In order to enable the insurance company to take up the defence under Section 149(2)(a)(i)(c) it must be shown that the use of the transport vehicle was for a purpose not allowed by the permit under which the vehicle was used. Instances may occur where transport vehicles intended or permitted for a particular purpose are used for another purpose. For example, if a transport vehicle permitted only for carrying goods, carries passengers and capsizes en route causing injuries to the passengers, certainly, the insurer can take up the defence under Section 149(2)(a)(i)(c). However, if such a vehicle is used only for the permitted purpose, and the accident occurs when the permit or fitness certificate ceased to exist, it amounts to a technical violation only, which will not entitle the insurer to disown the liability to third parties. For avoiding the liability relying on Section 149(2)(a)(i)(c), the insurer should plead and prove that the offending vehicle was used for a purpose not authorised by the permit. It is true, that the vehicles in these cases ceased to have fitness certificate as well as permit on their expiry. We are unable to agree that the breach of condition in respect of non-renewal of certificate of fitness or permit would entitle the insurer to take up the defence under Section 149(2)(a)(i)(c) of the Act. We are of the definite view that Thara v. Syamala (cited Supra) does not lay down the correct law. In both these cases, there is no contention by the insurer that the vehicles were used for a purpose not allowed by the permit. There is nothing on evidence to show that the breaches alleged were fundamental breaches which have contributed to the cause of the accident. In the absence of any evidence to show that the breach was so fundamental as to lead to the accident, there cannot be an automatic direction to allow the insurance company to recover the amount from the owner. Therefore, on facts also the appellants are entitled to succeed.
In the result, the reference is answered and the appeals are disposed of as under:
(a) We hold that the insurer cannot claim exoneration from its liability to indemnify the owner of a vehicle in respect of injuries to third parties if the vehicle gets involved in the accident after the expiry of period of validity of fitness certificate or permit, merely on account of such technical violations.
Equivalent Citation: AIR2015Ker131, 2015 (2) KHC 219, 2015(2)KLJ392, 2015(2)KLT139
IN THE HIGH COURT OF KERALA
M.A.C.A. Nos. 2526 of 2009 and 2507 of 2010
Decided On: 04.03.2015
Appellants: Augustine V.M.
Vs.
Respondent: Ayyappankutty and Ors.
Vs.
Respondent: Ayyappankutty and Ors.
Hon'ble Judges/Coram:T.R. Ramachandran Nair, A.V. Ramakrishna Pillai and P.V. Asha, JJ.
