w w w . L a w y e r S e r v i c e s . i n



Ujwala Prasad & Others v/s New India Assurance Company Ltd., Rep. by Division Manager & Others


Company & Directors' Information:- THE NEW INDIA ASSURANCE COMPANY LIMITED [Active] CIN = L66000MH1919GOI000526

Company & Directors' Information:- THE NEW INDIA ASSURANCE COMPANY LIMITED [Active] CIN = L99999MH1919GOI000526

Company & Directors' Information:- THE NEW INDIA ASSURANCE COMPANY LIMITED [Active] CIN = U99999MH1919GOI000526

Company & Directors' Information:- TO THE NEW PRIVATE LIMITED [Active] CIN = U72900DL2006PTC235208

Company & Directors' Information:- PRASAD CORPORATION PRIVATE LIMITED [Active] CIN = U32301TN1994PTC028160

Company & Directors' Information:- PRASAD AND CO. PRIVATE LIMITED [Active] CIN = U67120DL1995PTC068088

Company & Directors' Information:- M. PRASAD AND CO LIMITED [Active] CIN = U67120WB1999PLC090325

Company & Directors' Information:- REP CORPORATION PRIVATE LIMITED [Strike Off] CIN = U26921TN2005PTC055138

Company & Directors' Information:- NEW INDIA CORPORATION PRIVATE LIMITED [Strike Off] CIN = U36999TN1940PTC001776

Company & Directors' Information:- H PRASAD & CO PVT LTD [Strike Off] CIN = U51109WB1944PTC011797

    M.F.A. Nos. 3916 to 3920 of 2009, 10548 of 2012 (MV)

    Decided On, 01 October 2020

    At, High Court of Karnataka

    By, THE HONOURABLE MR. JUSTICE H.P. SANDESH

    For the Appellants: A. Ananda Shetty, N. Rajashekar, Advocates. For the Respondents: R1, M.P. Srikanth, C.R. Ravishankar, R4, B.C. Seetharama Rao, Advocates.



