National Insurance Co. Ltd vs Chander Pal

This revision petition has been filed by the petitioner, National Insurance Co. Ltd. against the order dated 31.07.2017 passed by the State Consumer Disputes Redressal Commission, U.T., Chandigarh (in short 'the State Commission') in F.A. No. 127/2017.

The brief facts of the case are that respondent/complainant purchased an auto on 1.2.2016 and the temporary registration expired on 29.2.2016. However, he did not apply for a permanent registration and in the meantime the vehicle caught fire on 4.3.2016 while standing in front of the house of the complainant. The insurance claim was preferred by the complainant, however, the same was repudiated vide repudiation letter dated 22.8.2016 on the ground that the vehicle was without registration at the time of fire accident.

Aggrieved by the repudiation of his claim, the complainant filed a consumer complaint no. 690 of 2016 before the District Forum and the District Forum vide its order dated 25.4.2017 dismissed the complaint relying on the judgement of the Hon'ble Supreme Court in the case of Narinder Singh Vs. New India Assurance Company Ltd. and others , Civil Appeal No. 8463 of 2014. The complainant preferred an appeal before the State Commission bearing FA No.127 of 2017. The State Commission however, accepted the appeal vide its order dated 31.7.2017 and directed the OP insurance company to pay Rs.1.5 lakh alongwith interest @ 10% p.a. from the date of application for settlement of claim moved by the complainant as well as compensation of Rs.75,000/- for mental agony and harassment alongwith cost of litigation as Rs.11,000/-. The order was to be complied with within two months, failing which the interest was to increase from 10% p.a. to 12% p.a.

Hence, the present revision petition.

Heard the learned counsel for both the parties and perused the record.

Learned counsel for the petitioner stated that the temporary registration expired on 29.2.2016 and the accident of fire happened on 4.3.2016. Thus, clearly the vehicle was not registered on the date of accident. The State Commission has allowed the appeal of the complainant on the ground that Section 39 of the Motor Vehicle Act is applicable only when the vehicle is plying without registration in public places and as the auto was standing in front of the house of the complainant, the State Commission has not considered this as a public place and the claim has been allowed. It was asserted by the learned counsel that Section 39 clearly states that without registration a vehicle cannot ply in a public place or any other place. The complainant in the complaint has averred that the vehicle was parked in front of his house. This clearly means that the complainant was using the vehicle and after using the vehicle the whole day, the same was parked in front of his house where the fire accident occurred. The learned counsel vehemently denied the argument of the learned counsel for the respondent that the vehicle was not being used after the temporary registration expired. As no application was made for getting the regular registration for the vehicle, the complainant was trying to use the vehicle without any registration. The learned counsel for the petitioner further stated that the complainant is taking the plea that the complainant could not apply for regular registration as he did not receive the policy document. Learned counsel for the petitioner has stated that there is no role of policy document in the application to be moved for registration.

Learned counsel has referred to the judgement of Narinder Singh Vs. New India Assurance Company Ltd. and others (supra) and stated that Hon'ble Supreme Court has considered this breach as fundamental breach of the policy conditions which read as under:

Indisputably, a temporary registration was granted in respect of the vehicle in question, which had expired on 11.1.2006 and the alleged accident took place on 2.2.2006 when the vehicle was without any registration. Nothing has been brought on record by the appellant to show that before or after 11.1.2006, when the period of temporary registration expired, the appellant, owner of the vehicle either applied for permanent registration as contemplated under Section 39 of the Act or made any application for extension of period as temporary registration on the ground of some special reasons. In our view, therefore, using a vehicle on the public road without any registration is not only an offence punishable under Section 192 of the Motor Vehicles Act but also a fundamental breach of the terms and conditions of policy contract."

On the other hand, learned counsel for the respondent/complainant stated that the vehicle was standing in front of his house and it got burnt. The vehicle was clearly not plying either in a public place or in any other place. In fact the vehicle was not being used as the same has been stated by the complainant in the rejoinder filed before the District Forum. Section 39 of the Motor Vehicles Act, 1988 only states that no vehicle shall be plied in a public place or in any other place without registration. As the vehicle was not being used after the expiry of the temporary registration on 29.2.2016, the Section 39 of the Motor Vehicle Act is not applicable in the present case. Accordingly, the judgment of Narinder Singh Vs. New India Assurance Company Ltd. and others (supra) relied upon by the learned counsel for the OP is not applicable in the present case.

