FAO No. 2090 of 2011 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO No. 2090 of 2011 (O&M) Date of decision: 18.11.2011 Rajbir Singh ........ Appellant Versus Reliance General Insurance Company Ltd. and others ........ Respondents CORAM: HON'BLE MR.JUSTICE JORA SINGH Present: Mr. Sandeep Kotla, Advocate for the appellant. Ms. Vandana Malhotra, Advocate for respondent No. 1-Insurance Company. JORA SINGH, J. Rajbir Singh-appellant/driver of three wheeler bearing registration No. HR-55-E-5094, filed this appeal to challenge the Award dated 6.1.2011, passed by the learned Motor Accident Claims Tribunal, Gurgaon, in MACT Petition No. 7 instituted on 25.1.2010. Brief facts of the case are that respondents No. 2 to 5, filed claim petition under Section 163-A of the Motor Vehicles Act, 1988, for grant of compensation to the tune of ` 10 lacs on account of death of Bhawani Shankar in a motor vehicle accident on the allegation that on 3.11.2009, three wheeler bearing registration No. HR-55-E-5094, was FAO No. 2090 of 2011 (O&M) -2- being driven rashly, negligently and in a zig zag manner by Rajbir Singh-appellant and due to rash and negligent driving there was an accident. In that accident, Bhawani Shanker received multiple grievous injuries. He was shifted to Geetanjli Hospital, Pataudi from where he was referred to General Hospital, Gurgaon but he died on reaching Gurgaon. Allegation of respondents No. 1 and 2 i.e. the driver and the owner was that there was no accident but three wheeler bearing registration No. HR-55-E-5094, was insured. In view of the evidence on file, claim petition was accepted. Driver Rajbir Singh-appellant and Mahabir Singh-owner were directed to pay ` 4,05,500/- with interest at the rate of 7.5% per annum from the date of filing the petition till realization to the claimants. Insurance Company was directed to satisfy the award and pay the amount to the claimants with a right to recover the same from the owner/insured. Learned counsel for the appellant-driver of the offending vehicle at the time of accident submits that appellant was holding a valid driving licence but he along with the owner were directed to pay compensation because permit issued by the Regional Transport Authority, Gurgaon was to ply vehicle within the area of Municipal Corporation, Gurgaon only whereas the accident was in the area of village Jodi Khurd and this village is not within the limitation of Municipal Corporation, Gurgaon. When appellant was holding a valid driving licence and there was a violation of terms and conditions of the permit then owner of the vehicle is liable. While discussing issue No. 2, learned Tribunal directed the appellant and the owner to pay the FAO No. 2090 of 2011 (O&M) -3- amount of compensation to the claimants. In support of his contention learned counsel for the appellant placed reliance upon, FAO No. 4792 of 2009, “Subhash and another vs. National Insurance Company Ltd. and others” decided on 29.7.2010. Mrs. Vandana Malhotra, Advocate for the Insurance Company-respondent No.1 submits that no doubt appellant was holding a valid driving licence but there was no valid permit. As per permit offending vehicle was to be plied within the limits of Municipal Corporation Gurgaon. Place of accident was not within the limits of Municipal Corporation, Gurgaon. When there is a violation of terms and conditions of the permit then insured is liable. Recovery right was given to the Insurance Company to recover the Award amount from the owner/insured and not from the driver. Learned counsel for respondent No.1-Insurance Company placed reliance upon, 2004 (7) JT 519, “National Insurance Co. Ltd. vs. Chella Bharathamma” and 2009 (4) AICJ 309, “Sunita vs. Ali Sagar and another”. Admittedly, accident was on 3.11.2009, in the revenue estate of village Jodi Khurd and at the time of accident appellant was the driver of the offending vehicle and was holding a valid driving licence. Offending vehicle was insured but as per permit the offending vehicle was to be plied within the limits of Municipal Corporation, Gurgaon. Learned counsel for the parties submitted that no appeal was preferred by the insured/owner against the Award in question. Offending vehicle was insured with the Insurance Company but the accident was in the area of village Jodi Khurd. Place of FAO No. 2090 of 2011 (O&M) -4- occurrence was not within the limits of Municipal Corporation Gurgaon. Offending vehicle was being driven by the appellant in violation of terms and conditions of the permit. When there is a violation of the terms and conditions of the permit then owner/insured is liable. When the offending vehicle was being driven without valid permit