Rajasthan High Court - Jodhpur
Choudhary Freight Carriers vs The Oriental Insurance Co. Ltd. And Anr on 24 May, 2019
Equivalent citations: AIRONLINE 2019 RAJ 410
Author: Pushpendra Singh Bhati
Bench: Pushpendra Singh Bhati
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Civil Writ Petition No.14885/2017
Choudhary Freight Carriers, through its partner, Ramjeevan
Choudhary, son of Shri Badri Ram Jakhar, aged 43 years,
resident of E-119-120, Shastri Nagar, Jodhpur.
----Petitioner
Versus
1. The Oriental Insurance Company Limited, through its Branch
Manager, Paota, Mandore Road, Jodhpur.
2. Permanent Lok Adalat, Jodhpur.
----Respondents
For Petitioner(s) : Mr. Anil Bhandari
For Respondent(s) : Mr. Jagdish Vyas
HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI
Judgment Reserved on 20/05/2019 Pronounced on 24/05/2019
1. This writ petition under Articles 226 and 227 of the Constitution of India has been preferred claiming the following reliefs:
"1. The impugned judgment dated 16.06.2017 (Annexure-7) passed by the learned Permanent Lok Adalat, Jodhpur may kindly be set aside.
2. The claim petition filed by the petitioner under Section 22-B of the Act of 1987 may kindly be allowed in toto with costs.
3. Any other appropriate writ, order or direction as may be deemed just and proper in the facts and circumstances of the case may be passed.
4. The costs of the writ petition may kindly be ordered to be awarded to the petitioner."(Downloaded on 28/06/2019 at 06:23:42 AM)
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2. The present petitioner is a partnership Firm. As per the pleaded case of the petitioner, a claim was lodged before the respondent No.1-The Oriental Insurance Company Limited on 16.09.2010 in respect of an insured Truck bearing registration No.RJ 19 GA 2231, which met with an accident and was resultantly damaged. The said claim was made for Rs.4,50,000/-. However, the respondent-Insurance Company denied the claim on 18.09.2012 on the ground that as per the investigation report, the fitness certificate was not effective at the time of accident.
3. The petitioner made an averment in the writ petition that the respondent has not been able to establish the investigator's report before the learned Permanent Lok Adalat, Jodhpur, and therefore, the rejection of the petitioner's claim on the ground of non-availability of the fitness certificate was not correct.
4. As the pleaded facts would further reveal, the claim of the petitioner was repudiated on 27.02.2013, against which the petitioner moved an application under Section 22-B of the Public Utility Service of Legal Services Authorities Act, 1987 before the respondent No.2.
5. The claim petition filed by the petitioner was registered as Claim Case No.19/2016, and after proper adjudication, the learned Permanent Lok Adalat, Jodhpur dismissed the claim of the petitioner vide judgment/award dated 16.06.2017.
6. Learned counsel for the petitioner has drawn the attention of this Court towards the parameters for deciding the non-standard claims, as contained in condition No.10 of Procedural Manual of Motor Claims (own damage and third party), and the said condition No.10 reads as under: (Downloaded on 28/06/2019 at 06:23:42 AM)
(3 of 16) "10. NON STANDARD CLAIMS Following types of claims shall be considered as non-
standard and shall be settled as indicated below after recording the reasons:
Sr. Description Percentage of settlement No. i. Under declaration of licensed Deduct 3 years' difference in carrying capacity. premium from the amount of claim or deduct 25% of claim amount, whichever is higher.
ii. Overloading of vehicles Pay claims not exceeding beyond licensed carrying 75% of admissible claim. capacity.
iii Any other breach of Pay upto 75% of admissible warranty/condition of policy claim. including limitation as to use.
For breach of warranties/conditions which do not involve any saving in premiums or any additional exposure to the Insurers, such claims be considered as Standard Claims e.g. Route Permit."
7. Learned counsel for the petitioner submitted that such non-standard claims have to be paid to the extent of 75% on the breach of any particular condition in the Policy, and even if the Policy contained a condition of fitness certificate, then at best, the non-standard claim of the petitioner could have been payable upto 75%.
