Karnataka High Court
The Divisional Manager, United India, vs Jayamma W/O Hanumanthappa Nyamathi, on 25 January, 2018
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IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 25th DAY OF JANUARY 2018
R
BEFORE
THE HON'BLE MR. JUSTICE B.A. PATIL
MISCELLANEOUS FIRST APPEAL NO.23097 OF 2012(MV)
BETWEEN
THE DIVISIONAL MANAGER, UNITED INDIA,
INSURANCE CO. LTD., ENKAY COMPLEX,
KESHAVAPUR HUBLI.
REP. BY DIVISIONAL MANAGER,
THE UNITED INDIA INSURANCE CO. LTD.,
DIVISIONAL OFFICE NO.1 KESHAVAPUR. HUBLI
... APPELLANT
(By Sri A G JADHAV, ADV.)
AND
1. SMT.JAYAMMA W/O HANUMANTHAPPA NYAMATHI,
AGE: 45 YEARS, OCC: HOUSEHOLD WORK,
R/O: KUPPELUR, TQ: RANEBENNUR.
DIST. HAVERI.
2. SMT. SULOCHANA W/O SANJEEVREDDY REDDER,
AGE: 27 YEARS, OCC: HOUSEHOLD WORK,
R/O: MALANAYAKANAHALLI,
TQ: RANEBENNUR, DIST. HAVERI.
3. SMT.RENUKA W/O CHANNAGOUDA PATIL,
AGE: 25 YEARS, OCC: HOUSEHOLD WORK,
R/O: GODIHAL TQ: RANEBENNUR, DIST. HAVERI
4. PRAVEEN S/O HANUMANTHAPPA NYAMATHI,
AGE: 24 YEARS, OCC: NIL,
R/O: KUPPELUR, TQ: RANEBENNUR, DIST. HAVERI.
5. KUMARI KAVITA D/O HANUMANTHAPPA NYAMATHI,
AGE: 22 YEARS, OCC: HOUSEHOLD
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R/O: KUPPELUR, TQ: RANEBENNUR
DIST. HAVERI.
6. VENKAPPA S/O TIRUKAAPPA NYAMATHI,
AGE: 80 YEARS, OCC: NIL, R/O: KUPPELUR,
TQ: RANEBENNUR, DIST. HAVERI.
7. SRI. MANJUNATH S/O HONNAPPA INGALAGONDI,
AGE: MAJOR, OCC: BUSINESS,
R/O: HOLEANWERI,
TALUK: RANEBENNUR., HAVERI DIST.
... RESPONDENTS
(By Sri ARAVIND D KULKARNI FOR R1-R6, ADV.
NOTICE TO R7 IS HELD SUFFICIENT))
THIS MFA IS FILED U/S 173(1) OF MV ACT 1988,
AGAINST THE JUDGMENT AND AWARD DATED:25-05-2012
PASSED IN MVC NO.390/2010 ON THE FILE OF ADDL. SENIOR
CIVIL JUDGE AND MEMBER, ADDL. MACT, RANEBENNUR,
AWARDING THE COMPENSATION OF RS.7,44,000/- WITH
INTEREST AT THE RATE OF 6% P.A., FROM THE DATE OF
PETITION TILL ITS REALISATION.
THIS MFA BEING HEARD AND RESERVED ON 27.10.2017
AND COMING ON FOR PRONOUNCEMENT OF JUDGMENT
THIS DAY THE COURT, DELIVERED THE FOLLOWING:
JUDGMENT
The present appeal has been preferred by the appellant-insurer challenging the judgment and award dated 25.05.2012 passed by the Additional Senior Civil Judge and Additional Motor Accident Claims Tribunal, Ranebennur, in MVC No.390 of 2010.
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2. Heard. Though the appeal is listed for admission, with consent of the learned counsel appearing for the parties, it is taken up for final disposal.
3. The facts leading to the case are that on 15.03.2010 at about 11.00 a.m. one Hanumanthappa and members of his family were travelling in an autorickshaw bearing registration No.KA.27/A-1891 from Kuppelur to Kodiyal Hospeth for Darshan of Lord Durgadevi. When the said auto was so proceeding on Kuppelur-Holeanveri road, the driver drove the autorickshaw rashly and negligently and when it came near Lingadahalli cross, he lost control over the vehicle and the vehicle went into a pothole and then dashed against a dog and then went to left side of the road and toppled down. As a result of the said impact, Hanumanthappa sustained grievous injuries and on the way to Government Hospital, Ranebennur, he succumbed to the injuries. It is contended that after the post mortem, they took the dead body to their native place by hiring a vehicle and spent Rs.30,000/- for performing the funeral and final obsequies. It was further contended that the deceased was 4 an agriculturist and was earning more than Rs.50,000/- per month. Because of the sudden death of Hanumanthappa, they have lost the bread earner and as such the wife, daughters, son and father of the deceased filed a claim petition under Section 166 of the Motor Vehicles Act, 1988 (hereinafter referred to as the 'Act' for short).
