Kerala High Court
Pareed Pillai vs Oriental Insurance Co. Ltd on 9 October, 2018
Equivalent citations: AIR 2019 KERALA 9, (2019) 2 TAC 499, (2019) 2 ACC 148, (2019) 1 ACJ 16, (2018) 4 KER LT 792, (2019) 194 ALLINDCAS 548 (KER), AIRONLINE 2018 KER 810
Bench: Hrishikesh Roy, P.R.Ramachandra Menon, A.K.Jayasankaran Nambiar, Anil K.Narendran
[CASE REPORTABLE]
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE THE CHIEF JUSTICE MR.HRISHIKESH ROY
THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON
THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR
THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN
and
THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN
TUESDAY ,THE 09TH DAY OF OCTOBER 2018 / 17TH ASWINA, 1940
MACA.No. 2030 of 2015
AGAINST THE AWARD IN OPMV 21/2008 of MACT, IRINJALAKUDA
DATED 29-01-2013
APPELLANT:
PAREED PILLAI, AGED 47 YEARS,
S/O.ABDULKHADER,ANDOTH
HOUSE,P.O.KALADI,ERNAKULAM DISTRICT.
BY ADVS. SRI.REJI GEORGE
SMT.ANUPAMA JOHNY
RESPONDENT:
ORIENTAL INSURANCE CO. LTD.
DEETHI BUILDING,PALLIMUKKU(OPP.COCHIN
HOSPITAL), M.G.ROAD,ERNAKULAM-682016.
BY ADV. SRI.A.R.GEORGE
THIS MOTOR ACCIDENT CLAIMS APPEAL HAVING BEEN FINALLY HEARD
ON 26.07.2018, ALONG WITH MACA.1414/2013, 2202/2015 &
2641/2015, THE COURT ON 09.10.2018 DELIVERED THE FOLLOWING:
MACA No. 2030 of 2015 and
connected cases
:2:
JUDGMENT
Ramachandra Menon, J.
"Does the law declared by a Full Bench of this Court in Augustine V.M. Vs. Ayyappankutty @ Mani and Another [2015 (2) KLT 139] stand correct in declaring that, the 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 Vs. Challa Bharathamma [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 Vs. Challa Upendra Rao [(2004) 8 SCC 517)]. For having not made even a reference to the decision of the Apex Court, is not the above verdict liable to be declared as 'per incurium' ? Has the Full Bench considered all the relevant provisions under the Motor Vehicles Act, 1998, [referred to as the 'Act' for short], as to the necessity for having a 'Fitness Certificate' to the vehicle (in view of public safety), the necessity to have valid 'Permit', necessity to have 'Certificate of Registration' to ply the MACA No. 2030 of 2015 and connected cases :3: 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 ?"
------ These were the questions raised and referred by a Division Bench of this Court as per the reference order dated 23.12.2015, pointing out the necessity to have the matter considered by a Bench of appropriate strength.
2. On placing the matter before the Full Bench, the issue was dealt with marked elaboration. It was observed that the Apex Court, as per the verdict dated 22.11.2017 in M.S. Middle High School Vs. HDFC ERGO General Insurance Co. Ltd. and others [Special Leave to Appeal (c) No. 31406/2017 = MANU / SCOR /49062 /2017] had declared that the view taken by the Full Bench of this Court in Augustine's case [cited supra] could not be held to be valid and it was disapproved to the extent in holding that the insurer was liable, even if there was breach of conditions of the policy. After considering the dictum laid down by the Apex Court in United India Insurance Co. Ltd. Vs. Shila Datta and others [2011 (4) KLT 378 ] MACA No. 2030 of 2015 and connected cases :4: and also in Challa Upendra Rao's case [cited supra], the Full Bench of this Court observed that, when the Apex Court permitted the Insurance Company to contest the matter with reference to the absence of valid Permit and when the said judgment was not taken note of by the Full Bench in Augustine's case (cited supra), it necessarily required consideration. It was accordingly held that, the extent to which the Insurance Company could contest the matter when there was no valid Permit or Fitness Certificate, turned out to be a question of law, which was required to be determined by a Larger Bench. It is based on the said reference, that the above matters came to be listed before this Bench, for considering the declaration of law made by the Full Bench of this Court in Augustine's case [cited supra].
