Criminal charges for permit violations do not establish policy breach to exonerate an insurer from liability.

The appellant-Insurance Company challenged the award dated 12.09.2018 passed by the 9th Additional Motor Accident Claims Tribunal, Bilaspur, in Claim Case No. 310/2017

The Tribunal had awarded ₹8,26,000/- with interest to the claimants (Respondents 1–5) under Section 166 of the Motor Vehicles Act, 1988, for an accident involving the offending vehicle

The Insurance Company contended that it should be exonerated from liability because the offending vehicle lacked a valid and effective permit and fitness certificate at the time of the accident

To support this, the insurer relied on the testimony of its Deputy Manager and the police final report (Ex.P/1), which showed the owner was charged under Sections 56/192 and 66/192 of the Act for operating without said documents

Whether the Insurance Company can be exonerated from its liability solely on the basis that the owner of the offending vehicle was charged in a criminal final report for lacking a valid permit and fitness certificate.

The Court evaluated the burden of proof required to establish a breach of policy conditions under the Motor Vehicles Act, 1988.

It applied the principle that an insurer must provide "clinching evidence" to prove that the owner did not possess a valid permit or fitness certificate

The appellant relied upon the Supreme Court precedent in Amrit Paul Singh and another v. Tata AIG General Insurance Company Limited and others (2018) 7 SCC 558, which addresses the necessity of a valid permit for commercial vehicles to fasten liability

The High Court noted that the Insurance Company's witness, Abdul Kaleem, only testified that the vehicle must have had a permit and fitness certificate as per Ex.D/1, and relied on the fact that the owner was charged by the police for their absence in the final report (Ex.P/1)

Justice Sanjay K. Agrawal reasoned that merely because an owner is added as an accused in a criminal court for lacking these documents, it cannot be legally presumed that the documents did not exist

The Court held that the Insurance Company failed to discharge its burden of proof by not bringing forth direct, clinching evidence to confirm the absence of the permit or certificate

Consequently, the mere existence of a criminal charge is insufficient to prove a fundamental breach of the insurance policy

The Court answered the core issue by ruling that the absence of a permit or fitness certificate cannot be proved solely by the existence of a criminal charge against the owner

No costs were awarded