Judgment Text

(Prayer: This M.F.A is filed Under Section 173(1) of MV Act against the judgment and award dated 31.12.2008 passed in MVC.No.36/2007 on the file of the Civil Judge (Senior Division), Member, MACT, Doddaballapur, awarding a compensation of Rs.15,000/- with interest @ 6% P.A. from the date of petition till realisation.This M.F.A is filed Under Section 173(1) of MV Act against the judgment and award dated 31.12.2008 passed in MVC.No.4/2007 on the file of the Civil Judge (Senior Division), Member, MACT, Doddaballapur, awarding a compensation of Rs.1,00,000/- with interest @ 6% P.A. from the date of petition till realisation.This M.F.A is filed Under Section 173(1) of MV Act against the judgment and award dated 31.12.2008 passed in MVC.No.7/2007 on the file of the Civil Judge (Senior Division) and Member MACT at Doddaballapur, awarding a compensation of Rs.25,000/- with interest at the rate of 6% P.A. from the date of petition till its actual realisation.This M.F.A is filed Under Section 173(1) of MV Act against the judgment and award dated 31.12.2008 passed in MVC.No.8/2007 on the file of Civil Judge (Senior Division) and Member, MACT, Doddaballapur, awarding a compensation of Rs.25,000/- with interest @ 6% P.A. from the date of petition till realisation.This M.F.A is filed Under Section 173(1) of MV act against the judgment and award dated 31.12.2008 passed in MVC.No.19/2007 on the file of the Civil Judge (Senior Division), Member, MACT, Doddaballapur, awarding a compensation of Rs.15,000/- with interest @ 6% P.A. from the date of petition till realisation.This M.F.A is filed Under Section 173(1) of MV Act against the judgment and award dated 08.07.2011 passed in Mvc.No.683/2010 on the file of II Additional District Judge, MACT-II, Davanagere, awarding a compensation of Rs.3,61,000/- with interest @ 6% P.A. from the date of petition till deposit.)1. M.F.A.Nos.3920/2009, 3916/2009, 3917/2009, 3918/2009 and 3919/2009 are filed by the owner challenging the common judgment and award dated 31.12.2008, passed in M.V.C.Nos.36/2007, 4/2007, 7/2007, 8/2007 and 19/2007, on the file of the Civil Judge, (Sr.Dn.) and MACT Doddaballapura, ('the Tribunal' for short) fastening the liability on the insured/owner to pay the compensation.2. M.F.A.No.10548/2012 is filed by the owner challenging the judgment and award dated 08.07.2011, passed in M.V.C.No.683/2010, on the file of the II Additional District Judge and MACT-II, Davangere, ('the Tribunal' for short), questioning the liability fastened on the owner-cum-insured.3. This Court vide order dated 11.02.2016 ordered to connect M.F.A.No.10548/2012 along with other appeals since the question involved in the matter is similar and even though M.F.A.No.10548/2012 is different from other cases, it is taken up for common disposal in view of the earlier order.4. The parties are referred to as per their original rankings before the Tribunal to avoid the confusion and for the convenience of the Court.5. The appellant/respondent No.1 before the Tribunal, has filed the appeals in M.F.A.Nos.3920/2009, 3916/2009, 3917/2009, 3918/2009 and 3919/2009. The factual matrix of the case is that on 13.08.2005, the claimants and the legal heirs of the deceased Honnagangamma along with other villagers had been to Chikkasagare Village, Korategere Taluk to attend the marriage reception of C. Gayathri and Shashi kumar and they were traveling in the bus belonging to the appellant/respondent No.1 bearing registration No.KA-06/A-4118. When they reached near Doddabelavangala, Kanasawadi Main Road, the driver of the said bus drove the same in a rash and negligent manner and he lost his control over the bus and the said bus fell down towards the right side of tank bund. Due to the impact, Honnagangamma sustained grievous injuries and other petitioners sustained simple and grievous injures and they were immediately shifted to Nelamangala Government Hospital, Prasad Hospital and Jayaprakash Nursing Home. Further they were referred to Ramaiah Hospital where Honnagangamma succumbed to the injuries on the way and others were treated as inpatient and out patient. Hence, they made the claim before the Tribunal.6. In pursuance of the claim petitions, notice was issued against respondent Nos.1 and 2. Respondent No.1, who is the appellant herein appeared through the counsel and filed written statement denying the averments made in the claim petitions, age, occupation and income and contended that there is an insurance policy and hence, the Insurance Company is liable to pay the compensation.7. The respondent No.2 Insurance Company filed the written statement denying the accident and also the nature of injuries, avocation and medical expenses. However, contended that the liability is subject to terms and conditions of the policy. Further contended that R.W.1 insured/owner had violated the permit route and timings and hence there is a breach of conditions of policy and Insurance Company is not liable to pay compensation.8. The claimants examined themselves in all the cases as P.W.1 to P.W.26 and got marked the documents at Exs.P.1 to 263. On the other hand, the respondents also examined one Company witness as R.W.1 and power of attorney holder of respondent No.1 as R.W.2.9. The Tribunal after considering both oral and documentary evidence placed on record, allowed the claim petitions in part and comes to the conclusion that respondent No.1 is liable to pay the compensation. However, directed the Insurance Company to deposit the amount and liberty was given to recover the said amount from the owner. Hence, these