(Prayer: This M.F.A. is filed under Section 173(1) of M.V.Act against the Judgment and Award Dated 27.11.2010 passed in MVC No.78/2009 on the file of the Senior Civil Judge and Member Additional Mact, Hiriyur, partly allowing the claim petition for compensation and seeking Enhancement of Compensation.)
1. This judgment and award passed by the Motor Accident Claims Tribunal at Hiriyur ( the Tribunal for short) in MVC No.78/2009, is assailed by the claimant in this appeal, whereby, the Tribunal awarded total compensation of Rs.69,100/- with interest, considering the claim of the injured claimant, alleging actionable negligence of the driver of the Auto Rickshaw bearing Registration No.KA-16/A-5286 (offending vehicle), as the cause for the road traffic accident which occurred on 03.08.2008 while the claimant was proceeding with her father on Maradihally to Gollarahatty road, as a pedestrian. The insurer was absolved from the liability since the offending vehicle was plying outside the permitted limits of Chitradurge town violating the permit conditions, as such the liability was fastened on the registered owner of the offending vehicle.
2. Learned Counsel Sri Harish N.R., appearing for the appellant would contend that the claimant was a minor represented through natural guardian-mother, instituted the claim petition seeking compensation for the bodily injuries sustained in the road traffic accident which occurred on 03.08.2008 owing to the negligence of the driver of the offending vehicle duly insured with the insurer-Respondent No.3 herein. However, the Tribunal grossly erred in exonerating the insurer and saddling the liability on the registered owner of the offending vehicle-respondent No.2 herein. The learned Counsel submits that no statutory defence is available to the insurer under Section 149 (2) of the Motor Vehicles Act, 1988 ( the Act for short) in much as deviation of route permit. He would contend that deviation in route permit would amount to violation of terms and conditions of the insurance policy but would not exonerate the liability of the insurer to indemnify the insured. It is vehemently contended that the vehicle was being used for sanctioned purpose and if any condition was violated, that would be the breach of conditions of permit amenable to punitive action but cannot be said to be used for the purpose for which it was not authorized by the permit. The learned Counsel distinguishing the judgment of Hon ble Apex Court in the case of NATIONAL INSURANCE CO. LTD. VS. CHALLA BHARATHAMMA AND OTHERS reported in 2004 AIR SCW 5301 would contend that Hon ble Apex Court rendered said judgment in the context of vehicle plying on the road without a valid permit which cannot be applied to the vehicle with permit. Thus, it is contended that merely because the accident took place outside the limits as mentioned in the permit that itself would not amount to violation of insurance policy. In support of his contention, the learned Counsel placed reliance on the following judgments:
a. K.V.THIMMEGOWDA VS. KAMALAMMA (ILR 1991 KAR 4127)
b. UNITED INDIA INSURANCE CO. LTD. AND OTHERS VS. CHANDAMMA AND OTHERS (ILR 200 KAR 1302)
c. NEW INDIA ASSURANCE CO. LTD., BANGALORE VS. PAPAIAH AND OTHERS (2005 AIR KANT R 1678)
d. DIVISIONAL MANAGER, NATIONAL INSURANCE COMPANY LIMITED, HUBLI VS. SMT. LAXMAWWA AND OTHERS (2010 ACJ 1406)
e. RELIANCE GENERAL INSURANCE CO. LTD. VS. DEVIBAI AND ANOTHERS [(2015 (2) AKR 827]
f. REHMAT BEE AND OTHERS VS. LIYAQAT ALI AND ANOTHER (M.F.A. No.30274/2010, DD 20.08.2014)
g. NATIONAL INSURANCE CO. LTD., VS. N. SIDDAIAH (M.F.A.No.9791/2010, DD 03.04.2013)
h. BRANCH MANAGER, NATIONAL INSURANCE CO. LTD., VS ANANDAPPA AND OTHERS (M.F.A.No.5450/2010, DD 09.04.2013)
The learned counsel further seeks for enhancement of compensation.
3. Per contra, Sri O.Mahesh, learned Counsel appearing for the insurer placing reliance on Section 66 of the Act would contend that, Necessity for permits contemplates that no owner of a motor vehicle shall use or permit the use of the vehicle as a transport vehicle in any public place, the use of the vehicle in that place in the manner in which the vehicle is being used. The learned Counsel submits that Section 149(2)(a)(i)(c) of the Act is the statutory defence available to the insurer. Admittedly, the vehicle in question had the permit to ply within the town limits of Chitradurge town and at the time of the accident, it was plying within AimangalaHobli, Hiriyur Taluk, outside the town limits of Chitrdurge town, which was in violation of Section 66 of the Act. It is not only violation of Section 66 of the Act, but violation of the terms and conditions of the insurance policy. In support of his contentions, the learned Counsel placed reliance on the following judgments:
a. NATIONAL INSURANCE CO. LTD. VS CHALLA BHARATHAMMA AND OTHERS (2004 AIR SCW 5301),
b. B.T. VENKATESH VS. SRI JAGADEESH KUMAR AND OTHERS (M.F.A. NO.9582/2007, DD 24.08.2012)
c. SMT. KEMPAMMA VS. RAMESH AND ANOTHER (M.F.A.NO.7723/2011 DD 08.10./2013)
d. ORIENTAL INSURANCE CO. LTD. VS. K.C.PAPANNA AND ANOTHER (M.F.A NO.8742/2008, DD 09.10.2012)
