Use of a motor vehicle without a valid permit constitutes a fundamental breach of insurance policy conditions, entitling the insurer to the 'pay and recover' remedy. Furthermore, compensation must be calculated based on current minimum wage notifications and include future prospects.

(Order on Board)

1. This appeals under Section 173 of the Motor Vehicles Act, 1988 (for short the “Act of 1988”) has been preferred by the Claimants challenging the impugned award dt. 11.10.2018, passed by the learned Claims Tribunal seeking enhancement of the amount of compensation and direction for pay and recovery.

2. Learned counsel for the Claimants would submit that learned Claims Tribunal has erred in not applying the principle of pay and recovery under the facts and circumstances of the present case despite holding that the offending vehicle was being plied in breach of the policy condition (i.e. without valid and effective permit). He would rely upon the decision of the Supreme Court in Amrit Paul Singh and another v. Tata AIG General Insurance Company Limited and others ¹(2018) 7 SCC 558 to bolster his submissions. He further submits that just and proper compensation has also not bee awarded in the present, therefore, the same is also liable to be enhanced suitably. As such, the impugned award is liable to be modified to that extent.

3. On the other hand, learned counsel for the Insurance Company would support the impugned order by opposing the submissions made by learned counsel for the Claimants and prays for dismissal of both the appeals.

4. I have heard learned counsel for the parties, considered their rival submissions made herein-above and went through the records with utmost circumspection.

5. So far the plea of the Claimants that learned Claims Tribunal has erred in not applying the principle of pay and recovery under the facts and circumstances of the present case is concerned, the Supreme Court in the matter of Amrit Paul Singh (supra) has clearly held that use of vehicle in absence of permit is fundamental breach of the policy condition and applied the principle of pay and recovery and observed in Para-24 as under:

“24. 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 appellants had taken the stand that the vehicle was not involved in the accident. That apart, they had not stated whether the vehicle had temporary permit or any other kind of permit. The exceptions that have been carved out under Section 66 of the Act, needless to emphasise, are to be pleaded and proved. The exceptions 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 said situations cannot be equated with absence of licence or a fake licence or a licence for different kind of vehicle, or, for that matter, violation of a condition of carrying more number of passengers. Therefore, the principles laid down in Swaran Singh [ National Insurance Co. Ltd. v. Swaran Singh , (2004) 3 SCC 297 : 2004 SCC (Cri) 733] and Lakhmi Chand [ Lakhmi Chand v. Reliance General Insurance , (2016) 3 SCC 100 : (2016) 2 SCC (Civ) 45] in that regard would not be applicable to the case at hand. That apart, the insurer had taken the plea that the vehicle in question had no permit. 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 had directed 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 principles stated in Swaran Singh [ National Insurance Co. Ltd. v. Swaran Singh , (2004) 3 SCC 297 : 2004 SCC (Cri) 733] and other cases pertaining to pay