Vehicle Owner Entitled For Insurance Claim Despite The Expiration Of Vehicle Permit, Bangalore Commission Orders Compensation

Brief Facts:

M/S Jeevan Road Lines (“Complainant”), insured their vehicle with Reliance General Insurance Company Limited (“Insurance Company”). The concerned vehicle was an Eicher Pro Canter Lorry used by the Complainant to transport goods across India. On 01.04.2022, around 2:45 A.M., a severe accident occurred near Miduturu village on the Bangalore-Hyderabad Road in Andhra Pradesh. The vehicle abruptly stopped, resulting in a collision with another vehicle. Tragically, the drivers of both vehicles suffered fatal injuries, and others sustained serious wounds. The incident led to a police case under sections 337 and 304A of the IPC. As a result, the Complainant filed a claim with the Insurance Company on seeking compensation for the vehicle’s damages, which was rejected by the Insurance Company on the ground that at the time of the accident, the vehicle permit had expired and wasn’t renewed. Aggrieved, the Complainant filed a complaint in the District Consumer Disputes Redressal Commission, Bangalore (“District Commission”), seeking an amount of Rs. 14,00,000/- from the Insurance Company.

The Complainant contended that the vehicle sustained substantial damage due to the negligence of another vehicle. They maintained that their insurance policy with the Insurance Company was valid during the accident, entitling them to claim compensation for the inflicted damages. The Complainant disputed the Insurance Company’s rejection of their claim, which was based on an alleged expiration of the vehicle permit. The Complainant argued that the permit was valid until 12.10.2022, asserting that the Insurance Company’s denial amounted to a deficiency in service. Seeking redressal, the Complainant claimed compensation for the depreciated value of the vehicle, loss of income, damages, towing costs, and the distress endured.

The Insurance Company countered the Complainant's claim, contending that their refusal was grounded in the non-validity of the vehicle permit at the time of the accident. The Insurance Company maintained that the Complainant's permit had lapsed before the accident and was renewed after the incident. This, the Insurance Company asserted, absolved them from liability. Citing the Motor Vehicles Act, the Insurance Company emphasized the significance of holding a valid permit when operating a vehicle on public roads.

Observations of the Commission:

The District Commission relied on the Karnataka High Court judgment of Dr. Narasimulu Nandini Memorial Education Trust vs. New India Assurance Co. Ltd. & others MFA No.202022/2016(MV), wherein it was emphasized by the High Court that insurance companies cannot evade liability solely based on permit renewal timing. This judgment underscored that even if a permit had technically lapsed at the exact moment of the accident, post-accident permit renewal should be deemed valid for maintaining insurance coverage.

Consequently, the District Commission concluded that the Insurance Company’s rejection of the claim solely on the grounds of permit expiration was untenable. The District Commission upheld the principle that permit validity should not negate insurance coverage.

In light of its findings, the District Commission ruled in favour of the Complainant. It further directed the Insurance Company to compensate the Complainant with Rs.11,60,000/- for the vehicle’s damaged value, along with Rs.40,000/- for towing, Rs.1,00,000/- for loss of income, Rs.50,000/- for damages, and Rs.10,000/- for litigation expenses.

Case: M/s. Jeevan Road Line vs Reliance General Insurance Company Limited

Case No.: CC/215/2022

Advocate for the Complainant: Prop. Yogisha

Advocate for the Respondent: The Respondent’s Manager

Click Here To Read/Download Order