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HIGH COURT OF KARNATAKA - KALABURAGI BEN
Sreenivas Harish Kumar, S. Rachaiah, JJ
Dr. Narasimulu Nandini Memorial Education Trust – Appellant
Versus
Banu Begum – Respondent
MISCELLANEOUS FIRST APPEAL No. 202022/2016(MV)
For the Appellants/Petitioners: Sri Shivakumar Kalloor
For the Respondents: Sri Basavaraj R. Math, Smt. Preethi Patil Melkundi
Under Section 81(5) of the Motor Vehicles Act, the renewal of a transport vehicle's permit after its expiry has retrospective effect from the date of expiry, creating a 'deemed permit' and preserving the insurer's obligation to indemnify the owner.
Headnote:(A) Motor Vehicles Act, 1988 - Section 81(5) - Renewal of Permit - Effect of renewal after expiry - A transport vehicle plying on public road pending renewal of permit falls under the legal fiction of Section 81(5), where renewal shall have effect from the date of expiry (Paras 11 and 12) - Such a situation constitutes a "deemed permit" and the insurer cannot disown the liability to indemnify the owner (Para 12).
(B) Motor Vehicles Act, 1988 - Sections 56(1), 66(1), 84(a) and 84(f) - Fitness Certificate and Permit - While these are essential for a transport vehicle, the retrospective effect of renewal under Section 81(5) overrides the technical lapse of permit validity on the date of accident (Paras 10 and 13).
Facts of the case:
An accident occurred on 28.09.2015 involving a school bus and a motorcycle, resulting in the death of the motorcycle rider, Syed Wali. The Tribunal awarded compensation of Rs. 6,18,000/- but absolved the insurance company of liability, directing the owner to pay, on the grounds that the fitness certificate and permit were not in force on the date of the accident. The owner appealed, contending that subsequent renewal of these documents relates back to the date of expiry per Section 81(5) of the Act.
Findings of Court:
The court found that although the permit and fitness certificate had expired on the date of the accident, they were subsequently renewed. Relying on the interpretation of Section 81(5), the court held that the renewal takes effect from the date of expiry, thereby deeming the permit to be in force at the time of the accident.
Issues: Whether the insurance company is liable to indemnify the owner if the transport vehicle did not possess a valid permit and fitness certificate on the date of the accident, but these were subsequently renewed.
Ratio Decidendi: The court ruled that under Section 81(5) of the Motor Vehicles Act, a permit renewed after expiry has a retrospective effect from the date of expiry. This creates a legal fiction of a "deemed permit," ensuring that the insurer remains liable to indemnify the owner provided the insurance policy itself was in force.
Result: Appeal allowed.
This MFA is filed under Section 173 (1) of MV Act, praying to allow the above Miscellaneous First Appeal and set aside the impugned judgment and award passed by II Addl. District and Sessions Judge at Raichur, in MVC No. 586/2015 dated: 5.10.2016 and dismiss the claim petition MVC No.586/2015 as against the appellant.
This MFA having been heard and reserved on 07.06.2022 and coming on for pronouncement this day, SREENIVAS HARISH KUMAR J., delivered the following:
JUDGMENT
The owner of the offending vehicle having been saddled with the liability to pay compensation to the claimants, has preferred this appeal. The factual background is as follows :
2. Name of the deceased in the accident is Syed Wali. On 28.9.2015, about 4.00, PM he was riding a motor cycle with registration No. KA-36/W-3987 with one Mr.Mohammed Shali on the pillion. As they came near the by-pass of Raichur-Merched Road, a school bus with registration No. KA-36/A-1164 being driven rashly and negligently by its driver hit the motor cycle while overtaking it. As a result Syed Wali met instant death and the pillion rider was injured.
3. In the claim petition laid by the dependants of the deceased, the insurer of the offending vehicle took a specific defence that since on the date of accident, the fitness certificate and the permit were not in force, it was not liable to indemnify the liability of the owner although the insurance policy was in force. The tribunal computed the total compensation payable to the dependants at Rs.6,18,000/- with interest at the rate of 6% p.a. and accepting the defence of the insurer absolved it of its liability and directed the owner of the offending vehicle to pay compensation amount to the dependants. Aggrieved by this finding, the owner has preferred this appeal.
4. We have heard Sri Shivakumar Kalloor, learned advocate for the appellant, Sri Basavaraj R Math for respondents 1 and 2/claimants, and Smt. Preethi Patil Melkundi, learned counsel for respondent No.4 insurance company.
5. It was the argument of Sri Shivakumar Kalloor that on the date of accident, the insurance policy issued for the offending vehicle was in force. The policy would not have been renewed unless the vehicle had fitness certificate and the permit. The appellant applied for renewal of the fitness certificate and he remitted the required fee through the challan dated 6.10.2015 and thereafter fitness certificate was issued to be valid till 18.12.2016. Once the fitness certificate was issued, it would relate back to the date of expiry. In regard to permit also he argued that the appellant paid the road tax and applied for renewal of the permit. Once permit was issued or renewed, it would come into effect from the date of expiry. In this regard he referred to section 81(5) of the Motor Vehicles Act and placed reliance on the decisions of this court in MFA 5159/2016 [ United India Insurance Company Limited vs Smt. Yasmin Begum and Others , and MFA 3338/2015 [ Catherine Louis A vs Kengaiah and Others ]. He argued that the position of law being like this, appeal deserves to be allowed and the insurance company should be directed to pay the compensation amount to the claimants.
6. Sri Basavaraj R Math supported the argument of Sri Shivakumar Kalloor.
7. But, Smt. Preethi Patil Melkundi refuted the argument of Sri Shivakumar Kalloor and submitted that the position of law is otherwise. Referring to the judgment of the Supreme Court in the case of Amrit Paul Singh and Another vs Tata AIG General Insurance Company Limited and Others [(2018) 7 SCC 558], she submitted that on the day when the accident took place, the permit and the fitness certificate were not in force. The validity period of the insurance policy was from 29.6.2015 to 28.6.2016. Permit was issued for the period 20.7.2010 to 19.7.2015. Fitness certificate was obtained after the accident. Therefore it is clear that the policy conditions were violated and in this view the insurer need not indemnify the liabil
