Vehicle lacking an FC and a permit; insurance still liable for damages: High Court of Karnataka

The Karnataka High Court (HC) ruled on Monday that an insurer cannot avoid their obligation to pay damages even if a vehicle's Fitness Certificate (FC) and permit are not renewed but the insurance policy is still in effect.

The HC overturned a lower court's decision that had previously mandated that the owner of the school bus compensate the family of an accident victim since the school bus was operating without a permission and fitness certificate on the day of the accident.

The HC has instructed the insurance provider to compensate the owner of the school bus in full.

The court stated, according to the PTI report, "In this case, even if the insurance policy was in effect on the accident date, the permission and the validity of the fitness certificate had expired." After the accident, the fitness certificate was received.

The insurance provider "would not have provided the policy without the fitness certificate was in effect and it appears that the fitness certificate expired after the issuance of the policy," the HC stated.

When a permission application is made after the current one has expired, the court emphasised that "a temporary permit is provided during the interregnum period, and it has nothing to do with renewal."

The HC added that the insurance company cannot disavow its obligation to cover the culpability of the appellant and stated that it should be considered that the permit was in effect on the day the accident occurred.

On September 28, 2015, Syed Wali was driving a motorbike while Mohammed Shali was in the passenger seat. The motorcycle collided with the school bus. Wali perished instantaneously.

Banu Begum, Wali's spouse, and Moula Husen and Malan Begum, his daughters, submitted claims for compensation.

The New India Assurance Co., the insurance provider, said that despite the insurance policy being in place, the school bus did not possess a fitness certificate and its permit was not valid.

In 2015, the II Additional District and Sessions Judge agreed with the insurance company's argument. The court ordered the owner of the school bus, Dr. Narasimulu Nandini Memorial Education Trust, Raichur, to pay Rs 6,18,000 in damages to Wali's family members.

The Trust filed an appeal contesting it with the High Court. The division bench of Justices Sreenivas Harish Kumar and S Rachaiah recently decided the appeal that was filed in 2016.

According to the HC judgement, the insurance provider must now indemnify this sum to the Trust.

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