# The New India Assurance Co. Ltd v. Smt. Savita Tiwari & Ors

- **Citation:** (2026) 2 ILRA 1276
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2026-02-06
- **Case number:** First Appeal From Order No. 291 of 2015
- **Bench:** Sandeep Jain
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/the-new-india-assurance-co-ltd-v-smt-savita-tiwari-ors-54161
- **Pages:** 26

## Text

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1276 INDIAN LAW REPORTS ALLAHABAD SERIES
the insurance policy does not entitle the Insurance Company to avoid its contractual liability under
the Act. It is further evident that the offending car was a private vehicle which only requires a
driver to drive it. It is not a commercial vehicle or a truck in which a Conductor or Khalasi is
employed, besides the driver. It is further evident that under IMT-29 only a premium of Rs.25/- per
employee is charged but in the instant case, the insurance company has charged premium of two
persons, which proves that the driver was also covered under the instant insurance policy, which is
also corroborated from the above mentioned circular of the IRDAI.

15. The Insurance Company has examined its Investigator Firoz Khan and Pawan Saxena as
DW-1 and DW-2 in order to prove that the deceased was not covered under the terms and
conditions of the insurance policy but it is evident that under IMT-29, the Insurance Company took
premium of two employees regarding the private car, in which only a driver is employed to drive
the vehicle. It is also apparent that the car was not registered in the name of Company, so as to
enable the Company to carry its employees in the car. In view of the above premium charged by the
Insurance Company, which was towards two employees of the insured, which also included paid
driver of the car, hence the contention of the learned counsel of the appellant, contrary to it, is
liable to be rejected.

16. No other issue was pressed by the learned counsel for the appellant.

17. In view of the aforesaid facts, the instant appeal does not raise any substantial questions of
law and there is no illegality in the impugned judgment and award dated 03.11.2025 passed by the
Commissioner concerned, as such, this appeal has got no merit and is liable to be dismissed at the
admission stage.

18. Accordingly, this appeal is dismissed at the admission stage.

19. It is apparent that the Insurance Company has deposited the amount of compensation along
with interest awarded by the Commissioner amounting to Rs.17,94,718/- on 02.01.2016. The
Commissioner is directed to disburse the above amount to the claimants, in accordance with the
impugned judgment.
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(2026) 2 ILRA 1276
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 06.02.2026

BEFORE

THE HON'BLE SANDEEP JAIN, J.

First Appeal From Order No. 291 of 2015

The New India Assurance Co. Ltd. ...Appellant
Versus
Smt. Savita Tiwari & Ors. ...Respondents
2 All. The New India Assurance Co. Ltd. Vs. Smt. Savita Tiwari & Ors.
1277
Issues for Consideration
(i) Whether compensation under Section 166 of the Motor Vehicles Act, 1988 could be awarded in absence of
negligence of the offending driver;
(ii) Whether absence of valid fitness certificate of the offending vehicle absolves the insurer from liability
under Section 149(2) of the Act;
(iii) Whether the compensation awarded by the Tribunal required enhancement.

Headnotes
Motor Vehicles Act, 1988 - Section 166 - Negligence - Proof:

Held: For awarding compensation under Section 166 of the Act, proof of rash and negligent driving is
essential; where the testimony of eye-witness established that the offending vehicle was driven rashly and
negligently and the accident occurred due to loss of control by the driver, the finding of negligence recorded
by the Tribunal was justified. [Paras 9-12]

Motor Vehicles Act, 1988 - Accident - Res ipsa loquitur - Applicability:
Held: Where the offending vehicle overturned without involvement of any other vehicle, the principle of res
ipsa loquitur applies and supports the inference of negligence on the part of the driver. [Para 12]

Motor Vehicles Act, 1988 - Section 149(2) - Defence of insurer - Scope:

Held: The defences available to the insurer are confined to those specified under Section 149(2) of the Act
and cannot be enlarged by raising grounds not contemplated therein. [Paras 25-26]

Motor Vehicles Act, 1988 - Fitness certificate - Absence - Effect on liability:

Held: Mere absence of a valid fitness certificate of the offending vehicle does not constitute a defence
available to the insurer under Section 149(2) of the Act, particularly where the vehicle had a valid permit and
no order of cancellation of permit was shown. [Paras 24-25, 30]

