Karnataka High Court
Habeeba Khanum vs Hulageshi on 18 November, 2016
Author: S.Sujatha
Bench: S.Sujatha
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 18TH DAY OF NOVEMBER, 2016
BEFORE
THE HON'BLE MRS.JUSTICE S.SUJATHA
M.F.A.No.10083/2012 [MV]
BETWEEN :
HABEEBA KHANUM
W/O LATE ABDUL REHAMAN,
AGED ABOUT 52 YEARS,
OWNER OF INDO GAS AGENCY,
R/O 3RD MAIN, 1ST CROSS,
BEHIND OLD BCM OFFICE,
VIDYA NAGARA, CHITRADURGA-577501 ...APPELLANT
(BY SRI SPOORTHY HEGDE N., ADV.)
AND :
1. HULAGESHI
S/O DEVIRAPPA, MAJOR,
OWNER OF AUTORICHKSHAW
NO.KA-16/A-4354,
R/O CHEERANAHALLY,
HOLALKERE TALUK,
CHITRADURGA DISTRICT-577526.
2. M/s RELIANCE GENERAL INSURANCE
CO. LTD., BY ITS MANAGER,
B.D.ROAD, CHITRADURGA-577501. ...RESPONDENTS
(BY SMT.ARCHANA MURTHY P., ADV. FOR R-1;
SRI H.N.KESHAVA PRASHANTH, ADV. FOR R-2.)
THIS M.F.A. IS FILED UNDER SECTION 173(1) OF
M.V.ACT AGAINST THE JUDGMENT AND AWARD DATED
31.05.2012 PASSED IN MVC NO.471/2011 ON THE FILE OF
THE SENIOR CIVIL JUDGE AND CJM, ADDITIONAL MACT,
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CHITRADURGA, PARTLY ALLOWING THE CLAIM PETITION FOR
COMPENSATION AND SEEKING ENHANCEMENT OF
COMPENSATION.
THIS M.F.A. HAVING BEEN RESERVED FOR ORDERS ON
06.10.2016, COMING ON FOR PRONOUNCEMENT OF
JUDGMENT, THIS DAY, THE COURT DELIVERED THE
FOLLOWING:
JUDGMENT
This appeal is filed by the claimant challenging the Judgment and Order passed by the Motor Accident Claims Tribunal, Chitradurga, [the 'Tribunal', for short] in MVC No.471/2011, whereby the claim petition as against respondent No.2 is dismissed.
2. Briefly stated the facts are:
That the claimant filed a petition before the Tribunal contending that he sustained grievous injuries in the motor vehicle accident which occurred on 30.8.2010 owing to the actionable negligence of the driver of the auto rickshaw bearing registration No. KA-16/A-4354 (offending vehicle), while he was walking on the road as a pedestrian. Respondent Nos.1 and 2 entered appearance through their respective counsel and -3- resisted the claim. The Tribunal, after analyzing the evidence on record, awarded a sum of Rs.15,000/- with interest @ 6% p.a. from the date of petition till realization, as global compensation absolving the insurer from the liability to indemnify the owner of the offending vehicle.
3. The principal contention of the insurer was that on the date of the accident, the offending vehicle had permit to ply within Holalkere town only, as per Ex.R2. Thus, even if the said vehicle is validly insured as per Ex.R1, the insurer is not liable to indemnify the owner since the driver of the offending vehicle had violated the terms and conditions of the policy by deviating the permitted route i.e., plying the vehicle outside the Holalkere town. Admittedly, the accident in question had occurred at Vidya Nagar, Chitradurga. It was the case of respondent No.1/owner of the offending vehicle that the driver of the said offending vehicle had -4- taken the vehicle for repairs to the garage at Chitradurga. Such being so, clause (p) to Subsection (3) of Section 66 would apply. This ground not being substantiated by convincing evidence, the Tribunal rejected the same and exonerated the Insurance company from the liability.