appeals are filed by appellant/respondent No.1 before this Court.10. The learned counsel for the appellants contend that the Tribunal committed an error in directing the owner to pay the compensation inspite of valid insurance policy was in existence and vehicle is covered by a valid stage carrier permit on the route Magadi to Tumkur and back. Just because the driver had to take a deviation to reach the destination on a deviated route, it cannot be held that the vehicle is not covered by a permit. On the date of the accident, the vehicle was required to be operated on the deviated route because of the road block. Hence, it is contended that the Insurance Company cannot absolve its liability. At the most, it amounts to violation of terms and conditions of the permit under Section 86 of the Motor Vehicles Act and the same amounts to cancellation or suspension of the permit. The Tribunal committed an error in fastening the liability on the insured. Hence, it requires interference of this Court.11. M.F.A.No.10548/2012 is filed by the owner/insured. The factual matrix of the case is that on 15.04.2010 at about 8.45 p.m., the deceased was moving in a bus bearing registration No.KA-16/A-6629 with his son i.e., the petitioner No.2. When the bus reached the place Chikkabannihatti bus stop, the offending vehicle was stopped to facilitate its passengers to get down from the bus and at that time, while the deceased was getting down from the bus, driver of the offending vehicle suddenly drove the same without observing the signals of the conductor, cleaner, in a rash and negligent manner. As a result of the same, the deceased fell down from the bus to the road and sustained severe injuries and thereafter he was taken to Government Hospital, Jagalur and succumbed to the injuries.12. In pursuance of the claim petition, notice was ordered and respondent Nos.1 and 2 remained exparte and respondent No.3 - Insurance Company appeared through its counsel and filed the written statement denying the averments made in the claim petition and contended that the offending vehicle was permitted to ply on Challakere - Shimoga route, but at the time of the accident, it was plied on Jagalur Taluk without having a valid permit on that route. Hence, respondent Nos.1 and 2 have violated the terms and conditions of the permit as well as the policy. Hence, the Insurance Company is not liable to pay the compensation.13. The claimants have examined petitioner No.2 as P.W.1 and got marked the documents at Exs.P.1 to 9. The respondents have examined two witnesses as R.Ws.1 and 2 and got marked the documents at Exs.R.1 to 3. The Tribunal after considering the material on record, allowed the claim petition in part and directed the owner to pay the compensation amount and exonerated the liability of the Insurance Company. Hence, the present appeal is filed by the appellant/owner questioning the same.14. The grounds urged in the appeal is that he was placed exparte based on the paper publication. The Tribunal failed to consider that under the provisions of law, violation of the permit condition is not a defence available to the Insurance Company. In the present case, it clearly indicates that the vehicle was covered with permit. Under the said circumstances, fixing the liability on the insured is improper.15. The learned counsel would also contend that the Tribunal has failed to consider that the vehicle was taking the passengers and also their luggage from disabled vehicle to reach their destination. Rule 57 of the Motor Vehicles Rules, provides that the exemption from Section 66 of the Motor Vehicles Act which reads as thus:"The provisions of sub-section (1) of Section 66 shall not apply to any transport vehicle used as a relief vehicle for carrying passengers and their luggage from a disabled Stage Carriage to the place of destination."This aspect has not been considered by the Claims Tribunal and committed an error.16. The learned counsel for the appellant/insured in all the appeals in support of his contentions relied upon the following judgments:(i) Judgment of this Court dated 07.09.2020 passed in M.F.A.No.1510/2009 c/w M.F.A.No.11976/2007 - Balakrishna Rao v. United India Insurance Co. Ltd., and others.(ii) Full Bench judgment of this Court reported in 2020(2) KCCR 1405 - New India Assurance Co. Ltd., Bijapur v. Yallavva and another.(iii) Judgment of this Court dated 25.10.2019 passed in M.F.A.No.1176/2012 - B.S. Chidananda Reddy v. Smt. Marakka and others.(iv) Judgment of this Court reported in ILR 2018 KAR 1849 - Divisional Manager, United India Insurance Co. Ltd. v. Smt. Jayamma and others.(v) Judgment of this Court reported in 2017 (1) KLR 251 - Durugammma v. S.G. Naresh and others.(vi) Judgment of this Court dated 19.12.2018 passed in M.F.A.No.6719/2012 C/w 6820/2013 - H.G. Chandramouli v. Hanumakka and others.(vii) Judgment of this Court reported in ILR 2000 KAR 1302 - United India Insurance Co. Ltd., and others v. Chandamma and others.(viii) Judgment of this Court reported in ILR 1991 KAR 4127 - K.V. Thimmegowda v. Kamalamma.(ix) Judgment of Apex Court reported in (2004) 8 SCC 517 - National Insurance Co. Ltd., v. Challa Bharathamma and others.