Motor Vehicles Act, 1988 - Permit - Validity - Finding of Tribunal:

Held: Where the offending vehicle was proved to be having a valid permit on the date of accident, the
Tribunal did not err in fastening liability upon the insurer. [Para 13]

Motor Vehicles Act, 1988 - Liability of insurer - Statutory obligation:

Held: The insurer cannot avoid its statutory liability on grounds not enumerated in Section 149(2), and
breach such as absence of fitness certificate, not being a specified defence, does not absolve the insurer.
[Paras 24-26]

Motor Vehicles Act, 1988 - Appeal by insurer - Dismissal:

Held: Where the finding of negligence and liability recorded by the Tribunal was based on evidence and did
not suffer from perversity, no interference was warranted in appeal. [Paras 12, 31]

Motor Vehicles Act, 1988 - Compensation - Assessment - Income:

Held: Where the claimants failed to prove actual income of the deceased, compensation is to be assessed on
the basis of minimum wages applicable at the relevant time. [Paras 5-6 (Cross-objection)]

Motor Vehicles Act, 1988 - Compensation - Future prospects:
1278 INDIAN LAW REPORTS ALLAHABAD SERIES
Held: Where the deceased was below 40 years of age, addition towards future prospects at the rate of 50%
is permissible in view of statutory rules. [Para 7 (Cross-objection)]

Motor Vehicles Act, 1988 - Compensation - Conventional heads:

Held: Compensation towards loss of consortium, loss of estate and funeral expenses is to be awarded in
accordance with settled principles laid down by the Supreme Court with periodical enhancement. [Paras 8-10
(Cross-objection)]

Motor Vehicles Act, 1988 - Compensation - Multiplier - Correction:

Held: Where incorrect multiplier was applied by the Tribunal, the same is liable to be corrected in accordance
with settled law. [Para 12 (Cross-objection)]

Motor Vehicles Act, 1988 - Interest - Rate:

Held: Where statutory rules prescribe a higher rate of interest, the same is to be applied and inadequate rate
awarded by the Tribunal requires enhancement. [Para 14 (Cross-objection)]

Appeal dismissed; Cross-objection allowed. (E-14)

Case Law Cited
Rekha Jain and another v. National Insurance Co. Ltd., (2013) 12 SCC 202 - relied on; National
Insurance Co. Ltd. v. Nicolletta Rohtagi, (2002) 7 SCC 456 - relied on; United India Insurance
Co. Ltd. v. Smt. Uma Tripathi and others, 2019 SCC OnLine All 4416 - relied on; Oriental
Insurance Co. Ltd. v. Roop Rani and another, 2019 SCC OnLine All 8154 - considered;
National Insurance Co. Ltd. v. Pranay Sethi and others, (2017) 16 SCC 680 - relied on; Magma
General Insurance Co. Ltd. v. Nanu Ram @ Chuhru Ram and others, (2018) 18 SCC 130 - relied
on; Gurpreet Kaur and others v. United India Insurance Co. Ltd. and others, 2022 SCC OnLine SC
1778 - relied on; Jitendra v. Sadiya and others, 2025 SCC OnLine SC 261 - relied on; Rahul
Ganpatrao Sable v. Laxman Maruti Jadhav (Dead) through LRs and others, (2023) 13 SCC 334 -
relied on.

List of Acts / Statutes
Motor Vehicles Act, 1988; U.P. Motor Vehicle Rules, 1998.

List of Keywords
Motor accident; Negligence; Res ipsa loquitur; Fitness certificate; Permit; Insurer's liability; Statutory defence;
Compensation; Future prospects; Multiplier; Minimum wages.

Case Arising From
Judgment and award dated 29.11.2014 passed by Motor Accidents Claims Tribunal/Additional District Judge,
Court No.4, Kanpur Nagar in Motor Accident Claim Petition No. 159 of 2013 (Smt. Savita Tiwari and others vs.
Susheel Kumar Pandey and another).

Appearance for Parties
For the Appellants: Sri Aditya Singh Parihar
For the Respondents: Sri Anil Kumar Mehrotra, Sri Mohd. Naushad Siddiqui, Sri Vidya Kant Shukla

(Delivered by Hon'ble Sandeep Jain, J.)

