NCDRC Rejects Vehicle Insurance Claim Due To Invalid Driver's License During Accident

Brief Facts:

Girish Koregaonkar (“petitioner”), from Latur, Maharashtra, had purchased a vehicle insurance policy from National Insurance Company Ltd. (“Insurance Company”), covering his Honda City car for the period of 2nd February 2016 to 1st February 2017. On 4th December 2016, while being driven by Anil Manjule, the car met with an accident near Terkheda village, Kallam taluka, District Osmanabad. On 25th January 2017, the petitioner informed the Insurance Company about the accident and submitted an insurance claim. The claim was repudiated by the Insurance Company on 4th April 2018, stating that the driver, Anil Manjule, did not possess a valid driving license for a Light Motor Vehicle (LMV) at the time of the accident.

The petitioner then approached the District Consumer Disputes Redressal Commission, Latur (“District Commission”) seeking a claim of Rs. 14.39 lakh with 18% interest, Rs. 1 lakh for mental agony, and Rs. 10,000 as litigation cost. However, the District Commission dismissed the complaint, stating that the driver did not possess a valid driving license at the time of the accident. The petitioner subsequently filed an appeal before the Aurangabad Circuit Bench of the Maharashtra State Consumer Disputes Redressal Commission (“State Commission”). The State Commission, in its order on 5th February 2020, set aside the District Commission’s order and upheld the appeal. The State Commission allowed the appeal, directing the Insurance Company to pay Rs. 6.55 lakh within three months, Rs. 25,000 as compensation for mental and physical harassment, and Rs. 5,000 as litigation cost. The State Commission also directed the money to be credited to the loan account of the borrowers, as prayed for by the petitioner.

However, the Insurance Company challenged the order before the National Consumer Disputes Redressal Commission (“NCDRC”), arguing that Anil Manjule's driving license was endorsed for LMV-Transport (LMV-TR) from 5th October 2004 to 28th March 2014 and for a motor cycle with gear (MCWG) until 4th October 2024. The Insurance Company contended that the validity of the LMV endorsement was not available as of 4th December 2016, the date of the accident.

Observations by the Court:

After considering the arguments and examining the documents, the NCDRC observed that the extract of Anil Manjule's driving license showed the validity of LMV-TR from 29th March 2011 to 28th March 2014 and for the non-transport vehicle from 5th October 2004 to 4th October 2024. The NCDRC dismissed the appeal, stating that the notification cited by the petitioner was not applicable as there was no endorsement for an LMV on the driving license.

Referring to the State Commission’s reasoning that a separate endorsement was not required for driving a Transport vehicle if the driver had a valid license for a Light Motor Vehicle, the NCDRC found that the State Commission's interpretation of the law was erroneous, as the driver's license did not have a valid endorsement for LMV-TR at the time of the accident.

Consequently, the NCDRC set aside the order of the State Commission, ruling in favour of the Insurance Company and rejecting the petitioner’s insurance claim.

Case: Girish vs Manager, National Insurance Company Ltd. & 3 Ors

Case No.: RP/482/2022

Advocate for the Complainant: Mr. Varun V. Solshe

Advocate for the Respondent: Mr. Abhishek Kumar Gola

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