4. Reiterating the grounds urged before the Tribunal, the parties to the appeal submitted their arguments. Given the circumstances, the point that arises for consideration in this appeal is, whether deviation of permitted route as per the permit issued by the appropriate authority would be a statutory defence available to the Insurance company under Section 149(2)(a)(i)(c) of the Motor Vehicles Act, 1988, ('Act' for short) ?
5. It is apt to examine the relevant provisions i.e., Section 149(2)(a)(i)(c) of the Act which reads thus: -5-
(a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:-
(i) a condition excluding the use of the vehicle -
"(a) xxxx
(b) xxxx
(c): for a purpose not allowed
by the permit under which the
vehicle is used, where the
vehicle is a transport vehicle, or
(d) xxxx "
Section 66(1) of the Act reads as follows:
"Section 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 -6- authority authorizing him the use of the vehicle in that place in the manner in which the vehicle is being used:"
Section 149 (7) of the Act indicates the manner in which Subsection 2 of Section 149 has to be interpreted.
"Section 149 (7) : No insurer to whom the notice referred to in sub-section (2) or sub- section (3) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment or award as is referred to in sub-section (1) or in such judgment as is referred to in sub-section (3) otherwise than in the manner provided for in sub-section (2) or in the corresponding law of the reciprocating country, as the case may be."
6. Thus, it is clear that the insurer can avoid its liability only on the statutory defences enumerated in Subsection 2 of the Section 149 of the Act. -7-
7. In this background, the Judgments relied upon by the learned Counsel appearing for the parties are examined.
8. In the case of K.V.THIMMEGOWDA VS.
KAMALAMMA reported in ILR 1991 KAR 4127, the Division Bench of this Court while considering the question whether the insurance company is liable to pay compensation in respect of the injury to or death of a third party, caused by the motor accident by a motor vehicle, which is a stage carriage while plying or being used lawfully otherwise than as a stage carriage, at a public place, even if such place does not lie on the route in respect of which it is permitted to operate as a stage carriage, has held that an insurance company is liable to pay compensation even in such cases.
9. In the case of UNITED INDIA INSURANCE CO. LTD. AND OTHERS VS. CHANDAMMA AND OTHERS reported in ILR 2000 KAR 1302 considering -8- the relevant provisions of the Act and on consideration of the relevant conditions in the policy of insurance, the Division Bench of this Court has held thus:
"6. Admittedly, the ground spelt out under sub-clauses (b), (c) and (d) of clause
(a)(i) and the ground under clause (b) of Section 149(2) are not applicable to the defence of insurers in these cases. On the other hand, an attempt had been made for the insurers to bring their cases within the purview of the defence ground envisaged in sub-clause (a) of sub-section (2)(a)(i). This ground is also not available to them for the reason that, admittedly, each of the offending vehicles was covered by a valid permit to carry passengers for hire or reward as they were "public service vehicles". Merely because these vehicles were stated to have stopped and picked up passengers on the permitted route, presumably in breach of their permit condition, that by itself does not constitute a statutory defence available in sub-section (2)(a)(i)(a) of Section 149. In fact, Section 149(2) of the New Act i.e., Act of 1988, -9- corresponds to Section 96(2) of the Old Act i.e., Act of 1939. The same defence grounds as are contained in Section 149(2) of the New Act were existing as the defence grounds under sub-section (2)(b) and (c) of Section 96 of the Old Act. Similar question had arisen for consideration of the Division Bench of this Court in the case of K.V. Thimmegowda v Kamalamma' and the same had been answered holding:
"An Insurance Company is liable to pay compensation in respect of the injury to or death of a third party, caused by a motor accident by a motor vehicle, which is a stage carriage while plying or being used lawfully otherwise than as a stage carriage, at a public place, even if such public place does not lie on the route in respect of which it is permitted to operate as a stage carriage".
Therefore, in law the appellants/petitioners- insurers are not exempt from their liability to pay compensation under their respective 'Act Policies' by mere reason of 'contract carriages'
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in question being plied as 'stage carriages' in breach of their permit condition since such a defence plea is not permissible under sub- section (2) of Section 149 of the Act. If the said vehicles were found to have been plying in breach of their permits condition, it is open for the concerned authorities under the Act to take appropriate action as is permissible under other provisions thereof viz., Sections 86, 177and 192, as the case may be.
