1 2025:CGHC:27191 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR MAC No. 1338 of 2019 1. Branch Manager New India Insurance Company Limited (Correct Name As Assurance) Branch Office Rama Trade Centre, Infront Of Rajeev Plaza, Bus Stand, Bilaspur, District Bilaspur Chhattisgarh. (Insurer Of Vehicle Bus No. C.G. -10g- 0150), District : Bilaspur, Chhattisgarh ... Appellant versus 1. Fulkunwar W/o Sundar Lal Aged About 54 Years R/o Village Bhilai, Post Amora, Tahsil Pathariya, District Mungeli Chhattisgarh, Presently Residing At Village Parsada Raipur Road, Police Station Chakarbhatha, District Bilaspur Chhattisgarh. (Claimant) 2. Laxman Singh Thakur S/o Vishram Singh Thakur Aged About 52 Years R/o Old Thana Takhatpur, Tahsil Takhatpur, District Bilaspur Chhattisgarh. (Driver Of Vehicle Bus No. C.G. 10-G- 0150)., 3. Laxmichand Sachdev S/o Vishram Singh Thakur Aged About 52 Years R/o Sachdev Auto Parts, Sangam Nagar Main Road, Takhatpur, Tahsil Takhatpur, District Bilaspur Chhattisgarh. (Owner Of Vehicle Bus No. C.G. 10-G-1050). ... Respondents For Appellant : Ms.Swati Agrawal, Advocate on behalf of Mr. Pankaj Agrawal, Advocate For Respondent No.1 : None. For Respondent No.2 & 3 : Mr. Santosh Bharat, Advocate 2 Hon'ble Shri Justice Parth Prateem Sahu Order on Board 24/06/2025 1. Appellant-Insurance Company has filed this appeal challenging the liability fastened upon it to pay amount of compensation to claimant, as awarded by learned Additional Motor Accident Claims Tribunal, Bilaspur (for short ‘the Claims Tribunal’) vide its award dated 2.5.2019 in Claim Case No.531/2018, mainly on the ground that on the date of accident, the offending vehicle was not having valid fitness certificate. 2. Facts of the case, in brief, are that claimant/respondent No.1 filed an application under Section 166 of the Motor Vehicles Act, 1988 (for short ‘the Act of 1988’) seeking compensation to the tune of Rs.11,50,000/- under various heads, for the injuries sustained by her in a motor vehicular accident. According to claimant, on 4.3.2018 she was going to Bhilai from Takhatpur in the bus bearing registration number CG10- G-0150 (for short ‘offending vehicle’). Due to rash and negligent driving by driver, the offending vehicle fell 20 feet downward from the bridge in Maniyari River as a result she sustained grievous injuries including fracture of bone of right hand and below knee. The compensation is sought on the ground that on account of injuries sustained by her in the accident, she has become disabled to do the work which she 3 was doing prior to accident. 3. Driver and owner of offending vehicle jointly filed reply pleading that all of a sudden a cow came in front of vehicle and in order to save the cow, the driver turned the vehicle on the side of road, it was the slope road, therefore, driver lost control over the vehicle and it fell down. The driver of offending vehicle had made best efforts to avoid accident. Non-applicant was holding valid license and the offending vehicle was insured with non-applicant No.3, therefore, in case of award of any compensation, the liability to satisfy the same would be of insurance company. 4. Non-applicant No.3 Insurance Company filed reply denying occupation and income of claimant as pleaded in claim application. At the time of accident, driver of offending vehicle was under the influence of liquor. Offending vehicle was carrying excess passengers than its seating capacity. Offending vehicle was plied on road without valid fitness certificate. Thus, there was violation of essential conditions of insurance policy and therefore, the insurance company is not liable to indemnify the insured. 5. The Claims Tribunal upon analyzing the pleadings and evidence brought on record by the parties, came to the conclusion that accident occurred due to rash and negligent driving of motorcycle by non-applicant No.1 as a result 4 claimant suffered injuries. Relying on decision rendered by the High Court of Chhattisgarh in MAC No.1251/2017 (Sunil Chandrakar vs Mohd. Salim) has held that the ground raised regarding absence of valid fitness certificate has no force. It was also held that there was no element of contributory negligence and violation of any of the conditions of insurance policy. Consequently, the Claims Tribunal allowed application in part, awarded compensation of Rs.20,000/- and fastened liability upon the non-applicants, jointly and severally, to satisfy the award. 6. Learned counsel for claimants/appellants submits that on the date of accident though there was coverage of Insurance Policy, the offending vehicle was not having fitness certificate and unless there was fitness certificate of the offending vehicle, it cannot be plied on public road. Since there is no valid fitness certificate to the offending vehicle, the same amounts to violation of condition of insurance policy and therefore, finding of the Claims Tribunal that the insurer is liable to pay compensation is unsustainable and liable to be set aside. 7. On the other hand learned counsel for respondent No.2 and 3 supporting the impugned award, submitted that the Claims Tribunal after appreciating the pleadings and evidence brought on record by the respective parties, has rightly held 5 that there was no violation of any condition of the insurance policy and therefore, the award passed by the learned Claims Tribunal was just and proper. 8. I have heard learned counsel for the respective parties and perused record of claim case including impugned award. 