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2025 Supreme(Online)(NCDRC) 3260
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Jonnalagadda Rajendra, Presiding Member, Anoop Kumar Mendiratta, Member
IFFCO Tokio General Insurance Co. Ltd. – Appellant
Versus
Rajiv – Respondent
REVISION PETITION NO.1171 OF 2018 | Appeal No.1251/2016 | C.C. No.362/2013
For the Appellants/Petitioners: D. Satya Sai Sumanth
For the Respondents: Nemo
Repudiation of a theft insurance claim requires a fundamental breach of policy conditions. A breach of the 'limitation as to use' clause (e.g., using a private vehicle for hire) does not automatically constitute a fundamental breach, justifying a non-standard settlement of up to 75% of the claim.
Headnote:(A) Consumer Protection Act, 1986 - Section 21(b) - Theft of insured vehicle - Breach of policy conditions - Limitation as to use - Use of vehicle for hire and reward - Quantum of compensation - Award of 75% of Insured Declared Value (IDV) on non-standard basis - Only a fundamental breach of policy conditions can justify total denial of a claim (Para 12). A breach of policy terms, such as using a private vehicle for commercial hire, does not necessarily constitute a fundamental breach if the theft did not arise out of such use. (Para 13)
(B) Insurance Law - Non-standard settlement - In cases where there is some contributory factor or a breach of policy warranty/condition including limitation as to use, a proportionate deduction is justified, with settlement typically up to 75% of the admissible claim. (Paras 18, 19)
Facts of the case:
The registered owner of a tractor insured with a private insurance company filed a claim after the vehicle was stolen. The insurance company repudiated the claim on the ground that the vehicle was being used for hire and reward, which breached the policy conditions. The District Forum partly allowed the complaint, directing the insurer to pay 75% of the IDV on a non-standard basis, which was subsequently affirmed by the State Commission.
Findings of Court:
The use of the tractor for hire and reward, while a breach of policy, did not constitute a fundamental breach sufficient to defeat the theft claim, as the theft did not occur due to such use. The award of 75% of the IDV on a non-standard basis was found to be justified based on settled legal principles.
Issues: Whether the use of the tractor for hire and reward constituted a fundamental breach disentitling the complainant to the claim, and whether the award on a non-standard basis was correct.
Ratio Decidendi: A theft insurance claim cannot be totally repudiated unless there is a fundamental breach of the policy conditions. Where a breach exists but is not fundamental to the loss, settlement on a non-standard basis (proportionate deduction) is the appropriate remedy.
Result: Revision Petition dismissed.
(Against the order dated 09.10.2017 in Appeal No.1251/2016
Haryana State Consumer Disputes Redressal Commission, Panchkula)
IFFCO Tokio General Insurance Co. Ltd.
Iffco Tower-II, Plot No.3,
Sector 29, Gurugram,
Haryana-122001. … Petitioner
VERSUS
Rajiv
S/o Gulshan Kumar
R/o 92, Vikas Nagar,
Yamuna Nagar, Tehsil Jagadhri,
District Yamuna Nagar, Haryana. … Respondent
BEFORE:
HON’BLE AVM JONNALAGADDA RAJENDRA, AVSM, VSM (Retd),
PRESIDING MEMBER
HON’BLE MR. JUSTICE ANOOP KUMAR MENDIRATTA, MEMBER
For the Petitioner : Mr.D. Satya Sai Sumanth, Advocate (VC)
For the Respondent : Nemo (Exparte vide order dt.01.12.2025)
JUDGMENT
AVM JONNALAGADDA RAJENDRA, AVSM, VSM (Retd), MEMBER
1. The present Revision Petition has been filed under Section 21(b)
of the Consumer Protection Act, 1986 (“the Act”) against the Haryana
State Consumer Disputes Redressal Commission, Panchkula („the
State Commission‟) order dated 09.10.2017 in FA No.1251/2016
dismissing the Appeal filed by the OP/ Petitioner and affirmed the
District Consumer Disputes Redressal Forum, Yamuna Nagar („the
District Forum‟) order dated 20.10.2016 in C.C. No.362/2013.
2. For convenience, the parties are referred to as placed in the
original Complaint filed before the District Forum.
RP No.1171 of 2018 Page 1 of 11
3. Brief facts of the case, as per the Complainant, are that the
complainant, Rajiv (respondent herein), is the registered owner of
tractor bearing registration No. HR-02Z-3842, which he had insured
with IFFCO TOKIO General Insurance Co. Ltd (“the Insurance
Company”/ “the Opposite Party - OP”) vide Policy No. 78669789 for
the period from 23.12.2011 to 22.12.2012, with the Insured Declared
Value (IDV) of Rs. 4,75,000. During the intervening night of
26/27.04.2012, the tractor was parked outside the house of the
complainant‟s driver, but in the morning of 27.04.2012 at about 7:00
A.M., it was found missing, having been stolen by unknown persons.
FIR No.168 dated 27.04.2012 was promptly lodged at Police Station
City Yamuna Nagar. The Insurance Company was also duly informed
and supplied with all requisite documents. However, vide letter dated
04.03.2013, the Insurer repudiated the claim. Consequently, the
complainant filed a complaint before the District Forum under Section
12 of the Consumer Protection Act, 1986 seeking a direction to the OP
to honour the insurance claim, along with compensation of
Rs.3,00,000/- and litigation expenses of Rs. 15,000/-.
4. The OP Insurer, in written version, raised preliminary objections
regarding the complainant‟s locus standi, territorial jurisdiction of the
District Forum Yamuna Nagar, and maintainability of the complaint.
While admitting issuance of the policy for the relevant period with IDV
of Rs. 4,75,000, the OP contended that upon receipt of intimation of
theft, the claim was registered and Shri Sonu Bhola, Advocate, was
appointed as Investigator. The Investigator‟s report revealed violation
of policy conditions, specifically that the tractor was being used for
„hire and reward.‟ Relying on the said report, the OP repudiated the
claim, terming it a “no claim” case on the ground of breach of policy
terms. It was asserted that the complainant is not entitled to any relief,
and dismissal of the complaint with costs was prayed for.
RP No.1171 of 2018 Page 2 of 11
5. The learned District Forum vide Order dated 20.10.2016 partly
allowed the complaint and relevant portion is as under:-
“Resultantly, we partly allow the complaint of complainant
and direct the OP Insurance Company to pay a sum of
Rs.3,56,250/- i.e. 75% of the insured value of Rs.4,75,000/- on
non-standard basis within a period of 30 days after
preparation of copy of this order failing which the OP
Insurance Company shall also be liable to pay interest at the
rate of 6% per annum from the date of filing of complaint till
its realization subject to submission of subrogation letter and
indemnity bond and other necessary documents which are
required to transfer the ownership of traction question in the
name of OP Insurance Company. Copies of this ord