Order on Appeal:-
2 All. The New India Assurance Co. Ltd. Vs. Smt. Savita Tiwari & Ors.
1279

1. The instant appeal under Section 173 of the Motor Vehicles Act, 1988 has been preferred by
the insurer of the offending Xylo car No.UP-35-H-0005 against the impugned judgment and award
dated 29.11.2014 passed by the Motor Accidents Claims Tribunal/Additional District Judge, court
no.4, Kanpur Nagar, in Motor Accident Claim Petition No. 159 of 2013 (Smt. Savita Tiwari and
others vs. Susheel Kumar Pandey and another), whereby, for the untimely death of Manoj Kumar
Tiwari @ Gandhi in an accident that took place on 05.12.2012, the Tribunal has awarded
compensation of Rs.4,44,000/- along with interest at the rate of 6% per annum to the
claimants(wife, son and mother), which has been ordered to be indemnified by the insurer of the
offending Xylo car No.UP-35-H-0005.

2. Shri Aditya Singh Parihar, learned counsel for the appellant-insurance company submitted
that the deceased was alleged to be travelling on the date of the accident i.e. 05.12.2012 in the
offending Xylo car No.UP-35-H-0005 when the accident occurred in which besides the deceased,
three other persons namely Amit Dubey, Pankaj Shukla and Gaurav Mishra also died. He further
submitted that from the G.D. entry No.31 dated 05.12.2012 recorded in Police Station Pilua District
Etah, it was proved that in the accident there was no negligence of the offending driver. Learned
counsel for the appellant further submitted that even the tribunal did not frame any issue regarding
the negligence of the offending driver and also did not conclude that there was any such negligence
on the part of the offending driver, as such, without the finding of negligence, compensation under
Section 166 of the Motor Vehicles Act,1988 has been awarded to the claimants, which is illegal. It
was further submitted that the offending vehicle was a commercial vehicle and for plying it, a valid
certificate of fitness was mandatory but the offending vehicle was not having a valid fitness on the
date of the accident, as such, the insurance company was not liable to indemnify the compensation
payable to the claimants, but this fact was also not considered by the tribunal. It was further
submitted that for awarding compensation under Section 166 of the Act, a finding of negligence is
sine qua non, but this finding was not recorded by the tribunal, as such, no compensation under
Section 166 of the Act could have been awarded to the claimants. It was further submitted that even
the eye witness of the alleged accident admits that there was no negligence of the offending driver,
as such, the tribunal could not have decided the claim petition under Section 166 of the Act. With
these submissions, it was prayed that the appeal preferred by the appellant-insurance company be
allowed and the cross objection of the claimants-respondent be dismissed.

3. Per contra, learned counsel for the claimants-respondents submitted that on the date of the
accident, the deceased Manoj Kumar Tiwari was travelling in the offending car alongwith Pankaj
Shukla, Gaurav Mishra and Amit Dubey, the vehicle was being driven in a rash and negligent
manner, which was proved from the testimony of eye witness Vishnu Tiwari PW-2. He further
submitted that due to the rash and negligent driving of the offending driver, the vehicle overturned
and it was res ipsa loquitur proved that there was negligence on the part of the offending driver. It
was further submitted that the tribunal has also recorded that there was negligence of the offending
driver in the accident, as such, it has rightly allowed the claim petition under Section 166 of the
Act. It was further submitted that the offending vehicle was having a valid fitness certificate on the
date of the accident and even if it is presumed that the fitness was not valid, even then, it is not the
defence available to the insurance company to evade its statutory liability under Section 149(2) of
the Act. In support of its contention, learned counsel for the claimants-respondent has relied upon
the judgment of this Court in United India Insurance Co. Ltd. Vs. Smt. Uma Tripathi & others
1280 INDIAN LAW REPORTS ALLAHABAD SERIES
2019 SCC OnLine All 4416. He further submitted that the deceased was working as a Supervisor in
construction company and was getting a salary of Rs.16,600/- per month which was also proved by
PW-3 Brijesh, but still the tribunal has assessed the compensation on the notional income of the
deceased by presuming that he was only earning Rs.3,000/- per month, which is grossly inadequate.
It was further submitted that the tribunal has not awarded any compensation towards the future
prospects of the deceased, awarded inadequate amount of compensation under non-pecuniary heads
and has also awarded less interest on compensation and for enhancing it, the claimants have filed
the cross objection before this Court. It was submitted that the appeal preferred by the insurance
company be dismissed and the cross objection filed by the claimants-respondent be allowed.

