A renewed permit takes effect from expiry, making the insurer liable for accidents during renewal.

The claimant alleged that he was travelling as a hamali in a lorry owned by the appellant when it met with an accident on 24 May 2012, causing him injuries.

The Tribunal awarded compensation of ₹78,000 with interest at 6% per annum but dismissed the claim against the insurer because the vehicle’s permit was not shown as current on the accident date, and held the driver and owner liable.

The owner appealed, relying on Section 81(5) of the Motor Vehicles Act and evidence that the renewal fee had been paid before the previous permit expired.

The insurer opposed the appeal, also disputing that the claimant was employed as a hamali.

Whether the Tribunal was justified in dismissing the claim against the insurer and denying indemnification to the insured.

Whether the insurer could avoid liability on the ground that the claimant’s status as a hamali travelling in the goods vehicle was not established.

Section 81(5) of the Motor Vehicles Act provides that, upon renewal of a permit after its expiry, the renewal is effective from the date of expiry.

The court also considered the insurer’s reliance on Sanjeev Kumar Samrat v. National Insurance Company Ltd., (2014) 14 SCC 243, concerning insurer liability where a person is carried in a goods vehicle; it held that the precedent did not apply on the evidence in this case.

The insurer had obtained permission under Section 170 of the Act to contest the claim on grounds available to the owner, but the court noted that it had not produced material to rebut the claimant’s account that he was travelling as a hamali.

The court found that the earlier permit expired on 23 May 2012 and that the subsequent permit record showed validity beginning on 25 May 2012.

However, the renewal-fee challan showed payment on 21 May 2012, supporting the inference that renewal had been sought before expiry.

Applying Section 81(5), the court concluded that renewal took effect from the expiry date and therefore covered the accident on 24 May 2012; the Tribunal’s permit-based reason for absolving the insurer was unsustainable.

The claimant had consistently described himself as a hamali in the police records, claim petition and deposition, while the insurer produced no material to disprove that account.

The court therefore rejected the insurer’s objection and distinguished Sanjeev Kumar Samrat.

The owner was denied a refund of the amount deposited, with the deposited amount and accrued interest ordered to be transmitted to the Tribunal for disbursement to the claimant; the insurer was directed to deposit the balance within six weeks.