Thus, it would be seen that a trip is to be plied within the prescribed time;
the driver and the conductor are required to wear the uniform; the driver
and conductor deputed on the bus are required to be of good moral
characters and expected to be courteous and polite to the commuters, etc.
etc. Would violation of these conditions entitle an Insurance Company to
avoid the contract of insurance. To my mind, the Insurance Company
cannot avoid its liability merely on ground of violation of any condition
of permit.
IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 4th December, 2012
MAC.APP. 756/2010
The Appellant Bajaj Allianz General Insurance Company Limited
impugns a judgment dated 17.08.2010 passed by the Motor Accident
Claims Tribunal (the Claims Tribunal) whereby while awarding a
compensation of `5,75,000/- for the death of Smt. Shanti Devi, the
Appellant Insurance Company was made liable to pay the compensation
and its plea of exoneration was rejected.
2.
The only ground of challenge raised on behalf of the Appellant is that
there was breach of the terms and conditions of the permit in as much as
the authorization of the driver to drive vehicle was not obtained as per the
condition of permit and thus, the Insurance Company was not liable to
pay the compensation.
3.
It is not in dispute that the driver did possess a licence to drive a transport
vehicle. Learned counsel for the Appellant drew my attention to the
document Ex.R3W1/5. As per condition No.33 (v) forming part of the
permit, a driver was not authorized to drive a transport vehicle unless he
carried the proper authorization card. The said condition is extracted
hereunder:33 (v) No transport vehicle shall ply unless it carries a proper
authorization card, containing the name, photograph and other
such particulars of the driver, issued by the State Transport
Authority authorizing such driver to drive the vehicle. The
authorization card shall be displayed in the vehicle at a
conspicuous place.
4.
Thus, the learned counsel for the Appellant argues that since the driver
did not possess a proper authorization card containing the name and
photograph and other particulars of the driver, there was breach of the
condition of the permit. A perusal of the permit conditions shows that
there are more than 100 conditions attached to the issuance of the permit
which includes the condition No.8, which is extracted hereunder:(8) The permit holder shall ply the bus as per approved timetable and on the assigned route. It shall be ensured that the trip is
plied within the time prescribed for a trip and the directions of
time-keepers, are strictly followed.
(a) The driver and the conductor shall be required to wear the
uniform in grey colour with P.S.V. Badge prominently-displaced
on it.
(b) The driver and conductor to be deployed shall bear high moral
character and shall be courteous and polite to the commuters.
(c) No driver/conductor who has ever been suspended/dismissed
by DTC or any Govt. Organization in his previous service shall be
eligible to be deployed in the proposed buses.
(d) The driver/conductor to be deployed in the buses will be
required to undergo the test and training as prescribed by STA,
Delhi.
(e) Any driver/conductor shall not be appointed or changed
without prior intimation to the Secretary, STA, Delhi.
5.
Thus, it would be seen that a trip is to be plied within the prescribed time;
the driver and the conductor are required to wear the uniform; the driver
and conductor deputed on the bus are required to be of good moral
characters and expected to be courteous and polite to the commuters, etc.
etc. Would violation of these conditions entitle an Insurance Company to
avoid the contract of insurance. To my mind, the Insurance Company
cannot avoid its liability merely on ground of violation of any condition
of permit. It is Section 149 (2) (a) of the Motor Vehicles Act, 1988 (the
Act) which entitles the insurer to defend the action for payment of
compensation. Section 149(2)(a)(i)(c) of the Act deals with the condition
of permit it states that if the vehicle is used for a purpose not allowed by
the permit under which the vehicle was being used, the insurer would be
entitled to avoid the policy. To appreciate the contention raised, it would
be appropriate to extract Section 149 (2) of the Act, which is extracted
hereunder:149. Duty of insurers to satisfy judgments and awards against
persons insured in respect of third party risks(1)
(2)
No sum shall be payable by an insurer under sub-section
(1) in respect of any judgment or award unless, before the
commencement of the proceedings in which the judgment of 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(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 organized 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,
(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 licence during
the period of disqualification; or..
6.
I had the occasion to deal with this similar issue in Mahender Singh v.
Oriental Insurance Company Limited, MAC APP.430/2010 decided on
10.05.2012 where certain conditions are imposed on the permit holder.
Paras 6,7,8 and 9 of the report are extracted hereunder:6.
