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Chattisgarh High Court
United India Insurance Company Limited vs Smt. Uttara Kashyap on 4 July, 2025
Author: Parth Prateem Sahu
Bench: Parth Prateem Sahu
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, 2 nd 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
Digitally
signed by
BALRAM
BALRAM PRASAD
PRASAD DEWANGAN
DEWANGAN Date:
2025.07.16
Hon’ble Shri Justice Parth Prateem Sahu
11:27:11
+0530Order On Board
204/07/2025
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
3valid 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
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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
6testing 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
7tested 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,
8which 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
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