empty 5/6 milk tanks as alleged in para no. 2 of the complaint. Insurance policy represents a contract between the insurer and the insured and the insured has to act strictly in accordance with the statutory limitations and/or the terms of policy. Since use of vehicle in question at the time of incident was in contravention of aforesaid Sub-section (1) of Section 66 and conditions of policy, the respondent is not entitled to any amount under the policy. Orders passed by Fora below being legally erroneous cannot be sustained and deserve to be set aside". In this judgment, it is also held that "Resultantly, while allowing revision, aforesaid orders dated 28.01.2003 and 27.03.2002 are CS (Comm.) No. 829/2023 -16- set aside and complaint dismissed. Awarded amount received by the respondent will be refunded to the petitioner-insurance company within four weeks from the date of receipt of copy of this order. No order as to cost". Ld. Counsel for defendant has placed reliance on judgment titled as "United India Insurance Co. ltd. Vs. Dharam Raj" IV (2005) CPJ 115 (NC), wherein, it is held that "Bare reading of this provision would show that it creates a total bar on use of a vehicle in any public place whether or not such vehicle is carrying any passenger or goods unless the owner thereof holds a permit as defined in Section 2 (31). It is not in dispute that respondent was not possessing a permit of the said vehicle on the date of accident. Said sub- section would, thus, be applicable even if vehicle in question was used by the respondent for his personal work i.e. to return empty 5/6 milk tanks as alleged in para no. 2 of the complaint. Insurance policy represents a contract between the insurer and the insured and the insured has to act strictly in accordance with the statutory limitations and/or the terms of policy. Since use of vehicle in question at the time of incident was in contravention of aforesaid Sub-section (1) of Section 66 and conditions of policy, the respondent is not entitled to any amount under the policy. Orders passed by Fora below being legally erroneous cannot be sustained and deserve to be set aside".
Ld. Counsel for defendant has placed reliance on judgment titled as "National Insurance Company Ltd. Vs. Binod Kumar Singh" wherein, it is held that "In the present case, the main question for consideration is whether an insurance claim should be allowed either fully or on non-standard basis even CS (Comm.) No. 829/2023 -17- when there is no permit with the truck. Clearly, absence of permit is a fundamental breach of terms and conditions of the policy. We are not convinced by the reliance placed by the State Commission on the decision of the Hon'ble Supreme Court in National Insurance Company Limited Vs. Nitin Khandelwal (supra) because the present case relates to damage by fire and in Nitin Khandelwal case, the vehicle was stolen. Moreover, the Hon'ble Supreme Court in a recent judgment in Amrit Paul Singh & Anr. Vs. TATA AIG General Insurance Co. Ltd. & Ors., Civil Appeal No. 2253 of 2018, decided on 17.05.2018 has observed that the breach in respect of permit cannot be treated similar to breach due to a fake licence or overloading etc." Ld. Counsel for defendant has also placed reliance on judgment titled as "Amrit Paul Singh Vs. Tata Aig General Insurance Co. Ltd.", Civil Appeal No. 2253 of 2018, decided on 17.05.2018, wherein, it is held that "In the case at hand, it is clearly demonstrable from the materials brought on record that the vehicle 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 Act, needless to emphasis, 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 a public place without a permit is a fundamental statutory infraction. We are disposed to think so in view of the series of exceptions carved out in Section 66. The said situations cannot be equated with absence of licence or a fake CS (Comm.) No. 829/2023 -18- licence or a licence of different kind of vehicle, or, for that matter, violation of a condition of carrying more number of passengers. Therefore, the principles laid down in Swaran Singh (supra) and Lakmi Chand (supra) in that regard would not be applicable to the 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 "Tripitaka", that the existence of a permit of any nature is a matter of documentary evidence. Nothing has been brought 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 High Court had directed 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 Swaran Singh (supra) and others cases pertaining to pay and recover principle". I have perused these judgments with utmost regard. In all these judgments, the vehicle in question was not having valid permit. But in the present case permit of the vehicle was renewed.