Thus, a perusal of the condition for issuance of permit,
inter alia, are that the vehicle shall be kept neat and clean at the
time of operation (condition No.16); that the vehicle must be
equipped with the First Aid Box; that the driver must display the
particulars of his identity and photograph at a prominent place
inside the windscreen (Condition No.19); that the driver must be of
good character and without any criminal record; the driver shall
wear uniform in gray colour with his/her smart card based Public
Service Vehicle (PSV) badge prominently displaying on the
uniform (Condition No.8).
7.
Can it be said that the Insurance Company would be able
to avoid liability if the vehicle is not kept clean or the driver is not
wearing the uniform? It is not each and every condition of permit
contravention of which would allow the Insurance Company to
avoid the liability. On the other hand, a close reading of the
Clause (c) to Section 149 (2) (i) (a) would show that it is only the
user of the transport vehicle for the purpose not allowed by the
permit would enable the Insurance Company to defend the action
to satisfy an award in a motor accident where the risk is covered
by a policy obtained under Section 147 of the Act.
8.
The interpretation of contravention of condition of permit
envisaged under Section 66 of the Act and the contravention of
condition of permit with respect to the purpose for which the
vehicle may be used came up for consideration before the Supreme
Court in State of Maharastra and Ors. v. Nanded-Parebhani
Z.L.B.M.V. Operator Sangh (2000) 2 SCC 69 albeit in a different
context. In the said case, the police had seized certain vehicles for
carrying passengers in excess of the numbers permitted by the
condition of permit issued by the Transport Authority. The action
was challenged by the Association of Transporters by virtue of a
writ petition before the Aurangabad Bench of Bombay High Court.
The High Court analyzed the different provisions of the Motor
Vehicles Act, 1988 and the Rules framed thereunder and on
consideration of the same came to the conclusion that it is not each
and every violation of the condition of the permit which would
authorize the seizure and detention of the vehicle under Section
207 (1) of the Act. It was held that it was only when the condition
of permit relating to the route on which or the area in which or the
purpose for which the vehicle was used, is violated, the vehicle
could be seized by the Authorities. The Appeal filed by the State of
Maharastra was dismissed by the Supreme Court. The contention
raised on behalf of the State of Maharastra that carrying
passengers more than prescribed by the permit could be construed
to be violation, was rejected. The Supreme Court relied upon the
report in Kanailal Sur v. Paramnidhi Sadhu Khan (1958) 1 SCR
360 and held as under:"If the words used are capable of one construction only then
it would not be open to the Courts to adopt any other
hypothetical construction on the ground that such
construction is more consistent with the alleged object and
policy of the Act". The intention of the legislature is required
to be gathered from the language used and, therefore, a
construction, which requires for its support with additional
substitution of words or which results in rejection of words
as meaningless has to be avoided. Bearing in mind, the
aforesaid principles of construction of statute and on
examining the provisions of Section 207 of the Act, which
has been quoted earlier, we have no doubt in our mind that
the police officer would be authorised to detain a vehicle, if
he has reason to believe that the vehicle has been or is being
used in contravention of Section 3 or Section 4 or Section 39
or without the permit required under Sub-section (1) of
Section 66 or in contravention of 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. In the case in
hand, we are not concerned with the contravention of
Section 3 or Section 4 or Section 39 or Sub-section (1) of
Section 66 and we are only concerned with the question of
contravention of the condition of permit. Reading the
provisions as it is, the conclusion is irresistible that the
condition of permit relating to the route on which or the
area in which or the purpose for which the vehicle could be
used if contravened, would only authorise the police officer
to detain the vehicle and not each and every condition of
permit on being violated or contravened, the police officer
would be entitled to detain the vehicle. 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 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. But carrying passengers more than the number
specified in the permit will not be a violation of the purpose
for which the permit is granted. If the legislature really
wanted to confer power of detention on the police officer for
violation of any condition of the permit, then there would not
have been the necessity of adding the expression "relating to
the route on which or the area In which or the purpose for
which the vehicle may be used". The user of the aforesaid
expression cannot be ignored nor can it be said to be a
tautology. We have also seen the Form of permit (From
P.Co. T.), meant in respect of a tourist vehicle, which is
issued under Rule 72(1)(ix) and Rule 74(6) of the
Maharashtra Motor Vehicles Rules, 1989. On seeing the
different columns, we are unable to accede to the contention
of the learned Counsel appearing for the State of
Maharashtra, that carrying passengers beyond the number
mentioned in Column 5, indicating the seating capacity,
would be a violation of the conditions of permit relating to
either the route or the area or the purpose for which the
permit is granted. In this view of the matter, we see no
infirmity with the conclusion arrived at by the High Court in
the impugned judgment and the detention of the vehicles has
rightly been held to be unauthorised and consequently, the
compensation awarded cannot be said to be without
jurisdiction
9.
