JUSTICE A.P. SAHI, PRESIDENT 1. The Revision Petition is directed against the order dated 07.05.2014 passed in FA/762/2012 passed by the State Consumer Disputes Redressal Commission, Punjab Chandigarh, whereby the order passed by the District Consumer Disputes Redressal Commission, Sri Muktsar Sahib dated 16.04.2012 was set aside and the appeal was allowed at the instance of the Insurance Company. 2. There are certain undisputed facts namely, that a commercial vehicle (Goods Carrier) of make and model Tata LPT 1109 was insured by the complainant/ revisionist with New India Assurance Company Limited. The said policy was valid from 17.12.2010 to 16.12.2011. On 13.02.2011, the vehicle met with an accident near J.D. College, Bathinda Road, Muktsar. The accident was reported and a claim was also made before the Insurance Company, who appointed Mr. Pawan Pahwa as the surveyor. All documents were produced by him and the vehicle after being taken to a garage was repaired and it is on the said strength that indemnification was claimed. 3. The claim was repudiated on 06.09.2011 on the ground that the vehicle was plying without a valid route permit. The complaint was filed before the District Commission, whereafter the pleadings and evidence were exchanged and the District Commission allowed the claim on the ground that the Insurance Company failed to prove the fact that the claim was repudiated validly on the ground of no permit being available for the vehicle. Thus, the burden was placed on the Insurance Company to prove the fact of non-production of a valid permit and accordingly the complaint was allowed on 16.04.2012. 4. The Insurance Company went up in appeal and by the impugned order the State Commission has found that the District Commission failed to refer to the limitations as to the use of the vehicle as provided for in the policy coverage. It was therefore held that in the absence of a valid permit, this was a fundamental breach of the insurance policy and hence the repudiation was valid. 5. The complainant/ revisionist also set up a claim that they had not been made aware of the terms and conditions of the policy and even otherwise in view of the judgments of the Apex Court in the case of Amalendu Sahoo v. Oriental Insurance Co. Ltd., (2010) 4 SCC 536 and National Insurance Co. Ltd. v. Nitin Khandelwal, (2008) 11 SCC 259, the claim ought to have been indemnified by the Insurance Company on non-standard basis. 6. The State Commission held that where there is a breach of a fundamental condition of the policy then the repudiation can be upheld and on facts the judgments referred to above and relied on by the complainant were distinguishable. 7. So far as the issue relating to the terms and conditions of the policy are concerned, Mr. Gola has invited the attention of the Bench to the policy brought on record to contend that the complainant was well aware of the terms and conditions of the policy and he has also cited the circular of the Insurance Company dated 06.10.2024 that with immediate effect, in the event of an absence or existence of a valid permit on the date of the loss, the claim should be repudiated. The said circular is extracted herein under: HO/MTD/TP/CIR/39/IBD/ADMN/411 26TH OCTOBER 2004 ALL A.G.M. IN CHARGES/ REGIONAL MANAGERS RE: Liability of Insurance Company against Third Party in the absence of Permit as held by the Supreme Court of India in the case of National Insurance Co. Ltd. Vs. Chella Bharathamma. Enclosed please find the script of a judgement delivered by the Apex Court in C.A: No. 6179/2004 arising out of SLP (C) No. 13210/2003, wherein it is held that plying the vehicle without requisite permit is a breach of specific condition of the policy and therefore the insurer had no liability. It is further held that in terms of Section 149(2), defence is available to the Insurer on the aspect of permit. Therefore, the view of High Court to the effect that since there was no permit, the question of violation of any condition thereof does not arise held to be clearly fallacious. However, considering the beneficial objective of the Act, Supreme Court directed the Insurer to satisfy the award, though in law it has no liability, with the right to recovery from the owner/insured by initiating necessary execution proceeding before the executing court. It has further been directed that before release of the amount to the claimants, owner of the offending vehicle shall furnish security for the entire amount & the vehicle shall be attached as a part of security. It has come to our notice that Motor Own Damage claims, are considered for settlement either fully or on compromise basis, wherever the vehicles are found to be plying without a valid permit. In view of the above judgment, settlement of own damage claims may act as estoppel against the Company in third party claim cases. Therefore it has been decided with immediate effect that all own damage claims, where there is no existence of a valid permit on the date of loss, should be repudiated. Meanwhile, please ensure that appropriate defence on the question of permit may be taken in all cases, wherever applicable. Kindly circulate this to all the operating offices for its strict implementation and confirm. - V. Girija Kumar
Asstt. General Manager 7. He has then relied on the order passed by this Commission in the case of Manoj Banerjee Vs. Oriental Insurance Company Limited, I (2013) CPJ 542 (NC), decided on 21.01.2013, where the revision petition filed by the complainant was dismissed and the stand taken by the Insurance Company was upheld. 8. He has then cited the order passed by the Apex Court dated 07.09.2018 in the same case of Manoj Banerjee Vs. Oriental Insurance Company Limited, Special Leave Petition (Civil) Diary No (s). 