22. On the other hand, Ld. Counsel for plaintiff has placed reliance on judgment titled as "United India Insurance Co. Ltd. Vs. Singhla Engineers & Contractors Pvt. Ltd. & Anr." III (2020) CPJ 184 (NC), wherein, it is held that "There is a huge distinction between not having route permit at all and having route permit but no having relevant route permit at point of time. The complainant, as soon as it became aware that it did CS (Comm.) No. 829/2023 -19- not possess route permit for accident site, took immediate step to rectify situation. Nothing greatly amiss was found in such conduct by concerned Haryana Authorities either as such a permit was granted with retrospective effect. This suggest that non-possession of route permit was not an act of intent, with any mala fide motive; indeed, it could not be as it is hard to imagine how complainant would have gained by not having route permit". In this judgment, it is also held that "There is also the fact that whether or not the vehicle had a route permit had nothing what so ever to do with the fact of the accident and the damage caused thereby. The insurance cover was taken for damage due to unforeseen events. The accident was unforeseen and unexpected. No mala fide on the part of the complainant with a view to gain pecuniary advantage from the Insurance Company has been alleged". Ld. Counsel for plaintiff has also placed reliance on judgment titled as "New India Assurance Co. Ltd. VS. Thirath Singh Brar" Revision Petition No. 1870 of 2015 passed by National Consumer Dispute Redressal Commission, New Delhi, wherein, it is held that "Additionally, we are of the considered view that the accident in which the vehicle got damaged cannot be attributed to its being plied without a route permit and therefore, no prejudice would be caused to the Insurance Company on account of the Complainant not possessing a route permit. For all the afore- noted reasons were are of the considered view that there is no illegality or infirmity in the concurrent finding of deficiency of service by both the Fora below". Ld. Counsel for plaintiff has placed reliance on judgment titled as "G. Kothainachiar Vs. United India Insurance Co. Ltd. & Ors" IV (2007) CPJ 347 CS (Comm.) No. 829/2023 -20- (NC), wherein, it is held that "From the facts stated above, it is apparent that there is no breach of policy condition, that is to say that there is no breach of the contract of insurance. Hence, on the ground of breach of condition of the policy, the claim cannot be repudiated". In this judgment, it is held that "The alleged breach is with regard to the provisions of Motor Vehicles Act. Therefore, the question would be whether the Insurance Company can repudiate the claim on the alleged ground of beach of some provisions of the Motor Vehicles Act or some other Act. It is not the case of the Insurance Company that the policy is a statutory policy". In this judgment, is also held that "In our view, the Insurance Company cannot repudiate the claim when there is no breach of terms of the policy, because insurance is a matter of contract between the parties". In this judgment, it is held that 'The insurance is a contract between the parties and the parties are governed by the terms of the contract. The law on the subject is settled and for this purpose, we would refer to some of the decisions of the Apex Court which were referred to at the time of hearing of the matter". In this judgment, it is held that "claim for reimbursement can be repudiated in case where the breach of condition of the policy is fundamental or material". Ld. Counsel for plaintiff has placed reliance on judgment titled as "Amalendu Sahoo Vs. Oriental Insurance Co. Ltd." II (2010)SLT 672 passed by Hon'ble Supreme Court of India. Ld. Counsel for plaintiff has heavily placed reliance on judgment titled as "Dr. Narasimula Nandini Memorial Education Trust Vs. Banu Begum & Ors." passed by Hon'ble High Court of Karnataka, Kalaburagi Bench, wherein, it is held that "A co-
CS (Comm.) No. 829/2023 -21-ordinate Bench of this court had an occasion to examine a similar issue in the case of United India Insurance Company Limited Vs. Yasmin Begum (supra). On a reading of the aforesaid provisions, it becomes clear when the permit is issued, in the first instance, it is effective from the date of issuance for a period of five years. But subsequently when a permit which has expired is renewed, it is from the date of expiry. Having regard to Sub-sections (2) and (3) of Section 81 of the Act, where there could be a delay in making of an application for renewal of permit and also keeping in mind the fact that renewal application would take sometime for it to be considered, processed and ultimately the permit being renewed even though such an application has been made well within time. Sub-section (5) of Section 81 of the Act takes care of a period during which the vehicle is plying on the public road, pending renewal of the permit. In such a case, Sub-section (5) of Section 81 of the Act states that where a permit is renewed after the expiry of its period, such renewal shall have an effect from the date of such expiry. In other words, Sub-section (5) of Section 81 of the Act deals with a case of deemed permit or takes care of a situation where pending renewal of a permit, a transport vehicle is plying on a public road. In such a situation, it cannot be considered to be a case where the transport vehicle is plying without a permit rather the vehicle is plying pending renewal of the permit i.e. on a deemed permit. Renewal of the permit could take place only if a permit had been issued in the first instance and not otherwise. Hence, the object of a provision incorporating a legal fiction must be given its fullest scope and application". In this judgment, it is also held that CS (Comm.) No. 829/2023 -22- "Smt. Preethi Patil has referred to the judgment of the Supreme Court in the case of Amrit Paul Singh (supra) in support of her contention. But the co-ordinate Bench referred to Amrit Paul Singh while deciding Yasmin Begum and held that the ratio in Amrit Paul Singh is not applicable because the factual