Registration Of Vehicle At Time Of Accident Is Mandatory To Claim Insurance Amount: Haryana State Commission
The State Consumer Disputes Redressal Commission, Haryana bench of Mr Naresh Katyal (Judicial Member) and Mr S.C. Kaushik (Member) held that the insurer is not under any obligation to disburse the accidental claim amount for unregistered vehicles at the time of the accident/theft. The bench highlighted that non-registration of vehicles amounts to an offence under Section 192 of the...
The State Consumer Disputes Redressal Commission, Haryana bench of Mr Naresh Katyal (Judicial Member) and Mr S.C. Kaushik (Member) held that the insurer is not under any obligation to disburse the accidental claim amount for unregistered vehicles at the time of the accident/theft. The bench highlighted that non-registration of vehicles amounts to an offence under Section 192 of the Motor Vehicles Act and would disentitle the owner from claiming the insurance amount for the said vehicle.
Brief Facts:
The Complainant purchased a Sonalika Tractor after taking a loan of Rs. 4,80,000/- under a Loan-cum-Hypothecation Agreement from L&T Finance Limited (“Financer”). At the time of securing the loan, the Financer informed him that he would need to insure the tractor through L&T Insurance Co. Ltd. (“Insurance Company”). Consequently, the Complainant insured the tractor with the Insurance Company.
On 02.09.2015, the tractor was stolen, leading to the registration of an FIR under Section 379 of the IPC in the local police station. The Complainant lodged a claim with the Financer and the Insurance Company and completed all necessary formalities. He was assured that the insurance benefits would be processed within two months and transferred to his loan account. However, despite his repeated requests, the payment was not made. He was informed that compensation would not be released until an untraced report was submitted.
On 07.06.2016, the Complainant obtained the untraced report from the court and submitted it to the Financer. Despite this, no compensation was paid. Instead, the Insurance Company demanded the financed amount with interest from him. The Complainant served a legal notice to both the Insurance Company and the Financer, urging them to settle the loan amount, but no action was taken. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, Karnal, Haryana (“District Commission”).
In response, the Insurance Company claimed that the complaint was premature, as the Complainant had not lodged a claim with the Insurance Company and had not informed them about the theft of the tractor. It also contended that the consumer forum had no jurisdiction.
The Financer stated that all disputes arising from the Loan Agreement should be settled through arbitration as per the terms of the agreement. The Financer asserted that it had not received any intimation of the theft or any amount from the Insurance Company. Further, it contended that it had the right to recover the loan amount as per the agreed terms and conditions and that the release of compensation was a matter between the Complainant and the Insurance Company.
The District Commission dismissed the complaint. Dissatisfied by the decision of the District Commission, the Complainant filed an appeal before the State Consumer Disputes Redressal Commission, Haryana (“State Commission”).
Observations by the State Commission:
The State Commission did not find any merit in the Complainant's argument that the failure of the Insurance Company and the Financer to respond to the legal notice amounted to an admission of the facts stated therein. The State Commission clarified that merely not replying to a legal notice does not constitute an admission of facts. It emphasized that only the facts stated or pleaded in the written statement or reply by the respondents would amount to an admission.
The State Commission further observed that the Complainant purchased the tractor on 03.04.2015, and it was allegedly stolen on 02.09.2015. However, during the period between the purchase and the theft, the Complainant failed to register the tractor in his name. The temporary number assigned to the vehicle had a validity of only 30 days, and it was the Complainant's responsibility to ensure that the vehicle was registered promptly. The State Commission noted that the Complainant's failure to register the tractor before the theft constituted a significant lapse on his part, which exposed him to risk. Consequently, the Insurance Company was under no obligation to satisfy the theft claim under these circumstances, and the Complainant was not entitled to any benefits under the insurance policy.
The State Commission referred to the judgment in Narinder Singh v. New India Assurance Company [Civil Appeal No. 68463 of 2014 arising out of SLP (Civil) 20308 of 2013], where it was held that a vehicle without registration at the time of an accident constituted not only an offence under Section 192 of the Motor Vehicles Act but also a fundamental breach of the terms and conditions of the insurance policy. The State Commission found the facts of the present case to be similar, as the Complainant did not provide any evidence that he had applied for an extension of the temporary registration or permanent registration under Section 39 of the Motor Vehicles Act before the theft.
Based on this analysis, the State Commission concluded that there was no deficiency in service on the part of the Insurance Company and the Financer. The District Commission's order was upheld and the complaint was dismissed.
Case Title: Jyoti Sagar vs L&T Insurance Company Limited and Others
Case No.: First Appeal No. 596 of 2018
Advocate for the Appellant: Mr Gobind Chauhan
Advocate for the Respondents: Mr Vishal Aggarwal
Date of Pronouncement: 16.08.2024