Although, the interpretation of Section 207 was done by
the Supreme Court in a different context, yet, the same would apply
to Clause (c) to Section 149 (2) (a) (i) of the Act.
7.
It is, therefore, evident that the Insurer is entitled to put a condition to
avoid the insurance policy as mentioned in Section 149 (2) (a) (i) and 149
(2) (b) of the Act.
8.
It was neither the condition in the insurance policy nor the insurer was
entitled to put a condition in the contract of insurance that any violation
of the permit would entitle it to avoid the insurance policy. The condition
that can be put is only that the vehicle was being used for a purpose not
allowed by the permit under which the vehicle was being used. Thus, it
would cover cases when the owner does not possess a valid permit at all
for the area where the vehicle is being plied or the vehicle is used as a
passenger vehicle when it is not a passenger vehicle and it is used as a
goods vehicle when it is not a goods vehicle, etc. etc.
9.
The filing of the instant Appeal shows total non application of mind by
the Insurance Company. The Appeal is frivolous; the same is dismissed
with costs of `10,000/-.
10.
The costs shall be paid to the Claimants through their counsel within four
weeks, failing which the same shall be deducted from the statutory
amount refundable to the Appellant Insurance Company.
11.
In case, the costs are paid, the statutory amount of `25,000/- shall be
refunded to the Appellant Insurance Company immediately. If the costs
are not paid and its proof is not filed within six weeks, the statutory
amount shall be refunded after paying cost to respondent No.1.
12.
Pending Applications also stand disposed of.
(G.P. MITTAL)
JUDGE
DECEMBER 04, 2012
Print Page
the driver and the conductor are required to wear the uniform; the driver
and conductor deputed on the bus are required to be of good moral
characters and expected to be courteous and polite to the commuters, etc.
etc. Would violation of these conditions entitle an Insurance Company to
avoid the contract of insurance. To my mind, the Insurance Company
cannot avoid its liability merely on ground of violation of any condition
of permit.
BAJAJ ALLIANZ GENERAL INSURANCE COMPANY LTD. Vs. VIBHISHAN MAHTO @ VIBHISHAN PRASAD & ORS.
Judge :
G.P. MITTALDecided On :
2012-12-04IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 4th December, 2012
MAC.APP. 756/2010
The Appellant Bajaj Allianz General Insurance Company Limited
impugns a judgment dated 17.08.2010 passed by the Motor Accident
Claims Tribunal (the Claims Tribunal) whereby while awarding a
compensation of `5,75,000/- for the death of Smt. Shanti Devi, the
Appellant Insurance Company was made liable to pay the compensation
and its plea of exoneration was rejected.
2.
The only ground of challenge raised on behalf of the Appellant is that
there was breach of the terms and conditions of the permit in as much as
the authorization of the driver to drive vehicle was not obtained as per the
condition of permit and thus, the Insurance Company was not liable to
pay the compensation.
3.
It is not in dispute that the driver did possess a licence to drive a transport
vehicle. Learned counsel for the Appellant drew my attention to the
document Ex.R3W1/5. As per condition No.33 (v) forming part of the
permit, a driver was not authorized to drive a transport vehicle unless he
carried the proper authorization card. The said condition is extracted
hereunder:33 (v) No transport vehicle shall ply unless it carries a proper
authorization card, containing the name, photograph and other
such particulars of the driver, issued by the State Transport
Authority authorizing such driver to drive the vehicle. The
authorization card shall be displayed in the vehicle at a
conspicuous place.
4.
Thus, the learned counsel for the Appellant argues that since the driver
did not possess a proper authorization card containing the name and
photograph and other particulars of the driver, there was breach of the
condition of the permit. A perusal of the permit conditions shows that
there are more than 100 conditions attached to the issuance of the permit
which includes the condition No.8, which is extracted hereunder:(8) The permit holder shall ply the bus as per approved timetable and on the assigned route. It shall be ensured that the trip is
plied within the time prescribed for a trip and the directions of
time-keepers, are strictly followed.
