Case: AMRIT PAUL SINGH Vs. TATA AIG GENERAL INSURANCE CO. LTD

Dipak Misra, C.J.I. 1. The legal representatives of the deceased, Jagir Singh, the husband of the second Respondent, preferred a claim petition being MACT Case No. 70 of 2013 Under Section 166 of the Motor Vehicles Act, 1988 (for brevity, the Act) before the Motor Accident Claims Tribunal, Pathankot (for short, the tribunal) claiming compensation to the tune of Rs. 36,00,000/-. The claim petition was filed on the basis that on 19.02.2013, Jagir Singh was travelling to Pathankot on his motor cycle and at that juncture, the offending truck bearing temporary registration No. PB-06-6894 belonging to the Appellant No. 2 driven in a rash and negligent manner hit the motor cycle of the deceased as a result of which he sustained multiple injuries, and eventually, succumbed to the same when being taken to the hospital. The claim put forth was sought to be sustained on many a basis which need not be adverted to. 2. The insurer, the first Respondent herein, opposed the claim on the ground that the vehicle in question was driven in violation of the terms of the insurance policy and further the driver was not having a valid and effective driving license and, therefore, it was not obliged to indemnify the insured. That apart, a stand was taken that the vehicle did not have the permit on the date of the accident. On behalf of the owner of the vehicle and driver, assertions were made that the vehicle was insured with the first Respondent as per the insurance policy, that the vehicle was registered and the driver had the requisite driving licence. Additionally, copy of the route permit of the offending truck was brought on record. 3. The tribunal noted that the vehicle was purchased in September 2012 and insured on 20.12.2012. It was registered on 26.02.2013. The accident, as stated earlier, occurred on 19.02.2013. The tribunal, placing reliance on the decision rendered by this Court in National Insurance Co. Ltd. v. Challa Bharathamma and Ors. (2004) 8 SCC 517 , held that the insurer was not liable and proceeded to quantify the amount of compensation and determined the same at Rs. 15,63,120/-. The tribunal directed the amount to be paid by the insurer along with interest at the rate of 9% from the date of award till its realisation and recover the same from the owner and driver of the vehicle. A further direction was given for attachment of the truck in question till the award was satisfied. 4. The award dated 20.11.2014 passed by the tribunal was challenged in FAO No. 1702 of 2016 before the High Court of Punjab and Haryana at Chandigarh. It was contended in appeal that the Appellant No. 2, the owner of the offending vehicle, had deposited the necessary fees along with application on 19.02.2013 for issue of route permit and the same was issued on 27.02.2013. It was further urged that when the owner of the vehicle had already submitted the documents in the transport office for grant of permit along with the requisite fees, the tribunal was in error in holding that the vehicle was being plied without a valid permit. In support of the submissions, reliance was placed upon Ashok Kumar Khemaka v. Oriental Insurance Co. Ltd. and Ors. 2014 (3) RCR (Civil) 1018 , National Insurance Company Limited v. Kamlesh Kaur and Ors. 2006 (3) RCR (Civil) 634 and Moti Ram v. ICICI Lombard and Ors. 2015 ACJ 1793. 5. The High Court scrutinized Annexure A-1 which was filed to justify the stand that the application for issue of the route permit was made to the competent authority and, on a scrutiny of the same, came to hold that the owner had not been able to establish that he had submitted the application for issue of permit before the accident. Referring to Section 66 of the Act and placing reliance on Challa Bharathamma case, the High Court opined that even assuming that the owner had already applied for grant of the permit before the accident, the same would not entitle the owner to ply the vehicle. It is worthy to note that the learned single Judge distinguished the decisions cited before him and, resultantly, confirmed the award of the tribunal. 6. We have heard Mr. Sudhir Walia, learned Counsel for the Appellants, and Mr. Amit Kumar Singh, learned Counsel for the Respondent-insurer. 7. The conclusions recorded by the tribunal and further confirmed by the High Court clearly show that the accident occurred on 19.02.2013 and the competent authority issued the permit on 27.02.2013. In this regard, Sections 2(28) and 2(31) of the Act that define motor vehicle or vehicle and permit are reproduced below: (28) motor vehicle or vehicle means any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer; but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises or a vehicle having less than four wheels fitted with engine capacity of not exceeding twenty-five cubic centimetres; (31) permit means a permit issued by a State or Regional Transport Authority or an authority prescribed in this behalf under this Act authorising the use of a motor vehicle as a transport vehicle; On a perusal of both the definitions, it is quite clear that a permit has to be issued by the competent authority under the Act for use of a motor vehicle as a transport vehicle. The emphasis is on the words use as well as transport vehicle. 