Branch Manager vs Fulkunwar on 24 June, 2025

Chattisgarh High Court

Branch Manager vs Fulkunwar on 24 June, 2025

Author: Parth Prateem Sahu

Bench: Parth Prateem Sahu

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                                                 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
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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
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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
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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
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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
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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,
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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
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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
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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
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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
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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
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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
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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.

       Digitally
SYED   signed
ROSHAN by SYED
ZAMIR  ROSHAN                                                     Sd/-
ALI    ZAMIR
       ALI                                                (Parth Prateem Sahu)
                                                                Judge
roshan/-