(x) Judgment of Apex Court reported in AIR 2018 SC 2662 - Amrit Paul Singh and another v. TATA AIG General Insurance Co. Ltd. and others.17. The learned counsel referring these judgments would submit that this Court consistently held that violation of permit conditions is not a defence available to the Insurance Company and the Insurance Company can avoid its liability only if it is a fundamental breach. In all these cases, the Insurance Company has admittedly covered the policy in respect of the vehicle with permit and have also produced the permit as Ex.R.2 and contended that the Company is not liable only on the ground that the deviation amounts to an infraction and there is violation of the terms and conditions of the permit as well as the policy, cannot be accepted.18. Per contra, the learned counsel for the Insurance Company in his argument vehemently contend that there is no dispute with regard to the using of the vehicle in a place, which is not authorized to ply and also there is a clear violation of the terms and conditions of the permit as well as the policy. The learned counsel would submit that it is not only a deviation, but the vehicle is used for other than the purpose for which the permit was given. The learned counsel would submit that the stage carriage vehicle was used for contract carriage and hence, there is a fundamental breach of the terms and conditions of the policy. At the most, it amounts to pay and recovery. Hence, the appeals filed by the insured are liable to be dismissed.19. Having heard the arguments of the learned counsel for the appellants and the respondents and also on perusal of material available on record, the points that arise for the consideration of this Court are:(i) Whether the Tribunal has committed an error in fastening the liability on the insured in M.V.C.No.683/2010?(ii) Whether the Tribunal has committed an error in ordering for pay and recovery in M.V.C.Nos.36/2007, 4/2007, 7/2007, 8/2007 and 19/2007?(iii) Whether the defence available to the Insurance Company to invoke Section 149 of the MV Act and would contend that using of the stage carriage vehicle for contract carriage amounts to fundamental breach and the same is an infraction?(iv) Whether the Tribunal has committed an error in coming to the conclusion that the deviation of the vehicle in a place which is not authorized to ply amounts to an infraction and amounts to fundamental breach holding that the owner is liable to pay the compensation?(v) What order?Point Nos.(i) to (iv):20. Having heard the arguments of the appellant/insured and the learned counsel appearing for the Insurance Company and also on perusal of the material available on record, this Court has to consider the above points together since all are interconnected. All the matters are connected with each other and both the question of fact and question of law are involved in these cases on hand to decide the issue with regard to fastening the liability.21. The factual matrix of the case in M.F.A.Nos.3920/2009, 3916/2009, 3917/2009, 3918/2009 and 3919/2009 is that, on the date of the accident the claimant and the deceased have travelled in the bus bearing registration No.KA-06/A-4118 and the vehicle met with an accident near Doddabelavangala, Kanasawadi Main Road. There is no dispute with regard to the accident. There is no dispute with regard to the fact that accident has occurred outside the permit area. Hence, it is contended that the same amounts to violation of the terms and conditions of the policy and the permit and it amounts to infraction.22. The claimants, in order to substantiate their claim have examined themselves as PWs.1 to 26 and categorically deposed before the Tribunal that they have traveled in the bus to attend the marriage function. The main contention of the insured in these appeals is that the deviation has taken place due to the road block and the same does not amount to fundamental breach of policy.23. The factual matrix in MFA No.10548/2012 arising out of MVC No.683/2010 is that the vehicle met with an accident at Chikkabannihatti near bus stop and vehicle bearing registration No. KA-16/A-6629 was not permitted to ply in the said route. In both the cases, there is no dispute that there was a deviation in plying the vehicle.24. In MFA No.10548/2012, the owner/insured would contend that other vehicle was arranged to take the passengers from the place where they were disabled to continue their destination since the vehicle in which the passengers were travelling was not in order and hence, an arrangement was made to send them to reach their destination. The other contention in MFA No.3920/2009 series is that, not only there was a deviation and the vehicle was permitted to ply under the permit for stage carriage purpose and the same was used for contract carriage.25. Firstly, in order to appreciate the facts of the case, this Court has to consider the evidence available on record both on the claimants' side and also on the respondents' side in respect of M.F.A.Nos.3920/2009, 3916/2009, 3917/2009, 3918/2009 and 3919/2009. The claimants in all the claim petitions have deposed that they travelled in the bus to attend the marriage and the same depicts in the documents as per Exhibit 'P'. series. In the cross-examination of the witnesses, it is suggested that permit was given not to run the vehicle in the said route. Hence, the insurance company is not liable to pay the compensation. The said suggestion was denied.26. The respondent/Insurance Company examined one witness as RW.1 and in the evidence of RW.1, he reiterated the averments made in the written statement contending that the insurance company is not liable to pay the compensation as the insured did not possess a valid route permit to run the vehicle on the particular route as on the date of the accident. Hence, he has violated the permit. This witness got marked one document as Ex.R.1-Policy and he was subjected to cross- examination. In his cross examination, he