3. Obviously, the main point involved in these cases is with regard to the 'right of recovery' from the insured, given in favour of the insurer [after satisfying the liability towards the third parties/claimants] for causing the transport vehicle to be driven without a valid Permit/Fitness Certificate/Driving Licence. MACA No. 2030 of 2015 and connected cases :5: According to the insured/owner, absence of valid Permit/Fitness Certificate is only a 'technical breach' and it does not constitute a 'fundamental breach'; by virtue of which, right of recovery from the insured is not automatic; unless it is established by the insurer that absence of valid Permit/Fitness Certificate was the reason for/had contributed to the accident.
4. We heard Mr. Reji George, the learned counsel for the appellants/insured in MACA Nos. 2030 and 2641 of 2015, Mr. A. R. George, the learned counsel for the insurer in the said appeals; Mr. Lal George the learned counsel for the appellant/insurer in MACA No. 2202 of 2015 and also heard the learned lawyers who have entered appearance on behalf of the other parties.
5. Though the point to be decided is purely a question of law, it will be worthwhile to note the basic facts, to understand the genesis of the cause of action. All the three appeals, except MACA No. 2202 of 2015, arise from a common cause of action involving an accident caused by the same vehicle on 12.01.2007. The two riders, travelling on a motor cycle from Kodakara - MACA No. 2030 of 2015 and connected cases :6: Puthukad, along NH 47, were knocked down by a lorry owned by the appellants in MACA Nos. 2030 and 2641 of 2015, i.e. the first respondent before the Tribunal, driven by the second respondent and insured by the 3rd respondent Company. The insured/owner did not choose to contest the matter and was set ex parte. The rider who was a bachelor succumbed to his injuries and died, which led to O.P. (MV) No. 21 of 2008 preferred by the parents, as the legal heirs. This was tried along with O.P. (MV) No. 862 of 2007 preferred by the pillion rider, claiming compensation for the injuries. The insured/owner of the vehicle [appellant in MACA Nos. 2030 and 2641 of 2015] did not contest the matter and was set ex parte. The Tribunal awarded a sum of Rs. 27,900/- in respect of the injuries sustained by the claimant in O.P.(MV) No. 862 of 2007, while a total sum of Rs. 1.8 lakhs was awarded as compensation for the loss of life of the rider, to the parents/claimants in O.P. (MV) No. 21 of 2008, with interest, as specified. However, observing that the lorry, though covered by a valid policy, was not having a Fitness Certificate [as revealed from the materials on record], MACA No. 2030 of 2015 and connected cases :7: 'right of recovery' was granted in favour of the 3 rd respondent/insurer, which is sought to be interdicted by the insured/owner of the vehicle in MACA No. 2030 of 2015 [arising from O.P.(MV) No. 21 of 2008] and MACA 2641 of 2015 [arising from O.P. (MV) No. 862 of 2007]. At the same time, contending that the amounts awarded by the Tribunal in respect of the death of the rider is abysmally low, the claimants/parents have preferred MACA No. 1414 of 2013 seeking for enhancement of the compensation.
6. Coming to MACA No. 2202 of 2015, a pedestrian was knocked down by an auto-rickshaw on 21.01.2011, which led to O.P.(MV) No. 634 of 2011 preferred by the claimant. The owner and driver of the auto-rickshaw did not contest the matter and were set ex parte. Apart from contending that the driver was not having a valid driving licence and the amounts claimed were exorbitant, the insurer disputed the existence of a valid policy as well, to have them absolved of liability, if any. Ext. A6 final report filed by the police clearly revealed that the driver was not having a valid driving licence; the vehicle was not covered by a MACA No. 2030 of 2015 and connected cases :8: valid policy; the vehicle was not having a valid Permit and further that there was no Fitness Certificate as well. After fixing the total compensation payable as Rs. 69,039/- [with interest and proportionate cost, as specified], the Tribunal directed the insurer to satisfy the same, with liberty to have it recovered from the owner; in view of the proven fact that the vehicle was being driven in violation of the statutory/policy condition in so far as the driver was not having a valid driving licence on the date of the accident. This is sought to be challenged by the 3rd respondent/insurer, pointing out that no liability could be mulcted on the insurer, in the absence of any valid policy, even with liberty to recover the same from the owner. It is also pointed out that, the observation of the Tribunal in paragraph 5 of the Award that the 'existence of policy was admitted' by the 3rd respondent is quite wrong and perverse, as evident from the observation in paragraph 2 of the very same Award, referring to the contention raised by the 3rd respondent, disputing the existence of valid policy. It is also contended that, the more crucial aspect as to the absence of valid 'Permit' and 'Fitness MACA No. 2030 of 2015 and connected cases :9: Certificate' to the vehicle [substantiated by Ext. A6 final report submitted by the police and not disputed by the owner] was virtually omitted to be noted by the Tribunal and hence it requires interference.