4. I have heard learned counsel for the parties and perused the impugned judgment and the
documents submitted with the appeal.

5. GD No. 31, recorded at 18:45 hours on 05.12.2012 at Police Station Pilua, District Etah,
discloses that on the information provided by Devendra Tiwari, on 05.12.2012 the informant, along
with Gajendra Tiwari, Krishna Kumar, Vishnu Kumar, Amit Dubey, Pankaj Shukla, Manoj Tiwari,
Gopalji and Gaurav Mishra, were travelling from Patel Nagar, Kanpur to Harduaganj, Aligarh to
attend the engagement ceremony of his niece, Shweta Tiwari, in a Xylo car bearing registration No.
UP-35-H-0005, which was being driven by Gaurav Mishra. At about 5:30 p.m., while attempting to
save a bicycle rider, the driver lost control of the vehicle and it suddenly overturned, as a result of
which the passengers travelling in the car sustained grievous injuries. The injured persons were sent
by the police for treatment to the District Hospital, Etah, where Manoj Kumar Tiwari and Pankaj
Shukla were declared dead, while Amit Dubey and Gaurav Mishra were referred to Kanpur for
better treatment. The treatment of Gajendra Tiwari, Krishna Kumar and Gopalji continued at the
District Hospital, Etah. The said GD entry further records that there was no negligence on the part
of the driver of the offending vehicle.

6. It is further evident that the FIR relating to the accident was registered on 08.01.2013 at
15:34 hours as Case Crime No. 2 of 2013 at Police Station Pilua, District Etah, under Sections
279,338,337,304A IPC, on the basis of the report lodged by Satish Chandra Dwivedi. The FIR
discloses that on 05.12.2012, the first informant, Amit Dubey, along with other relatives, were
travelling in vehicle No. UP-35-H-0005 to attend the engagement ceremony of Km. Shweta Tiwari,
at Harduaganj, Aligarh . It is alleged that the driver of the said vehicle was driving rashly and
negligently and, despite being cautioned several times to drive carefully, he continued to drive at a
high speed. At about 5:30 p.m., while attempting to save a bicycle rider, the driver lost control of
the vehicle due to its high speed, as a result of which the vehicle overturned. In the said accident,
Manoj Kumar Tiwari and Pankaj Shukla died on the spot, whereas Amit Dubey and Gaurav Mishra
were taken in grievous condition to Agra for treatment; however, Amit Dubey succumbed to his
injuries on 05.12.2012 while being taken for treatment, and Gaurav Mishra died during treatment
after about two hours. It is further disclosed that the initial information furnished by Devendra
Tiwari, which was recorded in GD No. 31, indicated that the accident occurred coincidentally
which was not correct. The subsequent FIR alleges that the accident was caused due to rash and
negligent driving on the part of the driver of the vehicle.
2 All. The New India Assurance Co. Ltd. Vs. Smt. Savita Tiwari & Ors.
1281

7. Before the tribunal the claimants examined the wife of the deceased Smt. Savita Tiwari as
PW-1, Vishnu Tiwari as PW-2 and Brijesh as PW-3. Whereas, the Insurance Company examined
its investigator Kailash Upadhyay as DW-1 and owner of vehicle Sushil Kumar Pandey, as DW-2.

8. Smt. Savita Tiwari PW-1 very fairly accepted that she was not an eye witness of the
accident. PW-3 Brijesh is also not an eye witness, who has proved the salary of the deceased.

9. PW-2 Vishnu Tiwari deposed that the accident occurred on 05.12.2012 when he was going
to the engagement ceremony of Km. Shweta Tiwari at Harduaganj, Aligarh alongwith his relatives
in vehicle No. UP-35-H-0005, then within the jurisdiction of police station Pilua, District Etah, the
Xylo Car No. UP-35-H-0005 overturned because it was being driven rashly and negligently by its
driver, due to which Amit Dubey, Pankaj Shukla, Gaurav Mishra and Manoj Kumar Tiwari @
Gandhi died. He further deposed that the GD entry regarding the accident was made at police
station Pilua on 05.12.2012 on the basis of information provided by Devendra Tiwari and
subsequently, an FIR was registered by Satish Chandra Dwivedi. He specifically deposed that the
accident occurred due to rash and negligent driving of the Xylo car driver.

