Supreme Court Rules Absence of Permit is Statutory Breach under the Motor Vehicles Act, 1988

The Supreme Court, in the case of Amrit Paul Singh & Anr. v. TATA AIG General Insurance Co. Ltd. & Ors., decided on 17^th May, 2018, has held that plying of the transport vehicles in public without permit is a statutory breach and if such vehicles get involved in an accident, the insurer will be absolved of liability to pay.

In the present case, the offending truck had hit a motorcycle and resultantly caused the death of driver of the motorcycle. A claim petition was preferred by the legal representatives of the deceased under section 166 of the Motor Vehicles Act, 1988 before the Motor Accident Claims Tribunal, Pathankot claiming compensation to the tune of Rs. 36,00,000/-.

The Motor Accident Claims Tribunal held that since the truck was being plied without permit, a statutory breach of policy conditions under the Motor Vehicles Act, 1988 had occurred and therefore, the insurer is not liable to pay compensation. The   Tribunal directed that an amount of Rs.   15,63,120/- shall be paid by the insurer along with interest at the rate of 9% from the date of award till its realization and the same be recovered from the owner and driver of the vehicle.

Aggrieved, the owner of the truck filed the appeal before the Punjab and Haryana High Court. The Punjab and Haryana High Court upheld the order of the Tribunal.

The Supreme Court also rejected the contentions of the owner and upheld the orders of the Tribunal and the High Court and ruled as follows:

In the case at hand, it is clearly demonstrable from the materials brought on record that the vehicle at the time of the accident did not have a permit. The exceptions under   Section   66   of   the   Act cannot be taken aid of in the course of an argument to seek absolution from liability. Use of a vehicle in a public place without a permit is a fundamental statutory infraction.  We are disposed to think so in view of the series of exceptions carved out in Section 66. The situations carved out in the said section 66 cannot be equated with absence of license or a fake license or a license for different kind of vehicle, or, for that matter,   violation   of   a   condition   of   carrying   more   number   of passengers.   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 were correct in directing that 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 pay and recover principle.

Surabhi Aggarwal

Senior Associate

The Indian Lawyer