8. Section 2(47) states that transport vehicle means a public service vehicle, a goods carriage, an educational institution bus or a private service vehicle. Section 66 stipulates necessity for permits. Sub-section (1) thereof provides that 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. Various provisos have been appended to the main provision stipulating conditions for use of the vehicle and purpose of carriage of goods vehicle. Sub-section (2) states that the holder of a goods carriage permit may use the vehicle for the drawing of any trailer or semi-trailer not owned by him, subject to such conditions as may be prescribed. It is necessary to mention here that a proviso has been added by Act 54 of 1994 with effect from 14.11.1994 allowing the holder of a permit of any articulated vehicle to use the prime-mover of that articulated vehicle for any other semi-trailer. Section 2(2) defines articulated vehicle to mean a motor vehicle to which a semi-trailer is attached. 9. It is apt to note here that Sub-section (3) of Section 66 carves out certain exceptions to Sub-section (1). The relevant part of Sub-section (3) is extracted below: (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 disabled vehicle or for removing goods from a disabled vehicle to a place of safety; (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) x x x x (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) x x x x (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. 10. In the case at hand, the findings would show that the Appellant No. 2 did not have a permit for the vehicle. There is no dispute that the vehicle initially had a temporary registration and eventually the permanent registration. It is the stand of the Appellants that the tribunal and the High Court did not appreciate that the chasis of the vehicle was sent to the body where the body of the truck was fabricated and when the vehicle was driven out of the work shop at which point of time it met with an accident. A contention has been made that the insurance policy was in force at the relevant time and, hence, the insurer is legally obliged to indemnify the insured. A distinction has to be made between route permit and permit in the context of Section 149 of the Act. Section 149(2) provides the grounds that can be taken as defence by the insurer. It enables the insurer to defend on the ground that there has been breach of a specific condition of the policy, namely, (i) a condition that excludes 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. That apart, it also entitles the insurer to raise the issue pertaining to a condition that excludes 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 that excludes liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion. A further defence that can be availed of by the insurer is that the policy is void on the ground that it has been obtained by non-disclosure of the material fact or by representation of act which is false in the material particular. 11. On a perusal of the written statement filed by the owner and the driver, it is evident that the factum of accident having been caused by the vehicle in question had been denied. That apart, there is also a denial of liability that relates to the manner in which the accident had occurred as alleged in the claim petition. It was the specific assertion of the insurer before the tribunal that the vehicle was running in contravention of the provisions of the Act, for it did not possess a route permit. The tribunal, on the basis of the materials brought on record to the effect that the route permit was issued on 27.02.2013 and the accident occurred on 19.02.2013, returned a finding that the vehicle in question did not have the permit. As stated earlier, the High Court has affirmed the same. 12. Learned Counsel for the Appellants would submit that in the obtaining factual matrix, the breach would not exonerate the insurer from satisfying the judgment and an award in terms of Section 149 of the Act. He has drawn inspiration from the decision of a three-Judge Bench in National Insurance Co. Ltd. v. Swaran Singh and Ors. (2004) 3 SCC 297. In the said case, the Court was dealing with the interpretation of Section 149(2)(a)(ii) vis-à-vis the proviso appended to Sub-sections (4) and (5) of Section 149 of the Act. The issue centrally pertained to the necessity of having a driving licence. After adverting to various provisions, the Court also delved into the fundamental concept of third party right. Regard being had to the nature of the beneficial legislation, the Court observed: 39. The question as to whether an insurer can avoid its liability in the event it raises a defence as envisaged in Sub-section (2) of Section 149 of the Act corresponding to Sub-section (2) of Section 96 of the Motor Vehicles Act, 1939 had been the subject-matter of decisions in a large number of cases. 13. The Court posed the question as to whether an insurer can avoid its liability in the event it raised the defence as envisaged in Sub-section (2) of Section 149 of the Act corresponding to Sub-section (2) of Section 96 of the Motor Vehicles Act, 1939. The Court analysed the language employed in Sub-section (2) of Section 149, specifically Clause (a), and, after scrutinizing the same and referring to various authorities, opined: 69. The proposition of law is no longer res integra that the person who alleges breach must prove the same. The insurance company is, thus, required to establish the said breach by cogent evidence. In the event the insurance company fails to prove that there has been breach of conditions of policy on the part of the insured, the insurance company cannot be absolved of its liability. (See Sohan Lal Passi1) 70. Apart from the above, we do not intend to lay down anything further i.e. degree of proof which