7. The requirements of policies and limits of liabilities are stipulated under Section 147 of the M.V. Act, 1988. The defences available to the insurer are specified under Section 149 (2) of the Act; while Section 170 deals with wider defence under special circumstances. Section 149 (2) reads as follows :
[specific reference to 149 2 (a) (i)) (c)].
"149. Duty of insurer to satisfy judgements and awards against persons insured in respect of third party risks-
(1) xxxxxxx (2) No sum shall be payable by an insurer under sub-
section (1) in respect of any judgement or award unless, before the commencement of the proceedings in which the judgement or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgement or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party there to and to MACA No. 2030 of 2015 and connected cases : 10 : defend the action on any of the following grounds, namely--
(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) for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or
(b) for organised racing and speed testing, or
(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or
(d) without side-car being attached where the vehicle is a motor cycle; or
(ii) a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving license during the period of disqualification; or
(iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or
(b) that the policy is void on the ground that it was obtained by the non-disclosure of a material fact or by a representation of fact which was false in some material particular. "
8. The scope of the above provision was considered and MACA No. 2030 of 2015 and connected cases : 11 : explained by the Apex Court, with reference to Section 170 and it was held in Shila Datta's case [cited supra], that the limitation to the insurer is only when it is issued a notice by the Tribunal under Section 149 (2) and in all other cases, where the insurance company is already made a party to the proceedings, it can challenge the award on all grounds including the quantum. The Apex Court also held that a joint appeal by the insurer and the insured is maintainable; overruling the decision rendered in Chinnamma George vs. N.K. Raju [(2000) 4 SCC 130)].
9. Any motor vehicle, as defined under Section 2 (28) of the Act, requires to be registered in terms of Section 39 for putting the same on road, subject to the riders mentioned therein and the exception carved out in the proviso in the case of a dealer. If such vehicle is to be used as a 'transport vehicle' as defined under Section 2 (47) , it is mandatory that it should have a valid 'Permit' as defined under Section 2 (31) of the Act, in view of the mandate under Section 66 [stipulating the necessity for permit], subject to the exception under sub section 3. Section 66 stipulates that no owner of a vehicle shall use or permit to use the vehicle in a public place, whether or not such vehicle is actually carrying any passenger or goods, save in accordance with the conditions of a Permit granted or counter signed MACA No. 2030 of 2015 and connected cases : 12 : by a Regional or State Transport Authority or any such other Authority authorizing the use of the vehicle at that place and in the manner as sanctioned.
10. Section 66 of the Act reads as follows :
"66. Necessity for permits-
(1) No owner of a motor vehicle shall use or permit the use of the vehicle as a transport vehicle in any public place whether or not such vehicle is actually carrying any passengers or goods save in accordance with the conditions of a permit granted or countersigned by a Regional or State Transport Authority or any prescribed authority authorising him the use of the vehicle in that place in the manner in which the vehicle is being used.
Provided that a stage carriage permit shall, subject to any conditions that may be specified in the permit, authorise the use of the vehicle as a contract carriage.
Provided further that a stage carriage permit may, subject to any conditions that may be specified in the permit, authorise the use of the vehicle as a goods either when carrying passengers or not.
