1 2025:CGHC:30440 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR MAC No. 638 of 2019 United India Insurance Company Limited Through Divisional Manager, Divisional Office - Plot No. 183, Second Floor, Near Balaji Petrol Pump, Korba - 495677, District Korba Chhattisgarh. Through Authorized Signatory United India Insurance Company Limited Divisional Office, 2nd Floor Guru Kripa Towers, Vyapar Vihar Road Bilaspur Chhattisgarh. --- Appellant versus 1 - Smt. Uttara Kashyap W/o Makhanlal Aged About 29 Years 2 - Ku. Kajal Kashyap D/o Makhanlal Aged About 6 Years 3 - Ku. Jiya Kashyap D/o Makhanlal Aged About 3 Years No.2 and 3 are Minors through : Natural Guardian Mother Respondent No. 1 Uttara Kashyap, No.1 to 3 all are R/o Bandabhra, Police Station Birra, District Janjgir Champa Chhattisgarh. (Claimants) 4 - Anil Kumar Rahi S/o Kewalram Aged About 34 Years R/o Tiwaripara, Kharod, Police Station Shivrinarayan, District Janjgir Champa Chhattisgarh. (Driver) 5 - Prakash Chandra Agrawal S/o Vishwadayal Agrawal R/o Bansal Bhawan, Main Road, Near Pul Chowk Shivrinarayan, Police Station Shivrinarayan, District Janjgir Champa Chhattisgarh. --- Respondents For Appellant : Mr. Abhishek Mishra, Advocate For Respondent No. 1 to 3 : Mr. Pritendra Chauhan, Advocate on behalf of Mr. Ashutosh Trivedi, Advocate For Respondent No.4 & 5 : None present though served Hon'ble Shri Justice Parth Prateem Sahu Order On Board BALRAM PRASAD DEWANGAN Digitally signed by BALRAM PRASAD DEWANGAN Date: 2025.07.16 11:27:11 +0530 2 04/07/2025 1. Appellant/Insurance Company has filed this appeal under Section 173 of the Motor Vehicles Act, 1988 (for short ‘the Act of 1988’) challenging the impugned award dated 23.10.2018, passed in Claim Case No.93 of 2017, whereby the learned 3rd Additional Motor Accident Claims Tribunal, Janjgir-Champa, District – Janjgir-Champa (C.G.) (for short ‘the Claims Tribunal’) has awarded compensation of Rs.3,88,427/- to the claimants in an injury case. 2. Facts relevant for disposal of this appeal are that a claim application was filed by the applicants/claimants claiming compensation of Rs.5,51,178/- as against the injury suffered by them in the road accident. It was pleaded that on 09.07.2016, claimants/applicants were coming towards Shivrinarayan on motor cycle bearing No. MP/37/F/3267 at that time driver of offending vehicle highwa truck bearing No.C.G.-11-AB-2235 while driving the said vehicle in a rash and negligent manner dashed the motor cycle in which the claimants were travelling and caused accident, due to which they fell down and suffered severe injuries. They were taken hospital at Shivrinarayan and after primary treatment, applicants/claimants were referred to Apollo Hospital, Bilaspur where applicant- Uttara was admitted from 09.07.2016 to 25.07.216 and applicant – Kajal and Jiya were admitted from 09.07.2016 to 13.07.2016. 3. Non-applicant No.1 and 2 jointly filed their reply to the claim application resisting the claim of applicants. They denied the accident from the offending vehicle and in order to get compensation, offending vehicle has been falsely implicated. Non-applicant No.1 was having 3 valid and effective driving license and the vehicle was duly insured with non-applicant No.3 at the time of accident. Non-applicant No.3 also filed its reply denying the averments made in the application. It was pleaded that the accident occurred due to self neligence of applicants. Non-applicant No.1 was not having valid and effective driving license to drive the vehicle and the offending vehicle was being plied without any fitness. There was breach of conditions of insurance policy. 4. Upon appreciation of pleadings and evidence placed on record by respective parties, the learned Claims Tribunal held that accident occurred due to rash and negligent driving of offending vehicle by non- applicant No.1, due to which applicants suffered grievous injuries. Breach of Policy condition was not found to be proved. Tribunal allowed application in part, awarded total compensation of Rs.3,88,427/- along with interest @ 6% per annum, fastened liability upon non-applicant No.3-Insurance Company to pay the amount of compensation. 