PAREED PILLAI Vs. ORIENTAL INSURANCE CO. LTD.

JUDGEMENT

(1.) "Does the law declared by a Full Bench of this Court in Augustine V.M. v. Ayyappankutty @ Mani and Another [2015 (3) R.C.R.(Civil) 638 (Kerala) : 2015 (2) KLT 139] stand correct in declaring that, the absence of 'Permit' or 'Fitness Certificate' to the transport vehicle is only a 'technical breach' and not a 'fundamental breach', in so far as it stands contrary to the law declared by the Apex Court in National Insurance Company v. Challa Bharathamma [2004(4) R.C.R.(Civil) 399 (SC) : 2004 (3) KLT 454] [name of the case has been subsequently corrected as per the Official Corrigendum No. F.3/Ed.B.J./96/2004 dated

(2.) On placing the matter before the Full Bench, the issue was dealt with marked elaboration. It was observed that the Apex Court, as per the verdict dated 211.2017 in M.S. Middle High School v. HDFC ERGO General Insurance Co. Ltd. and others [Special Leave to Appeal (c) No. 31406/2017 had declared that the view taken by the Full Bench of this Court in Augustine's case [cited supra] could not be held to be valid and it was disapproved to the extent in holding that the insurer was liable, even if there was breach of conditions of the policy. After considering the dictum laid down by the Apex Court in United India Insurance Co. Ltd. v. Shila Datta and others [2011 (4) KLT 378 ] and also in Challa Upendra Rao's case [cited supra], the Full Bench of this Court observed that, when the Apex Court permitted the Insurance Company to contest the matter with reference to the absence of valid Permit and when the said judgment was not taken note of by the Full Bench in Augustine's case (cited supra), it necessarily required consideration. It was accordingly held that, the extent to which the Insurance Company could contest the matter when there was no valid Permit or Fitness Certificate, turned out to be a question of law, which was required to be determined by a Larger Bench. It is based on the said reference, that the above matters came to be listed before this Bench, for considering the declaration of law made by the Full Bench of this Court in Augustine's case [cited supra].

(3.) Obviously, the main point involved in these cases is with regard to the 'right of recovery' from the insured, given in favour of the insurer [after satisfying the liability towards the third parties/claimants] for causing the transport vehicle to be driven without a valid Permit/Fitness Certificate/Driving Licence. According to the insured/owner, absence of valid Permit/Fitness Certificate is only a 'technical breach' and it does not constitute a 'fundamental breach'; by virtue of which, right of recovery from the insured is not automatic; unless it is established by the insurer that absence of valid Permit/Fitness Certificate was the reason for/had contributed to the accident.