HC: Vehicle with no FC and permit; insurer still has to pay compensation

Bengaluru: The High Court of Karnataka has held that an insurer cannot escape the liability of paying compensation even when the fitness certificate (FC) and permit of a vehicle are not renewed but the insurance policy is in force.

The HC overruled the judgement of a lower court which had ordered the owner of the school bus to pay compensation to the family of an accident victim because the school bus did not have fitness certificate and permit on the day of accident.

The HC has directed the insurance company to indemnify the school bus owner by paying the entire compensation amount.

"In this case though the insurance policy was in force on the date of accident, the permit and the validity of the fitness certificate had expired," the court noted. The fitness certificate was obtained after the accident.

The HC said that the insurance company "would not have issued the policy unless fitness certificate was in force and it appears that the fitness certificate expired after the issuance of the policy."

As for the permit, the court pointed out that when the permit is applied for after the existing one has expired, "temporary permit is issued for the interregnum period, and it has nothing to do with renewal."

The HC said that it should be deemed that on the day when the accident took place, the permit was in force, adding that the insurance company cannot disown its responsibility to indemnify the liability of the appellant.