would satisfy the aforementioned requirement inasmuch as the same would indisputably depend upon the facts and circumstances of each case. It will also depend upon the terms of contract of insurance. Each case may pose a different problem which must be resolved having regard to a large number of factors governing the case including conduct of parties as regards duty to inform, correct disclosure, suppression, fraud on the insurer etc. It will also depend upon the fact as to who is the owner of the vehicle and the circumstances in which the vehicle was being driven by a person having no valid and effective licence. No hard-and-fast Rule can, therefor, be laid down. If in a given case there exists sufficient material to draw an adverse inference against either the insurer or the insured, the Tribunal may do so. The parties alleging breach must be held to have succeeded in establishing the breach of conditions of the contract of insurance, on the part of the insurer by discharging its burden of proof. The Tribunal, there cannot be any doubt, must arrive at a finding on the basis of the materials available on records. 71. In the aforementioned backdrop, the provisions of Sub-sections (4) and (5) of Section 149 of the Motor Vehicles Act, 1988 may be considered as to the liability of the insurer to satisfy the decree at the first instance. x x x 83. Sub-section (5) of Section 149 which imposes a liability on the insurer must also be given its full effect. The insurance company may not be liable to satisfy the decree and, therefore, its liability may be zero but it does not mean that it did not have initial liability at all. Thus, if the insurance company is made liable to pay any amount, it can recover the entire amount paid to the third party on behalf of the assured. If this interpretation is not given to the beneficent provisions of the Act having regard to its purport and object, we fail to see a situation where beneficent provisions can be given effect to. Sub-section (7) of Section 149 of the Act, to which pointed attention of the Court has been drawn by the learned Counsel for the Petitioner, which is in negative language may now be noticed. The said provision must be read with Sub-section (1) thereof. The right to avoid liability in terms of Sub-section (2) of Section 149 is restricted as has been discussed hereinbefore. It is one thing to say that the insurance companies are entitled to raise a defence but it is another thing to say that despite the fact that its defence has been accepted having regard to the facts and circumstances of the case, the Tribunal has power to direct them to satisfy the decree at the first instance and then direct recovery of the same from the owner. These two matters stand apart and require contextual reading. 14. We may fruitfully note that the three-Judge Bench adverted to situations where the driver does not have a licence and the same has been allowed to be driven by the owner of the vehicle by such person, the insurer would be entitled to succeed in defence and avoid liability, but the position would be different where the disputed question of fact arises as to whether the driver had a valid licence and where the owner of the vehicle committed a breach of the terms of the contract of insurance as also the provisions of the Act by consciously allowing any person to drive a vehicle who did not have a valid driving licence. 15. The Court held that if, on facts, it is found that the accident was caused solely because of some other unforeseen or intervening causes like mechanical failures and similar other causes having no nexus with the driver not possessing the requisite type of licence, the insurer will not be allowed to avoid its liability merely for technical breach of conditions concerning driving licence. That apart, minor and inconsequential deviations with regard to licensing conditions would not constitute sufficient ground to deny the benefit of coverage of insurance to third parties. The other category of cases that the Court addressed to included cases where the licence of the driver is found to be fake. In that context, the Court expressed its general agreement with United India Insurance Co. Limited v. Lehru (2003) 3 SCC 338 and stated thus: 92. ... In Lehru case the matter has been considered in some detail. We are in general agreement with the approach of the Bench but we intend to point out that the observations made therein must be understood to have been made in the light of the requirements of the law in terms whereof the insurer is to establish willful breach on the part of the insured and not for the purpose of its disentitlement from raising any defence or for the owners to be absolved from any liability whatsoever.. 16. The three-Judge Bench summed up its conclusions and we think it appropriate to reproduce the relevant part of the same: 110. (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 proved 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 parties. 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 licensed driver or one who was not disqualified to drive at the relevant time. xxxx (vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards the insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply the Rule of main purpose and the concept of fundamental breach to allow defences available to the insurer Under Section 149(2) of the Act. (vii) The question, as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case. 17. Learned Counsel for the Appellants would submit that there has been no fundamental breach of the policy conditions. In this context, we may profitably refer to the decision in Challa Bharathamma (supra) wherein a two-Judge Bench squarely dealt with the absence of a permit and ruled that plying a vehicle without a permit is an infraction and insurer is not liable. 