10. In his cross-examination, PW-2 deposed that at the time of the accident he was travelling
in the offending vehicle and had also sustained injuries in the said accident. He further deposed that
prior to the accident, the driver had been cautioned to drive the vehicle in a controlled manner, but
the driver remained unrelenting. He also deposed that the car was being driven by Gaurav Mishra.

11. The insurance company has examined Kailash Upadhyay as DW-1 and owner of vehicle,
Sushil Kumar Pandey as DW-2, in order to prove that the offending Xylo car was being driven in
violation of the terms and conditions of the policy, in the absence of valid fitness certificate on the
date of the accident. It is undisputed that both the above witness are not the eye-witness of the
accident, as such, on the basis of their evidence, the negligence of the offending driver and the
factum of the accident cannot be determined.

12. From the evidence of eye-witness PW-2 it was proved that he was travelling in the
offending car at the time of the accident, which was driven in rash and negligent manner, by its
driver and even prior to accident, the driver was cautioned to drive the vehicle slowly, according to
rules and regulations of the traffic, but the driver remained unrelenting and he continued to drive
the vehicle rashly and negligently and when a bicycle rider suddenly appeared on the road, due to
the high speed of the vehicle, the driver in order to save the bicycle rider, lost control and the car
overturned causing grievous injuries to the passengers travelling in the offending vehicle. It is
further apparent that the tribunal has considered the testimony of the eye witness PW-2 and has
recorded that accident occurred due to rash and negligent driving of the offending driver, and even
from the facts and circumstance of the accident, it was res ipsa loquitur proved that the accident
was caused due to rash and negligent driving of the Xylo car driver because no other vehicle was
involved in the accident. It is further apparent that the owner of the offending vehicle has not led
any evidence to prove that there was no rashness and negligence of the offending driver in the
accident. It is also evident that the offending driver Gaurav Mishra has also died in the accident. In
view of the above evidence on record, there is no perversity in the conclusion of the tribunal that
1282 INDIAN LAW REPORTS ALLAHABAD SERIES
the accident occurred due to the rash and negligent driving of the driver of the Xylo car, warranting
any interference by this court in exercise of its appellate jurisdiction.

13. It is further apparent that the owner DW-2 claimed that the offending vehicle was being
driven with all the valid document on the date of the accident but the fitness certificate of the
offending vehicle was not produced before the Tribunal. Learned counsel of the insurance company
has also submitted that the offending vehicle was not having a valid permit on the date of the
accident but this fact is not corroborated by the evidence on record. It is apparent that the vehicle
was having a valid UP permit on the date of the accident which was valid from 20.09.2010 to
19.09.2015, whereas the accident occurred on 05.12.2012 as such, the tribunal has not erred in
concluding that the permit of the offending vehicle was valid on the date of the accident.

14. Section 149 of the Motor Vehicles Act,1988, which was in force at the relevant time, while
specifying the limited grounds of defence available to an insurer, on which it can avoid its statutory
liability to indemnify the insured, reads as under:-

149. Duty of insurers to satisfy judgments and awards against persons insured in
respect of third party risks.-(1)***

(2) No sum shall be payable by an insurer under sub-section (1) in respect of any
judgment or award unless, before the commencement of the proceedings in which the judgment or
award is given the insurer had notice through the Court or, as the case may be, the Claims
Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as
execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of
any such proceedings is so given shall be entitled to be made a party thereto and to defend the
action on any of the following grounds, namely:-

(a) that there has been a breach of a specified condition of the policy, being one of the
following conditions, namely:-

(i) a condition excluding the use of the vehicle-

(a) for hire or reward, where the vehicle is on the date of the contract of insurance a
vehicle not covered by a permit to ply for hire or reward, or

(b) for organised racing and speed testing, or

(c) for a purpose not allowed by the permit under which the vehicle is used, where the
vehicle is a transport vehicle, or

(d) without side-car being attached where the vehicle is a motor cycle; or

(ii) a condition excluding driving by a named person or persons or by any person who is
not duly licensed, or by any person who has been disqualified for holding or obtaining a driving
licence during the period of disqualification; or
2 All. The New India Assurance Co. Ltd. Vs. Smt. Savita Tiwari & Ors.
1283

(iii) a condition excluding liability for injury caused or contributed to by conditions of
war, civil war, riot or civil commotion; or

(b) that the policy is void on the ground that it was obtained by the non-disclosure of a
material fact or by a representation of fact which was false in some material particular.