4. Heard the learned Counsel for the parties and perused the material on record.
5. It is apt to refer to the relevant provisions of the Act. Section 149 (2) (a) (i) (c) of the Act reads as follows:
(a) that there has been a breach of a specified condition of the policy, being one of the following condition, namely:-
(i) a condition excluding the use of the vehicle
(c): for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or
Section 66(1) of the Act reads as follows:
Section 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 authorizing him the use of the vehicle in that place in the manner in which the vehicle is being used:
Section 149(7) of the Act indicates the manner in which Subsection 2 of Section 149 has to be interpreted.
Section 149 (7): No insurer to whom the notice referred to in sub-section (2) 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 sub-section (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.
6. Thus, it is clear that the insurer can avoid its liability only on the statutory defences enumerated in Subsection 2 of the Section 149 of the Act.
7. In this background, the Judgments relied upon by the learned Counsel appearing for the parties are examined.
8. In THIMMEGOWDA S case [supra], the Division Bench of this Court while considering the question whether the insurance company is liable to pay compensation in respect of the injury to or death of a third party, caused by the motor accident by a motor vehicle, which is a stage carriage while plying or being used lawfully otherwise than as a stage carriage, at a public place, even if such place does not lie on the route in respect of which it is permitted to operate as a stage carriage, has held that an insurance company is liable to pay compensation even in such cases.
9. In the case of CHANDAMMA [supra], considering the relevant provisions of the Act and on consideration of the relevant conditions in the policy of insurance, the Division Bench of this Court has held thus,
6. Admittedly, the ground spelt out under sub-clauses (b), (c) and (d) of clause (a)(i) and the ground under clause (b) of Section 149(2) are not applicable to the defence of insurers in these cases. On the other hand, an attempt had been made for the insurers to being their cases within the purview of the defence ground envisaged in sub-clause (a) of sub-section (2)(a)(i). This ground is also not available to them for the reason that, admittedly, each of the offending vehicles was covered by a valid permit to carry passengers for hire or reward as they were public service vehicles . Merely because these vehicles were stated to have stopped and picked up passengers on the permitted route, presumably in breach of their permit conditions, that by itself does not constitute a statutory defence available in sub-section (2)(a)(i)(a) of Section 149. In fact, Section 149 (2) of the New Act i.e., Act of 1988, corresponds to Section 96(2) of the Old Act i.e., Act of 1939. The same defence grounds as are contained in Section 149(2) of the New Act were existing as the defence grounds under sub-section (2)(b) and (c) of Section 96 of the Old Act. Similar question had arisen for consideration of the Division Bench of this Court in the case of K.V.Thimmegowda v Kamalamma and the same had been answered holding:
An Insurance Company is liable to pay compensation in respect of the injury to or death of a third party, caused by a motor accident by a motor vehicle, which is a stage carriage while plying or being used lawfully otherwise than as a stage carriage, at a public place, even if such public place does not lie on the route in respect of which it is permitted to operate as a stage carring.
Therefore, in law the appellants/petitioners-insurers are not exempt from their liability to pay compensation under their respective Act Policies by mere reason of contract carriages in question being plied as stage carriages in breach of their permit condition since such a defence plea is not permissible under sub-section (2) of Section 149 of the Act. If the said vehicles were found to have been plying in breach of their permits conditions, it is open for the concerned authorities under the Act to take appropriate action as is permissible under other provisions thereof viz., Sections 86, 177 and 192, as the case may be. Therefore, we find the contention of the learned Counsel for appellants/writ petitioners without force and weight and the appeals are, therefore, bound to fail.
10. In PAPAIAH s case [supra], placing reliance on the Judgment of the Hon ble Apex Court in CHALLA BHARATHAMMA s case [supra], it was observed thus:
10. Thus, in view of the settled position of law as laid down by the Apex Court in the cases referred to above, we are of the considered opinion that even if the Insurance Company is not liable, yet, having regard to the object of the Motor Insurance Company Act and the victims being the third parties, the Insurance Company, through not liable, has to pay the compensation awarded to the claimants and the course open to it is to initiate proceedings against the insured before the very same Tribunal and take necessary steps to recover the amount awarded by the Tribunal from the insured.