In pursuance of the notice, the respondents appeared and filed statement of objections. Respondent No.1, by denying the contents of the petition, contended that the vehicle was insured with respondent No.2 and the policy was in force as on the date of the accident and the driver was holding a valid and effective driving licence as on the date of the accident. On these grounds he prayed for dismissal of the petition.
Respondent No.2 in its objections denied the contents of the petition. It is contended that the alleged accident took place solely due to the rash and negligent act of the deceased himself. It is contended that the said vehicle had plied out of the territorial area and as such there is breach of policy condition, the insurer is not liable to pay any compensation. On these grounds, it prayed for dismissal of the petition. On the basis of the above pleadings, the Tribunal framed the following issues:
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1. Whether the petitioner proves that the deceased sustained injuries in the accident on 15.03.2010 and died as stated in the petition?
2. Whether the petitioner is entitled for compensation? If so what is the quantum and from whom?
3. What order or Award?
The petitioners, in order to prove their case, got examined petitioner No.4 as PW-1 and one more witness came to be examined as PW-2 and got marked the documents as Exs.P-1 to P-18. On behalf of the respondents, official of the insurer was examined as RW-1 and got marked the documents as Exs.R-1 to R-3.
The Tribunal, after hearing the parties to the lis, passed the impugned judgment and award, awarding compensation of Rs.7,44,000/- with interest at 6% per annum from the date of petition till its realization holding both the respondents jointly and severally liable to pay the compensation. But however, directed the second respondent to deposit the compensation with interest.
Assailing the aforesaid judgment and award, the insurer is before this Court.
4. I have heard Sri A.G. Jadhav, learned counsel appearing for the appellant-insurer and Sri Aravind D. 6 Kulkarni, learned counsel for respondent Nos.1 to 6- claimants.
5. The main grounds urged by the learned counsel for the appellant is that the Tribunal has misapplied the law and the decision of the Apex Court and thereby by violating the existing law, has fastened the liability on the insurer. He would contend that the issue relating to violation of the terms and conditions of the policy and thereby absolving the insurer of its liability has been well settled by the decision of the Apex Court. This aspect has not been properly considered and appreciated by the Tribunal. He further contended that the Tribunal has utterly failed to look into the documents, particularly, the permit produced at Ex.R-1 issued by the RTO, Haveri, which is crystal clear that the autorickshaw in question had plied beyond the jurisdiction. Under such circumstances, the Tribunal ought to have held that there is clear violation of the terms and conditions of the policy and the insurer is not liable to pay any compensation. He further contended that, the compensation awarded is also on the higher side. He further contended that there was no 7 permit to ply the vehicle beyond the jurisdiction and as such the owner of the vehicle has violated the condition thereof. Plying of vehicle without permit is an infraction and as such, the insurer is having a defence available under Section 149(2) of the Act. In order to substantiate his contention, he relied upon the decision in the case of National Insurance Company Limited v. Challa Barathamma and other reported in CDJ 2004 SC 1048. On these grounds, he prayed for allowing the appeal by setting aside the impugned judgment and award.
6. Per contra, learned counsel appearing on behalf of the respondents-claimants vehemently argued and contended that no statutory defence is available to the insurer under sub clause(2) of Section 149 of the Act inasmuch as deviation of route permit. He further contended that the violation of the route permit would not amount to violation of the terms and conditions of the policy and as such, insurer cannot be exonerated from its liability. He further contended that the vehicle was being used for sanction purpose and if any condition is violated that would 8 be the breach of the conditions of permit amenable to punitive action but cannot be said to be used for the purpose for which it was not authorized by the permit. He further contended that merely because the accident took place outside the territorial limits as mentioned in the permit that itself would not amount to violation of the policy conditions of the insurance policy. He further contended that this Court in a case between The Branch Manager v. Paramanand and Another in MFA No.23978 of 2011 connected with MFA Crob 746 of 2012 disposed of on 03.02.2012 has held that the said violation is not a violation and as such the liability has been fixed on the insurer. He relied on an unreported judgment of this Court in Durugamma v. S.M. Govindappa and Another in MFA No.1201 of 2011 disposed of on 07.11.2016. He further contended that using the vehicle in breach of permit condition does not absolve the insurer from paying the compensation awarded by the Tribunal. In order to substantiate this contention he relied upon the decision in the case of United India Insurance Company Limited and others v Chandamma and others 9 reported in ILR 2000 Kar 1302. On these grounds, he prayed for dismissal of the appeal.
