Motor Vehicle Act. Insurance company not limiting insurance policy till fitness certificate period can not escape liability on the ground that vehicle’s fitness certificate lapsed on the date of accident. Karnataka High Court.

Chetan Kumari L.M. vs The Manager, Oriental Insurance Co. Ltd. and another. Miscellaneous First Appeal 948/2015 decided on 11 November 2020.

Judgment Link: http://judgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/330682/1/MFA948-15-11-03-2020.pdf

Relevant paragraphs: 5. The Tribunal, noting that the offending Maruti Car did not possess a fitness certificate as on the date of the accident, though it had a fitness certificate on the date of issuance of the insurance policy, held that the owner of the offending car i.e., insured has violated the terms of the policy and therefore, imposed the penalty on the owner of the car and discharged the Insurance Company from its liability.

11. Having perused the documents and the judgment, it is seen that as on the date of the issuance of the insurance policy, there was a fitness certificate and vehicle was being plied on the road. At the time of issuance of insurance policy, the insurer has not limited its liability till the date of validity of the fitness certificate. The insurer had issued a policy beyond the validity of the fitness certificate. Therefore, the insurer cannot now contend that the policy would be valid only until the date of the validity of the fitness certificate more so when the insurer has collected the premium for the entire period without any limitation. Needless to say that at the time of issuance of the insurance policy, the insurer has to verify the validity of the required document including the existence of a valid fitness certificate Therefore, I am of the considered opinion that when the insurer knowing fully well that the fitness certificate was valid only till 23.07.2013 having issued a policy to cover the period beyond the said date, insurer would be liable to make payment of compensation for the entire period during which the insurance policy is in operation subject to recovering the same from the insured on account of  violation  committed  by  the  insured  in  not renewing the fitness certificate as agreed by the insured in terms of the policy.

Appeal allowed.

Compiled by S. Basavaraj, Advocate, Daksha Legal.