No separate permit authorization is required for a vehicle operating within the State.

The Motor Accident Claims Tribunal, Bilaspur, awarded ₹12,98,500 in compensation in connection with an accident that occurred on 14 November 2019 and fastened liability on the insurer.

The insurer appealed under Section 173 of the Motor Vehicles Act, 1988, contending that the offending vehicle’s permit was not duly authorized and that this breached the insurance policy.

The claimants responded that no separate authorization was required because the vehicle was operating, and the accident occurred, within Chhattisgarh.

Whether the absence of separate authorization for the vehicle’s permit, when it was operating within Chhattisgarh, constituted a breach of the insurance policy

Whether that alleged breach absolved the insurer of liability to indemnify the insured

Section 173 of the Motor Vehicles Act, 1988, provides for an appeal against an award of a Motor Accident Claims Tribunal.

Relying on Shri Binod Kumar Singh v. National Insurance Company Ltd., SLP (Civil) No. 13060 of 2020, the Court applied the principle that a separate authorization fee is not required when a vehicle covered by a permit is being used within the state in which the permit was issued; the absence of such authorization in those circumstances does not, by itself, establish a breach warranting denial of insurance coverage.

The vehicle was registered with the Transport Authority at Ambikapur, was operating within Chhattisgarh, and the accident also occurred within the State.

Applying Shri Binod Kumar Singh, the Court held that separate permit authorization was not required for the vehicle’s operation within Chhattisgarh. Accordingly, the alleged lack of authorization did not constitute a policy breach that could absolve the insurer of its obligation to indemnify the insured.

It dismissed the appeal as devoid of merit, leaving the Tribunal’s award undisturbed.