Provided also that a goods carriage permit shall, subject to any conditions that may be specified in the permit, authorise the holder to use the vehicle for the carriage of goods for or in connection with a trade or business carried on by him. MACA No. 2030 of 2015 and connected cases : 13 : (2) The holder of a goods carriage permit may use the vehicle, for the drawing of any trailer or semi-trailer not owned by him, subject to such conditions as may be prescribed. 1[Provided that the holder of a permit of any articulated vehicle may use the prime mover of that vehicle for any other semi-trailer.] (3) The provisions of sub-section (1) shall not apply-
(a) to any transport vehicle owned by the Central Government or a State Government and used for Government purposes unconnected with any commercial enterprise;
(b) to any transport vehicle owned by a local authority or by a person acting under contract with a local authority and used solely for road cleaning, road watering or conservancy purpose.
(c) to any transport vehicle used solely for police, fire brigade or ambulance purpose;
(d) to any transport vehicle used solely for the conveyance of corpses and the mourners accompanying the corpses;
(e) to any transport vehicle used for towing a disabled vehicle or for removing goods from a disabled vehicle to a place safety;
(f) to any transport vehicle used for any other public purpose as may be prescribed by the State Government in this behalf;
MACA No. 2030 of 2015 and connected cases : 14 :
(g) to any transport vehicle used by a person who manufacturers or deals in motor vehicles or builds bodies for attachment to chassis, solely for such purposes and in accordance with such conditions as the Central Government may, by notification in the Official Gazette, specify in this behalf;
[xxxx]
(i) to any goods vehicle, the gross vehicle weight of which does not exceed 3,000 kilograms;
(j) subject to such conditions as the Central Government may, by notification in the Official Gazette, specify, to any transport vehicle purchased in one State and proceeding to a place, situated in that State or in any other State, without carrying any passenger or goods;
(k) to any transport vehicle which has been temporarily registered under section 43 while proceeding empty to any place for the purpose of registration of the vehicle;
[xxxx]
(m) to any transport vehicle which, owing to flood, earthquake or any other natural calamity, obstruction on road, or unforeseen circumstances is required to be diverted through any other route, whether within or outside the State, with a view to enabling it to reach its destination;
(n) to any transport vehicle used for such purposes as the Central or State Government may, by order, specify;
MACA No. 2030 of 2015 and connected cases : 15 :
(o) to any transport vehicle which is subject to a hire-purchase, lease or hypothecation agreement and which owing to the default of the owner has been taken possession of by or on behalf of the person with whom the owner has entered into such agreement, to enable such motor vehicle to reach it destination; or
(p) to any transport vehicle while proceeding empty to any place for purpose of repair.
(4) Subject to the provisions of sub-section (3), sub- section (1) shall, if the State Government by rule made under section 96 so prescribes, apply to any motor vehicle adapted to carry more than nine persons excluding the driver. From the above, it is clear that the mandatory requirement under Section 66 (1) of the Act, to possess a valid 'Permit' by a Transport vehicle can not be avoided, unless it comes under the specified circumstances mentioned in sub-section (3), which is a matter to be pleaded and proved by the party who claims the exemption i.e. the insured/owner. Obviously, no such case of exemption is mooted by the insured/owner in the instant case, who did not even contest the matter before the Tribunal.
11. No person shall drive any motor vehicle and no owner of a motor vehicle shall cause or permit the vehicle to be driven in any public place or in any other place, unless the vehicle is registered in MACA No. 2030 of 2015 and connected cases : 16 : accordance with Chapter IV of the Act and the Certificate of Registration of the vehicle has not been suspended or cancelled and the vehicle carries a registration mark displayed in the prescribed manner, which provision however shall not apply to a motor cycle in possession of a dealer, subject to such conditions as may be prescribed by the Central Government. This is the mandate of Section 39 of the Motor Vehicles Act 1988. The registration envisaged therein could be suspended in terms of Section 53 of the Act which authorizes the registering authority or the prescribed authority to have it done, if he has reason to believe that the motor vehicle within his jurisdiction would constitute a danger to the public or that it fails to comply with the requirements of the Acts/Rules or is being used for hire or reward without a valid Permit for being used as such. Registration suspended under Section 53 could be cancelled by the Registering Authority in terms of Section 54 of the Act i.e., if the suspension of registration is continued without interruption for a period not less than six months.