(3)******

(4)******

(5)******

(6)******

(7) No insurer to whom the notice referred to in sub-section (2) or sub-section (3) has
been given shall be entitled to avoid his liability to any person entitled to the benefit of any such
judgment or award as is referred to in sub-section (1) or in such judgment as is referred to in subsection (3) otherwise than in the manner provided for in sub-section (2) or in the corresponding
law of the reciprocating country, as the case may be.

15. The Division Bench of the Apex Court in the case of Rekha Jain and another vs National
Insurance Co. Ltd.(2013) 12 SCC 202 while interpreting S149(2) of the Motor Vehicles Act,1988,
held as under:-

"17. This principle has been laid down by a three-Judge Bench decision of this Court in
National Insurance Co. Ltd. v. Nicolletta Rohtagi [(2002) 7 SCC 456 : 2002 SCC (Cri) 1788] . The
relevant paragraphs of the judgment read as under: (SCC p. 468, paras 15-16)

"15. It is relevant to note that Parliament, while enacting sub-section (2) of Section 149
only specified some of the defences which are based on conditions of the policy and, therefore, any
other breach of conditions of the policy by the insured which does not find place in sub-section (2)
of Section 149 cannot be taken as a defence by the insurer. If Parliament had intended to include
the breach of other conditions of the policy as a defence, it could have easily provided any breach
of conditions of insurance policy in sub-section (2) of Section 149. If we permit the insurer to take
any other defence other than those specified in sub-section (2) of Section 149, it would mean we
are adding more defences to the insurer in the statute which is neither found in the Act nor was
intended to be included.

16. For the aforesaid reasons, we are of the view that the statutory defences which are
available to the insurer to contest a claim are confined to what are provided in sub-section (2) of
Section 149 of the 1988 Act and not more and for that reason if an insurer is to file an appeal, the
challenge in the appeal would confine to only those grounds."

Precedents of this Court
1284 INDIAN LAW REPORTS ALLAHABAD SERIES

16. This Court in the case of Smt. Uma Tripathi (supra) where the offending truck was
possessing a valid permit, but lacked fitness certificate, which expired a week before the date of the
accident, held as under:-

"20. Before coming to the contention of learned counsel for the insurance company with
respect to the fitness certificate, it is worth noticing the few relevant sections namely, 56(1), 66(1),
and 84(a) of the Act, 1988 touching the aspect of the fitness certificate, which are extracted herein
below:-

56. Certificate of fitness of transport vehicles.--

(1) Subject to the provisions of sections 59 and 60, a transport vehicle shall not be
deemed to be validly registered for the purposes of section 39, unless it carries a certificate of
fitness in such form containing such particulars and information as may be prescribed by the
Central Government, issued by the prescribed authority, or by an authorized testing station
mentioned in sub-section (2), to the effect that the vehicle complies for the time being with all the
requirements of this Act and the rules made thereunder:

Provided that where the prescribed authority or the -authorized testing station- refuses to
issue such certificate, it shall supply the owner of the vehicle with its reasons in writing for such
refusal.

66. Necessity for permits.--

(1) No owner of a motor vehicle shall use or permit the use of the vehicle as a transport
vehicle in any public place whether or not such vehicle is actually carrying any passengers or
goods save in accordance with the conditions of a permit granted or countersigned by a Regional
or State Transport Authority or any prescribed authority authorising him the use of the vehicle in
that place in the manner in which the vehicle is being used:

Provided that a stage carriage permit shall, subject to any conditions that may be
specified in the permit, authorise the use of the vehicle as a contract carriage : Provided further
that a stage carriage permit may, subject to any conditions that may be specified in the permit,
authorise the use of the vehicle as a goods carriage either when carrying passengers or not:

Provided also that a goods carriage permit shall, subject to any conditions that may be
specified in the permit, authorise the holder to use the vehicle for the carriage of goods for or in
connection with a trade or business carried on by him.