5. Learned counsel for appellant/Insurance Company submits that appellant/Insurance Company has filed this appeal challenging the impugned award passed by the learned Claims Tribunal on the ground that the learned Claims Tribunal erred in fastening the liability upon the appellant/Insurance Company to satisfy the award overlooking the fact that non-applicant No.1 and 2 driver and owner of the offending vehicle failed to produce valid and effective fitness certificate of the offending vehicle on the date of accident. He contended that absence of valid and effective fitness certificate on the date of accident is 4 breach of conditions of the insurance policy. In support of his contention, he placed reliance upon the judgment of Division Bench of this Court in MAC No. 123/2015 “Radhakant Keshri Vs. Ku. Radha @ Sadha Sahu & Ors., decided on 01.02.2021” 6. Learned counsel for respondents No.1 to 3 would submit that he is representing the claimants and not the owner and driver. 7. Notice is served upon all the respondents No.1 to 5, however, there is no representation on behalf of respondents No.4 and 5. 8. Perusal of the record would show that appellant/non-applicant No.3 Insurance Company in para 15 of reply (additional pleadings) has taken specific plea that on the date of accident the offending vehicle was being driven in breach of policy conditions as it was not having valid registration, permit and fitness certificate. Reply by non-applicant No.3/Insurance Company was filed on 22.02.2018. Non-applicant No.1 and 2 i.e. driver and owner of the offending vehicle submitted reply to the claim application on 05.03.2018. They have not made any specific averments with respect to the fitness certificate nor have filed copy of the same before the Claims Tribunal. Claimants have filed copy of final report and other documents of the charge-sheet filed by the Investigating Agency in criminal case. In property seizure memo (Ex.A- 10), the police during investigation seized documents of the offending vehicle from the possession of the driver. By that seizure memo, police seized the registration certificate, insurance policy, tax receipt, permit of offending vehicle and driving license of driver. There is no mention of seizure of fitness certificate. Perusal of the order sheets of the claim case would show that when the date was fixed for recording 5 of evidence of non-applicant No.1 and 2 (driver and owner) of offending vehicle, the learned counsel for representing them has made statement that non-applicant No.1 and 2 do not want to examine any witness. Accordingly, their right to examine witness were closed. 9. 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 of the Act of 1988 reads thus:- “56. Certificate of fitness of transport vehicles.—(1) Subject to the provisions of Sections 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 authorized 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: Provided that where the prescribed authority or the authorized testing station refuses to issue such certificate, it shall supply the owner of the vehicle with its reasons in writing for such refusal. [Provided further that no certificate of fitness shall be granted to a vehicle, after such date as may be notified by the Central Government, unless such vehicle has been tested at an automated testing station.] [(2) The “authorised testing station” referred to in sub- section (1) means any facility, including automated 6 testing facilities, authorised by the State Government, where fitness testing may be conducted in accordance with the rules made by the Central Government for recognition, regulation and control of such stations.] (3) Subject to the provisions of sub-section (4), a certificate of fitness shall remain effective for such period as may be prescribed by the Central Government having regard to the objects of this Act. (4) The prescribed authority may for reasons to be recorded in writing cancel a certificate of fitness at any time, if satisfied that the vehicle to which it relates no longer complies with all the requirements of this Act and the rules made thereunder; and on such cancellation the certificate of registration of the vehicle and any permit granted in respect of the vehicle under Chapter V shall be deemed to be suspended until a new certificate of fitness has been obtained: [Provided that no such cancellation shall be made by the prescribed authority unless,— (a) such prescribed authority holds such technical qualification as may be prescribed by the Central Government and where the prescribed authority does not hold the technical qualification, such cancellation is made on