12. Necessity to have a 'Permit' for plying the vehicle as a 'transport vehicle' is stipulated under Section 66 of the Act, which mentions in unequivocal terms, that no owner of a motor vehicle shall use or permit the use of the vehicle as a transport vehicle in any MACA No. 2030 of 2015 and connected cases : 17 : public place, whether or not such vehicle actually carries any passengers or goods, save in accordance with the conditions of Permit granted or countersigned by a Regional or State Transport Authority or any such other authority authorising the use of vehicle in that place in the manner in which the vehicle is being used, subject to the exemption carved out under the sub-section (3) of Section 66 of the Act [extracted already].
13. Fitness of the vehicle to be plied on the road as a 'transport vehicle' is very important, especially in relation to the lives and limbs of the persons travelling in the vehicle, the pedestrians, other vehicles and properties of persons who are also using the road. It is with this intent, that a specific provision has been incorporated under the Statute as Section 84, prescribing the general conditions attached to all permits. Clause (a) of Section 84 reads as follows :
84. General conditions attaching to all permits-
The following shall be conditions of every permit-
(a) that the vehicle to which the permit relates carries valid certificate of fitness issued under section 56 and is at all times so maintained as to comply with the requirements of this Act and the rules made thereunder;
14. It is pertinent to note, that power is conferred upon the MACA No. 2030 of 2015 and connected cases : 18 : Transport Authority who has granted the 'Permit' to cancel the Permit or suspend the same on the grounds specified under Section 86; among which Clause (a) is in respect of the breach involving any conditions specified in Section 84 or any condition contained in the Permit. Section 86 (1) (a) and (c), to the extent, it is relevant here, is extracted below :
86. Cancellation and suspension of permits-
(1)The Transport Authority which granted a permit may cancel the permit or may suspend it for such period as it thinks fit-
(a) on the breach of any condition specified in section 84 or of any condition contained in the permit, or
(b) xxxxx
(c) if the holder of the permit ceases to own the vehicle covered by the permit, or
15. As mentioned above, fitness of a vehicle, to be used as a transport vehicle, is of paramount importance. The necessity to have 'Fitness Certificate' is prescribed under Section 56 of the Act. Sub- section (1) of Section 56 clearly stipulates that, a transport vehicle [subject to the provisions of Section 59 (power to fix the age limit of motor vehicle) and Section 60 (registration of the vehicles belonging to the Central Government)] shall not be deemed to be validly registered for the purpose of Section 39, unless it carries a 'Certificate MACA No. 2030 of 2015 and connected cases : 19 : of Fitness' as prescribed. By virtue of Section 84 (a), as mentioned already, it is a mandatory requirement of every Permit, that the vehicle to which the Permit relates, shall carry valid 'Certificate of Fitness' issued under Section 56 at all time, absence of which will automatically lead to a situation that the vehicle will not be deemed as having a Permit [if it is not having a 'Fitness Certificate' on a given date]. Using a motor vehicle in an unsafe condition in any public place itself is an offence under Section 190 of the Act. Separate penalty is prescribed under Section 192 for driving or using the motor vehicle in contravention of Section 39 of the Act [i.e. without registration]; which at the first instance by fine upto Rs.5000/- [not less than Rs. 2000/-] and for the second or subsequent offences, it may be with imprisonment, which may extend to one year or fine upto Rs.10,000/- [not less than Rs.5000/-] or with both; of course, conferring power upon the Court to impose a lesser punishment, for reasons to be recorded. Similarly, separate punishment is provided for using vehicles without 'Permit' as provided under Section 192A [first offence with fine upto Rs.5000/- which shall not be less than Rs.2000/- and for any subsequent offence with imprisonment upto one year [which shall not be less than 3 months or with fine upto Rs.10.000/- which shall not be less than Rs.5000/-] or with both; here MACA No. 2030 of 2015 and connected cases : 20 : again conferring power on the Court to impose lesser punishment, for reasons to be recorded. Reference is made to the above provisions only to illustrate the utmost requirement to have a valid 'Registration, Permit and Fitness Certificate'.
