Operating a motor cab without a valid permit constitutes a fundamental breach of insurance policy, thus insurers are not liable for compensations claimed.

JUDGMENT :

SHOBA ANNAMMA EAPEN, J.

This appeal has been filed by respondents 1 & 2, who are the driver and owner of the offending vehicle respectively, in OP(MV) No.1537 of 2006 on the files of the Motor Accidents Claims Tribunal, Kollam. The respondents 1 & 2 herein were the claimant and the insurer respectively before the tribunal.

2. The case of the claimant was that on 03.05.2006, while he was riding a scooter bearing Reg.No.KL-03/M 864, a scorpio car bearing Reg.No.KL-04/V 905 driven by the first respondent in a rash and negligent manner, hit the scooter, whereby he sustained serious injuries. He approached the tribunal claiming a total compensation of ₹1,10,000/-.

3. Respondents 1 and 2, who are the driver and the owner of the offending vehicle respectively, filed a written statement denying negligence and contending that the petition is not maintainable. The third respondent insurer filed a written statement, admitting the policy coverage for the offending vehicle, but disputing the liability and quantum of compensation claimed. PW1 and RW1 were examined and Exts.A1 to A12 & B1 to B6 were marked. The tribunal, after analysing the pleadings and materials on record, held that the accident took place on account of the negligence of the driver of the offending vehicle and awarded a sum of ₹36,500/- as compensation under different heads with interest @ 7.5% per annum from the date of petition till realization, against the third respondent being the insurer. However, the tribunal granted a right of recovery to the insurer against the second respondent/owner, finding that the offending vehicle did not have a valid permit. Challenging this, the owner and the driver of the offending vehicle have come up in appeal.

4. I have heard the learned counsel for the appellants and the learned Standing Counsel for the respondent insurer.

5. The learned counsel for the appellants submitted that the vehicle was purchased on 12.04.2006 and the accident occurred on 03.05.2006 and on that day, the vehicle was having only a cover note, which was valid from 13.04.2006 to 12.05.2006. It is further submitted that the first appellant/owner applied for a permit on 20.04.2006 and Ext.B5 permit was issued on 09.05.2006. The main argument of the learned counsel for the appellants is that though the vehicle was registered as a motorcab at the time of the accident, it was not used as a vehicle for hire or reward. According to the learned counsel, the vehicle was returning after dropping back the brother and his wife of the first appellant/owner of the vehicle at Varkala after conducting a “pooja” for the vehicle; and other than the driver, there was nobody in the vehicle at the time of the accident and it was not being used as a “taxi”. The learned counsel for the appellants argued that as per Section 149 (2)(1)(a) of the Motor Vehicles Act, 1988 (for short, “the Act”), it is the duty cast upon the insurer to prove that the vehicle was used as a “taxi”. In order to substantiate the said contention, she relied on the judgment of the apex court in Kamala Mangalal Vayani and Others v. M/s United India Insurance Co. Ltd. and Others [2010 ACJ 1441] and also the deposition of RW1, who specifically testified that the vehicle was not used for hire or reward, but was returning after taking the vehicle for a “pooja”. The learned counsel for the appellants further argued that since the insurer did not adduce any evidence to prove that the vehicle was used as “taxi” at the time of the accident, they are liable to pay the compensation awarded by the tribunal and hence, the finding of the tribunal granting right to recover the said amount from the owner is erroneous.

6. The learned Senior Standing Counsel for the insurer submitted that the vehicle was admittedly registered as a motor cab and hence, the issue of “use of the vehicle for hire or reward” under Section 149 (2)(1) of Act does not arise in this case. The learned Senior Standing Counsel further submitted that the ve