IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS.8221-8225 OF 2002
Kamala Mangalal Vayani & Ors. ... Appellants
Vs.
M/s United India Insurance Co. Ltd. & Ors ...Respondents
O R D E R
The claimants in five motor accident claim cases are
the appellants in these appeals by special leave. The
owner-cum-driver (third respondent) did not contest the
proceedings before the Tribunal. Only the insurer (first
respondent) contested the proceedings. The Motor
Accidents Claims Tribunal allowed the claim petitions by
a common judgment dated 16.5.1996. The first case relates
to death of one Mangalal and the Tribunal awarded
Rs.21,61,965/- as compensation. The other four cases
relate to injuries sustained by the respective claimants
in the same accident and the Tribunal awarded
Rs.84,000/-, Rs.80,000/-, Rs.84,000/- and Rs.1,01,000/-
respectively, as compensation. The Tribunal held that the
owner and insurer were jointly and severally liable and
the amount was recoverable from the insurer.2
2. The insurer (first respondent) filed appeals before
the Madras High Court contending that the insured vehicle
had been engaged by a group consisting of claimants and
others for a pilgrimage tour in the States of Karnataka
and Tamil Nadu; that the vehicle did not have a permit to
operate as a public service vehicle; that the insurance
policy covered the use of the vehicle only under a
`permit' within the meaning of Motor Vehicles Act, 1988
or such a carriage falling under sub-section (3) of
section 66 of the said Act; and that as the permit was
not produced, the insurer could not be made liable. The
High Court, by its common judgment dated 5.10.2001
accepted the said contentions and set aside the judgement
and awards of the Tribunal insofar as it made the insurer
liable. The said judgment is challenged by the claimants.
3. The fact that the vehicle involved in the accident
was insured with the first respondent under a
comprehensive Commercial Vehicle Insurance Policy on the
date of the accident (27.7.1990) is not disputed. The
insurance cover under the said policy was available from
31.3.1990 to 30.3.1991. The schedule to the insurance
policy shows that the owner of the vehicle had paid in
addition to the basic premium, additional premium to
cover liability in respect of ten passengers as also the
driver. The insurer however contends that as it had3
denied that the vehicle had a valid permit, the claimants
ought to have proved that the vehicle had a valid permit
on the date of the accident; and as they failed to do so,
it was not liable.
4. As noticed above, the owner-cum-driver had remained
ex parte. Once it was established that the vehicle was
comprehensively insured with the insurer to cover the
passenger risk, the burden to prove that it was not
liable in spite of such a policy, shifted to the insurer.
The claimants are not expected to prove that the vehicle
had a valid permit, nor prove that the owner of the
vehicle did not commit breach of any of the terms of the
policy. It is for the insurer who denies its liability
under the policy, to establish that in spite of the
comprehensive insurance policy issued by it, it is not
liable on account of the requirements of the policy not
being fulfilled. In this case, the insurer produced a
certified copy of the proceedings of the Registering
Authority and Assistant Regional Transport Authority,
Bangalore, dated 7.7.1990 to show that the application
for registration of the vehicle filed by the third
respondent, was rejected with an observation that it was
open to the applicant to apply for registration in the
appropriate class. But that only proved that on 7.7.1990,
the vehicle did not have a permit. But that does not4
prove that the vehicle did not have a permit on
27.7.1990, when the accident occurred. It was open to the
insurer to apply to the concerned transport authority for
a certificate to show the date on which the permit was
granted and that as on the date of the accident, the
vehicle did not have a permit, and produce the same as
evidence. It failed to do so. The High Court committed an
error in expecting the claimants to prove that the
vehicle possessed a valid permit. We are of the view that
there was no justification for the High Court to
interfere with the judgment and awards of the Tribunal in
the absence of relevant evidence.
5. We therefore allow the appeals, set aside the order
of the High Court and restore the judgment and awards of
the Tribunal. The appellant-claimants will be entitled to
interest on the compensation amount from the date of
application for compensation to date of payment at the
rate 5% per annum.
6. We make it clear that this judgment will not come in
the way of the insurer proceeding against the owner and
recovering the amount paid by it to the claimants, in the
event of the insurer being able to establish, in any suit
it may choose to file against the owner, that there was
violation or breach of the conditions of the insurance5
policy or that the vehicle was not covered by a permit on
the date of the accident.
____________________J.(R V Raveendran)
New Delhi; ____________________J.January 14, 2010. (Surinder Singh Nijjar)
Permit- Liability of insurance Company
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