admitted that at the time of accident, Ex.R.1-Policy was in force and in the said policy, route was not mentioned. The owner got examined his Power of Attorney Holder as RW.2 and this witness has deposed that the policy was in force and the same covers the liability. In his cross- examination, it is elicited that he does not have any impediment to produce the route permit and he admitted the same. It is suggested that there was no permit to ply the vehicle in particular route and the same was denied. However, it is stated that in terms of Ex.R.2, he was having the permit and the same was used to run the vehicle in different routes, hence, the Insurance Company is not liable and the same was denied. The policy is marked as Ex.R.1 and the permit is marked as Ex.R.2. On perusal of Ex.R.2, permit route is issued to run the vehicle from Magadi to Tumkur and back.27. In MFA No.10548/2012, the second petitioner is examined as PW.1 and in his evidence, he reiterated the averments made in the claim petition. He was subjected to cross-examination. In the cross-examination, he admits the place of the accident i.e., while proceeding from Jagalur, the accident took place at Chikkabannihatti. The respondents have examined two witnesses. One of the official of the insurance company was examined as RW.1 and in his evidence, he has reiterated the averments made in the written statement. He was subjected to cross-examination. In the cross-examination, he admitted that the policy was in force as on the date of the accident and also admitted that the permit was standing in the name of the second respondent - Sri S.V.Deepak. The insurance Company has also examined Superintendent of RTO Office as RW.2 and in his evidence, he categorically stated that in respect of vehicle bearing registration No.KA-16/A-6629, permit was given to run the vehicle as stage carriage and the said document was marked as Ex.R.3. The witness also admitted that in terms of the agreement between the permit holder- Smt.H.J.Shantha, a lease agreement was entered into with Sri S.V.Deepak and there is a shara at Ex.R.3. The witness admitted that in terms of Ex.R.1, the accident spot was between Jagaluru -Kottur road near Chikabannihatti. He also states that in terms of Ex.R.3, the vehicle cannot run at Chikkabannihatti village. This witness was subjected to cross-examination. He admitted that Ex.R.3 is not applicable to the period of accident and also admits that Jagaluru- Kottur road is a District Highway. However, he denies the suggestion that the vehicle could ply on the road between Kottur- Jagaluru.28. Having considered the materials available on record, insofar as the question of fact is concerned, there is no dispute with regard to the place of the accident, in which the permission was given to ply the vehicle and there was a clear deviation of the route in respect of both the appeals and the records produced before the Tribunal would indicate that the vehicles were plied on the routes other than its permit. Hence, question of fact is decided based on the material that there was a deviation. Apart from that, in M.F.A.Nos.3920/2009, 3916/2009, 3917/2009, 3918/2009 and 3919/2009, there is no dispute that permit was given for the purpose of stage carriage and the documents reveal that the vehicle was used on contract basis. In the pleadings and the evidence, it is clear that on the date of the accident, the vehicle was used to carry the passengers for the purpose of attending the marriage reception. It is emerged in the evidence in both the cases that the respective vehicles plied in different route and also the stage carriage vehicle is used for contract carriage.29. Secondly, in order to consider the question of law, which has been raised in the matter, it is apt to refer to the relevant provisions of the Act. Section 149 (2) (a) (i) (c) of the Motor Vehicles Act reads as follows:(a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:-(i) a condition excluding the use of the vehicle -"(a) xxxx(b) xxxx(c) for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or(d) xxxx "Section 66(1) of the Act reads as follows:"66. Necessity for permits: (1) No owner of a motor vehicle shall use or permit the use of the vehicle as a transport vehicle in any public place whether or not such vehicle is actually carrying any passengers or goods save in accordance with the conditions of a permit granted or countersigned by a Regional or State Transport Authority or any prescribed authority authorizing him the use of the vehicle in that place in the manner in which the vehicle is being used"30. Section 149 (7) of the Act indicates the manner in which Subsection 2 of Section 149 has to be interpreted."Section 149 (7) : No insurer to whom the notice referred to in sub-section (2) or sub- section (3) has been given shall be entitled to avoid his liability to any person entitled to the benefit of any such judgment or award as is referred to in sub-section (1) or in such judgment as is referred to in sub-section (3) otherwise than in the manner provided for in sub-section (2) or in the corresponding law of the reciprocating country, as the case may be."Thus, it is clear that the insurer can avoid its liability only on the statutory defences enumerated in sub-section (2) of Section 149 of the Act.31. The learned counsel for the appellant also quoted Rule 57 of the Motor Vehicles Rules and contend that there is an exemption to Section 66 of the Motor Vehicles Act which is extracted below:"The provisions of sub-section (1) of Section 66 shall not apply to any transport vehicle used