8. Learned counsel for the petitioner further submitted that a fitness certificate was in fact produced, but has not been accepted by the respondent.
9. Learned counsel for the petitioner also submitted that the respondent-Insurance Company is duty bound to accept the claim of the petitioner, once it has issued the Policy, and at best, it could have awarded a non-standard claim, as per condition 10 (iii) as quoted hereinabove.
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10. Learned counsel for the petitioner further submitted that the respondent has presumed the fitness certificate to be forged, whereas the said certificate was genuine, and thus, the petitioner has been unlawfully deprived of his valid claim.
11. Learned counsel for the petitioner relied upon the order passed by National Consumer Disputes Redressal Commission, New Delhi in National Insurance Co. Ltd. Vs. Munni Lal Yadav, reported in II (2001) CPJ 53 (NC), relevant portion of which reads as under:-
"2. Apart from that, the State Commission was fully conscious of the guidelines for settling the claim where any of the terms of policy have not been adhered to. The said guideline provides for settlement of such claims as non-standard and the percentages are also duly indicated in Clause 10 of the Procedural Manual of Motor Claims (own damage and third party).
After the judgment had been reserved, Counsel filed a written note of arguments virtually reiterating the grounds of revision. The said note has not brought out any ground which makes the guidelines inapplicable.
3. We reproduce the relevant passage from the said Procedural Manual of Motor Claims which read as under:-
"10. NON STANDARD CLAIMS Following types of claims shall be considered as non- standard and shall be settled as indicated below after recording the reasons:
Sr. Description Percentage of settlement No. i. Under declaration of licensed Deduct 3 years' difference in carrying capacity. premium from the amount of claim or deduct 25% of (Downloaded on 28/06/2019 at 06:23:42 AM) (5 of 16) claim amount, whichever is higher.
ii. Overloading of vehicles Pay claims not exceeding beyond licensed carrying 75% of admissible claim. capacity.
iii Any other breach of Pay upto 75% of admissible warranty/condition of policy claim. including limitation as to use.
(Emphasis supplied) The settlement of the claim has been ordered by the District Forum at less than 75%. For that reason, the State Commission has rightly declined the relief sought by the Insurance Company and dismissed its appeal. We find no merit in this revision petition. It is accordingly dismissed."
12. Learned counsel for the petitioner has also placed reliance upon the order passed by National Consumer Disputes Redressal Commission, Circuit Bench at Bangalore, Karnataka in New India Assurance Co. Ltd. Vs. Narayan Prasad Appaprasad Pathak, reported in II (2006) CPJ 144 (NC), relevant portion of which reads as under:-
"5. Keeping in view the Guidelines, the repudiation of the claim by the Insurance Company cannot be sustained but we also cannot sustain the order of the State Commission insofar as the quantum of relief is concerned. Keeping in view the Guidelines and the facts and circumstances of this case, the appellant is directed to settle the claim on 'Non-standard basis' pay Rs.3,24,000/- (Rs.4,32,000/- x 75%) along with interest @ 9% p.a. and cost awarded by the State Commission. Since the respondent/complainant is being paid separately and also interest is being awarded, we see no ground to sustain the order with regard to the compensation of Rs.15,000 which is set (Downloaded on 28/06/2019 at 06:23:42 AM) (6 of 16) aside. The appellant is directed to make the above payments within a period of 6 weeks from the date of passing this order, failing which the complainant shall be at liberty to proceed under Section 25 and Section 27 of the Consumer Protection Act."
