The Chhattisgarh High Court has clarified a critical principle in motor accident claims: the absence of a valid fitness certificate for a transport vehicle extinguishes the insurer’s statutory obligation to indemnify, regardless of policy terms. This ruling reinforces the non-negotiable nature of statutory compliance under the Motor Vehicles Act and reshapes how claims against insurers are evaluated.
Background & Facts
The Dispute
On 11 December 2019, Mohd. Sabit, a 19-year-old, died in a road accident when the pick-up truck bearing registration No. CG-15 DB 0813, driven by Nandlal Prajapati, collided with his motorcycle. The deceased’s parents, as claimants, filed a claim petition under Section 166 of the Motor Vehicles Act, seeking compensation for loss of dependency. The vehicle owner, Santosh Kumar, and the driver contested liability, asserting that the vehicle was insured with The Oriental Insurance Company Limited. However, the Insurance Company disputed coverage, alleging the vehicle lacked a valid fitness certificate and the driver held no valid license.
Procedural History
- 2020: Claim petition filed before the Additional Motor Accident Claims Tribunal, Pratappur
- 2022: Tribunal awarded Rs. 9,97,200/- with 6% interest, holding the owner and driver jointly liable
- 2023: Appeal filed by the vehicle owner under Section 173 of the Motor Vehicles Act challenging the apportionment of liability
- 2026: Chhattisgarh High Court heard the appeal and upheld the Tribunal’s award
Relief Sought
The appellant sought to shift full liability to the Insurance Company, arguing that no evidence was adduced to prove the absence of a valid driving license or fitness certificate. He contended that the Tribunal erred in not considering contributory negligence by the deceased and in failing to hold the insurer solely liable.
The Legal Issue
The central question was whether an insurance company can be absolved of its statutory liability under Section 147 of the Motor Vehicles Act when the insured vehicle is operated without a valid fitness certificate as mandated by Section 56.
Arguments Presented
For the Appellant
The vehicle owner’s counsel argued that the Insurance Company failed to discharge its burden of proving the absence of a fitness certificate, as no witness was examined on this point. He relied on the principle that insurance policies are contracts of indemnity and that the insurer must prove breach of policy conditions to deny liability. He further contended that the Tribunal’s failure to frame an issue on contributory negligence violated principles of natural justice.
For the Respondent
The Insurance Company’s counsel countered that the absence of a fitness certificate was established by the failure of the owner and driver to produce it before the Tribunal, despite being under a statutory obligation to maintain one. He cited United India Insurance Co. Ltd. v. Vinod to argue that fitness certification is not a mere policy condition but a statutory precondition for lawful use of a transport vehicle, and that non-compliance voids the insurer’s liability under Section 147.
The Court's Analysis
The Court examined the statutory framework under Section 56 and Section 147 of the Motor Vehicles Act. It held that while Section 147 mandates insurance for lawful use of a vehicle, Section 56 makes a valid fitness certificate a mandatory condition for registration and operation of transport vehicles. The Court emphasized that these provisions are interlinked and form part of a public safety regime.
"Thus, in the considered opinion of this Court, the requirement of fitness certificate for the liability of the Insurance Company is not dependent upon the terms and conditions of the Insurance Policy, but it is the requirement of law for using the vehicle in accordance with law and none of the term or condition of the Insurance Policy allows the owner of the vehicle to ply the vehicle in contravention of any provision of law."
The Court noted that the appellant failed to produce the fitness certificate before the Tribunal or before itself, thereby failing to rebut the presumption of non-compliance. It distinguished between policy-based defenses and statutory violations, holding that the latter cannot be overridden by private contractual terms. The Court also rejected the argument on contributory negligence, noting that no such plea was raised by the owner or driver during the proceedings, and thus no issue was required to be framed.
The Verdict
The appeal was dismissed. The Court held that the absence of a valid fitness certificate under Section 56 renders the vehicle’s use unlawful, thereby extinguishing the insurer’s liability under Section 147. The liability was rightly fastened on the owner and driver, with the insurer ordered to pay compensation first and recover it from them.
What This Means For Similar Cases
Insurance Coverage Is Conditional on Statutory Compliance
- Practitioners must now verify whether the offending vehicle had a valid fitness certificate before asserting insurer liability
- Insurers may invoke non-compliance with Section 56 as a complete defense, even if the policy does not explicitly exclude it
- Claimants’ advocates should request production of fitness certificates during discovery
Burden of Proof Lies with the Vehicle Owner
- The onus is on the owner/driver to prove the vehicle was legally fit at the time of accident
- Failure to produce the certificate creates a rebuttable presumption of illegality
- Courts will not infer compliance from silence or absence of evidence
Contributory Negligence Requires Active Pleading
- Courts will not frame issues on contributory negligence unless specifically pleaded by the defendant
- Advocates must explicitly raise contributory negligence in written statements to preserve the defense
- Failure to plead waives the right to argue it at any stage, including appeal