the basis of the report of an officer having such qualification; and (b) the reasons recorded in writing cancelling a certificate of fitness are confirmed by an authorised testing station chosen by the owner of the vehicle whose certificate of fitness is sought to be cancelled: Provided further that if the cancellation is confirmed by the authorised testing station, the cost of undertaking the test shall be borne by the owner of the vehicle being 7 tested and in the alternative by the prescribed authority.] (5) A certificate of fitness issued under this Act shall, while it remains effective, be valid throughout India. [(6) All transport vehicles with a valid certificate of fitness issued under this section shall carry, on their bodies, in a clear and visible manner such distinguishing mark as may be prescribed by the Central Government. (7) Subject to such conditions as the Central Government may prescribe, the provisions of this section may be extended to non-transport vehicles.]” 10. In the matter of Pareed Pillai Vs. Oriental Insurance Co. Ltd., reported in 2019 ACJ 16, five judges Bench of Kerala High Court 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. The 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, 8 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 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 when 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.” 11. Division Bench of this Court in MAC 1289 of 2014, Adesh Kumar and another Vs Smt Satarupa Bai Yadav and others and connected 9 cases decided on 19.11.2020, reiterating the judgment of Kerala High Court in case of Pareed Pillai (Supra) has considered the issue with regard to breach of policy conditions for not having valid fitness certificate and held that absence of fitness certificate for a Transport vehicle to be a fundamental breach of policy conditions. 12. Considering the aforementioned provisions of Section 56 of the Act, 1988 as also the fact that in absence of valid fitness certificate of transport vehicle, it will have affect of not having valid registration for the purpose of Section 39 of the Act, 1988. The learned Claims Tribunal held that the Insurance Company has not proved the plea of breach of conditions of the insurance policy in accordance with law, which in the facts of the case is erroneous. The learned Claims Tribunal while giving such finding has failed to consider that Insurance Company has taken categorical plea, that the driver and owner of the offending vehicle appeared before the learned Claims Tribunal, represented through an advocate till the end of the proceedings have not made any pleading about having fitness certificate nor have produced the said documents before the learned Claims Tribunal in evidence, to controvert the pleadings of the non-applicant No.3 that the offending vehicle was not having the valid fitness certificate on the date of accident. 13. For the forgoing discussions in the opinion of this Court, the learned Claims Tribunal erred in deciding the issue no.4 whether the offending vehicle on the date of accident was plied in breach of policy condition, in negative. The said finding recorded by the learned Claims tribunal is not sustainable accordingly, it is set-aside and it is held that on the 10 date of accident, the offending vehicle was being plied in breach of the conditions of the insurance policy. 14. As there was breach of conditions of insurance policy, the Insurance Company is exonerated from the liability from satisfying the impugned award. However, in the facts of the case taking note of the decision of Hon’ble Supreme Court in case of Manuara Khatun v. Rajesh Kr. Singh, (2017) 4 SCC 796 as also the decision of Hon’ble Supreme Court in case of Shivraj Vs. Rajendra & Another, reported in (2018) 10 SCC 432, Amrit Paul Singh v. TATA AIG General Insurance Co. Ltd., reported in (2018) 7 SCC 558, the Insurance Company/appellant is directed to first pay the amount of compensation and thereafter to recover the same from owner of the vehicle. It is made clear that the Insurance Company can recover the amount of compensation so paid as observed by the Hon’ble Supreme Court in case of Oriental Insurance Co. Ltd. v. Nanjappan, (2004) 13 SCC 224 in same execution proceeding. Rest of the conditions of the impugned award shall remain intact. 15. Accordingly, the appeal is allowed. Sd/- (Parth Prateem Sahu) Judge Balram