Therefore, we find the contention of the learned Counsel for appellants/writ petitioners without force and weight and the appeals are, therefore, bound to fail."
10. In the case of NEW INDIA ASSURANCE CO. LTD., BANGALORE .VS. PAPAIAH AND OTHERS reported in 2005 AIR KANT R 1678 placing reliance on the Judgment of the Hon'ble Apex Court in NATIONAL INSURANCE CO. LTD. VS. CHALLA BHARATHAMMA AND OTHERS reported in 2004 AIR SCW 5301, it was observed thus:
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"10. Thus, in view of the settled position of law as laid down by the Apex Court in the cases referred to above, we are of the considered opinion that even if the Insurance Company is not liable, yet, having regard to the object of the Motor Insurance Company Act and the victims being the third parties, the Insurance Company, though not liable, has to pay the compensation awarded to the claimants and the course open to it is to initiate proceedings against the insured before the very same Tribunal and take necessary steps to recover the amount awarded by the Tribunal from the insured."
11. The Judgment in the case of 'NATIONAL INSURANCE CO. LTD., vs. SIDDAIAH AND ANOTHER' rendered in MFA No.9791/2010 [DD-3.4.2013] distinguishing the Judgment of the Hon'ble Apex Court in CHALLA BHARATHAMMA's case [supra], had observed that the insured had permit to ply the auto rickshaw. However, he had violated the route
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conditions of permit. Therefore, it cannot be said that vehicle was used for a purpose not allowed by permit. It was held that CHALLA BHARATHAMMA's case [supra], was rendered in the context where the insured vehicle had plied without there being a permit. Similar view was taken in the case of ''NATIONAL INSURANCE CO. LTD., vs. ANANDAPPA' rendered in MFA No.5450/2010 [DD-9.4.2013]. In the case of B.T. VENKATESH - VS- SRI JAGADEESH KUMAR AND OTHERS (M.F.A. NO.9582/2007, DD 24.08.2012, the Division Bench of this Court observed that so far as fastening the liability on insurance company is concerned, the findings of the Tribunal is clear that, there is violation of the policy conditions by the driver and the owner of the offending auto rickshaw which is insured with the third respondent/insurance company. The earlier Judgment of the Division Bench was not referred to in B.T. VENKATESH's case [supra]. It was purely on the facts of that case the Judgment was rendered. In the case of
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SMT. KEMPAMMA VS. RAMESH AND ANOTHER (M.F.A. NO.7723/2011 DD 08.10.2013), it was observed that in view of the Judgment of the Hon'ble Apex Court in the case of CHALLA BHARATHAMMA [supra], it cannot be said that the words used in clause [c] of Section 149[2][a][1] has to be read in the context of 'use of vehicle' and not relating to violation of permit condition. It is held that violation of the permit condition is the defence available to the insurer, thus accepted the plea put forward by the insurer, namely, it is entitled to contend violation of permit condition as a ground to stave of its liability, thereby finding of the Tribunal in absolving the insurer of its liability was upheld. In the case of REHMAT BEE AND OTHERS VS. LIYAQAT ALI AND ANOTHER (M.F.A. NO.30274/2010, DD 20.08.2014) placing reliance on the Judgment of this Court in THIMMEGOWDA and CHANDAMMA [supra], distinguished the Division Bench Judgment of B.T. VENKATESH and held that the Division Bench
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Judgment of THIMMEGOWDA and CHANDAMMA [supra] are applicable. It is held that deviation of route permit would not absolve the liability of the insurer since the same does not come with in the purview of Section 149[2] of the Act.
12. In the background of these Judgments, the factual matrix of the present case is analysed.
13. Admittedly, the offending vehicle had the permit to ply within Holalkere town as per Ex.R2, the permit issued by the appropriate authority. The accident in question occurred within the jurisdictional limits of Vidyanagar, Chitradurga, outside the permitted jurisdictional limits. However, it was contended by the owner of the offending vehicle that the driver of the said offending vehicle had taken the vehicle for repairs to garage at Chitradurga. Thus, exemption clause (p) of Subsection (3) of Section 66 is pressed into service.