16. Importance of the fitness/road worthiness of a vehicle, right from the time of registration of the vehicle, is further discernible from Rule 47 of the Central Motor Vehicles Rules 1989 [referred to as Central Rules]. The said Rule deals with application for registration of motor vehicles, which, among other things, stipulates that it shall be accompanied by various documents. Under sub-rule (1) (g), it is mandatory to produce road worthiness certificate in Form 22 from the manufacturers [Form 22A from the body builders]. On completing the formalities/procedures, 'Certificate of Registration' is to be issued in terms of Rule 48 of the Central Rules in Form 23/23A, as the case may be. The said Rule contains a proviso, insisting that, when Certificate of Registration pertains to a transport vehicle, it shall be handed over to the registered owner only after recording the Certificate of Fitness in Form 38. Validity of the Certificate of Fitness is only to the extent as envisaged under Rule 62 of the Central Rules, which mandates, as per the proviso, that the renewal of a Fitness Certificate shall be made only after the Inspecting Officer or MACA No. 2030 of 2015 and connected cases : 21 : authorised Testing Station as referred to in sub Section 1 of Section 56 of the Act has carried out the test specified in the table given therein.
17. The stipulations under the above provisions clearly substantiate the importance and necessity to have a valid Fitness Certificate to the transport vehicle at all times. The above prescription converges on the point that Certificate of Registration, existence of valid Permit and availability of Fitness Certificate, all throughout, are closely interlinked in the case of a transport vehicle and one requirement cannot be segregated from the other. The transport vehicle should be completely fit and road worthy, to be plied on the road, which otherwise may cause threat to the lives and limbs of passengers and the general public, apart from damage to property. Only if the transport vehicle is having valid Fitness Certificate, would the necessary Permit be issued in terms of Section 66 of the Act and by virtue of the mandate under Section 56 of the Act, no transport vehicle without Fitness Certificate will be deemed as a validly registered vehicle for the purpose of Section 39 of the Act, which stipulates that nobody shall drive or cause the motor vehicle to be driven without valid registration in public place or such other place, as the case may be. These requirements are quite 'fundamental' in MACA No. 2030 of 2015 and connected cases : 22 : nature; unlike a case where a transport vehicle carrying more passengers than the permitted capacity or a goods carriage carrying excess quantity of goods than the permitted extent or a case where a transport vehicle was plying through a deviated route than the one shown in the route permit which instances could rather be branded as 'technical violations'. In other words, when a transport vehicle is not having a Fitness Certificate, it will be deemed as having no Certificate of Registration and when such vehicle is not having Permit or Fitness Certificate, nobody can drive such vehicle and no owner can permit the use of any such vehicle compromising with the lives, limbs, properties of the passengers/general public. Obviously, since the safety of passengers and general public was of serious concern and consideration for the law makers, appropriate and adequate measures were taken by incorporating relevant provisions in the Statute, also pointing out the circumstances which would constitute offence; providing adequate penalty. This being the position, such lapse, if any, can only be regarded as a fundamental breach and not a technical breach and any interpretation to the contrary, will only negate the intention of the law makers.
18. Coming to the field of precedents, the issue as to the absence of a valid Permit to a transport vehicle and the right of MACA No. 2030 of 2015 and connected cases : 23 : defence of the insurer to satisfy the claim and its extent under such circumstances, was the subject matter of consideration before the Apex Court in Challa Upendra Rao's case [cited supra]. In this case, the claim petitions filed by the injured and the legal representatives of the deceased passengers, who met with the accident on 09.05.1992, while travelling in an autorikshaw, were sought to be resisted by the insured, contending that there was no valid Permit to ply the vehicle and hence, in terms of the policy, the insurer had no liability. The Tribunal accepted the said plea and the liability came to be mulcted upon the insured; sparing the insurer. On challenging the Award, a Division Bench of the High Court of Andhra Pradesh held that the insurer was liable to indemnify the insured, which ended up in the case filed before the Apex Court. After detailed discussion with specific reference to the validity of necessary Permit under Section 66 of the Act, the scope of Section 149 (2) of the Act and various rulings rendered by the Apex Court at different points of time, the Apex Court held that the absence of valid Permit was very much a ground of defence available to the insurer in terms of Section 149 (2) (a) (i)
(c) of the Act. The Apex Court also held that the view taken by the High Court of Andhra Pradesh, that the question of violation of any condition did not arise since there was no Permit, was clearly MACA No. 2030 of 2015 and connected cases : 24 : fallacious; observing that 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. It was mentioned in crystal- clear terms that, the plying of transport vehicle without a Permit was an infraction and a defence available to the insurer, in terms of Section 149 (2) of the Act; in turn conferring the right of recovery to the insurer from the insured/owner, after satisfying the liability to claimant /3rd party .