13. Learned counsel for the petitioner has also relied upon the order passed by Rajasthan State Consumer Disputes Redressal Commission, Jaipur in Pushpa Devi Vs. National Insurance Co. Ltd., reported in IV (2008) CPJ 488, relevant portion of which reads as under:-
"4. We have given thoughtful consideration to rival contentions. At this stage, we will like to mention that the New India Assurance Company Ltd. issued a Circular on 13th May, 1997, wherein the instructions were issued to settle the claim on non-standard basis in case non-existence of fitness certificate has in no way contributed to the accident. Although the instant matter relates to the National Insurance Company Ltd., but the above Circular gives some insight. Aeroflot Soviet case (supra) relates to the period from 20.5.1990 to 19.5.1991 whereas the instant case relates to the period from 17.3.1999 to 16.3.2000. Although no circular was shown to have been issued by the National Insurance Company Ltd., but both these companies are subsidiaries of General Insurance Company and, therefore, we can derive some help from the above circular. We feel that in case non- existence of fitness certificate has not contributed to the accident then the claim should be allowed on non- standard basis. We have perused the report submitted by the Surveyor who has nowhere mentioned that fitness certificate has anything to do with the accident.(Downloaded on 28/06/2019 at 06:23:42 AM)
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5. For the foregoing reasons, we feel that 75% of the amount assessed by the Surveyor should be allowed to the complainant.
6. Consequently, we allow this appeal partially and direct the respondent Insurance Company to pay to the complainant a sum of Rs.26,340 with interest @ 9% per annum from 31.12.2001. Looking to the facts and circumstances of the case, the parties are left to bear their own cost."
14. On the other hand, learned counsel for the respondent- Insurance Company submitted that it has been established before the learned Permanent Lok Adalat that the fitness certificate in question was forged, and the specific information regarding the fitness certificate was not there with the authorities, and therefore, the said fitness certificate itself was under cloud.
15. Learned counsel for the respondent further submitted that the learned Permanent Lok Adalat has, at length, dealt with the prevailing circumstances, and after taking the whole record of the case into consideration, the learned Permanent Lok Adalat has come to a conclusion that the fitness certificate submitted by the petitioner was bad in the eye of law.
16. Learned counsel for the respondent has drawn the attention of this Court towards Sections 39 & 56 of the Motor Vehicles Act, 1988, and the same are reproduced hereunder, for ready reference:-
"39. Necessity for registration.- 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 accordance with this Chapter and the certificate of registration of the vehicle has (Downloaded on 28/06/2019 at 06:23:42 AM) (8 of 16) not been suspended or cancelled and the vehicle carries a registration mark displayed in the prescribed manner.
Provided that nothing in this section shall apply to motor vehicle in possession of a dealer subject to such conditions as may be prescribed by the Central Government.
56. Certificate of fitness of transport vehicles.--
(1) Subject to the provisions of sections 59 and 60, a transport vehicle shall not be deemed to be validly registered for the purposes of section 39, unless it carries a certificate of fitness in such form containing such particulars and information as may be prescribed by the Central Government, issued by the prescribed authority, or by an authorized testing station mentioned in sub-section (2), to the effect that the vehicle complies for the time being with all the requirements of this Act and the rules made thereunder:
Provided that where the prescribed authority or the "authorized testing station" refuses to issue such certificate, it shall supply the owner of the vehicle with its reasons in writing for such refusal. (2) The "authorized testing station" referred to in sub-section (1) means a vehicle service station or public or private garage which the State Government, having regard to the experience, training and ability of the operator of such station or garage and the testing equipment and the testing personnel therein, may specify in accordance with the rules made by the Central Government for regulation and control of such stations or garages.
(3) Subject to the provisions of sub-section (4), certificate of fitness shall remain effective for such period as may be prescribed by the Central Government having regard to the objects of this Act.(Downloaded on 28/06/2019 at 06:23:42 AM)
(9 of 16) (4) The prescribed authority may for reasons to be recorded in writing cancel a certificate of fitness at any time, if satisfied that the vehicle to which it relates no longer complies with all the requirements of this Act and the rules made thereunder; and on such cancellation the certificate of registration of the vehicle and any permit granted in respect of the vehicle under Chapter V shall be deemed to be suspended until a new certificate of fitness has been obtained:
[Provided that no such cancellation shall be made by the prescribed authority unless such prescribed authority holds such technical qualification as may be prescribed or where the prescribed authority does not hold such technical qualification on the basis of the report of an officer having such qualifications.] (5) A certificate of fitness issued under this Act shall, while it remains effective be valid throughout India."