9. Perusal of record would show that the accident has taken place on 4.3.2018 in which claimant, who was traveling in the offending bus, sustained grievous injuries including fracture injuries. Based on the report lodged, a criminal case was registered against non-applicant in Police Station Tarbahar, Bilaspur for commission of offence under Section 279, 337, 338, 304A of IPC and after completion of investigation, charge sheet was filed before the Court concerned against non-applicant No.1-driver. In the course of investigation, the police seized documents relating to offending vehicle like registration certificate, permit and insurance policy. However, there is no seizure of fitness certificate valid on the date of accident. 10. Claimant filed application seeking compensation for the injuries sustained by her in the accident. The claim petition filed by the claimants was resisted by the insurance company inter alia contending that the offending vehicle did not possess a valid and effective fitness certificate at the time of accident and in support thereof produced documents as 6 Ex.D-1,Ex.D-2 and Ex.D-3 and also examined Shri Pitambar Prasad Tripathi, Assistant Grade-III of the Regional Transport Office Bilaspur as NAW3-1. Ex.D-1 is the registration certificate of offending vehicle which mentions that the fitness of offending vehicle was valid upto 21.7.2015. Ex.D-3 is the application submitted by the counsel for insurance company with the Regional Transport Officer, Bilaspur for supply of certified copy of fitness certificate of offending vehicle. There is an endorsement by the Registering Authority on this application, mentioning that as per office records, fitness certificate with the respect to offending vehicle was issued lastly for the period from 22.7.2014 to 21.7.2015 and thereafter the owner of offending vehicle has not applied for fitness. Shri Pitambar Prasad Tripathi, Assistant Grade-III, RTO, Bilaspur as NAW3-1 has proved the documents Ex.D-1 and Ex.D-2 and also deposed that on the date of accident i.e. 4.3.2018 there was no fitness certificate of the offending vehicle. 11. An application under Order 11 Rule 12 CPC has been filed on behalf of the owner and driver of offending vehicle pleading that they are in possession of fitness certificate for the period from 2014 to 2015, the fitness certificate of the offending vehicle for the period thereafter has lost, the same will be filed as and when received. However, in support of this application, 7 the owner and driver of offending vehicle has not filed any document like copy of FIR or application pending before the concerned licensing authority for issuance of duplicate fitness certificate, to substantiate their plea that fitness certificate valid on the date of accident has been lost. Thus, it is clear that an opportunity was available with owner and driver of offending vehicle to establish that there was a valid fitness certificate, but they failed to furnish any evidence in that context. 12. As per Section 56 of the Act of 1988, any Transport Vehicle shall not be deemed to be validly registered for the purpose of Section 39 of the Act of 1988, unless, it carries a certificate of Fitness in the prescribed form issued by the prescribed authority. Section 56 (1) of the Act of 1988 reads thus:- “56.Certificate of fitness of transport vehicles.- (1) Subject to the provisions of Section 59 and 60, a transport vehicle shall not be deemed to be validly registered for the purposes of Section 39, unless it carries a certificate of fitness in such form containing such particulars and information as may be prescribed by the Central Government, issued by the prescribed authority, or by an authorised testing station mentioned in sub-section (2), to the effect that the vehicle complies for the time being with all the requirements of this Act and the rules made thereunder: 13. As per Section 2 (47) of the Act of 1988, "Transport vehicle" means a public service vehicle, a goods carriage, an educational institution bus or a private service vehicle". In the 8 instant case, the offending vehicle is the bus as per certificate of registration seized by police vide Seizure Memo Ex.P-9. 14. In the matter of Pareed Pillai vs Oriental Insurance Co. Ltd. reported in 2019 ACJ 16, the Kerala High Court has observed that it is a mandatory requirement of every permit that the vehicle to which the permit relates shall carry valid certificate of fitness issued under Section 56 at all times, absence of which will automatically lead to a situation that the vehicle shall not be deemed having a valid permit and thus, there is violation of insurance policy. 15. Thus, keeping in mind the provisions of Section 56 of the Act of 1988, the evidence of Umesh Tripathi (NAW3-1) that after 21.7.2015, fitness certificate of the offending vehicle has not been issued by the RTO, Bilaspur coupled with admission of owner and driver of offending vehicle that on the date of accident, they were not in possession of valid fitness certificate, this Court is of the considered view that defence raised by appellant Insurance Company that there was violation of insurance policy as the offending vehicle was plied on road without fitness certificate. This being the position, the finding recorded by the Claims Tribunal on the issue relating to violation of conditions of insurance policy is not sustainable and it is hereby set aside. It is held that on the date of accident the offending vehicle was plied on road 9 without valid fitness certificate, the terms and condition of insurance was violated and thus the insurance company is not jointly and severally liable to make payment of compensation. 