(a) The driver and the conductor shall be required to wear the
uniform in grey colour with P.S.V. Badge prominently-displaced
on it.
(b) The driver and conductor to be deployed shall bear high moral
character and shall be courteous and polite to the commuters.
(c) No driver/conductor who has ever been suspended/dismissed
by DTC or any Govt. Organization in his previous service shall be
eligible to be deployed in the proposed buses.
(d) The driver/conductor to be deployed in the buses will be
required to undergo the test and training as prescribed by STA,
Delhi.
(e) Any driver/conductor shall not be appointed or changed
without prior intimation to the Secretary, STA, Delhi.
5.
Thus, it would be seen that a trip is to be plied within the prescribed time;
the driver and the conductor are required to wear the uniform; the driver
and conductor deputed on the bus are required to be of good moral
characters and expected to be courteous and polite to the commuters, etc.
etc. Would violation of these conditions entitle an Insurance Company to
avoid the contract of insurance. To my mind, the Insurance Company
cannot avoid its liability merely on ground of violation of any condition
of permit. It is Section 149 (2) (a) of the Motor Vehicles Act, 1988 (the
Act) which entitles the insurer to defend the action for payment of
compensation. Section 149(2)(a)(i)(c) of the Act deals with the condition
of permit it states that if the vehicle is used for a purpose not allowed by
the permit under which the vehicle was being used, the insurer would be
entitled to avoid the policy. To appreciate the contention raised, it would
be appropriate to extract Section 149 (2) of the Act, which is extracted
hereunder:149. Duty of insurers to satisfy judgments and awards against
persons insured in respect of third party risks(1)
(2)
No sum shall be payable by an insurer under sub-section
(1) in respect of any judgment or award unless, before the
commencement of the proceedings in which the judgment of 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(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 organized 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,
(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 licence during
the period of disqualification; or..
6.
I had the occasion to deal with this similar issue in Mahender Singh v.
Oriental Insurance Company Limited, MAC APP.430/2010 decided on
10.05.2012 where certain conditions are imposed on the permit holder.
Paras 6,7,8 and 9 of the report are extracted hereunder:6.
Thus, a perusal of the condition for issuance of permit,
inter alia, are that the vehicle shall be kept neat and clean at the
time of operation (condition No.16); that the vehicle must be
equipped with the First Aid Box; that the driver must display the
particulars of his identity and photograph at a prominent place
inside the windscreen (Condition No.19); that the driver must be of
good character and without any criminal record; the driver shall
wear uniform in gray colour with his/her smart card based Public
Service Vehicle (PSV) badge prominently displaying on the
uniform (Condition No.8).
7.
Can it be said that the Insurance Company would be able
to avoid liability if the vehicle is not kept clean or the driver is not
wearing the uniform? It is not each and every condition of permit
contravention of which would allow the Insurance Company to
avoid the liability. On the other hand, a close reading of the
Clause (c) to Section 149 (2) (i) (a) would show that it is only the
user of the transport vehicle for the purpose not allowed by the
permit would enable the Insurance Company to defend the action
to satisfy an award in a motor accident where the risk is covered
by a policy obtained under Section 147 of the Act.
8.
The interpretation of contravention of condition of permit
envisaged under Section 66 of the Act and the contravention of
condition of permit with respect to the purpose for which the
vehicle may be used came up for consideration before the Supreme
Court in State of Maharastra and Ors. v. Nanded-Parebhani
Z.L.B.M.V. Operator Sangh (2000) 2 SCC 69 albeit in a different
context. In the said case, the police had seized certain vehicles for
carrying passengers in excess of the numbers permitted by the
condition of permit issued by the Transport Authority. The action
was challenged by the Association of Transporters by virtue of a
writ petition before the Aurangabad Bench of Bombay High Court.