22075/2018, dismissing the same, which is extracted herein under: “Delay condoned. We see no reason to interfere with the impugned order. The special leave petition is, accordingly, dismissed. Pending application, if any, shall also stand disposed of.” 9. To further fortify his submissions that in the absence of a valid permit a vehicle cannot be used in a public place and is a fundamental breach, paragraph 24 of the judgment of the Apex Court in the case of Amrit Paul Singh v. TATA AIG General Insurance Co. Ltd., (2018) 7 SCC 558, is extracted herein under: “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 [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297 : 2004 SCC (Cri) 733] and Lakhmi Chand [Lakhmi Chand v. Reliance General Insurance, (2016) 3 SCC 100 : (2016) 2 SCC (Civ) 45] 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. It does not require the wisdom of the “Tripitaka”, that the existence of a permit of any nature is a matter of documentary evidence. Nothing has been brought on record by the insured to prove that he had a permit of the vehicle. In such a situation, the onus cannot be cast on the insurer. Therefore, the Tribunal as well as the High Court had directed that the insurer was required to pay the compensation amount to the claimants with interest with the stipulation that the insurer shall be entitled to recover the same from the owner and the driver. The said directions are in consonance with the principles stated in Swaran Singh [National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297 : 2004 SCC (Cri) 733] and other cases pertaining to pay and recover principle.” 10. A perusal of the decisions therefore leave no room for doubt that they squarely apply on the facts of the present case, where the undisputed fact is that the vehicle was being plied without a valid permit when it met with an accident. Consequently, the judgments relied on by the learned counsel for the complainant/ revisionist has been rightly distinguished by the State Commission and we find no different reason to deviate from the view taken by the State Commission. 11. The question of the policy and terms and conditions having not been received by the insured has been raised, and is being noted to be rejected in view of the ratio of the Constitution Bench decision in the case of General Assurance Society Ltd. Vs. Chandumull Jain & Anr. AIR 1966 Supreme Court 1644, where in paragraph 12 and 13, it is observed as under: 12. The letters of acceptance clearly mentioned that cover notes were being sent. The contract of insurance was based upon the cover notes for the period covered by the cover notes. Nothing happened in the 30 days during which the cover notes operated. It is true that the letters of acceptance showed that the risk was covered for the whole year and not for 30 days. This was an unfortunate way of expressing that the acceptance of the proposal would operate in the first instance for 30 days only during which the company would be free to decline the policy. The four essentials of a contract of insurance are, (i) the definition of the risk, (ii) the duration of the risk, (iii) the premium, and (iv) the amount of insurance. See Macgillivray on Insurance Law (5th Edn.) Vol. 1, para 656, p. 316. But the policy which is issued contains more than these essentials because it lays down and measures the rights of the parties and each side has obligations which are also defined. In a policy against fire the purpose is not so much to insure the property but to insure the owner of the property against loss. The policy not only defines the risk and its duration but also lays down the special terms and conditions under which the policy may be enforced on either side. Even if the letter of acceptance went beyond the cover notes in the matter of duration, the terms and conditions of the proposed policy would govern the case because when a contract of insuring property is complete, it is immaterial whether the policy is actually delivered after the loss and for the same reason the rights of the parties are governed by the policy to be, between acceptance and delivery of the policy. Even if no terms are specified the terms contained in a policy customarily issued in such cases, would apply. There is ample authority for the proposition. In Corpus Juris Secundum (Vol. 44, p. 953) the following occurs: “Where the contract to insure or issue a policy of fire insurance does not specify the terms and conditions of the policy, it is a general Rule that the parties will be presumed to have contemplated a form of policy containing such conditions and limitations as are usual in such cases.…” See also Richards on Insurance (5th Edn.) Vol. 3, p. 1296, para 390. In Eames v. Home Insurance Co. [24 L ed 298] the Supreme Court of the United States observed: “If no preliminary contract would be valid unless it specified minutely the terms to be contained in the policy to be issued, no such contract could ever be made or would ever be of any use. The very reason for sustaining such contracts is, that the parties may have the benefit of them during that incipient period when the papers are being perfected and transmitted. It is sufficient if one party proposes to be insured, and the other party agrees to insure, and the subject, the period, the amount and the rate of insurance is ascertained or understood, and the premium paid if demanded. It will be presumed that they contemplated such form of policy, containing such conditions and limitations as are usual in such cases, or have been used before between the parties. This is the sense and reason of the thing, and any contrary requirement should be expressly notified to the party to be affected by it.” 13. In General Accident Insurance Corporation v. Cronk [(1901) 17 TLR 233] it was also ruled that a person making a proposal must be taken to have applied for the ordinary form of policy issued by the company. It is only when there is a condition precedent that the policy must be delivered that the assurer is not on the risk otherwise he is. See Macgillivray (Vol. 1, p. 325, para 675). In such a case acceptance is merely an intimation that the assurer is willing to issue a policy but there will be no binding contract (ibid para 679, p. 328). In the present case, there was no such condition precedent and the company was on risk throughout. As insurance was asked for on the policy of the company the usual policy would have issued and as the insurance was from June 3, 1950 the policy would have related back to that date. The insurance of the policy does not add to the contract. The incipient terms and conditions of the contract later merge in the policy and the terms and conditions then become express. 12. Thus, the arguments advanced on behalf of the revisionist cannot come to the aid of the complainant as there is no material irregularity either in fact or in law in the impugned order of the State Commission, which deserves to be confirmed. The revision petition lacks merit and is accordingly dismissed. | 