The learned counsel further stated that the application for registration could not be submitted to the transport authority because the policy was not received by the complainant by that time. The fact is that the policy was sent on wrong address which has been admitted by the insurance company. The address of the complainant is House No.633 whereas the same was sent on House No.63 and therefore, it did not reach the complainant in time. In fact, on 2.3.2016 the policy was given by the insurance company to the complainant. Therefore, delay in applying before the registration authority has been caused due to non-supply of the insurance policy by the OP themselves. If the OP is responsible for this delay, complainant cannot be allowed to suffer loss. The learned counsel for the respondent /complainant relied upon the judgment of Jitendra Kumar Vs. Oriental Insurance Company Ltd. and another, (2003) 6 Supreme Court Cases 420, which has also been relied upon by the State Commission. In this case, the claim was repudiated on the ground that the driver was not having the driving licence when the vehicle caught fire. However, the claim has been allowed by the Hon'ble Supreme Court as it did not happen due to any deficiency on the part of the driver. The learned counsel for the respondent further relied upon the judgment of the Hon'ble Supreme Court in National Insurance Company Ltd. Vs. Nitin Khandelwal, (2008) 11 SCC 259, wherein the Hon'ble Supreme Court has held that in case of theft of vehicle, use of the vehicle cannot be looked into and the insurance company cannot repudiate the claim on that basis. In this case, the claim was repudiated on the ground that the vehicle was used as a taxi.

I have carefully considered the arguments advanced by the learned counsel for the parties and have examined the material on record. The admitted facts are that temporary registration of the vehicle had expired on 29.2.2016 and the complainant did not apply before the fire accident for registration of the vehicle. It is also admitted that the policy papers were not received by the complainant before 2.3.2016. The Hon'ble Supreme Court in the matter of Narinder Singh Vs. New India Assurance Company Ltd. and others (supra) has held that if the complainant has violated the provisions of Section 39 of the Motor Vehicle Act. 1988 and the vehicle was being used without any registration, then the insurance claim of the complainant cannot be allowed. Though in the complaint, it is not mentioned whether vehicle was being used or not. However in the rejoinder, it has been stated by the complainant that the vehicle was not being used on the roads after the expiry of the temporary registration on 29.2.2016. Hon'ble Supreme Court in National Insurance Company Ltd. Vs. Nitin Khandelwal, (supra) has allowed the claim even though the vehicle was being used as a commercial vehicle. Learned counsel for the respondent has tried to establish the link between this case and the present case that vehicle was in violation of the provision of the Motor Vehicle Act, 1988 when the vehicle was lost in both the cases. It is immaterial whether the vehicle was lost by theft or by fire. In National Insurance Company Ltd. Vs. Nitin Khandelwal, the Hon'ble Supreme Court has observed that the nature of use of vehicle is not to be seen when the vehicle has been lost by theft. However, in the present case, there is no question of examining the use of vehicle because the vehicle itself could not have been used for want of registration.

In the present case, clearly there is a breach of Section 39 of the Motor Vehicle Act, 1988 to the extent that the vehicle was not registered. The question whether the vehicle was being plied in a public place or any other place is not clearly answered by the surveyor. The surveyor has reported that on the basis of DDR, the vehicle was parked outside the premises at night and got burnt during early morning hours. The surveyor has not given clear report that vehicle was being used after the expiry of temporary registration certificate. There is no other document which has been filed by the insurance company that the vehicle was being plied on the road. The complainant has clearly stated in the rejoinder that the vehicle was not being used after the expiry of the temporary registration. Though the violation of Section 39 is a fundamental breach of the conditions of the insurance policy, however, if no clear observation can be made about plying of the vehicle after the expiry of the temporary registration, the applicability of Section 39 in the present matter becomes doubtful and advantage can be given to the complainant.

Clearly, the complainant had also not applied for registration for which the complainant has blamed the Insurance Company itself for not sending the policy in time. Hon'ble Supreme Court in Amlendu Sahoo Vs. Oriental Insurance Company, (Civil Appeal No.2703/2010 decided on 25.3.2010, has held that for such violation of conditions of policy, the claim can be allowed on non-standard basis. In the present case, one condition of the policy has been breached that the complainant has not complied with all the provisions of the Motor Vehicles Act, 1988. The claim can be settled on non-standard basis. and therefore, the insurance claim is allowed at 75% of the claim amount awarded by the State Commission.

It is also seen that the State Commission has granted compensation of Rs.75,000/- for mental agony and harassment for an insurance claim of Rs.1,50,100/-. The compensation of Rs.75,000/- seems unreasonable and highly excessive. In my view, when the State Commission has allowed the claim alongwith 10% per annum interest, there was no justification for the State Commission to have awarded Rs.75,000/- as compensation.

On the basis of above discussion, the revision petition is partly allowed and the insurance company is directed to settle the claim on non-standard basis by paying Rs.1,12,575/- (One lakh twelve thousand five hundred seventy five only) to the complainant alongwith interest @ 9% p.a. from the date of filing of complaint i.e. from 24.8.2016. The order relating to compensation of Rs.75,000/- is set aside. Order relating to Rs.11,000/- as cost of litigation is maintained. This order be complied with within a period of 45 days from the date of receipt/service of this order. The order of the State Commission stands modified accordingly.