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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Ashok Bhan, President and Vineeta Rai, Member
NATIONAL INSURANCE COMPANY LTD. - Appellant
Versus
HARDEEP PAL SINGH AND ANR. - Respondents
Revision Petition No. 2922 of 2007 from Order dated 11.4.2007 in Appeal No. 41 of 2002 of State Consumer Disputes Redressal Commission, Punjab
Decided on : 14-11-2011
Mr. Ramesh Chandra Mishra, Advocate, for the Appellant; Mr. G.N. Rathi, Advocate, for the Respondent
In the case of theft of a vehicle, the insurance company is liable to indemnify the owner of the vehicle, and the nature of use of the vehicle is not relevant for claim settlement.
Headnote:
Insurance - Vehicle Insurance - [National Insurance Company Ltd. v. Nitin Khandelwal] - [Section 12, Section 13] - The court upheld that in the case of theft of a vehicle, breach of condition is not relevant, and the insurance company is liable to indemnify the owner of the vehicle. The nature of use of the vehicle cannot be looked into, and the insurance company cannot repudiate the claim on this basis.
Fact of the Case:
The complainant purchased a vehicle and got it insured comprehensively. The vehicle was stolen, and the insurance company refused to settle the claim, alleging that the vehicle was being used as a taxi.
Finding of the Court:
The court found that the insurance company was liable to indemnify the owner of the stolen vehicle, and the nature of use of the vehicle was not relevant in the case of theft.
Issues: The issues revolved around the liability of the insurance company to reimburse the loss of the stolen vehicle and the relevance of the vehicle's use as a taxi.
Ratio Decidendi: The court held that in the case of theft of a vehicle, breach of condition is not relevant, and the insurance company is liable to indemnify the owner of the vehicle. The nature of use of the vehicle cannot be looked into, and the insurance company cannot repudiate the claim on this basis.
Final Decision: The court dismissed the Revision Petition and ordered the insurance company to pay the balance amount with interest to the complainant.
ORDER
Ashok Bhan, President - National Insurance Company Ltd., Petitioner herein which was the opposite party before the District Forum has filed this revision petition against the order and judgment dated 11.4.2007 passed by the State Consumer Disputes Redressal Commission, Punjab (in short, the State Commission ) in appeal No. 41/02 whereby the State Commission upholding the order of the District Forum has directed the petitioner to pay the insured declared value of vehicle, i.e., Rs. 3,87,828 to the complainant with interest @ 6% p.a. from four months after the date of lodging of the claim till realization. Rs. 2,000 were awarded as costs.
Facts:
2. Complainant/Respondent purchased a Tata Sumo vehicle from M/s. Cargo Motors Ltd. on 29.1.2000 for a sum of Rs. 3,87,828 Respondent got the vehicle insured comprehensively from the petitioner Insurance Company for the period from 31.1.2000 to 30.1.2001. The said vehicle was stolen on 28.6.2000 from Ludhiana as the driver of the complainant went missing along with the vehicle. FIR was lodged. Intimation regarding the theft was given to the petitioner. Police could not trace the vehicle and gave non-traceable certificate/report. Respondent lodged the claim with the petitioner but the petitioner did not settle the same on the ground that certain documents were made made available to it by the Respondent. Aggrieved by this, Respondent filed the complaint before the District Forum. During the pendency of the complaint, Petitioner repudiated the claim on 16.1.2001 on the ground that the vehicle was being used as a Taxi .
3. District Forum allowed the complaint and directed the petitioner to pay the Insured Declared Value of the Vehicle, i.e. Rs. 3,87,828 to the Respondent along with interest @ 6% p.a. from four months after the date of lodging of the claim till realization. Rs. 2,000 were awarded as costs.
4. Petitioner being aggrieved, filed the appeal before the State Commission. During the pendency of the appeal before the State Commission, an Interim Application was filed to bring on record the Motor and General Finance Ltd. which had financed the vehicle to the tune of Rs. 3,75,000 which was to be re-paid in 24 equated monthly instalments. Admittedly, there was a default in payment of instalments by the Complainant. Matter was referred to the Arbitrator where an agreement (Annexure A-1) was entered into between the parties under which the complainant agreed to substitute the Motor and General Finance Ltd. in his place and authorized them to receive the amount awarded by the District Forum. The Application was allowed by the State Commission and the Motor and General Finance Ltd was impleaded as Respondent No. 2 in the appeal.
5. Plea raised by the Petitioner that the Petitioner was not liable to reimburse the loss of the stolen vehicle as the same was being used as Taxi was rejected by the State Commission by observing that theft of the vehicle had nothing to do with the user of the vehicle. The appeal was dismissed and the awarded amount was ordered to be released to the Motor and General Insurance Company Ltd. Petitioner being aggrieved, has filed the present Revision Petition.
6. Heared the learned Counsel for the parties.
7. Hon'ble Supreme Court in the case of National Insurance Company Ltd. v. Nitin Khandelwal, (2008) 11 SCC 259, has held that in a case where the vehicle has been snatched or stolen, the breach of condition is not germane and the Insurance Company is liable to indemnify the owner of the vehicle where the insurer has obtained comprehensive policy for the loss caused to the insurer. That the Insurance Company could not repudiate the claim in toto in case of loss of vehicle due to theft.
8. In view of the aforesaid judgment of the Supreme Court, Counsel for the Petitioner does not press the point that the Petitioner was not liable to reimburse for the stolen vehicle because it was being used as Taxi.
9. In the said case, the Supreme Court has upheld the order of the State