7. The accident is not in dispute so also the involvement of the offending vehicle insured with the appellant-insurance company.
8. As could be seen from the impugned judgment and award, it is contended by the claimants that the deceased was hale and healthy and was an agriculturist earning Rs.50,000/- per month. In order to substantiate the said fact, the claimants have produced Exs.P-9 to P-17-the record of rights standing in the name of the deceased. Though the said documents have been produced, in the absence of proof of income, the Tribunal by taking the notional income at Rs.6,000/- per month, after deducting 1/3rd towards personal expenses of the deceased and by applying multiplier of 13, has awarded an amount of Rs.6,24,000/- towards loss of dependency. Further, an amount of Rs.1,20,000/- is awarded under conventional heads. Though the learned counsel contended that the compensation awarded under conventional heads is on the 10 higher side, he has not specifically made out under which head the compensation awarded is on the higher side. The Tribunal, after considering the fact that the record of rights stood in the name of the deceased, took the notional income at Rs.6,000/- per month and as there were 3 dependents, has rightly deducted 1/3rd of the income towards personal expenses of the deceased, by applying multiplier of 13, as the deceased was aged 50 years at the time of the accident, has awarded just compensation. As such the appellant has not made out any good grounds to reduce the compensation awarded by the Tribunal and same stands confirmed.
9. The next question which arises for consideration by this Court is:
Whether plying of auto beyond the permit amounts to violation of the terms and conditions of the insurance policy and whether the said defence is available to the insurer?
10. Before going to discuss the said aspect, I feel it apt to refer to the relevant provisions of Section 66(1) of the Act which reads as follows:
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" 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 authorizing 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, authorize 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, authorize the use of the vehicle as a goods carriage 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, authorize the holder to use the vehicle for the carriage of goods for or in connection with a trade or business carried on by him."
I also feel it just and proper to refer to the relevant provisions of Section 149(2)(a)(i)(c) of the Act which reads as under:
"149. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks.- (2) No sum shall be payable by an insurer 12 under sub-section(1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment 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 judgment 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 thereto and to 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-
(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or
11. As could be seen from Section 149 of the Act, it enumerates that the insurer can be absolved of its liability only on the grounds stated in sub-clause(2) of Section 149 of the Act. In order to absolve its liability, the insurer has to bring its defence under the contours of any of the defence enumerated under the aforesaid Section. It makes it clear that the said section is a statutory defence only to absolve or 13 to avoid the liability. The learned counsel for the appellant draws my attention to a decision of the Hon'ble Supreme Court in the case of National Insurance Co. Ltd v Challa Bharatamma and others reported in AIR 2004 Supreme Court 4882 wherein at paragraphs 10 and 11, it has been held as under:
" 10. Similarly, in National Insurance Co. Ltd., Chandigarh vs. Nicolletta Rohtagi and others (2002(7) SCC
456), the scope of Section 149(2) of the Act was elaborated.
It was, inter alia observed as follows:
" To answer the question, it is necessary to find out on what grounds the insurer is entitled to defend/contest against a claim by an injured or dependants of the victims of a motor vehicle accident. Under Section 96(2) of the 1939 Act, which corresponds to Section 149(2) of the 1988 Act, an insurance company has no right to be a party to an action by the injured person or dependants of the deceased against the insured. However, the said provision gives the insurer the right to be made a party to the case and to defend it. It is, therefore, obvious that the said right is a creature of the statue and its content depends on the provisions of the statute. After the insurer has been made a party to a case or claim, the question arises, what are the defenses available to it under the statute? The language employed in enacting sub-section(2) of Section 149 appears to be plain and simple and there is no ambiguity in it. It shows that when an insurer is impleaded and has been given notice of the case, 14 he is entitled to defend the action on grounds enumerated in the sub-section, namely, sub-section(2) of Section 149 of the 1988 Act, and no other ground is available to him. The insurer is not allowed to contest the claim of the injured or heirs of the deceased on other ground which is available to an insured or breach of any other conditions of the policy which do not find place in sub-section(2) of Section 149 of the 1988 Act. If an insurer is permitted to contest the claim on other grounds it would mean adding more grounds of contest to the insurer than what the statute has specifically provided for.