position there was that the offending vehicle did not have permit at all. Therefore, Amrit Paul Singh is not helpful to respondent no. 4. The decision of the Supreme Court in M.S. Middle High School was also considered by the coordinate bench in the case of Yasmin Begum. Moreover, in M.S. Middle High School, we do not find any law being laid down. Therefore, we are of the view that the ratio in Yasmin Begum can be applied to the case on hand. Looked in this view, we may stated that though Ex. R1 indicates that the permit was validated with effect from 30.03.2016, in view of Section 81(5) of the Motor Vehicles Act, it should be deemed that on the day when the accident took place, the permit was in force". Ld. Counsel for plaintiff has placed reliance on judgment titled as "United India Insurance Co. Ltd. Vs. Smt. Yasmin Begum @ Yasmin & Ors." passed by Hon'ble High Court of Karnataka at Bengaluru, wherein, it is held that "Next contention is with regard to breach of the insurance company on the aspect of the offending vehicle not possessing a valid permit on the date of the incident. It is noted that in this case, the vehicle had a valid permit till 14.12.2012 and the date of the accident is 23.02.2013. Subsequently, the permit was issued on 11.03.2013 up to 10.03.2018 as per Ex. R-5, which is dated 8/10.2015. In this regard, learned counsel for the appellant-insurance company contended that it has been established by the CS (Comm.) No. 829/2023 -23- insurance company before the Tribunal that the vehicle did not possess a permit on the date of the accident and therefore, there being a breach of the terms and conditions of the policy as well as Section 66 of the Act and hence, the insurance company ought to be exonerated". In this judgment, it is also held that "But, in the instant case, it is on record that the permit in respect of the vehicle in question had expired on 14.12.2012. Subsequently, as per Ex. R-5, the permit was renewed for a period from 11.03.2013 to 10.03.2018. In fact, on 11.03.2013 payment of Rs. 850/- was made for renewal of the permit". In this judgment, it is also held that "Amrit Paul Singh is a case where the offending vehicle therein did not have a permit at all. In such circumstance, the Hon'ble Supreme Court bearing in mind the interest of the claimants and the object and purpose of the Act held that the insurance company must pay to the claimants in the first instance and recover the compensation from the owner of the vehicle. But, in the instant case, as already noted, the offending vehicle did possess a permit. The permit had expired on 14.12.2012. It was subsequently renewed on 11.03.2013 up to 10.03.2018 and for the period from 14.12.2012 up to 10.03.2013, there was deemed permit in so far as the offending vehicle herein is concerned. The offending vehicle, in the instant case, cannot be considered to be a vehicle plying without a permit. Therefore, the direction in the case of Amrit Paul Singh and Rani and others cannot be straight away applied in the instant case. As already stated, this is not a case where the offending vehicle did not have a permit at all. It is a case of non-renewal of permit as on the date of the accident, but the vehicle being covered under a deemed permit under CS (Comm.) No. 829/2023 -24- Sub-section (5) of Section 81 of the Act". In this judgment, it is also held that "Having regard to the deeming provision under Sub-section (5) of Section 81 of the Act, it is held that there is no fundamental breach of the terms and conditions of the policy vis-a-vis the permit in the instant case. Therefore, the Tribunal was justified in directing the owner and insurer to jointly and severally satisfy the award. Hence, point No. 1 is answered against the insurance company and in favour of the respondents-claimants". Ld. Counsel for plaintiff has also placed reliance on judgment titled as "National Insurance Co. Ltd. Vs. Narinder Gupta" passed by National Consumer Disputes Redressal Commission, New Delhi, wherein, it is mentioned that Section 3 of the Motor Vehicles Act to the extent, it is relevant, reads as under:-
"(1) xxx(2) A permit may be renewed on in application made not less than 15 days before the date of its expiry.
(3) Notwithstanding anything contained in sub-section (2), the Regional Transport Authority or the State Transport Authority, as the case may be, may entertain an application for the renewal of a permit after the last date specified in that sub-
section if it is satisfied that the applicant was prevented by good and sufficient cause from making an application within the time specified.
(4) xxxx (5) Where a permit has been renewed under this section after the expiry of the period thereof, such renewal shall have effect from the date of such expiry irrespective of whether or not a temporary permit has been granted under clause (d) of Section 87, and where a temporary permit has CS (Comm.) No. 829/2023 -25- been granted, the fee paid in respect of such temporary permit shall be refunded".
In this judgment, it is held that "It would thus been seen that the Regional Transport Authority/State Transport Authority, as the case may, is competent to entertain an application for renewal of a permit even after the permit itself has expired. In view of the provisions of sub-section (5) of section 81, once the permit has been renewed, it has effect from the date of expiry meaning thereby once the permit was renewed, the truck shall be deemed to have a valid permit w.e.f. 28.06.2017, when the earlier permit had expired. If this was so, the truck carried a valid permit on the date it met with an accident". In this judgment, it is also held that "The learned counsel for the petitioner company relies on the judgment of the Hon'ble Supreme Court in National Insurance Co. Ltd. Vs. Challa Upendra Rao & Ors., (2004) 8 SCC 517, and judgment of this Commission in New India Assurance Co. Ltd. Vs. Meenakshi Jarial, 2015 SCC Online NCDRC 4666, which have no applicability to this case, in view of the permit having renewed retrospectively. The present revision petitions are devoid of any merit and therefore, dismissed".