18. In Lakhmi Chand v. Reliance General Insurance (2016) 3 SCC 100 , the Court was concerned with an order passed by the National Consumer Disputes Redressal Commission (NCDRC) that had declined the relief to the Petitioner therein. The insurer in the said case had taken the plea that the complainant had violated the terms and conditions of the policy, for five passengers were travelling in the goods carrying vehicle at the time of the accident, whereas the permitted seating capacity of the motor vehicle of the Appellant was only 1 + 1. The two-Judge Bench referred to Oriental Insurance Co. Ltd. v. Meena Variyal and Ors. (2007) 5 SCC 428 and expressed the view that in order to avoid liability, the insurer must establish that there was breach on the part of the insured. 19. The obtaining fact situation is sought to be equated with the factual score in the said case. In this regard, it is useful to refer to the Bench decision in HDFC Bank Limited v. Reshma and Ors. (2015) 3 SCC 679. The issue that arose before the Court was whether the financier was liable to pay the compensation or it was the liability of the borrower. The tribunal had returned the finding that the duty of the financier was to see that the borrower did not neglect to get the vehicle insured and, therefore, it was jointly and severally liable along with the owner. The High Court had concurred with the said conclusion. The Court referred to Purnya Kala Devi v. State of Assam and Ors. (2014) 14 SCC 142 that has dealt with the definition of the term owner as contained in Section 2(30) of the Act. In the said case, the vehicle in question was under the requisition of the State of Assam under the provisions of law. In that context, the Court has expressed that: 16. ... The High Court failed to appreciate that at the relevant time the offending vehicle was under the requisition of Respondent 1 State of Assam under the provisions of the Assam Act. Therefore, Respondent 1 was squarely covered under the definition of owner as contained in Section 2(30) of the 1988 Act. The High Court failed to appreciate the underlying legislative intention in including in the definition of owner a person in possession of a vehicle either under an agreement of lease or agreement of hypothecation or under a hire-purchase agreement to the effect that a person in control and possession of the vehicle should be construed as the owner and not alone the registered owner. The High Court further failed to appreciate the legislative intention that the registered owner of the vehicle should not be held liable if the vehicle was not in his possession and control. The High Court also failed to appreciate that Section 146 of the 1988 Act requires that no person shall use or cause or allow any other person to use a motor vehicle in a public place without an insurance policy meeting the requirements of Chapter XI of the 1988 Act and the State Government has violated the statutory provisions of the 1988 Act. 20. Be it noted, in the said case, the liability was fixed on the State keeping in view the legislative intention behind Section 146 of the Act, no person shall use or cause or allow any other person to use a motor vehicle in a public place without an insurance policy as that is the mandatory statutory requirement under the Act. Emphasis was laid on possession and control of the vehicle and accordingly liability was fixed on the State of Assam. 21. In HDFC Bank Limited (supra), the three-Judge Bench opined that the hypothecation agreement did not convey that the Appellant financier had become the owner and was in control and possession of the vehicle. It was the absolute fault of the Respondent No. 2 to take the vehicle from the dealer without full payment of the insurance, more so when nothing had been brought on record that the said fact was known to the Appellant financier or that it was done in collusion with the financier. 22. The Court held that when the intention of the legislature is quite clear to the effect that a registered owner of the vehicle should not be held liable if the vehicle is not in his possession and control and there was evidence on record that the Respondent No. 2, plied the vehicle without the insurance in violation of the statutory provision contained in Section 146 of the Act, the High Court could not have mulcted the liability on the financier and finally, the financer was absolved of the liability. 23. In the case at hand, it is clearly demonstrable from the materials brought on record that the vehicle at the time of the accident did not have a permit. The Appellants had taken the stand that the vehicle was not involved in the accident. That apart, they had not stated whether the vehicle had temporary permit or any other kind of permit. The exceptions that have been carved out Under Section 66 of the Act, needless to emphasise, are to be pleaded and proved. The exceptions cannot be taken aid of in the course of an argument to seek absolution from liability. Use of a vehicle in a public place without a permit is a fundamental statutory infraction. We are disposed to think so in view of the series of exceptions carved out in Section 66. The said situations cannot be equated with absence of licence or a fake licence or a licence for different kind of vehicle, or, for