The High Court analyzed the different provisions of the Motor
Vehicles Act, 1988 and the Rules framed thereunder and on
consideration of the same came to the conclusion that it is not each
and every violation of the condition of the permit which would
authorize the seizure and detention of the vehicle under Section
207 (1) of the Act. It was held that it was only when the condition
of permit relating to the route on which or the area in which or the
purpose for which the vehicle was used, is violated, the vehicle
could be seized by the Authorities. The Appeal filed by the State of
Maharastra was dismissed by the Supreme Court. The contention
raised on behalf of the State of Maharastra that carrying
passengers more than prescribed by the permit could be construed
to be violation, was rejected. The Supreme Court relied upon the
report in Kanailal Sur v. Paramnidhi Sadhu Khan (1958) 1 SCR
360 and held as under:"If the words used are capable of one construction only then
it would not be open to the Courts to adopt any other
hypothetical construction on the ground that such
construction is more consistent with the alleged object and
policy of the Act". The intention of the legislature is required
to be gathered from the language used and, therefore, a
construction, which requires for its support with additional
substitution of words or which results in rejection of words
as meaningless has to be avoided. Bearing in mind, the
aforesaid principles of construction of statute and on
examining the provisions of Section 207 of the Act, which
has been quoted earlier, we have no doubt in our mind that
the police officer would be authorised to detain a vehicle, if
he has reason to believe that the vehicle has been or is being
used in contravention of Section 3 or Section 4 or Section 39
or without the permit required under Sub-section (1) of
Section 66 or in contravention of 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. In the case in
hand, we are not concerned with the contravention of
Section 3 or Section 4 or Section 39 or Sub-section (1) of
Section 66 and we are only concerned with the question of
contravention of the condition of permit. Reading the
provisions as it is, the conclusion is irresistible that the
condition of permit relating to the route on which or the
area in which or the purpose for which the vehicle could be
used if contravened, would only authorise the police officer
to detain the vehicle and not each and every condition of
permit on being violated or contravened, the police officer
would be entitled to detain the vehicle. 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 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. But carrying passengers more than the number
specified in the permit will not be a violation of the purpose
for which the permit is granted. If the legislature really
wanted to confer power of detention on the police officer for
violation of any condition of the permit, then there would not
have been the necessity of adding the expression "relating to
the route on which or the area In which or the purpose for
which the vehicle may be used". The user of the aforesaid
expression cannot be ignored nor can it be said to be a
tautology. We have also seen the Form of permit (From
P.Co. T.), meant in respect of a tourist vehicle, which is
issued under Rule 72(1)(ix) and Rule 74(6) of the
Maharashtra Motor Vehicles Rules, 1989. On seeing the
different columns, we are unable to accede to the contention
of the learned Counsel appearing for the State of
Maharashtra, that carrying passengers beyond the number
mentioned in Column 5, indicating the seating capacity,
would be a violation of the conditions of permit relating to
either the route or the area or the purpose for which the
permit is granted. In this view of the matter, we see no
infirmity with the conclusion arrived at by the High Court in
the impugned judgment and the detention of the vehicles has
rightly been held to be unauthorised and consequently, the
compensation awarded cannot be said to be without
jurisdiction
9.
Although, the interpretation of Section 207 was done by
the Supreme Court in a different context, yet, the same would apply
to Clause (c) to Section 149 (2) (a) (i) of the Act.
7.
It is, therefore, evident that the Insurer is entitled to put a condition to
avoid the insurance policy as mentioned in Section 149 (2) (a) (i) and 149
(2) (b) of the Act.
8.
It was neither the condition in the insurance policy nor the insurer was
entitled to put a condition in the contract of insurance that any violation
of the permit would entitle it to avoid the insurance policy. The condition
that can be put is only that the vehicle was being used for a purpose not
allowed by the permit under which the vehicle was being used. Thus, it
would cover cases when the owner does not possess a valid permit at all
for the area where the vehicle is being plied or the vehicle is used as a
passenger vehicle when it is not a passenger vehicle and it is used as a
goods vehicle when it is not a goods vehicle, etc. etc.
9.
The filing of the instant Appeal shows total non application of mind by
the Insurance Company. The Appeal is frivolous; the same is dismissed
with costs of `10,000/-.
10.
The costs shall be paid to the Claimants through their counsel within four
weeks, failing which the same shall be deducted from the statutory
amount refundable to the Appellant Insurance Company.
11.
In case, the costs are paid, the statutory amount of `25,000/- shall be
refunded to the Appellant Insurance Company immediately. If the costs
are not paid and its proof is not filed within six weeks, the statutory
amount shall be refunded after paying cost to respondent No.1.
12.
Pending Applications also stand disposed of.
(G.P. MITTAL)
JUDGE
DECEMBER 04, 2012
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