I am of the view that the judgments relied upon by the Ld. Counsel for the plaintiff are fully applicable to the facts of case in hand. In all the judgments relied upon by Ld. Counsel for defendant there was no permit of vehicle in question but in the present case the vehicle was having permit but though it was expired and it was renewed. As per Section 81(5) of the Motor Vehicles Act, where a permit has been renewed under this section after the expiry of the period thereof, such renewal shall have CS (Comm.) No. 829/2023 -26- effect from the date of such expiry. I am of the view that plaintiff is able to prove that claim was wrongly rejected by the defendant.
23. Now, the question arises as to how much amount the plaintiff is entitled to as per Insurance Policy.
The plaintiff is relying on Surveyor Report which is proved on record as Ex. DW-1/1. It is admitted fact that the vehicle was insured for a sum of Rs. 11,83,381/- but it is to be seen that for how much amount the vehicle was damaged. I have perused the Surveyor report. The Surveyor in his report Ex. DW-1/1 has assessed the loss to the tune of Rs. 4,56,000.86 and labour charges to the tune of Rs. 70,800/-. Thus, the defendant has assessed the damages of vehicle to the tune of Rs. 5,26,800.86 paise. DW-1 during cross examination has admitted that surveyor has assessed the value of the loss as Rs. 4,81,450.86. In view of the Surveyor report, I am of the view that plaintiff has suffered loss due to accident of vehicle to the tune of Rs. 4,81,450.86 and plaintiff is entitled to claim this amount from the defendant.
24. ISSUE No. 2 - Whether the plaintiff is entitled to the interest on the amount of Rs. 12,45,241/-, if yes then at what rate and for what period ? (OPP) The burden to prove this issue is upon the plaintiff. The plaintiff has claimed interest @ 12% per annum. Reliance can be placed in this regard on the judgment of Central Bank of India Vs Ravindra & Ors MANU/SC/0663/2001 passed by Hon'ble Supreme Court of India. In this judgment it is held that CS (Comm.) No. 829/2023 -27- according to stroud's Judicial dictionary of Words and Phrases interest means, inter alia, compensation paid by the borrower to the lender for deprivation of the use of his money. In Secretary, Irrigation Department, Government of Orissa & Ors Vs G. C. Roy Manu/ SC/0297/1992 (1992) 2 SCC 508, it is held that the constitution bench opined that a person deprived of the use of money to which he is legitimately entitled has a right to be compensated for the deprivation, call it by any name. It may be called interest, compensation or damages. This is the principles of Section 34 CPC.
In this judgment, Judgment of Dr. shamlal Narula Vs CIT Punjab MANU/ SC/0109/1964 (53) was also relied upon wherein it is held that interest is paid for the deprivation of the use of the money. In this judgment it is also held that in whatever category "interest in a particular case may be put, it is a consideration paid either for the use of money or for forbearance in demanding it, after it has fallen due, and thus, it is charge for the use of forbearance of money. In this sense, it is a compensation allowed by law or fixed by parties, or permitted by customs or usage, for use of money, belonging to another, or of the delay in paying money after it has become payable.
Reliance can also be placed on the judgment of
Aditya Mass Communication (P) Ltd Vs APSRTC
MANU/SC/0759/2003 wherein Hon'ble Supreme Court
granted interest @ 12% per annum. Reliance can also be placed on the judgment of "M/s IHT Network Limited Vs. Sachin Bhardwaj" in RFA No. 835/2016 & CM Appl.14617/2020 CS (Comm.) No. 829/2023 -28- wherein the Hon'ble High Court of Delhi has granted interest @12% per annum. I am of the view that interest claim by the plaintiff is reasonable. Accordingly, this issue is decided in favour of the plaintiff and against the defendant.
25. RELIEF:
In view of my above discussions, the suit of the plaintiff partly decreed/allowed. Accordingly, a decree of Rs. 4,81,450.86 is passed in favour of the plaintiff and against the defendant. The plaintiff is also entitled to interest @ 12% per annum on the amount of Rs. 4,81,450.86 from the date of repudiate of claim by the defendant till realization. Plaintiff is also entitled to the proportionate cost of the suit. Decree sheet be prepared accordingly. File be consigned to record room, after necessary compliance.
Announced in the (NARESH KUMAR MALHOTRA) open court on 13.05.24 District Judge, Comm. Court-06 West, Tis Hazari Courts Extension Block, Delhi/13.05.24 CS (Comm.) No. 829/2023 -29-