19. The above question came to be considered by a Division Bench of this Court in Thara G. Vs. Syamala S. and others [2009 (2) KLT 707], where it was held that the absence of a valid Permit was a defence available to the insurance company, in terms of Section 149 (2) of the Act. However, the above declaration was inadvertently omitted to be considered in the subsequent ruling rendered by the another Bench, taking a contrary view, in Sethunath Vs. John Varghese and others [2011 (1) KLT 222]. Taking note of the divergent views, at the same time without referring to the law declared by the Supreme Court in Challa Upendra Rao's case [cited supra], the Bench which considered a similar case referred the issue for consideration by a Full Bench; which ultimately led to the verdict in Augustine's case [cited supra]. Here again, as mentioned already, MACA No. 2030 of 2015 and connected cases : 25 : the declaration rendered by the Apex Court in Challa Upendra Rao's case [cited supra] was omitted to be brought to the notice of the Full Bench and it was in the said context, that the verdict of the Division Bench in Thara's case [cited supra] came to be overruled, while affirming the view taken by the Division Bench in Sethunath's case [cited supra].
20. It has been made clear by the Apex Court in the ruling rendered on 22.11.2017 in M.S. Middle High School's case [cited supra] that the view taken by the Full Bench of this Court in Augustine's case [cited supra] cannot be held to be valid and it was disapproved to the extent holding that the insurer was liable, even if there was breach of conditions of the policy. Since the declaration made by the Full Bench in Augustine's case [cited supra], is clearly contrary to the law declared by the Apex Court in Challa Upendra Rao's case [cited supra] [which is the law of land by virtue of Article 141 of the Constitution of India], the view taken by the Full Bench in Augustine's case [cited supra] is liable to be declared as 'per incurium'. It is ordered accordingly.
21. The question whether absence of valid Permit to a transport vehicle at the time of accident is a 'fundamental breach' or a 'technical breach' had come up for consideration again before the Apex Court MACA No. 2030 of 2015 and connected cases : 26 : recently in Amrit paul Singh and Another Vs. TATA AIG General Insurance Co. Ltd and Others [2018 (3) KHC 197]. The factual matrix in the said case is that, the rider of the motor cycle was knocked down to death by the offending truck on 19.02.2013, which led to the claim petition preferred by the legal heirs. The claim was resisted by the insurer, mainly contending that there was violation of policy conditions in so far as the offending truck was not having a valid Permit and the driver was not having a valid driving licence. Based on the materials on record and placing reliance on the verdict passed by the Apex Court in Challa Upendra Rao's case [cited supra], the Tribunal, after fixing the quantum of compensation, directed the insurer to satisfy the same, with liberty to have it recovered from the insured. The said finding and reasoning came to be affirmed by the High Court, in turn leading to the proceedings before the Apex Court. After exhaustive discussion on the relevant provisions of law including Section 2 (28), 2 (31), 2 (47), 66, 149 and 166 of the M.V. Act 1988 and the various judgments rendered by the Apex Court at different points of time, including in National Insurance Co. Ltd. Vs. Swaran Singh and others [(2004) 3 SCC 297] and Challa Upendra Rao's case [cited supra], the Apex Court held that the offending truck was not having a valid Permit on the date MACA No. 2030 of 2015 and connected cases : 27 : of accident; which was not a technical breach to attract the dictum in Swaran Singhs' case [cited supra] [where also right of recovery was held as conferred on the insurer, once the breach was established by the insurer]. It was also observed that, it was not a case where any of the exceptions under sub-section (3) of Section 66 was attracted and further that, existence of a Permit of any nature was matter of documentary evidence. The Bench held that the exceptions carved out under Section 66 (3) of the Act are to be pleaded