IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA FAO No. 69 of 2005 and 145 of 2005. Date of Decision: 30.10.2009. FAO No. 69 of 2005 National Insurance Co. Ltd. … Appellant. Versus. Hanso Devi and others. …Respondents. FAO No. 145 of 2005 National Insurance Co. Ltd. … Appellant. Versus. Kalsang Minguer and another. …Respondents. Coram: The Hon’ble Mr. Justice Deepak Gupta, Judge. Whether approved for Reporting? FAO No. 69 of 2005 For the Appellant: Ms. Devyani Sharma, Advocate. For the respondents No. 1 & 2: Mr. V.B.Verma, Advocate. For the respondents No.3 & 4: Ms. Salochana Kaundal, Advocate. FAO No. 145 of 2005 For the Appellant: Ms. Devyani Sharma, Advocate. For the respondent No. 1: Mr. R.K.Sharma, Advocate. For the respondent No. 2: Mr. Trilok Jamwal, Advocate. Deepak Gupta, J. Both these appeals are being disposed of by a common judgement since they arise out of the same accident and similar awards. In fact these matters were tied up with FAO No. 80 of 2004 and other connected matters arising out of the same accident which have already been disposed of by a judgement 2 delivered by Hon’ble Mr. Justice Kuldip Singh, Judge, on 19th December, 2008. It has been fairly submitted on behalf of the appellant in these appeals that insurer had not obtained permission under Section 170 of the Motor Vehicles Act, 1988 (for short, the Act). In these circumstances, the appellant could contest the petitions only on statutory defences available to the insurer under the Act. Hence the insurer cannot assail the impugned awards on the issues of negligence and quantum of compensation. The learned counsel for the appellant faced with this situation has confined her submissions only on the violation of policy and according to her at the time of accident seventeen persons were sitting in the vehicle as against the permissible limit prescribed in the policy, therefore, insurer is not liable to indemnify the owner of the vehicle. It has been submitted by the learned counsel for the appellant that as per insurance policy Ex. RW 1/C, the sitting capacity of the vehicle was twelve plus one. Similarly, as per tourist permit Ex. RW 1/D, the sitting capacity of the vehicle was twelve plus two. In violation of Ex. RW 1/C and Ex. RW 1/D, there were seventeen persons in the vehicle at the time of accident. The vehicle was being plied in violation of terms and conditions of the policy, therefore, the insurer of the vehicle is not liable to pay any compensation. Registration certificate of the vehicle is Ex. RW 1/A and driving licence of the driver Ex. RW 1/B is for driving transport vehicle. 3 Ms. Devyani Sharma has further submitted in view of the decision of this Court in Kaljang Dorge vs. Dorje Phunchok and another Latest HLJ 2006 (HP) 889 and FAO No. 230 of 2007, titled New India Assurance Company Ltd. Vs. Kaljang Dorge & anr., decided on 5.6.2008, the insurer is not liable to indemnify the owner of the vehicle. She has submitted that in New India Assurance Company Ltd. Vs. Kaljang Dorge & anr., the vehicle was found overloaded with passengers at the time of accident and, therefore, the insurer was exonerated even though at the first instance insurer was directed to deposit the award amount but was given liberty to recover the same from owner and driver of the offending vehicle. She has submitted that in view of aforesaid two pronouncements of this court, in the present case also the insurer is not liable to indemnify the owner of the vehicle. In Latest HLJ 2006 (HP) 889 (supra), it was admitted position that the accident took place due to overloading of the vehicle, which is clear from perusal of para-17 of the judgement. The learned Single Judge ultimately remanded the cases reported in Latest HLJ 2006 (HP) 889 to the learned Tribunal. After remand, the learned Tribunal allowed the claim petitions and appeals were filed in this court, which were decided on 5.6.2008 alongwith FAO No. 230 of 2007. The learned Single Judge in FAO No. 230 of 2007, held has follows:- “The fact that the accident was the result of overloading and considering the terrain in which the vehicle was being plied, was the direct cause of the accident already stands decided as the judgement(s) having been 4 accepted by the parties, have not been challenged in appeal and have attained finality. On remand, the learned Motor Accident Claims Tribunal has allowed all the appeals and awarded compensation in accordance with law fixing and apportioning the liability on the Insurance Company.” The learned Single Judge in FAO No. 230 of 2007 (supra), has further held that sole cause of accident was overloading which stands established by the evidence on record and, therefore, in those circumstances, it was held that in the first instance the insurance company shall pay the award amount to the claimants and it will be at liberty to recover the amount from the owner and the driver of the vehicle, who were held liable to pay the compensation jointly and severally. The facts in the present case are entirely different. There is no admission of the claimants that the accident took place due to overloading of the vehicle. On behalf of the insurance company, it has been submitted that terms and conditions of the policy have been violated by overloading the vehicle but it is not the case of the insurance company that accident took place only due to overloading of the vehicle at the time of accident and not due to any other reason. In B.V.Nagaraju vs. Oriental Insurance Co. Ltd., Divisional Officer, Hassan 1996 (4) SCC 647, the facts were that nine persons were sitting in the vehicle as against six persons permitted by the policy. On those facts, the Apex Court has held as under:- “It is plain from the terms of the Insurance Policy that the insured vehicle was entitled 5 to carry 6 workmen, excluding the driver. If those 6 workmen when travelling in the vehicle, are assumed not to have increased any risk from the point of view of the Insurance Company on occurring of an accident, how could those added persons be said to have contributed to the causing of it is the poser, keeping apart the load it was carrying…………………. Merely by lifting a person or two, or even three, by the driver or the cleaner of the vehicle, without the knowledge of the owner, cannot be said to be such a fundamental breach that the owner should, in all events, be denied indemnification. The misuse of the vehicle was somewhat irregular though, but not so fundamental in nature so as to put an end to the contract, unless some factors existed which, by themselves, had gone to contribute to the causing of the accident. In the instant case, however, we find no such contributory factor.” The insurance company in all the cases has taken almost similar defence. RW 1 R.K. Sharma, Branch Manager of the National Insurance Company has appeared as a witness. He has nowhere stated that accident took place due to overloading of the vehicle. He has not stated that in absence of overloading possibly accident could not have taken place. The statement of RW 1 R.K. Sharma makes it clear that insurance company is not imputing cause of accident to the overloading of the vehicle at the time of accident. The insurance company has projected the case that permitted capacity of the vehicle was 13 or 14 but vehicle was carrying 17 persons at the time of accident. Thus according to the insurer the overloading was of 3 or 4 persons but such overloading has not been proved to be the 6 fundamental cause of accident. In these circumstances, the insurance company cannot escape the liability to pay the compensation to the claimants when the ill-fated vehicle was duly insured with it. There is no merit in the appeals which are accordingly dismissed with no order as to costs. 30th October, 2009 ( Deepak Gupta ) ™ Judge.