Sub-section(7) of Section 149 of the 1988 Act clearly indicates in what manner sub-section (2) of Section 149 has to be interpreted Sub-section(7) of Section 149 provides that 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. The expression 'manner' employed in sub-section(7) of Section 149 is very relevant which means an insurer can avoid its liability only in accordance with what has been provided for in sub- section(2) of Section 149. It, therefore, shows that the insurer can avoid its liability only on the statutory defences expressly provided in sub-section(2) of Section 149 of the 1988 Act. We are, therefore, of the view that an insurer cannot avoid its liability on any other 15 grounds except those mentioned in sub-section(2) of Section 149 of the 1988 Act."
11. As was observed in the said case the statutory defences which are available the insurer to contest the claim are confined to those provided in sub-section(2) of Section
149."
12. On plain reading of the decision referred to by the learned counsel for the appellant, though it appears as if it aids his contention, on a closer examination of the issue with reference to Section 149 of the Act, the said decision is not applicable to the facts of the case on hand for the reason that the proposition of law laid down in the said decision does not say anything about plying of the vehicle beyond the permit limit. In the said decision, it has not specifically dealt with the fact as to whether the vehicle plied beyond the required permit or territorial limits amounts to violation of terms and conditions of the insurance policy? With great respect it is not applicable to the case on hand. The fact situation in this case is, the autorickshaw had plied crossing the city limits. In order to substantiate the said fact, the insurer got examined one of its officials as 16 RW-1 and he has also substantiated his contention in his evidence and has produced Ex.R-1 permit and contended that the limitation 'as to use' has been specifically mentioned in the policy and the policy covers the use of the vehicle only under the permit within the meaning of the Act, or such carriage falling under Section 66(3) of the Act. As such, it is not going to cover the said aspect and it is in violation of the terms and conditions of the policy.
13. Section 66 read with Sections 74, 75 and 207 of the Act clearly indicate that, in case, if, a vehicle had plied beyond the permit limit, then it will be a punitive action which can be imposed on the owner of the vehicle. But nowhere the Section gives any right to the insurer to avoid the liability. When the insurer takes a specific contention in his statement of objections, heavy burden lies upon him to prove the same. With regard to this proposition of law, I rely upon the decision of the Hon'ble Supreme Court in the case of Lakhmi Chand v. Reliance General Insurance reported in (2016) 3 Supreme Court Cases 100.
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14. On going through the above said decision it is clear that the violation of permit condition is not a valid defence unless the insurer has incorporated such a condition as one of the conditions in the insurance policy. As could be seen from Ex.R-1 though there is mention about the limitation as to the use, it has not specifically mentioned with reference to plying of the vehicle beyond the permit limit. It is well settled principle of law that the law of insurance is the law of contract between the parties and whenever any contract has been entered into between the insurer and the insured then there must be a specific incorporation of the terms and conditions of the policy and the contracting parties getting them understood and then thereafter the policy must be issued. This is based upon the principles of "consensus addendum. If there is no consensus addendum between the parties to the terms and conditions of the policy and if it is issued in a general manner, then, under such circumstances the said condition does not come to the rescue of the insurer in view of the 18 decision of the Apex Court at paragraph 16 of Lakhmi Chand's case(supra) which reads as under:
"16. It becomes very clear from a perusal of the above mentioned case law of this Court that the insurance company, in order to avoid liability must not only establish the defence claimed in the proceeding concerned, but also establish breach on the part of the owner/insured of the vehicle for which the burden of proof would rest with the insurance company."
Rule 32 of the Rules of the Road Regulations, 1989, also casts a duty on the driver of the vehicle not only to carry certain documents in the vehicle, but also to exhibit the same to a Police Officer or to an Officer of the Regional Transport Office.
Rule 32 reads as under:
32. Production of documents.- A person driving a vehicle:
i. Shall always carry with him his driving licence; certificate of registration, certificate of taxation and certificate of insurance of the vehicle and in case of transport vehicle the permit and fitness certificate, also ii. shall on demand by police officer in uniform or an officer of the Motor Vehicle Department in uniform or any other officer authorized by the Government, produce the documents for inspection;19
Provided that where any or all of the documents are not in his possession, he shall produce in person an extract or extracts of the documents duly attested by any police officer or by any other officer or send it to the officer who demanded the documents, by registered post, within 15 days of the demand.
On perusal of the said provision, it does not cast a burden of proof upon the driver, or owner, to be discharged during the proceedings pending before the learned Tribunal. It merely imposes a duty to carry the documents while driving the vehicle and to show the same when called upon to do so.