then there is a breach of a specific condition of the policy. In National Insurance Co. ltd. (supra) relevant para No. 7 is reproduced as under: “Section 149(2) (a) (i) relates to a vehicle not covered by a permit to ply for hire or reward. Section 149(2) reads as follows: " 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 FAO No. 2090 of 2011 (O&M) -5- 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 licensed, or by any person who has been disqualified for holding or obtaining a driving licence during the period of dis-qualification; 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 material fact or by a representation of fact which was false in some material particular." Section 66 of the Act is also relevant. Same reads as follows: FAO No. 2090 of 2011 (O&M) -6- "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. FAO No. 2090 of 2011 (O&M) -7- (2) The holder of a goods carriage permit may use the vehicle, for drawing of any trailer or semi-trailer not owned by him, subject to such conditions as may be prescribed: Provided that the holder of a permit of any articulated vehicle may use the prime-mover of that articulated vehicle for any other semi- trailer. (3) The provisions of sub-section (1) shall not apply - (a) to any transport vehicle owned by the Central Government or a State Government and used for Government purposes unconnected with any commercial enterprise; (b) to any transport vehicle owned by a local authority or by a person acting under contract with a local authority and used solely for road cleansing, road watering or conservancy purposes; (c) to any transport vehicle used solely for police, fire brigade or ambulance purposes; (d) to any transport vehicle used solely for the conveyance of corpses and the mourners accompanying the corpses; (e) to any transport vehicle used for towing a disable vehicle or for removing goods from a disabled vehicle to a place of safety; FAO No. 2090 of 2011 (O&M) -8- (f) to any transport vehicle used for any other public purpose as may be prescribed by the State Government in this behalf; (g) to any transport vehicle used by a person who manufactures or deals in motor vehicles or builds bodies for attachment to chassis, solely for such purposes and in accordance with such conditions as the Central Government may, by notification in the Official Gazette, specify in this behalf; (h) omitted (i) to any goods vehicle, the gross vehicle weight of which does not exceed 3,000 kilograms; (j) subject to such conditions as the Central Government may, by notification in the Official Gazette, specify, to any transport vehicle purchased in one State and proceeding to a place, situated in that State or in any other State, without carrying any passenger or goods; (k) to any transport vehicle which has been temporarily registered under section 43 while proceeding empty to any place for the purpose of registration of the vehicle; (l) omitted. FAO No. 2090 of 2011 (O&M) -9- (m) to any transport vehicle which, owing to flood,earthquake or any other natural calamity, obstruction on road, or unforeseen circumstances, is required to be diverted through any other route, whether within or outside the State, with a view to enabling it to reach its destination; (n) to any transport vehicle used for such purposes as the Central or State Government may, by order, specify; (o) to any transport vehicle which is subject to a hire-purchase, lease or hypothecation agreement and which owing to the default of the owner has been taken possession of by or on behalf of, the person with whom the owner has entered into such agreement, to enable such motor vehicle to reach its destination; or (p) to any transport vehicle while proceeding empty to any place for purpose of repair. (4) Subject to the provisions of sub-section (3), sub-section (1) shall, if the State Government by rule made under section 96 so prescribes, apply to any motor vehicle adapted to carry more than nine persons excluding the driver." As per impugned Award, Insurance Company was to satisfy FAO No. 2090 of 2011 (O&M) -10- the award and pay the amount to the claimants with a right to recover the same from the owner/insured. In view of the Award, Insurance Company is at liberty to recover the Award amount from the owner/insured but when driver of the offending vehicle was holding a valid driving licence and there was a violation of terms and conditions of the permit, only then driver is not liable. For the reasons recorded above, Award of the Tribunal directing the driver to pay the Award amount is set aside, only the owner/insured is liable for the payment of Award amount. Appeal allowed. November 18, 2011 ( JORA SINGH ) rishu JUDGE