IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL Appeal From Order No. 785 of 2006 National Insurance Co. Ltd. …Appellant Versus Smt. Janki Devi & others …Respondents Sri Lalit Belwal, Advocate for appellant None for respondents Dated: December 15, 2008 Hon’ble B.C. Kandpal, J. This appeal, under Section 173 of Motor Vehicles Act, 1988, has been preferred by the appellants-claimants against the judgment and award dated 22.12.2005 passed by M.A.C.T./Additional District Judge, Almora, in M.A.C. Case No. 65 of 2005, Janki Devi & others versus Sri Ganesh Singh Bargali & another. Brief facts of the case as narrated in claim petition are that on 05.07.2004 the deceased-Hayat Singh was travelling in Bus No. U.A.04A-2877 on its way from Pithoragarh to Almora. The deceased had given his fare, but driver of its vehicle began to drive the vehicle rashly. When the Bus reached near Kalidhar about 10.30 a.m., it fell down into a deep ditch due to rash and negligent driving of driver, on account of which Hayat Singh sustained injuries and subsequently he died. Opposite party no. 1-owner of vehicle, Ganesh Singh Bargali filed his written statement and 2 pleaded that his vehicle was insured and driver was having valid driving licence, therefore, answering opposite party is not liable to pay any compensation. Opposite party no. 2-National Insurance Co. Ltd. filed its written statement and pleaded that accident had taken place on account of rash and negligence of driver, therefore, insurance company is not liable to pay the compensation. It has also been pleaded that driver was not having valid driving licence and vehicle in question was carrying more passengers than its limits, therefore, insurance company is not liable to pay the compensation. The Tribunal on the basis of pleadings of the parties framed relevant issues in the claim petition. Parties led evidence in support of their cases. The learned Tribunal after having considered the entire evidence available on record and hearing learned counsel for the parties decreed the claim petition for a sum of 1,77,000/- against opposite party no. 2- National Insurance Co. Ltd., along with interest of 6% per annum from the date of filing the petition till the date of actual payment, vide judgment and award dated 22.12.2005. Feeling aggrieved by the aforesaid impugned judgment and award, the appellant-National Insurance Co. Ltd. has preferred the present appeal before this Court. 3 Heard Sri Lalit Belwal, learned counsel for the appellant and perused the record. None has appeared on behalf of respondents. As far as factum of accident is concerned, it is established from the evidence available on record that the accident took place on 05.07.2004 at about 10.30 a.m. near Petsala, District Almora and at the time of the accident the driver was driving the bus rashly and negligently. The finding recorded by the Tribunal in this respect does not require any interference. The Tribunal has further held that evidence available on record also establishes this aspect that all the papers of the vehicle were valid and driver had a valid driving licence and it was insured with National Insurance Co. Ltd. at the time of accident. The said finding recorded by the Tribunal appears to be justified and requires no interference. Learned counsel for the appellant-insurance company has vehemently argued that the owner of the vehicle in question has used and permit the use of the insured vehicle in contravention of the provisions of law contained in Section 66 and 149 (2)(i)(c) of the M.V. Act 1988 and Rule 67(v) of U.P. Motor Vehicles Rules 1998 and as such only the owner of the insured vehicle can be held liable to pay compensation. According to him, the ill-fated vehicle was permitted to carry 30 passengers, whereas at the time of accident 44 passengers were travelling in it and due to overloading the accident had occurred. The learned counsel for the appellant has submitted that overloading is a breach of policy 4 as provided in sub rule (v) of Rule 67 of the U.P. Motor Vehicles Rules, 1998 which reads as under:- “that the maximum number of persons or maximum weight of luggage that may be carried in the vehicle covered by the permit shall not exceed as given in the certificate of registration.” The plea of overloading was taken by the Insurance Company before the Tribunal. In the accident 29 passengers had died and 4 sustained injuries. The Surveyor in his report dated 15.11.2004 has given the list of 30 dead and 14 injured passengers. Since there was breach of policy, therefore this ground was available to the appellant under sub-clause (c) of sub-clause (i) of Clause (a) of sub section (2) of Section 149 of the Motor Vehicles Act, 1988. The learned counsel for the appellant placed reliance to the provision of Section 66 of the Act and submitted that on account of this breach of policy the owner of the vehicle was prohibited to use or permit the use of vehicle as 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. In view of this prohibition created by Section 66 of the Act the owner could not use the motor vehicle even for the purpose for which the permit was granted. Therefore, the vehicle was not being used for the purpose for which the permit was granted. Thus, the ground under sub-clause (c) of sub-clause (i) of Clause (a) of sub-section (2) of Section 149 of the 5 Act is available to challenge the liability fastened upon the beyond the passengers insured under the permit. I think it appropriate to quote the definition of “permit” given in the Motor Vehicles Act, 1988 which reads 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.” It is clear from the definition that the permit is issued by the authority prescribed authorizing the use of a motor vehicle as a transport vehicle. In the instant case the vehicle in question was a passenger vehicle. In order to appreciate the aforesaid submission I think it also appropriate to quote sub-section (2) of Section 149 of the Act, which reads as under: “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 though 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 6 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, or (d) without side-car being attached where the vehicle is a motor cycle; or (ii) a condition excluding driving by a named person or persons or by any person who is not duly licenced or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification; or (iii) a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or (b) that the policy is void on the ground that it was obtained by the non-disclosure of a 7 material fact or by a representation of fact which was false in some material particular.” From perusal of above, it is clear that the section starts from the word ‘no’ which creates a prohibition for raising the grounds of appeal by the Insurance Company, except on the grounds mentioned in Clause (a) or Clause (b) of sub-section (2). Sub-clause (c) of sub-clause (i) of Clause (a) of sub-section (2) of Section 149 specifically provides for the purpose not allowed by the permit under which the vehicle is used. A motor vehicle is used only for two purposes as comes out from Section 66 of the Act itself; one for carrying the passengers and another for carrying the goods. The ground under the provision of sub-clause (c) aforesaid shall be available to the insurer only in case if goods are being carried by the passenger vehicle or passengers are being carried by a goods vehicle beyond the number mentioned in the permit. Then the use will be for the purpose not allowed by the permit. The breach of all the conditions of permit is not the ground available to the insurer to file an appeal. Only those conditions which are enumerated under Clause (a) of sub-section (2) aforesaid are only the grounds to be raised by the insurer as grounds of appeal. The Hon’ble Supreme Court in the case of B.V. Nagarju Vs. Oriental Insurance CO. Ltd., Divisional Office, Hassan, reported in (1996) 4 Supreme Court Cases, 647, while considering the liability of Insurance Company insurer for payment of compensation to the passengers which were 8 travelling in a goods vehicle beyond the number of passengers held that it was not a fundamental breach. Therefore, the insurer was held liable for payment of compensation, in the present case admittedly, the permit of the vehicle was granted for use of carrying the passengers and accident took place when the vehicle was carrying the passengers. Therefore, this ground is not available to the appellant under sub-clause (c) of sub-clause (i) of Clause (a) of sub-section (2) of Section 149 of the Act. In the instant appeal, the ground of challenge is misconceived and is hereby rejected. The appeal lacks merit and is liable to be dismissed. Accordingly, appeal is dismissed. The impugned judgment and award dated 22.12.2005 is hereby confirmed. The statutory amount deposited by the appellant with this Court be remitted to the Tribunal concerned. (B.C. Kandpal, J.) SP