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S.81(5) Motor Vehicle Act | Permit Renewed After Condoning Delay Is Deemed To Be Effective From Date Of Actual Expiry: Karnataka High Court

Mustafa Plumber
29 July 2022 1:45 PM GMT
S.81(5) Motor Vehicle Act | Permit Renewed After Condoning Delay Is Deemed To Be Effective From Date Of Actual Expiry: Karnataka High Court
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The Karnataka High Court has said an insurance company cannot disown its responsibility to indemnify the liability of the insurer (vehicle owner) on the ground that on the date of accident, the fitness certificate and the permit of the vehicle were not in force. A division bench of Justice Sreenivas Harish Kumar and Justice S Rachaiah allowed the appeal filed by Dr Narasimulu...

The Karnataka High Court has said an insurance company cannot disown its responsibility to indemnify the liability of the insurer (vehicle owner) on the ground that on the date of accident, the fitness certificate and the permit of the vehicle were not in force.

A division bench of Justice Sreenivas Harish Kumar and Justice S Rachaiah allowed the appeal filed by Dr Narasimulu Nandini Memorial Education Trust and modified order passed by the Motor Accidents Claim Tribunal, saddling the school bus owner with the liability to pay compensation to the claimants.

In the claim petition laid by the dependants of the deceased Syed Wali, the insurer of the offending vehicle took a specific defence that since on the date of accident, the fitness certificate and the permit were not in force, it was not liable to indemnify the liability of the owner although the insurance policy was in force.

The tribunal computed the total compensation payable to the dependents at Rs.6,18,000/- with interest at the rate of 6% p.a. and accepting the defence of the insurer absolved it of its liability and directed the owner of the offending vehicle to pay compensation amount to the dependants. Aggrieved by this finding, the owner preferred this appeal.

Advocate Shivakumar Kalloor for the appellant submitted that on the date of accident, the insurance policy issued for the offending vehicle was in force. The policy would not have been renewed unless the vehicle had a fitness certificate and the permit. The appellant applied for renewal of the fitness certificate and he remitted the required fee through the challan dated 6.10.2015 and thereafter fitness certificate was issued to be valid till 18.12.2016.

Once the fitness certificate was issued, it would relate back to the date of expiry. In regard to permit he also argued that the appellant paid the road tax and applied for renewal of the permit. Once a permit was issued or renewed, it would come into effect from the date of expiry.

Advocate Preethi Patil Melkundi refuted the argument and submitted that the position of law is otherwise. Referring to the judgment of the Supreme Court in the case of Amrit Paul Singh and Another vs Tata AIG General Insurance Company Limited and Others [(2018) 7 SCC 558], she submitted that on the day when the accident took place, the permit and the fitness certificate were not in force. The validity period of the insurance policy was from 29.6.2015 to 28.6.2016. Permit was issued for the period 20.7.2010 to 19.7.2015. Fitness certificate was obtained after the accident. Therefore it is clear that the policy conditions were violated and in this view the insurer need not indemnify the liability of the appellant.

Further it was said Section 81(5) of the Motor Vehicles Act is not applicable. Temporary permit was not issued to the offending vehicle in order to invoke section 81(5). She argued that section 81(1) clearly states that the permit would become effective from the date of renewal, and it does not relate back to the date of expiry. She also referred to sections 56(1), 66(1) and 84(a) and (f) of the Motor Vehicles Act to argue that unless permit and fitness certificate are issued, transport vehicle cannot be deemed to be validly registered for the purpose of section 39 and looked in this view section 149 (2) (a)(i) (C) of the Motor Vehicles Act is applicable.

Findings:

Firstly, the court noted that the accident took place on 28.9.2015, and on that day the insurance policy was in force. "It is not in dispute that the offending vehicle did not possess the fitness certificate as also the permit on the day when the accident took place. It is also not in dispute that the appellant obtained both after the accident."

Noting that the Insurance company does not dispute the fact of fitness certificate being in force on the date it issued the policy to the appellant, the bench said if the permit is renewed upon an application made before expiry, automatically the renewal takes place from the date of expiry. Whenever renewal is sought after expiry of the time, if the concerned authority entertains such an application according to section 81(3) and grants renewal by condoning delay, obviously the renewal goes back to the date of expiry as provided under section 81(5) of the Motor Vehicles Act. Temporary permit is issued for the interregnum period, and it has nothing to do with renewal.

Following which it held, "Though Ex.R1 indicates that the permit was validated with effect from 30.3.2016, in view of section 81(5) of the Motor Vehicles Act, it should be deemed that on the day when the accident took place, the permit was in force."

It added, "From the above discussion, we arrive at a conclusion that the fourth respondent/insurance company cannot disown its responsibility to indemnify the liability of the appellant. In this view, the finding of the tribunal is not sustainable and therefore this appeal deserves to be allowed."

Reliance was placed on United India Insurance Company Limited vs Yasmin Begum where it was held that Section 81(5) of the Act deals with a case of deemed permit or takes care of a situation where pending renewal of a permit, a transport vehicle is plying on a public road. In such a situation, it cannot be considered to be a case where the transport vehicle is plying without a permit rather the vehicle is plying pending renewal of the permit i.e. on a deemed permit.

The bench modified the order of the tribunal and directed the fourth respondent/insurance company to indemnify the liability of the appellant and pay compensation amount of Rs.6,18,000/- with 6% p.a. interest from the date of petition till the date of realisation. The company shall deposit the compensation amount with interest within four weeks from today.

Case Title: Dr Narasimulu Nandini Memorial Education Trust v. Banu Begum & Others

Case NO: MFA 202022/2016

Citation: 2022 LiveLaw (Kar) 295

Date of Order: July 8, 2022

Appearance: Advocate Shivakumar Kalloor for appellant; Advocate Basavaraj R Math for R1, R2; Advocate Preethi Patil Melkundi, for R4

Click Here To Read/Download Judgment



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