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SUPREME COURT OF INDIA
UDAY UMESH LALIT, S. RAVINDRA BHAT, BELA M. TRIVEDI, JJ.
United India Insurance Co. Ltd. - Appellant
Versus
Sushil Kumar Godara - Respondent
Civil Appeal No. 5887 of 2021
Decided On : 30-09-2021
Motor Vehicles Act, 1988 – Sections 39 and 192 – Consumer Protection Act, 1986 – Section 23[Consumer Protection Act, 2019 – Section 58] – Insurance – Theft of insured vehicle – State Commission directed Insurer to pay to respondent/complainant amount of Rs. 6,17,800/- along with 9% interest per annum from date of filing of complaint and also pay to respondent/complainant Rs. 20,000/- as litigation costs – Temporary registration of respondent’s vehicle had already expired – Not only was vehicle driven, but also taken to another city, where it was stationed overnight in a place other than respondent’s premises – There is nothing on record to suggest that respondent had applied for registration or that he was awaiting registration – Despite this, respondent plied his vehicle and took it to Jodhpur where theft took place – It is of no consequence that car was not plying on road when it was stolen – Material fact is that concededly, it was driven to place from where it was stolen, after expiry of temporary registration – But for its theft, respondent would have driven back vehicle – When an insurable incident that potentially results in liability occurs, there should be no fundamental breach of conditions contained in contract of insurance – On the date of theft, vehicle had been driven/used without a valid registration, amounting to clear violation of Sections 39 and 192 of Motor Vehicles Act, 1988 – This results in a fundamental breach of terms and conditions of policy entitling Insurer to repudiate policy – NCDRC’s order cannot be sustained – NCDRC should not have overlooked and disregarded a clear binding judgment of this Court – Impugned order and order of State Commission set aside and respondent’s complaint dismissed. (Paras 6, 13, 14 and 15)
Facts of the case:
Appellant (Insurer) questions the judgment and order of the National Consumer Disputes Redressal Commission, New Delhi1 (NCDRC). In the impugned order, NCDRC dismissed the appellant’s revision petition, that challenged the order2 of Rajasthan State Consumer Disputes Redressal Commission, Circuit Bench at Bikaner.
Findings of Court:
Policy holder had purchased a new Bolero which had a temporary registration. That registration lapsed on 19-07-2011. The respondent/complainant never alleged or proved that he applied for a permanent registration, or sought extension of the temporary registration beyond 19-07-2011. He travelled outside his residence, to Jodhpur, in his car, and stayed overnight in a guest house. In the morning of 28-07-2011, he discovered that the car had been stolen, when parked outside the guest house premises in Jodhpur.
Result : Appeal allowed.
ORDER :
S. RAVINDRA BHAT, J.
1. Counsel for parties were heard, with their consent, for final disposal of the appeal. The appellant (hereby “insurer”) questions the judgment and order of the National Consumer Disputes Redressal Commission, New Delhi,1[Dated 11/12/2020 in Revision Petition No. 1984/ 2015] ("hereafter the NCDRC"). In the impugned order, the NCDRC dismissed the appellant’s revision petition, that challenged the order,2[dated 20/03/2015, in FA No. 244/2013] of the Rajasthan State Consumer Disputes Redressal Commission, Circuit Bench at Bikaner (hereafter “the State Commission”).
2. The respondent-complainant obtained an insurance policy,3[bearing policy no. 200104/31/11/0100000947] from the insurer for his Bolero car, somewhere in Punjab, though 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 sum insured was Rs. 6,17,800/-. The temporary registration of the vehicle, however, expired on 19-07-2011.
3. As the respondent/complainant was engaged in business as a private contractor, for business purposes he had to be outside the city. On 28-07-2011 the complainant went to Jodhpur for business purposes; and stayed in Geeta Guest House at night. Whilst there, his vehicle was parked outside the guest house premises. When the respondent awoke in the morning, he found that the Bolero car had been stolen. He lodged a first information report (FIR) on 29-07-2011 with PS Ratanada, Jodhpur alleging commission of offences under Section 379, IPC. However, on 30-09-2011 the police lodged a final report stating that the vehicle was untraceable.
4. The respondent claimed the loss, from the appellant/insurer. The insurance claim, however was repudiated by order dated 23-01-2013 on three grounds:
(ii) The temporary registration of the vehicle expired on 19-07-2011 and the respondent did not get the vehicle permanently registered; and
(iii) The complainant left the vehicle unattended outside the guesthouse in violation of the policy conditions.
5. Aggrieved by the repudiation of his claim the respondent/complainant filed a complaint before the District Forum Consumer Protection, Shri Ganganagar (hereafter the “District Forum”) for a direction that the insurer ought to pay him the sum insured for the vehicle with rent amount of Rs.1,40,000/- and also claimed relief for mental agony and costs of litigation.
6. The insurer's position before the District Forum was that till the incidence of theft, the complainant’s vehicle was not registered which was in violation of conditions of insurance policy; the insurer therefore requested for dismissal of the complaint. The District Forum dismissed the complaint against the insurer while observing that on 28-07-2011 (date of the incident) the vehicle’s temporary registration had expired and relying upon two previous orders of the NCDRC had concluded that if at the time of 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. Aggrieved by the dismissal of his complaint, the respondent/complainant approached the State Commission. The State Commission set aside the order of the District Forum and allowed the appeal, and 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. The State Commission directed the insurer to pay to the respondent/complainant an amount of Rs.6,17,800/- (Rupees
Insurance claims cannot be denied on technical grounds if the insurer has accepted premium payments, ensuring consumer protection under the law.
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