11. The Judgment in the case of NATIONAL INSURANCE CO. LTD., vs SIDDAIAH AND ANOTHER rendered in MFA No.9791/2010 [DD-3.4.2013] distinguishing the Judgment of the Hon ble Apex Court in CHALLA BHARATHAMMA s case [supra], had observed that the insured had permit to ply the auto rickshaw. However, he had violated the route conditions of permit. Therefore, it cannot be said that vehicle was used for a purpose not allowed by permit. It was held that CHALLA BHARATHAMMA s case [supra], was rendered in the context where the insured vehicle had plied without there being a permit. Similar view was taken in the case of NATIONAL INSURANCE CO LTD., vs. ANANDAPPA rendered in MFA No.5450/2010 [DD-9-4-2013]. In B.T. VENKATESH s case [supra], the Division Bench of this Court observed that so far as fastening the liability on insurance company is concerned, the findings of the Tribunal is clear that, there is violation of the policy conditions by the driver and the owner of the offending auto rickshaw which is insured with the third respondent/insurance company. The earlier Judgment of the Division Bench was not referred to in B.T. VENKATESH s case [supra]. It was purely on the facts of that case the Judgment was rendered. In the case of SMT. KEMPAMMA [supra], it was observed that in view of the Judgment of the Hon ble Apex Court in the case of CHALLA BHARATHAMMA [supra], it cannot be said that the words used in clause [c] of Section 149 [a] has to be read in the context of use of vehicle and not relating to violation of permit condition. It is held that violation of the permit conditions is the defence available to the insurer, thus accepted the plea put forward by the insurer, namely, it is entitled to contend violation of permit condition as a ground to stave of its liability, thereby finding of the Tribunal in absolving the insurer of its liability was upheld. In the case of REHMAT BEE AND OTHERS [supra], placing reliance on the Judgment of this Court in THIMMEGOWDA and CHANDAMMA [supra], distinguished the Division Bench Judgment of B.T.VENKATESH and held that the Division Bench Judgment of THIMMEGOWDA and CHANDAMMA [supra] are applicable. It is held that deviation of route permit would not absolve the liability of the insurer since the same does not come with in the purview of Section 149 of the Act.
12. In the background of these Judgments, the factual matrix of the present case is analysed.
13. Admittedly, the offending vehicle had the permit to ply within the jurisdiction of Chitradurga. Exhibit.R2 the permit issued by RTO, Chitradurga clearly establishes that the permit was issued for plying of the offending vehicle only within the town limits of Chitradurga. It means that the offending vehicle was not allowed to ply exceeding the route permit. The accident in question occurred within the jurisdictional limits of AimangalaHobli, Hiriyur Taluk, outside the town limits of Chitradurga.
14. Not the first question would be whether the deviation of route would fall under Section 149[a][i][c] of the Act. To examine this, in the light of the Judgments referred to supra, it is apt to refer to the phrase for a purpose not allowed by the permit . The next question would be whether for a purpose not allowed by the permit would include violation of the terms and conditions of the permit. To analyze this aspect, it would be beneficialto refer to the definition clause of permit under Section 2 of the Act which defines permit as under:
permit means a permit issued by a State or Regional Transport Authority or an authority prescribed in this behalf under this Act authorizing the use of a motor vehicle as a transport vehicle.
Permit is issued to a transport vehicle. Section 66 of the Act contemplates the necessity for permit. Section 72 of the Act provides for grant of stage carriage permit whereby the Regional Transport Authority, if it decides to grant a stage carriage permit, may grant the permit for a stage carriage of a specified description and may, subject to any rule that may be made under this Act, attach to the permit any one or more of the conditional which are 24 number. Section 74 deals with grant of contract carriage permit. The condition attached to the permit under Section 74 are about 13 in number. Section 75 deals with scheme for renting of motor cabs. Section 76 deals with application for private service vehicle permit. Section 76 contemplates that the Regional Transport Authority if it decides to grant the permit may, subject to any rules that may be made under this Act, attach to the permit any one or more of the conditions which are 7 in number. Similarly, Sections 77, 78 and 79 deals with grant of goods carriage permit. The conditions that could be attached for granting goods carriage permit are about 9 in number.
15. Consequences of violation of permit condition are contemplated in Section 86 of the Act where the permit can be cancelled, penalty can be imposed under Section 192-A of the Act. Section 207 (1) of the Act contemplates power to detain vehicles used without certificate of registration permit, etc which reads thus:
207. Power to detain vehicles used without certificate of registration permit, etc.- (1) Any police officer or other person authorized in this behalf by the State Government may if he has reason to believe that a motor vehicle has been or is being used in contravention of the provisions of section 3 or section 4 or section 39 or without the permit required by sub-section (1) of section 66 or in contravention or any condition of such permit relating to the route on which or the area in which or the purpose for which the vehicle may be used, seize and detain the vehicle, in the prescribed manner and for this purpose take or case to be taken any steps he may consider proper for the temporary safe custody of the vehicle: Provided that where any such officer or person has reason to believe that a motor vehicle has been or is being used in contravention of section 3 or section 4 or without the permit required by sub-section (1) of section 66 he may, instead of seizing the vehicle, seize in the certificate of registration of the vehicle and shall issue an acknowledgment in respect thereof.