as a relief vehicle for carrying passengers and their luggage from a disabled Stage Carriage to the place of destination."32. In this background insofar as the question of law is concerned, no doubt, this Court in several judgments referred by the learned counsel for the insured has held that, if any deviation in plying the vehicle other than the route permit, it does not amount to any infraction. The same is held in the judgment rendered by this Court in the case of Balakrishna Rao (supra). The Full Bench of this Court in its judgment in the case of Yallavva (supra) has held that even if there is violation of terms and conditions of the policy, the Insurance Company cannot absolve its liability unless the fraud is made out.33. I would also like to refer to the judgment of this Court in the case of Jayamma (supra), wherein, it is held that it is well established principle of law that the insurer has to establish that the breach of policy is so fundamental, that it ended the contract which has been entered into between the insurer and the insured. The defence provided to the insurance company is a statutory right and further held that plying the vehicle outside the permit limit does not amount to fundamental breach of the terms of policy. The said violation finds no place under Section 149 (2) of the Act. Therefore, the defence of the insurer that the vehicle in question has been driven beyond the territorial limits amounts to violation of the permit condition, is not acceptable. The terms and conditions of the permit cannot be construed as purpose for the permit. The 'Purpose' and 'the terms of conditions' are two different aspects. The Legislature in its wisdom thought it fit to restrict the defence available under Section 149(2)(a)(i)(c) of the Act "for a purpose not allowed by the permit" and not for 'violation of any terms and conditions of the permit'. For example, if a vehicle holding goods carriage permit is carrying passengers or vice-versa, then it can be held that the vehicle holding goods carriage permit is being usage for a purpose not allowed by the permit. The breach of conditions of the permit would by itself cannot be characterized as the purpose not allowed in the permit. In view of the judgment of Co-ordinate Bench of this Court, it is clear that the defence which has been raised by the Insurance Company is not available within the defence enshrined under Section 149(2) of the Act.34. This Court also would like to refer to the judgment of the Division Bench of this Court in the case of K.V.Thimmegowda (supra), wherein it has been held that the insurance company is liable to pay in respect of the injury to or death of a third party, caused by motor vehicle, which is a stage carriage while plying or being used lawfully otherwise than as a stage carriage, at a public place, even if such public place does not lie on the route in respect of which it is permitted to operate as a stage carriage. The principle laid down in the judgment is aptly applicable to the case on hand. In the facts of the case on hand also there is deviation and stage carriage vehicle is used for contract carriage in M.F.A.Nos.3920/2009, 3916/2009, 3917/2009, 3918/2009 and 3919/2009.35. This Court also would like to refer to the decision in the case of Chandamma (supra), wherein it has held that the insured owner using the vehicle as "Stage Carriage" when it had permitted only to run as "Contract Carriage" and using offending vehicle in breach of the permit conditions does not absolve the insurer from paying the compensation awarded nor such plea is available to the insurer under Section 149 (2) of the Act.36. Having considered the principles laid down in the judgments referred supra, it is amply applicable to the case on hand and mere deviation does not amount to any infraction and fundamental breach. This Court in the judgment of Durugamma (supra) has categorically held that the same does not amount to an infraction and the same is not a fundamental breach with regard to deviation.37. The learned counsel has relied upon the judgment of the Hon'ble Supreme Court in the case Challa Bharathamma (supra) and also the judgment in the case of Amrit Paul (supra). No doubt, in these two judgments the Apex Court has held that the insurance company can first pay the compensation and recover the same from the insured and hence, ordered to pay and recover. In the case on hand, there was a permit and the vehicle was plied outside the permit route and also having stage carriage permit and used for contract basis. In view of the judgments referred supra, the same does not amount to any fundamental breach and hence, the findings of the Tribunal fastening the liability on the insured is erroneous.38. In MVC No.683/2010 (MFA No.10548/2012), the Tribunal has committed an error in completely fastening the liability on the insured. The Tribunal in the appeal arising out of MVC Nos.4 to 37/2007 series has ordered to pay and recover the same from the insured and such finding is also erroneous. Having considered the question of fact and question of law, the Tribunal has committed an error in fastening the liability on the insurer and there is no question of pay and recovery at the instance of the insured and also no order to pay and recover against the insurance company and these cases do not amount to any infraction which leads to any fundamental breach. The Tribunal failed to take note of the policy and specific premium is paid in respect of the passengers and in both the cases, buses are plied in public place and the vehicle plied outside the pe