that matter, violation of a condition of carrying more number of passengers. Therefore, the principles laid down in Swaran Singh (supra) and Lakhmi Chand (supra) in that regard would not be applicable to the case at hand. That apart, the insurer had taken the plea that the vehicle in question had no permit. It does not require the wisdom of the Tripitaka, that the existence of a permit of any nature is a matter of documentary evidence. Nothing has been brought on record by the insured to prove that he had a permit of the vehicle. In such a situation, the onus cannot be cast on the insurer. Therefore, the tribunal as well as the High Court had directed the insurer was required to pay the compensation amount to the claimants with interest with the stipulation that the insurer shall be entitled to recover the same from the owner and the driver. The said directions are in consonance with the principles stated in Swaran Singh (supra) and Ors. cases pertaining to pay and recover principle.

Decision reasoning: 0[ds]On a perusal of both the definitions, it is quite clear that a permit has to be issued by the competent authority under the Act for use of a motor vehicle as a transport vehicle. The emphasis is on the words use as well as transport vehicle.10. In the case at hand, the findings would show that the Appellant No. 2 did not have a permit for the vehicle. There is no dispute that the vehicle initially had a temporary registration and eventually the permanent registration.A distinction has to be made between route permit and permit in the context of Section 149 of the Act. Section 149(2) provides the grounds that can be taken as defence by the insurer. It enables the insurer to defend on the ground that there has been breach of a specific condition of the policy, namely, (i) a condition that excludes 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. That apart, it also entitles the insurer to raise the issue pertaining to a condition that excludes 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 that excludes liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion. A further defence that can be availed of by the insurer is that the policy is void on the ground that it has been obtained by non-disclosure of the material fact or by representation of act which is false in the material particular.11. On a perusal of the written statement filed by the owner and the driver, it is evident that the factum of accident having been caused by the vehicle in question had been denied. That apart, there is also a denial of liability that relates to the manner in which the accident had occurred as alleged in the claim petition.14. We may fruitfully note that the three-Judge Bench adverted to situations where the driver does not have a licence and the same has been allowed to be driven by the owner of the vehicle by such person, the insurer would be entitled to succeed in defence and avoid liability, but the position would be different where the disputed question of fact arises as to whether the driver had a valid licence and where the owner of the vehicle committed a breach of the terms of the contract of insurance as also the provisions of the Act by consciously allowing any person to drive a vehicle who did not have a valid driving licence15. The Court held that if, on facts, it is found that the accident was caused solely because of some other unforeseen or intervening causes like mechanical failures and similar other causes having no nexus with the driver not possessing the requisite type of licence, the insurer will not be allowed to avoid its liability merely for technical breach of conditions concerning driving licence. That apart, minor and inconsequential deviations with regard to licensing conditions would not constitute sufficient ground to deny the benefit of coverage of insurance to third parties. The other category of cases that the Court addressed to included cases where the licence of the driver is found to be fake.16. The three-Judge Bench summed up its conclusions and we think it appropriate to reproduce the relevant part of the same:(vi) Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards the insured unless the said breach or breaches on the condition of driving licence is/are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply the Rule of main purpose and the concept of fundamental breach to allow defences available to the insurer Under Section 149(2) of the Act(vii) The question, as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver (a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case.In this context, we may profitably refer to the decision in Challa Bharathamma (supra) wherein a two-Judge Bench squarely dealt with the absence of a permit and ruled that plying a vehicle without a permit is an infraction and insurer is not liable.18. In Lakhmi Chand v. Reliance General Insurance (2016) 3 SCC 100 , the Court was concerned with an order passed by the National Consumer Disputes Redressal Commission (NCDRC) that had declined the relief to the Petitioner therein. The insurer in the said case had taken the plea that the complainant had violated the terms and conditions of the policy, for five passengers were travelling in the goods carrying vehicle at the time of the accident, whereas the permitted seating capacity of the motor vehicle of the Appellant was only 1 + 1. The two-Judge Bench referred to Oriental Insurance Co. Ltd. v. Meena Variyal and Ors. (2007) 5 SCC 428  and expressed the view that in order to avoid liability, the insurer must