The three-Judges Bench of the Hon’ble Supreme Court of India in the case of United India Insurance Co. Ltd vs Sushil Kumar Godara (CA 5887 OF 2021), vide its Judgment dated 30-09-2021 held that the #insuranceclaim can be rejected if the damaged #vehicle was used without a permanent #registration.
One Sushil Kumar Godara (the ‘Respondent’) obtained an INSURANCE CLAIM policy of Rs 6,17,800/- from the United India Insurance Co. Ltd (the ‘Insurer’ or ‘Appellant’) for his Bolero car, somewhere in Punjab. He was a resident of Sri Ganganagar, Rajasthan.
The vehicle had a temporary Registration No. PB-11-T-5101 from 20-06-2011 to 19-07-2011. The temporary registration of the vehicle, however, expired on 19-07-2011.
On 28-07-2011 the Respondent went to Jodhpur for business purposes and parked his vehicle outside the guest house premises. The Respondent found the next day that the Bolero car had been stolen.
The Respondent lodged a first information report (FIR) with Police Station Ratanada, Jodhpur on 29-07-2011 alleging commission of an offense under Section 379 (Theft) of the Indian Penal Code, 1860.
The Police lodged a final report on 30-09-2011and informed the Appellant that the vehicle was untraceable.
Thereafter, the Respondent filed a claim for the loss before the Appellant-Insurer. The Insurer repudiated the claim vide Order dated 23-01-2013 on the ground that there was a violation of the policy condition as there was a considerable delay in giving an intimation of theft of the vehicle to the Insurer.
It further stated that the temporary registration of the vehicle expired on 19-07-2011 and the Respondent did not get the vehicle permanently registered.
As a result, the Respondent filed a Complaint before the District Consumer Protection Forum, Shri Ganga Nagar (the ‘District Forum’) for claiming the insured amount from the Appellant.
The District Forum dismissed the Complaint and relying upon two previous orders of the NCDRC had concluded that if at the time of the theft, the vehicle was not registered then the claim was not payable to the Complainant.
It was held that repudiation of the claim by the Insurer did not amount to deficiency in service on its part.
The Respondent aggrieved and dissatisfied challenged the District Forum decision before the State Commission. The State Commission set aside the Order of the District Forum and while allowing the Appeal held that “as the insurer had covered the complainant’s vehicle with particular engine and chassis number, and issued a policy during the currency of which, the vehicle was stolen it could not repudiate the insured’s genuine claim on technical, petty and frivolous grounds of absence of permanent registration certificate from the competent authority and thus escape its liability to indemnify the insured for the loss of the vehicle.”
Therefore, the State Commission directed the Insurer to pay a sum of Rs. 6,17,800/- along with 9% interest per annum from the date of filing of the Complaint and Rs. 20,000/- as litigation costs to the Respondent.
The Appellant filed a Revision Petition against the decision of the State Commission before the National Consumer Dispute Redressal Commission (‘NCDRC’), which was dismissed.
The Appellant filed an Appeal against the NCDRC Order before the Supreme Court of India. The Supreme Court observed and held as follows:
The temporary registration of the Respondent’s vehicle had expired on 28-07-2011. Not only was the vehicle driven, but also taken to another city, where it was stationed overnight in a place other than the Respondent’s premises.
It is of no consequence that the car was not plying on the road when it was stolen; the material fact is that admittedly, it was driven to the place from where it was stolen, after the expiry of temporary registration.
The Court observed that when an insurable incident that potentially results in liability occurs, there should be no fundamental breach of the conditions contained in the contract of INSURANCE CLAIM.
Therefore, on the date of theft, the vehicle had been driven/used without valid registration, amounting to a clear violation of Sections 39 and 192 of the Motor Vehicles Act, 1988.
In view of the above, the Supreme Court observed that the Order passed by the NCDRC is not sustainable in law. The Court also set aside the Order passed by the State Commission and the Respondent’s Complaint was dismissed.
Therefore, the Supreme Court allowed the Appeal and held that an INSURANCE CLAIM can be rejected if the vehicle was used without a valid registration.