In the High Court of Punjab and Haryana at Chandigarh F.A.O. No.1519 of 2008 (O&M) Date of decision: November 09, 2009 M/s Yadwindra Public School, SAS Nagar, Mohali .. Appellant Vs. Seema and others .. Respondents Coram: Hon'ble Mr. Justice A.N. Jindal Present: Mr. H.N. Sahu, Advocate for the appellant. Mr. T.S. Gujral, Advocate for the respondent No.2. A.N. Jindal, J The appellant-respondent No.2 (owner) has preferred this appeal against the award dated 9.8.2007 passed by the Motor Accident Claims Tribunal, Chandigarh, whereby the insurance company was given right to recover the compensation from the appellant. The Tribunal awarded compensation to the tune of Rs.9000/- in Claim Petition No.167 of 25.9.2006 (Vivek Kumar vs. Keshar Singh and others) and Rs.30817/- in Claim petition No. 136 of 25.9.2006 (Seema vs. Keshar Singh and others). Feeling aggrieved by the rights of recovery given to the company the appellant owner has filed this appeal while challenging the award passed in M.A.C.T. No.136 of 25.9.2006. The Tribunal had given right to recover the compensation from the appellant on the grounds that it failed to produce the route permit of the offending bus bearing registration No.PB-12E-9828. Arguments heard. No doubt, the onus to prove the issue with regard to violation of the terms and conditions of the insurance policy was upon the Insurance Company and it had to shift the onus by showing that a school bus also required the route permit. The offending bus is owned by M/s Yadwindra Public School and it was meant for bringing the school children from their houses and drop them back after school hours in the area of Chandigarh as well as Mohali. The Insurance Company did not lead any evidence to prove F.A.O. No.1519 of 2008 -2- *** that the bus which was operating under due registration certificate for plying the same for the purpose of delivering the children at their home places was required to have a route permit. No such notification has been passed on record to disclose if this private bus meant for private business needed route permit. The necessity to issue route permits arose to regulate the State and inter State transport vehicles so as to avoid the hotch-potch in plying the buses by the competitor companies. Any way, it was for the insurance company to prove that a school bus required a route permit. Similar observations were made by the Division Bench of this Court in case National Insurance Company Limited vs. Kamlesh Kaur and others, 2006 (3) The Punjab Law Reporter 83, which reads as under :- “5. The argument that a route permit was required within the State of Haryana, raised by the learned counsel for the Insurance Company is devoid of merit because it was not the pleaded case of the Insurance Company-appellant before the M.A.C.T. No witness or document has been produced on record by the Insurance Company-appellant to show that no 'permit' was obtained by the owner of the vehicle or any 'route permit' for a goods vehicle within the State of Haryana was required. The Insurance Company-appellant even failed to cross examine the Criminal Ahlmad, who had appeared as PW- 2 along with the Registration Certificate of the offending vehicle to show as to whether the vehicle was registered as a 'goods vehicle' or the vehicle was granted any permit. It may be true that a permit for goods carrier may be required under Section 66 of the Act but there is no requirement of acquiring a route permit for such a vehicle within the State as projected by the Insurance Company-appellant. In any case it has to be proved on record that the vehicle was not granted any permit. The defences of the Insurance Company-appellant are confined to those which have been referred to in Sub-section (2) of Section 149 of the Act, particularly with regard to liability towards third party. In that regard reliance may be placed on F.A.O. No.1519 of 2008 -3- *** a judgment of the Hon'ble Supreme Court in the case of National Insurance Company vs. Swaran Singh, (2004-1) 136 P.L.R. 510 (SC). It has been laid down by the Hon'ble Supreme Court that breach of condition of a policy committed by the insured, like non-issuance of licence, has to be proved by the Insurance Company if it wishes to avoid liability. In the summery of finding in para 110 of the judgment their Lordships have observed in sub-paras (iii) and (iv) as under :- “(iii) The breach of policy condition e.g. disqualification of the driver or invalid driving licence of the driver, as contained in sub-section (2)(a)(ii) of Section 149 has to be provided to have been committed by the insured for avoiding liability by the insurer. Mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third party. To avoid its liability towards the insured, the insurer has to prove that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by a duly licenced driver or one who was not disqualified to drive at the relevant time. (iv) Insurance Companies, however, with a view to avoid their liability must not only establish the available defence (s) raised in the said proceedings but must also establish “breach” on the part of the owner of the vehicle; the burden of proof wherefore would be on them.” Thus, I am of the confirmed opinion that the school bus never require any route permit as it was not presumed to be plied at a particular route for transporting the passengers, therefore, the Tribunal appears to have taken wrong view of the matter while holding that it needed a route permit F.A.O. No.1519 of 2008 -4- *** from the Transport Authorities and thereby committed breach of insurance policy (Ex.P4). It may further be observed that the insurance company while issuing the policy knew fully well that it was a school bus and it was not to be plied at particular route, therefore, it does not lie in their mouth that the appellant needed a route permit from the competent authority for plying the bus for transporting the school children. Resultantly, findings returned by the Tribunal qua this aspect of the case stands reversed. It is only the insurance company who would be liable to pay compensation as there was no violation of the terms of the insurance policy. Consequently, the appeal is allowed and the findings returned by the Tribunal on issue No.2 qua M.A.C.T. No.136 of 2006 stand reversed and the said issue is decided against the Insurance Company. No orders as to costs. November 09, 2009 (A.N. Jindal) deepak Judge