17. Learned counsel for the respondent also submitted once a valid fitness certificate was not there, a conjoint reading of the aforequoted provisions as contained in the Motor Vehicles Act, 1988 makes it amply clear that in case of a transport vehicle, unless it carries a valid certificate of fitness in accordance with law, no person is entitled to drive a transport vehicle and the owner of the transport vehicle is not entitled to cause or permit the vehicle to be driven in any public place or any other place. Therefore, a transport vehicle which is registered under Section 39 can be driven or plied on road only if it possesses a valid fitness certificate; if it is not having a valid fitness certificate, it shall be deemed to be an unregistered motor vehicle. Thus, a transport vehicle which is duly registered under Section 39 of the Act is of no use, unless it carries a certificate of fitness, and as (Downloaded on 28/06/2019 at 06:23:42 AM) (10 of 16) provided in sub-section (1) of Section 56, it becomes an unregistered motor vehicle. Thus, so much importance has been assigned under the Motor Vehicles Act to the fitness certificate.
18. Learned counsel for the respondent thus submitted that non-availability of the fitness certificate is like non-registration of the vehicle, which disentitles the petitioner to be considered under the aforequoted condition No.10 pertaining to the non-standard claims.
19. Learned counsel for the respondent relied upon the precedent law laid down by the Hon'ble Supreme Court in United India Insurance Co. Ltd. Vs. Rajendra Singh & Ors., reported in (2000) 3 SCC 581, which clearly laid down that any claim raised on the basis of a forged and fraudulent document ought to be repudiated at the threshold, as the person who does not approach the authority or the Court with clean hands is not entitled for any kind of relief on the basis of such document. The relevant portion of which said judgment reads as under:-
"12. No one can possibly fault the Insurance Company for persistently pursuing the matter up to this court because they are dealing with public money. If they have discovered that such public fund, in a whopping measure, would be knocked off fraudulently through a fake claim, there is full justification for the Insurance Company in approaching the Tribunal itself first. At any rate the High Court ought not have refused to consider their grievances. What is the legal remedy when a party to a judgment or order of court later discovered that it was obtained by fraud?(Downloaded on 28/06/2019 at 06:23:42 AM)
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13. In S.P. Chengalvaraya Naidu (dead) by L.Rs. Vs. Jagnnath (dead) by Lrs. & ors. {1994 (1) SCC 1} the two Judges Bench of this Court held:
"Fraud avoids all judicial acts, ecclesiastical or temporal- observed Chief Justice Edward Coke of England about three centuries ago. It is the settled proposition of law that a judgment or decree obtained by playing fraud on the court is a nullity and non est in the eyes of law. Such a judgment/decree- by the first court or by the highest court-has to be treated as a nullity by every court, whether superior or inferior. It can be challenged in any court even in collateral proceedings."
14. In Indian Bank Vs. Satyam fibres (India) Pvt. Ltd. {1996 (5) SCC 550} another two Judges bench, after making reference to a number of earlier decisions rendered by different High Courts in India, stated the legal position thus:
"Since fraud affects the solemnity, regularity and orderliness of the proceedings of the Court and also amounts to an abuse of the process of Court, the Courts have been held to have inherent power to set aside an order obtained by fraud practised upon that Court. Similarly, where the Court is misled by a party or the Court itself commits a mistake which prejudices a party, the Court has the inherent power to recall its order."