In catena of decisions, the Hon'ble Apex Court has held that the insurance company must not only take a defence that there was a violation of the condition of the policy, but must also prove the defence that there has been a substantive violation of the said policy condition. Moreover, as held above, the burden of proving a defence is always on the party who asserts it. In order to prove, the insurer can summon the concerned witness and documents to establish its plea. In the instant case on hand, except one official witness, no other witness is examined by the insurer. 20 In this behalf, insurer has failed to establish and prove its defence. A co-ordinate Bench of this Court in the case of Durugamma S/o Yallamma vs. S.G. Naresh, s/o Govindappa in MFA No.1201 of 2011 disposed of on 7th November 2016 at paragraphs 8 to 20 has observed as under.
" 8. In THIMMEGOWDA'S case [supra], 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 CHANDAMMA [supra], considering the relevant provisions of the Act and on consideration 21 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, 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 22 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' 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, 177 and 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 PAPAIAH's case [supra], placing reliance on the Judgment of the Hon'ble Apex Court in CHALLA BHARATHAMMA's case [supra], it was observed thus:
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, 23 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 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 B.T. VENKATESH's case [supra], 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 24 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 SMT. KEMPAMMA [supra], 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 [supra], 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 Judgment 25 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 the jurisdiction of Chitradurga. Exhibit.R2 the permit issued by RTO, Chitradurga clearly establishes that the permit was issued for plying of the offending vehicle only within the town limits of Chitradurga. It means that the offending vehicle was not allowed to ply exceeding the route permit. The accident in question occurred within the jurisdictional limits of Aimangala Hobli, Hiriyur Taluk, outside the town limits of Chitradurga.
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 26 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 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] 27 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.
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 28 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 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 the words 'the purpose for which the vehicle may be used'. There are different kinds of contravention of the permit. 29 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 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."30
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 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 31 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 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 32 CO., LTD., vs. ASHA RANI AND OTHERS' 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 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]."
Further in the case of the Branch Manager, United India Insurance Co. Ltd., vs. Paramanand, s/o Laxman Sunagar in MFA No.23978 of 2011 c/w MFa Crob 746 of 202 dated 03.02.2012, co-ordinate bench of this Court by 33 referring the decision in the case of National Insurance Company Limited vs. Challa Bharathamma quoted supra has held that violation of permit condition is not a valid defence unless the insurer has incorporated in the insurance policy as one of the conditions. Thereafter, has come to the conclusion that there is no breach of policy condition, insurer is liable.
15. Be that as it may. Even as could be seen from the written statement filed by the insurer, at paragraph 9, he has specifically contended that permit given to the autorickshaw bearing registration No.KA.27/A.1891 is to ply within 10 kms from the city limits of Ranebennur. But the owner of autorickshaw had taken away the said autorickshaw 22 kms away from Ranebennur limits. There is difference between two aspect. First one, there is no permit at all to ply the vehicle and the second one is, there is permit but has gone beyond the limit. In the first one, it is a fundamental breach and on proof, the insurer can avoid the liability. With respect to the second, City permit to a particular distance is fixed because large number of such 34 vehicles are operated in the State to the detriment of public interest. Another aspect is that the State has to see that the ownership and control of the material resources are so distributed as best serve the common good and there should not be concentration. In that light, a breach only invites criminal penalty, as such, it is not so fundamental to say there is breach of policy condition. It is well established principle of law that the insurer has to establish that the breach of policy is so fundamental that it ended the contract which has been entered into between the insurer and the insured. In other words violation must be of such a nature that it is the primary cause of the accident and not otherwise. With this object, the legislature has spelled out grounds on which the insurance company can avoid its liability. The defence provided to the insurance company is a statutory right. We cannot import or read any other grounds than what are spelled out in sub-Section(2) of Section 149 of the Act.
16. From the above said facts and circumstances, plying the autorickshaw a few kilometers beyond the permit 35 limits doesn't amount to fundamental breach of the terms of the policy. The said alleged violation finds no place in Section 149(2) of the Act. Therefore, the defence of the counsel that the vehicle in question had been driven beyond the territorial limits of Ranebennur amounts to violation of the permit condition, is not acceptable and the same is hereby rejected.
17. In the result, I am of the considered opinion that the appellant-insurer has not made out any case so as to interfere with the judgment of the Tribunal and the same deserves to be confirmed.
Accordingly, the appeal dismissed. The judgment and award dated 25.05.2012 passed by the Additional Senior Civil Judge and Additional Motor Accident Claims Tribunal, Ranebennur, in MVC No.390 of 2010 is affirmed.
Sd/-
JUDGE Kmv