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2025 Supreme(Online)(SCDRC) 8827
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
DR. SRIKANTH PANDEY, PRESIDING MEMBER, DR. MONIKA MALIK, MEMBER
NEW INDIA ASSURANCE CO.LTD. – Appellant
Versus
PREM NARAYAN NAYAK – Respondent
FIRST APPEAL NO. SC/23/A/20/692
For the Appellants/Petitioners: Shri Mahavir Bhatnagar
For the Respondents:
Usage of a transport vehicle without valid permit is a fundamental breach of insurance policy terms, justifying denial of claim.
Headnote:(A) Motor Vehicles Act, 1988 - Sections 2(31), 66 - Insurance claim for damages due to accident -Claim partially allowed by District Commission, later set aside by the State Consumer Commission for using vehicle without a valid permit - Court finds that usage contravenes mandatory provisions. (Paras 9-22)
(B) Insurance - Fundamental breach - Using transport vehicle without valid permit constitutes breach of policy conditions and service deficiency cannot be attributed to the insurance company. (Paras 16, 18)
Facts of the case:
Complainant insured vehicle involved in an accident, claimed repair costs, but insurance company limited payment due to lack of proper authorization for vehicle use.
Findings of Court:
District Commission erred in finding deficiency in service, insurance company complied with policy terms.
Issues: The core issues were the validity of insurance claim based on permit authorization and the resultant implications on service deficiency.
Ratio Decidendi: The court ruled that the absence of a valid permit during an accident constitutes a fundamental breach of the insurance policy, vindicating the insurance company's actions.
Result: Appeal allowed, complaint dismissed.
| Table of Content |
|---|
| 1. description of the claim and the district commission's order. (Para 2 , 3 , 4) |
| 2. insurance company's arguments against the district commission's order. (Para 6 , 7) |
| 3. analysis of legal requirements for vehicle permits. (Para 8 , 9 , 10) |
| 4. clarification of permit requirements and insurance policy implications. (Para 11 , 12 , 13) |
| 5. analysis of permit requirements under the act (Para 14 , 15) |
| 6. court's ruling and overall decision on the complaint. (Para 16 , 18 , 20) |
| 7. breach of terms due to lack of valid permit (Para 17) |
O R D E R
(Passed On 07.05.2025)
The following order of the Commission was delivered by Dr.
Monika Malik, Member:
This appeal by the opposite party/appellant-New India Assurance Company Limited (hereinafter referred to as ‘insurance company’) is directed against the order dated 03.07.2020 passed by the District Consumer Disputes Redressal Commission, Damoh (for short the ‘District Commission’) in C. C. No. 111/2019 whereby the complaint filed by the complainant/respondent has been partly allowed.
2. Briefly put, facts of the case as narrated by the complainant are that his vehicle-Bolero bearing registration number MP-34 T-0796 was insured with the opposite party-insurance company for the period w.e.f. 07.08.2018 to 06.08.2019. On 28.10.2018 near Angeethi Dhaba situated at Damoh Hata Marg the subject vehicle met with an accident in an attempt to save a cow and got damaged of which intimation was given to the insurance company. The insurance company appointed surveyor in the matter. The complainant incurred Rs.1,50,000/- in repairs of the subject vehicle and submitted the claim with the insurance company with requisite documents. The claim filed with the insurance company was allowed to the extent of Rs.23,000/-. The complainant therefore, alleging deficiency in service on part of opposite party-insurance company, filed complaint before the District Commission, seeking relief.
3. The opposite party-insurance company resisted the complaint and submitted in its reply that an 'All India Permit' was produced however, there was not authorization from the State on the date of accident. Even then the insurance company on the basis of the amount assessed by the Surveyor on non-standard and after deduction of excess clause and salvage value paid a sum of Rs.23,110/-
to the complainant. It was prayed that the complaint be dismissed with costs.
4. The District Commission partly allowed the complaint and directed the insurance company to pay Rs.1,13,900/- with interest @ 6%
-3-
p.a. from 25.04.2019, till payment to the complainant within a period of one month.
Compensation of Rs.2,000/- with costs of Rs.2,000/- is also awarded.
5. Heard. Perused the record.
6. Learned counsel for the opposite party/appellant-insurance company argued that the order passed by the District Commission is contrary to the law laid down by the Hon'ble National Commission and Hon'ble Supreme Court. He argued that the District Commission has acted with material irregularity in not going to the basis of settlement of claim which was as per documentary evidence on record. He therefore prayed for setting aside the impugned order. He placed reliance on a decision of Hon'ble National Commission in Tarun Parekh Vs Divisional Manager, Oriental Insurance Company Limited decided on 24 May 2022. in support of his contentions.
7. As per the insurance company, the District Commission has failed to consider the fact that the complainant’s vehicle being a transport vehicle (taxi), cannot run on road without having valid permit authorization since it is a clear violation of mandatory provision of having authorization under Rule 90 of the Central Motor Vehicle Rules, 1989 and this constitutes breach of conditions of the policy. Thus, using a vehicle on the public place by the complainant without valid authorization of permit is not -4-
only an offence punishable under the Central Motor Vehicle Rules but also a fundamental breach of the terms and conditions of p