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14. Now the first question would be whether the deviation of route would fall under Section 149[2][a][i][c] of the Act. To examine this, in the light of the Judgments referred to supra, it is apt to refer to the phrase 'for a purpose not allowed by the permit'. The next question would be whether 'for a purpose not allowed by the permit' would include violation of the terms and conditions of the permit. To analyze this aspect, it would be beneficial to refer to the definition clause of 'permit' under Section 2[31] of the Act which defines 'permit' 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.
Permit is issued to a transport vehicle. Section 66 of the Act contemplates the necessity for permit.
Section 72 of the Act provides for grant of stage carriage permit whereby the Regional Transport Authority, if it
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decides to grant a stage carriage permit, may grant the permit for a stage carriage of a specified description and may, subject to any rule that may be made under the Act, attach to the permit any one or more of the conditions which are 24 in number. Section 74 deals with grant of contract carriage permit. The condition attached to the permit under Section 74 are about 13 in number. Section 75 deals with scheme for renting of motor cabs. Section 76 deals with application for private service vehicle permit. Section 76[3] contemplates that the Regional Transport Authority if it decides to grant the permit may, subject to any rules that may be made under this Act, attach to the permit any one or more of the conditions which are 7 in number. Similarly, Sections 77, 78 and 79 deals with grant of goods carriage permit. The conditions that could be attached for granting goods carriage permit are about 9 in number.
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15. Consequences of violation of permit condition are contemplated in Section 86 of the Act where the permit can be cancelled, penalty can be imposed under Section 192-A of the Act. Section 207(1) of the Act contemplates power to detain vehicles used without certificate of registration permit, etc which reads thus:
"207. Power to detain vehicles used without certificate of registration permit, etc.--
(1) Any police officer or other person authorised in this behalf by the State Government may, if he has reason to believe that a motor vehicle has been or is being used in contravention of the provisions of section 3 or section 4 or section 39 or without the permit required by sub-section (1) of section 66 or in contravention or any condition of such permit relating to the route on which or the area in which or the purpose for which the vehicle may be used, seize and detain the vehicle, in the prescribed manner and for this purpose take or cause to be taken any steps he may consider proper for the temporary
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safe custody of the vehicle: Provided that where any such officer or person has reason to believe that a motor vehicle has been or is being used in contravention of section 3 or section 4 or without the permit required by sub-section (1) of section 66 he may, instead of seizing the vehicle, seize the certificate of registration of the vehicle and shall issue an acknowledgment in respect thereof.
(emphasis supplied)
16. Section 207 empowers any police officer or other authorized person to seize and detain the vehicle for the contraventions of sections 3 or section 4 or section 39 or without the permit required by sub- section [1] of section 66 or in contravention or any condition of such permit relating to the route on which or the area in which or the purpose for which the vehicle may be used.
17. It is beneficial to refer to this provision only to ascertain the intention of the legislature in employing
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the words 'the purpose for which the vehicle may be used'. There are different kinds of contravention of the permit. One of it is relating to the route on which or the area in which the vehicle may be used. The purpose for which the vehicle may be used is distinguishable from the terms and conditions of the permit. Utmost, route on which or the area in which the vehicle may be used is one of the terms and conditions of the permit. But, it cannot be construed as the purpose for which the vehicle may be used. The Hon'ble Apex Court while considering this aspect relating to section 207 of the Act, in the case of 'STATE OF MAHARASHTRA AND OTHERS vs. NANDED-PARBHANI Z.L.B.M.V. OPERATOR SANGH' reported in 2000 [2] SCC 69 has observed thus:
"According to the learned counsel appearing for the State of Maharashtra the expression "purpose for which the vehicle may be used" could be construed to mean that when the vehicle is found to be carrying
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passengers more than the number prescribed in the permit, the purpose of user is otherwise. We are unable to accede to this contention as in our opinion, the purpose would only refer to a contingency when a vehicle having a permit of a stage carriage is used as a contract carriage or vice versa or where a vehicle having a permit for stage carriage or contract carriage is used as a goods vehicle and vice versa."