establish that there was breach on the part of the insured.21. In HDFC Bank Limited (supra), the three-Judge Bench opined that the hypothecation agreement did not convey that the Appellant financier had become the owner and was in control and possession of the vehicle. It was the absolute fault of the Respondent No. 2 to take the vehicle from the dealer without full payment of the insurance, more so when nothing had been brought on record that the said fact was known to the Appellant financier or that it was done in collusion with the financier22. The Court held that when the intention of the legislature is quite clear to the effect that a registered owner of the vehicle should not be held liable if the vehicle is not in his possession and control and there was evidence on record that the Respondent No. 2, plied the vehicle without the insurance in violation of the statutory provision contained in Section 146 of the Act, the High Court could not have mulcted the liability on the financier and finally, the financer was absolved of the liability23. In the case at hand, it is clearly demonstrable from the materials brought on record that the vehicle at the time of the accident did not have a permit. The Appellants had taken the stand that the vehicle was not involved in the accident. That apart, they had not stated whether the vehicle had temporary permit or any other kind of permit. The exceptions that have been carved out Under Section 66 of the Act, needless to emphasise, are to be pleaded and proved. The exceptions cannot be taken aid of in the course of an argument to seek absolution from liability. Use of a vehicle in a public place without a permit is a fundamental statutory infraction. We are disposed to think so in view of the series of exceptions carved out in Section 66. The said situations cannot be equated with absence of licence or a fake licence or a licence for different kind of vehicle, or, for that matter, violation of a condition of carrying more number of passengers. Therefore, the principles laid down in Swaran Singh (supra) and Lakhmi Chand (supra) in that regard would not be applicable to the case at hand. That apart, the insurer had taken the plea that the vehicle in question had no permit. It does not require the wisdom of the Tripitaka, that the existence of a permit of any nature is a matter of documentary evidence. Nothing has been brought on record by the insured to prove that he had a permit of the vehicle. In such a situation, the onus cannot be cast on the insurer. Therefore, the tribunal as well as the High Court had directed the insurer was required to pay the compensation amount to the claimants with interest with the stipulation that the insurer shall be entitled to recover the same from the owner and the driver. The said directions are in consonance with the principles stated in Swaran Singh (supra) and Ors. cases pertaining to pay and recover principle.19. The obtaining fact situation is sought to be equated with the factual score in the said case. In this regard, it is useful to refer to the Bench decision in HDFC Bank Limited v. Reshma and Ors. (2015) 3 SCC 679. The issue that arose before the Court was whether the financier was liable to pay the compensation or it was the liability of the borrower. The tribunal had returned the finding that the duty of the financier was to see that the borrower did not neglect to get the vehicle insured and, therefore, it was jointly and severally liable along with the owner. The High Court had concurred with the said conclusion. The Court referred to Purnya Kala Devi v. State of Assam and Ors. (2014) 14 SCC 142  that has dealt with the definition of the term owner as contained in Section 2(30) of the Act. In the said case, the vehicle in question was under the requisition of the State of Assam under the provisions of law. In that context, the Court has expressed that:16. ... The High Court failed to appreciate that at the relevant time the offending vehicle was under the requisition of Respondent 1 State of Assam under the provisions of the Assam Act. Therefore, Respondent 1 was squarely covered under the definition of owner as contained in Section 2(30) of the 1988 Act. The High Court failed to appreciate the underlying legislative intention in including in the definition of owner a person in possession of a vehicle either under an agreement of lease or agreement of hypothecation or under a hire-purchase agreement to the effect that a person in control and possession of the vehicle should be construed as the owner and not alone the registered owner. The High Court further failed to appreciate the legislative intention that the registered owner of the vehicle should not be held liable if the vehicle was not in his possession and control. The High Court also failed to appreciate that Section 146 of the 1988 Act requires that no person shall use or cause or allow any other person to use a motor vehicle in a public place without an insurance policy meeting the requirements of Chapter XI of the 1988 Act and the State Government has violated the statutory provisions of the 1988 Act.20. Be it noted, in the said case, the liability was fixed on the State keeping in view the legislative intention behind Section 146 of the Act, no person shall use or cause or allow any other person to use a motor vehicle in a public place without an insurance policy as that is the mandatory statutory requirement under the Act. Emphasis was laid on possession and control of the vehicle and accordingly liability was fixed on the State of Assam.