16. Now the question arises for consideration is whether the insurance company is entitled to complete exoneration from its liability to indemnify the insured or not? 17. In case of Pareed Pillai (supra), the five Judges Bench of Kerala High Court while dealing with breach relating to non- availability of fitness certificate has observed thus:- “17. The stipulations under the above provisions clearly substantiate the importance and necessity to have a valid Fitness Certificate to the transport vehicle at all times. The above prescription converges on the point that Certificate of Registration, existence of valid Permit and availability of Fitness Certificate, all throughout, are closely interlinked in the case of a transport vehicle and one requirement cannot be segregated from the other. The transport vehicle should be completely fit and road worthy, to be plied on the road, which otherwise may cause threat to the lives and limbs of passengers and the general public, apart from damage to property. Only if the transport vehicle is having valid Fitness Certificate, would the necessary Permit be issued in terms of Section 66 of the Act and by virtue of the mandate under Section 56 of the Act, no transport vehicle without Fitness Certificate will be deemed as a validly registered vehicle for the purpose of Section 39 10 of the Act, which stipulates that nobody shall drive or cause the motor vehicle to be driven without valid registration in public place or such other place, as the case may be. These requirements are quite 'fundamental' in nature; unlike a case where a transport vehicle carrying more passengers than the permitted capacity or a goods carriage carrying excess quantity of goods than the permitted extent or a case where a transport vehicle was plying through a deviated route than the one shown in the route permit which instances could rather be branded as 'technical violations'. In other words, when a transport vehicle is not having a Fitness Certificate, it will be deemed as having no Certificate of Registration and when2020:CGHC:18660- DB such vehicle is not having Permit or Fitness Certificate, nobody can drive such vehicle and no owner can permit the use of any such vehicle compromising with the lives, limbs, properties of the passengers/general public. Obviously, since the safety of passengers and general public was of serious concern and consideration for the law makers, appropriate and adequate measures were taken by incorporating relevant provisions in the Statute, also pointing out the circumstances which would constitute offence; providing adequate penalty. This being the position, such lapse, if any, can only be regarded as a fundamental breach and not a technical breach and any interpretation to the contrary, will only negate the intention of the law makers.” 18. Thus, it is clear that absence of fitness certificate of the offending vehicle is a technical breach of the terms and 11 conditions of the insurance policy and it would not help the Insurance Company to secure complete exoneration. Even, once, the Insurance Company had agreed to indemnify the insured than it would be a dispute between the insured and the insurer as to whether the vehicle was being used contrary to the conditions of Insurance Policy or not? On account of such inter se dispute between the insured and the insurer, the claimants, who are completely stranger to the contract between them, cannot be made to suffer. In case at hand, it is not in dispute that on the date of accident, the insurance policy was effective and the accident occurred during validity of the policy. Hence, the insurer/Insurance Company cannot get away from its liability of indemnifying the insured by proving that the vehicle was being used contrary to the Insurance Policy. 19. In the matter of Amrit Paul Singh and another v. Tata AIG General Insurance Company Limited and others reported in (2018) 7 SCC 558 Hon'ble Supreme Court has held thus:- “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 12 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 other cases pertaining to pay and recover principle.” 20. In cases of Shivaraj vs. Rajendra, reportedin (2018) 10 SCC 432 and Shamanna and another Vs. Divisional Manager Vs. the Oriental Insurance Co. Ltd. and others, [(2018) 9 SCC 650, the Hon’ble Supreme Court has observed that in the case of breach of policy, directions against the Insurance Company to pay the awarded sum to the claimants and then to recover the said sum from the insured be given by applying the principle of "pay and recover". 21. Therefore, in the light of above decisions of Hon’ble Supreme Court and considering the beneficial object of the Act of 1988, it would be just and appropriate to apply the principle of 'pay 13 and recover' in the given facts and circumstances of the case. 22. Consequently, appellant Insurance Company is exonerated from its liability to indemnify insured under the policy. Respondents No.2 & 3, driver & owner of offending vehicle, are held liable to satisfy the compensation awarded by the Claims Tribunal, jointly and severally. Appellant Insurance Company is directed to first deposit the entire amount of compensation together with interest, as awarded by Claims Tribunal, and then to recover the same from respondent Nos.2 & 3- driver & owner of offending vehicle, jointly and severally, in accordance with law. For recovery of the compensation so paid, appellant is not required to file separate proceeding as held in case of Oriental Insurance Company Limited v. Nanjappan reported in AIR 2004 SC 1631. 23. In the result, appeal is allowed in part and award impugned stands modified to the extent indicated above. Sd/- (Parth Prateem Sahu) Judge roshan/- SYED ROSHAN ZAMIR ALI Digitally signed by SYED ROSHAN ZAMIR ALI