18. Though this decision is rendered in the context of Section 207 of the Act, the same would throw light to interpret the words 'for a purpose not allowed by the permit' under Section 149[2][a][i][c] of the Act. 'Purpose' would be construed as stage carriage, contract carriage, goods carriage, private vehicle, temporary permit and so on. The terms and conditions attached to each type of permit cannot be construed as the purpose for the permit. 'Purpose' and 'the terms of conditions' are two different aspects. The legislature in its wisdom
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thought it fit to restrict the defence available under Section 149[2][a][i][c] of the Act 'for a purpose not allowed by the permit' and not for 'violation of any terms and conditions of the permit'. For example, if a vehicle holding goods carriage permit is carrying passengers or vice-versa. Then, it can be held that the vehicle holding goods carriage permit is being used for a purpose not allowed by the permit. The breach of conditions of the permit would by itself can not be characterised as the purpose not allowed in the permit. In CHALLA BHARATHAMMA's case [supra], the Hon'ble Apex Court has held thus:
"12. High Court was of the view that since there was no permit, the question of violation of any condition thereof does not arise. The view is clearly fallacious. A person without permit to ply a vehicle cannot be placed at a better pedestal vis-a-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 Section
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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."
The said judgment is rendered in the context of 'no permit'. The motor vehicle not possessing a permit means the vehicle was not permitted to ply in the public place or in other words, there is infraction of law which clearly establishes the use of the vehicle for a purpose not allowed in law. Hence, the said Judgment of CHALLA BHARATHAMMA's case [supra] is not applicable to the facts of the present case.
19. In CHALLA BHARATHAMMA's case [supra], their Lordships have referred to the Judgment of the Hon'ble Apex Court in the case of 'NEW INDIA ASSURANCE CO., LTD., vs. ASHA RANI AND OTHERS'
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reported in [2003 [2] SCC 223] wherein it was observed as follows:
"We may consider the matter from another angle. Section 149[2] of the 1988 Act enables the insurers to raise defences against the claim of the claimants. In terms of clause [c] of sub-section [2] of section 149 of the Act one of the defences which is available to the insurer is that the vehicle in question has been used for a purpose not allowed by the permit under which the vehicle was used. Such a statutory defence available to the insurer would be obliterated in view of the decision of this Court in Satpal Singh's case [2000] 1 SCC 237."
20. In ASHA RANI's case [supra], the Hon'ble Apex Court was considering a case of unauthorized passengers travelling in a goods vehicle. In that context, it was held that it is one of the defence which is available to the insurer under section 149[2][a][i][c] of the Act, whether the vehicle has been used for a
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purpose not allowed by the permit under which the vehicle was used. Hence, the case on hand is distinguishable from ASHA RANI's case [supra].
21. Thus, it is clear that no statutory defence is available to the insurer to escape the liability. A purpose not allowed in the permit is distinct from breach of the terms and conditions attached to the permit. Deviation of permitted route can be construed as breach of terms and conditions of the permit but not the purpose not allowed in the permit.
22. The contention of the respondent No.1/owner that the accident in question occurred while the driver of the offending vehicle was taking the vehicle for repairs to garage situated at Chitradurga is not supported by any material evidence and the same is not worthy of acceptance. However, in view of the aforesaid reasons as discussed above, plying of the
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vehicle beyond the territorial limits permitted being not held to be a purpose not allowed in the permit, the appeal succeeds.
23. Considering the totality of circumstances of the case, the global compensation awarded by the Tribunal at Rs.15,000/- is enhanced to Rs.20,000/-. For the forgoing reasons, the appeal is allowed and the impugned Judgment and award is set-aside. Respondent No.2-insurer shall be liable to satisfy the award.
Sd/-
JUDGE ln.