84. General conditions attaching to all permits.--The following shall be conditions of
every permit--

(a) that the vehicle to which the permit relates carries valid certificate of fitness issued
under section 56 and is at all times so maintained as to comply with the requirements of this Act
and the rules made thereunder;
2 All. The New India Assurance Co. Ltd. Vs. Smt. Savita Tiwari & Ors.
1285

21. According to Section 56(1) of the Act, 1988, for registration of transport vehicles
under Section 39, a valid fitness certificate is required and in absence of such fitness certificate,
transport vehicle shall not be deemed to have valid registration.

22. Section 66(1) provides necessity for permit for the use of a vehicle as a transport
vehicle in a public place. According to Section 66(1), a transport vehicle shall be used or permitted
to be used by owner of vehicle in any public place in accordance with the condition of permit.

23. Section 84(a) provides the general condition which are attached to all the permits.
One of the condition as contemplated under Section 84(a) of the Act, 1988 is that vehicle to which
the permit relates carries valid certificate of fitness issued under Section 56 and is at all times so
maintained as to comply with the requirements of the Act, 1988 and the rules made thereunder.

24. From the aforesaid provisions, it can be safely culled out that for the purposes of
registration of transport vehicle, a fitness certificate as contemplated under Section 56 of the Act,
1988 is mandatory and plying of a transport vehicle without a valid fitness certificate amounts to
violation of condition of permit.

25. At this juncture, it is useful to notice Section 86(1)(a) which provides that the
transport authority which has granted permit may cancel the permit or suspend it for the period as
it thinks fit on the breach of any condition specified in Section 84 or of any condition contained in
the permit. The proviso to Section 86 (1) of the Act, 1988 provides that no permit shall be
suspended or cancelled unless an opportunity of hearing has been given to the holder of permit to
furnish his explanation. Section 86(1) of the Act, 1988 is reproduced herein below:-

"86. Cancellation and suspension of permits.- (1) The Transport Authority which granted
a permit may cancel the permit or may suspend it for such period as it thinks fit-

(a) on the breach of any condition specified in section 84 or of any condition contained in
the permit, or

(b) if the holder of the permit uses or causes or allows a vehicle to be used in any manner
not authorised by the permit, or

(c) if the holder of the permit ceases to own the vehicle covered by the permit, or

(d) if the holder of the permit has obtained the permit by fraud or misrepresentation, or

(e) if the holder of the goods carriage permit, fails without reasonable cause, to use the
vehicle for the purposes for which the permit was granted, or

(f) if the holder of the permit acquires the citizenship of any foreign country:

Provided that no permit shall be suspended or cancelled unless an opportunity has been
given to the holder of the permit to furnish his explanation.-
1286 INDIAN LAW REPORTS ALLAHABAD SERIES

26. The proviso to Section 86 (1) clearly contemplates an opportunity of hearing to the
holder of permit before cancellation or suspension of the permit on the ground specified in Section
86(1)(a) to (f). Thus, it is evident that the Act does not contemplate that if there is violation of any
condition of the permit, the permit shall automatically be deemed to have been cancelled. In fact
competent authority has to pass an order before cancelling or suspending the permit after
affording opportunity of hearing to the holder of permit.

27. In the instant case, it is not in dispute that fitness certificate of the truck was valid
upto 16.07.2010. The fitness certificate expired about a week before the date of accident i.e.
24.07.2010. It is also not disputed by the insurance company that the truck was having a valid
permit on the date of accident. There is no order passed by the competent authority on record
cancelling the permit of the truck after given an opportunity of hearing to the owner of the truck
on the ground that condition of permit has been violated by the owner as the truck was plied
without valid fitness certificate. Thus, in such situation, it cannot be said that the truck was not
having a valid permit. It is further useful to notice that Section 149(2)(a)(i)(c) talks about the
breach of condition of policy where vehicle is used for the purpose not allowed by the permit.

28. In the case in hand, it is not the case of the insurance company that there was no
permit of the truck or truck was being used for the purpose not allowed by the permit, therefore,
the contention of learned counsel for the insurance company that since fitness certificate has
expired on 16.07.2010 before the date of accident, therefore, insurance company is not liable to
pay compensation is devoid of merit and is rejected."