20. Learned counsel for the respondent has also placed reliance upon the precedent law laid down by the Hon'ble Supreme Court in Narinder Singh Vs. New India Assurance Company Limited & Ors., reported in (2014) 9 SCC 324, relevant portion of which reads as under:- (Downloaded on 28/06/2019 at 06:23:42 AM)
(12 of 16) "7. It is the case of the appellant that even when a vehicle is used without registration having been done, it does not amount to violation of any statutory requirement and in such a case, if the accident takes place, the insured is entitled to claim benefit under the insurance policy. There is no statutory bar in insuring the vehicle without registration and hence there is no bar in making payment of insured sum in the eventuality of an accident. Appellant submitted that the Apex Court in the case of Amalendu Sahoo vs. Oriental Insurance Company Ltd., (2010) 4 SCC 536, has held that in case of any variation from the policy document/any breach of the policy document, the Insurance company cannot repudiate the claim in toto and the claim of the complainant ought to be settled on non-standard basis. It is further contended that the main purpose of any temporary/permanent registration is to have identification of the vehicle in the records of the Government authorities so as to identify the vehicle, particularly, in case of any motor accident and for tracing the owner of the vehicle, and in this case, there was a temporary registration number (although its date expired) affixed on the vehicle, which would lead to the owner and other details as required in law.
11. A bare perusal of Section 39 shows that no person shall drive the motor vehicle in any public place without any valid registration granted by the registering authority in accordance with the provisions of the Act. However, according to Section 43, the owner of the vehicle may apply to the registering authority for temporary registration and a temporary registration mark. If such temporary registration is granted by the authority, the same shall be valid only for a period (Downloaded on 28/06/2019 at 06:23:42 AM) (13 of 16) not exceeding one month. The proviso to Section 43 clarified that the period of one month may be extended for such a further period by the registering authority only in a case where a temporary registration is granted in respect of chassis to which body has not been attached and the same is detained in a workshop beyond the said period of one month for being fitted with a body or unforeseen circumstances beyond the control of the owner.
12. Indisputably, a temporary registration was granted in respect of the vehicle in question, which had expired on 11.1.2006 and the alleged accident took place on 2.2.2006 when the vehicle was without any registration. Nothing has been brought on record by the appellant to show that before or after 11.1.2006, when the period of temporary registration expired, the appellant, owner of the vehicle either applied for permanent registration as contemplated under Section 39 of the Act or made any application for extension of period as temporary registration on the ground of some special reasons. In our view, therefore, using a vehicle on the public road without any registration is not only an offence punishable under Section 192 of the Motor Vehicles Act but also a fundamental breach of the terms and conditions of policy contract.
13. In the aforesaid premises, we do not find any infirmity in the order passed by the State Commission and the National Commission. For the reasons aforesaid, this appeal has no merit and is liable to be dismissed."(Downloaded on 28/06/2019 at 06:23:42 AM)
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21. Learned counsel for the respondents has also relied upon the judgment rendered by Full Bench of the Hon'ble Kerala High Court at Ernakulam in Pareed Pillai Vs. Oriental Insurance Co. Ltd. (MACA No.2030 of 2015 decided on 09.10.2018), relevant portion of which reads as under:
"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 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 (Downloaded on 28/06/2019 at 06:23:42 AM) (15 of 16) 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."
22. After hearing learned counsel for the parties as well as perusing the record of the case alongwith the precedent law cited at the Bar, this Court is of the opinion that the Permanent Lok Adalat has, after taking into consideration the material on record, established the failure of the petitioner to initially provide the fitness certificate, and thereafter, providing a fitness certificate, which was not endorsed by the authorities concerned. Thus, it is amply clear that the petitioner has lodged the claim on the strength of fraudulent documents. It was another thing that the petitioner did not have a valid fitness certificate and it is absolutely another thing that the petitioner has tried to lodge a claim by acting fraudulently. Thus, the learned Permanent Lok Adalat has rightly rejected the claim of the petitioner. (Downloaded on 28/06/2019 at 06:23:42 AM)
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23. This Court thus, does not find any reason why the petitioner's claim at all should be considered or even the applicability of condition No.10, as quoted hereinabove, be considered, in light of the fact that the petitioner has sought the non-standard claim on the basis of the fitness certificate, which was not only forged, but also the fact that the petitioner tried to make a claim on the basis of such forged certificate.
24. The case laws relied upon by learned counsel for the petitioner are not applicable in the present case.
25. In view of the above, no interference is called for in the present writ petition and the same is accordingly dismissed.
(DR. PUSHPENDRA SINGH BHATI),J Skant/-
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