The Insurance Company must prove its defense in accordance with the law to be exonerated from liability, and the distinction between contract and stage carriages is crucial in determining the Insurance Company's liability.

Deepak Gupta, J. These appeals are being disposed of by one judgment since all the appeals arise out of similar awards passed by the learned Motor Accident Claims Tribunal, Kinnaur Division at Rampur Bushehar in Claim Petitions arising out of the same accident.

2. The brief facts of the case are that a Maxi Cab No.HP-02-8971 was going from Tapri towards Chagaon. The same was being driven by Sunder Bhagat who alongwith his brother were the owners of the Maxi Cab. The Maxi Cab went off the road and fell down into a deep gorge. There were a large number of persons travelling in the Maxi Cab, some of whom suffered injuries and some died. Claim petitions were filed by the injured and the legal representatives of the deceased. The Insurance Company contested the claim petitions on various grounds but the two main defences raised by the Insurance Company were that the vehicle was being driven in violation of the terms of the permit inasmuch as the vehicle was a contract carriage but was being used as a stage carriage. It is contended that this violation was a fundamental breach of the permit and hence the Insurance Company could not have been held liable. The other ground urged was that the vehicle was over-loaded and therefore there was a breach of the policy and Insurance Company could not have been held liable.

3. The learned Tribunal allowed all the claim petitions, rejected the contentions of the Insurance Company and held it liable to pay the compensation. The Insurance Company has filed these appeals challenging the awards.

4. I have heard Shri Ashwani Sharma, learned counsel for the Insurance Company, Sh.Dibender Ghosh, learned counsel for owners of the vehicle and Ms.Rita Goswami and Sh.R.R.Rahi, learned counsel for the claimants.

5. The main contention of Sh.Ashwani Sharma is that the vehicle in question was a Maxi Cab and was granted route permit for contract carriage but it was being used as a stage carriage and in view of this breach of the terms of the policy the Insurance Company cannot be held liable. In support of his contention Sh. Ashwani Sharma has drawn my attention to the judgment of the Apex Court in New India Assurance Company Ltd. vs. Asha Rani, 2003 ACJ 1 (SC), wherein it was observed as follows:

"29. We may consider the matter from another angle. Section 149(2) of the 1988 Act enables the insurers to raise defences against the claim of the claimants. In terms of clause (c) of subsection (2) of Section 149 of the Act one of the defences which is available to the insurer is that the vehicle in question has been used for a purpose not allowed by the permit under which the vehicle was used. Such a statutory defence available to the insurer would be obliterated in view of the decision of this Court in Satpal Singh case"

6. Thereafter, in National Insurance Company Ltd. vs. Challa Bharathamma and others, 2004 ACJ 2094, the Apex Court held as follows:

“12. The High Court was of the view that since there was no permit, the question of violation of any condition thereof does not arise. The view is clearly fallacious. A person without permit to ply a vehicle cannot be placed on a better pedestal vis-a-vis one who has a permit, but has violated any condition thereof. Plying of a vehicle without a permit is an infraction. Therefore, in terms of Section 149(2) defence is available to the insurer on that aspect. The acceptability of the stand is a matter of adjudication. The question of policy being operative had no relevance for the issue regarding liability of the insurer. The High Court was, therefore, not justified in holding the insurer liable.”

7. A contract carriage has been defined in Section 2(7) of the Motor Vehicles Act as follows:

“2. (7) "contract carriage" means a motor vehicle which carries a passenger or passengers for hire or reward and is engaged under a contract, whether expressed or implied, for the use of such vehicle as a whole for the carriage of passengers mentioned therein and entered