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rmit limit does not amount to fundamental breach of the terms of the policy. The said violation does not find a place under Section 149(2) of the Act to contend that the same amounts to violation of policy conditions and permit. The vehicle is used for the purpose of carrying the passengers and the premium is paid for the purpose of carrying the passengers. The same does not amount to an infraction as contended by the Insurance Company.39. On perusal of the written statement, except contending that there was a deviation, no defence was taken in the written statement that not only a deviation and the stage carriage vehicle is used for the contract carriage. This ground is raised for the first time in the appeal and no evidence is also adduced by the Insurance Company that stage carriage vehicle was used for the contract carriage. This Court has already held that even if the vehicle is used for contract carriage instead of stage carriage, the same does not amount to an infraction and the Division Bench of this Court in the judgment in the cases of K.V.Thimmegowda (supra), and Chandamma (supra) held that the liability of the Insurance Company cannot be exonerated and the same does not absolve the insurer.40. This Court would also like to refer to the judgment of Hon'ble Supreme Court in the case of SURAJ MAL RAM NIWAS OIL MILLS PVT. LIMITED v. UNITED INDIA INSURANCE COMPANY LIMITED AND ANOTHER reported in (2010) 10 SCC 567. Paragraph No.26 of the said judgment reads as under:"26. Thus, it needs little emphasis that in construing the terms of a contract of insurance, the words used therein must be given paramount importance and it is not open for the court to add, delete or substitute any words. It is also well settled that since upon issuance of an insurance policy, the insurer undertakes to indemnify the loss suffered by the insured on account of risks covered by the policy, its terms have to be strictly construed to determine the extent of liability of the insurer. Therefore, the endeavour of the Court should always be to interpret the words in which the contract is expressed by the parties."41. In view of the above, it is concluded that in a contract of insurance, the rights and obligations are governed by the terms of the said contract. The parties are governed by the terms of a contract of insurance which have to be strictly construed and no exception can be made on the ground of equity. Any amount beyond the sum assured for which insurance policy is undertaken, no legitimate claim can be laid by the insured.Hence, the Insurance Company is liable to pay compensation.42. In view of the discussions made above, I pass the following:ORDER(i) The appeals filed by the insured are allowed and the liability is fastened on the Insurance Company to satisfy the compensation amount.(ii) The Insurance Company is directed to pay the compensation amount within eight weeks from today.(iii) The liability against the insured is hereby set aside.(iv) The amount in deposit, if any, be refunded to the insured.(v) The Registry is directed to send the records to the concerned Tribunal, forthwith.
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