16. Section 207 empowers any police officer or other authorized person to seize and detain the vehicle for the contraventions of sections 3 or section 4 or section 39 or without the permit required by sub-section  of section 66 or in contravention or any conditions of such permit relating to the route on which or the area in which or the purpose for which the vehicle may be used.
17. It is beneficial to refer to this provisions only to ascertain the intention of the legislature in employing the words the purpose for which the vehicle may be used . There are different kinds of contravention of the permit. One of it is relating to the route on which or the area in which the vehicle may be used. The purpose for which the vehicle may be used is distinguishable from the terms and conditions of the permit. Utmost, route on which or the area in which the vehicle may be used is one of the terms and conditions of the permit. But, it cannot be construed as the purpose for which the vehicle may be used. The Hon ble Apex Court while considering this aspect relating to section 207 of the Act, in the case of STATE OF MAHARASHTRA AND OTHERS vs. NANDED-PARBHANI Z.L.B.M.VOPERATOR SANCH reported in 2000  SCC 69 has observed thus:
According to the learned counsel appearing for the State of Maharashtra the expression purpose for which the vehicle may be used could be construed to mean that when the vehicle is found to be carrying passengers more than the number prescribed in the permit, the purpose of user is otherwise. We are unable to accede to this contention as in our opinion, the purpose would only refer to a contingency when a vehicle having a permit of a stage carriage is used as a contract carriage or vice versa or where a vehicle having a permit for stage carriage or contract carriage is used as a goods vehicle and vice versa.
18. Though this decision is rendered in the context of Section 207 of the Act, the same would throw light to interpret the words for a purpose not allowed by the permit under Section 149[a][i][c] of the Act. Purpose would be construed as stage carriage, contract carriage, goods carriage, private vehicle, temporary permit and so on. The terms and conditions attached to each type of permit cannot be construed as the purpose for the permit. Purpose and the terms of conditions are two different aspects. The legislature in its wisdom though it fit to restrict the defence available under Section 149[a][i][c] of the Act for a purpose not allowed by the permit and not for violation of any terms and conditions of the permit . For example, if a vehicle holding goods carriage permit is carrying passengers or vice-versa. Then, it can be held that the vehicle holding goods carriage permit is being used for a purpose not allowed by the permit. The breach of conditions of the permit would by itself can not be characterized as the purpose not allowed in the permit. In CHALLA BHARATHAMMA S case [supra], the Hon ble Apex Court has held thus:
12. 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 at a better pedestal vis- -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 a 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 insurer. High Court was, therefore not justified in holding the insurerliable.
The said judgment is rendered in the context of no permit . The motor vehicle not possessing a permit means the vehicle was not permitted to ply in the public place or in other words, there is infraction of law which clearly establishes the use of the vehicle for a purpose not allowed in law. Hence, the said Judgment of CHALLA BHARATHAMMA s case [supra] is not applicable to the facts of the present case.
19. In CHALLA BHARATHAMMA s case [supra], their Lordships have referred to the Judgment of the Hon ble Apex Court in the case of NEW INDIA ASSURANCE CO., LTD., vs ASHA RANI AND OTHERS reported in [2003  SCC 223] wherein it was observed as follows:
We may consider the matter from another angle. Section 149 of the 1988 Act enables the insurers to raise defences against the claim of the claimants. In terms of clause [c] of sub-section  of section 149 of the Act one of the defences which is available to the insurer is that the vehicle in question has been used for a purpose not allowed by the permit under which the vehicle was used. Such a statutory defence available to the insurer would be obliterated in view of the decision of this Court in Stapal Singh s case  1 SCC 237.
20. In ASHA RANI s case [supra], the Hon ble Apex Court was considering a case of unauthorized passengers travelling in goods vehicle. In that context, it was held that it is one of the defence which is available to the insurer under section 149 [a][i][c] of the Act, whether the vehicle has been used for a purpose not allowed by the permit under which the vehicle was used. Hence, the case on hand is distinguishable from ASHA RANI s case [supra].
21. For the aforesaid reasons, this Court is of the considered opinion that the impugned Judgment is not fit to be sustained in much as the liability aspect is concerned. The liability fastened on the registered owner of the vehicle is set aside. The insurer/respondent No.3 shall be liable to satisfy the Award.
22. The quantum of compensation awarded by the Tribunal is just and reasonable, the same remains undisturbed.
23. In the result, the appeal stands allowed in terms of the above.