(emphasis supplied)

17. A Coordinate Bench of this Court in the case of Oriental Insurance Co. Ltd. vs Roop
Rani and another 2019 SCC OnLine All 8154, while dealing with the issue where the owner was
not possessing a valid fitness certificate on the date of the accident and after appreciating the
relevant provisions of the Motor Vehicles Act, held as under:-

"12. As per Section 39 of the Act a motor vehicle as defined under section 2(28) of the Act
has to be compulsorily registered in accordance with the provisions of the Act before it is plied in a
public place. Section 39 of the Act reads as under:

Section 39. Necessity for registration. - No person shall drive any motor vehicle and no
owner of a motor vehicle shall cause or permit the vehicle to be driven in any public place or in
any other place unless the vehicle is registered in accordance with this Chapter and the certificate
of registration of the vehicle has not been suspended or cancelled and the vehicle carries a
registration mark displayed in the prescribed manner:

Provided that nothing in this section shall apply to a motor vehicle in possession of a
dealer subject to such conditions as may be prescribed by the Central Government.

13. Section 56 of the Act lays down that without a valid fitness certificate, a transport
vehicle shall be deemed to be without registration.
2 All. The New India Assurance Co. Ltd. Vs. Smt. Savita Tiwari & Ors.
1287

Relevant portion of section 56 reads as under:

Section 56. Certificate of fitness of transport vehicles. -

(1) Subject to the provisions of sections 59 and 60, a transport vehicle shall not be
deemed to be validly registered for the purposes of section 39, unless it carries a certificate of
fitness in such form containing such particulars and information as may be prescribed by the
Central Government, issued by the prescribed authority, or by an authorised testing station
mentioned in sub-section (2), to the effect that the vehicle complies for the time being with all the
requirements of this Act and the rules made thereunder:

14. In Narinder Singh v New India Assurance Co. Ltd., (2014) 9 SCC 324 the Apex
Court has held that the use of a motor vehicle in a public place without any registration is a
fundamental breach of the terms and conditions of a policy contract. Paragraph 12 of the said
report is extracted below:

"12. Indisputably, a temporary registration was granted in respect of the vehicle in
question, which had expired on 11-1-2006 and the alleged accident took place on 2-2-2006 when
the vehicle was without any registration. Nothing has been brought on record by the appellant to
show that before or after 11-1-2006, when the period of temporary registration expired, the
appellant, owner of the vehicle, either applied for permanent registration as contemplated under
Section 39 of the Act or made any application for extension of period as temporary registration on
the ground of some special reasons. In our view, therefore, using a vehicle on the public road
without any registration is not only an offence punishable under Section 192 of the Motor Vehicles
Act but also a fundamental breach of the terms and conditions of policy contract.-

15. As per section 66 of the Act a vehicle defined under Section 2(28) of the Act can only
be used as a -transport vehicle- as defined under Section 2(47) of the Act, only if it has a -permit-
as defined under Section 2(31) of the Act. Sub-section (3) of Section 66 of the Act carves out certain
exceptions to sub-section (1). Relevant portion of Section 66 of the Act reads as under:

66. Necessity for permits.-(1) No owner of a motor vehicle shall use or permit the use of
the vehicle as a transport vehicle in any public place whether or not such vehicle is actually
carrying any passengers or goods save in accordance with the conditions of a permit granted or
countersigned by a Regional or State Transport Authority or any prescribed authority authorising
him the use of the vehicle in that place in the manner in which the vehicle is being used.

16. Section 84 of the Act lays down the general conditions attaching to all permits. As
per Sub-section (a) of Section 84 of the Act every vehicle having a permit should have a valid
certificate of fitness at all times. Relevant portion of section 84 reads as under:

Section 84. General conditions attaching to all permits. - The following shall be
conditions of every permit--
1288 INDIAN LAW REPORTS ALLAHABAD SERIES

(a) that the vehicle to which the permit relates carries valid certificate of fitness issued
under section 56 and is at all times so maintained as to comply with the requirements of this Act
and the rules made thereunder,

17. In National Insurance Co. Ltd. v. Challa Upendra Rao, (2004) 8 SCC 517, the Apex
Court observed as under:

"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.-

18. In Amrit Paul Singh v. TATA AIG General Insurance Co. Ltd., (2018) 7 SCC 558 the
Apex Court following Challa Upendra Rao (supra) has held that plying of a transport vehicle in a
public place without a permit is a fundamental breach. Paragraph 12 of the said report being
relevant is extracted below:

"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 and Lakhmi Chand 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.