and proved by the insured/owner and this burden cannot be shifted to the shoulders of the insurer. It has accordingly been declared that, the use of a transport vehicle in a public place without Permit is a fundamental/statutory infraction and the principles laid down in Swaran Singh's case [cited supra] and Lakshmi Chand Vs. Reliance General Insurance [(2016) 3 SCC 100] cannot be applicable in this regard. The Apex Court held, in such circumstances, that the verdict passed by the High Court affirming the stand of the Tribunal directing the insurer to satisfy the liability and to have it recovered from the owner/insured was in consonance with the principles stated in Swaran Singh's case [cited supra] and other cases pertaining to 'pay and recover principle'. From the above, it is quite evident that the law stands settled by the Apex Court as per the MACA No. 2030 of 2015 and connected cases : 28 : decision Challa Upendra Rao' case [cited supra] and the latest ruling in Amrit paul's case [cited supra]. This being the position, the dictum laid down by the Full Bench of this Court in Augustine V.M. Vs. Ayyappankutty @ Mani and others [cited supra] holding that the absence of valid Permit or Fitness Certificate is not a fundamental breach, but a technical breach and that no right of recovery can be given to the insurer is not at all correct. It accordingly stands overruled. Consequently, the dictum in Thara's case [cited supra] is restored and the contrary view expressed in Sethunath's case [cited supra] stands declared as incorrect.
22. In view of the above finding, nothing remains to be considered in MACA No. 2030 of 2015 and MACA 2641 of 2015 preferred by the insured/owner challenging the right of recovery granted as per the Award passed by the Tribunal [MACT, Irinjalakkuda] in O.P.(MV) Nos. 21 of 2008 and 862 of 2007. Only 'four' grounds have been raised by the appellant, which do not constitute a challenge against the quantum of compensation awarded, but for the right of recovery granted to the insurer [from the insured]. Hence, these appeals stand dismissed. However, dismissal of these appeals will not bar the way of the appellants/insured in resisting the quantum of enhancement sought for by the claimants/appellants in MACA No. 2030 of 2015 and connected cases : 29 : MACA No. 1414 of 2013 by way of appropriate proceedings.
23. MACA No. 1414 of 2013 preferred by the claimants/legal heirs of the deceased in O.P.(MV) No. 21 of 2008, seeking enhancement of the compensation stands remitted to the Division Bench for consideration of the merit involved as to the actual quantum of compensation payable.
24. Coming to MACA No. 2202 of 2015, even though 'right of recovery' has been conferred to the insurer, for the breach involving non-possession of a valid driving licence, there is another case for the appellant/insurer that there was 'no valid Permit' as well. This, even if decided in favour of the insurer, it may not tilt the balance, as 'pay and recover' principle is to be applied. But, there is a yet another contention for the insurer, that the vehicle was not covered by any policy at all on the date of accident, as made out from Anenxure A6 charge sheet. The owner and driver of the vehicle did not contest the matter nor did they produce copy of the policy, if any. Pleadings of the Insurer/appellant stand uncontroverted. Despite this, a finding was rendered by the Tribunal in 'paragraph 5' of the Award, that the insurer had admitted existence of a valid insurance policy in respect of the offending vehicle; which prima facie appears to be factually incorrect. If there was no valid insurance policy covering the vehicle MACA No. 2030 of 2015 and connected cases : 30 : on the relevant date, which is a basic requirement to identify the insurer and fix the liability, if any, the 'pay and recover' principle may not be attracted. As such, it is a matter which requires to be considered by the Division Bench and hence this appeal also will stand remitted to the Division Bench.
The reference stands answered accordingly.
sd/-
HRISHIKESH ROY, CHIEF JUSTICE sd/-
P. R. RAMACHANDRA MENON, JUDGE sd/-
A. K. JAYASANKARAN NAMBIAR, JUDGE sd/-
ANIL K. NARENDRAN, JUDGE sd/-
DEVAN RAMACHANDRAN, JUDGE kmd