Vehicle Owner’s Insurance Extends To Borrower Of Vehicle, Chandigarh Commission Orders IFFKO TOKIO Insurance Co. To Pay Insured Amount

Brief Facts of the Case:

Mrs Neelam Sharma and Mr Khem Chand Sharma (“Complainants”) owned a vehicle which was ensured with IFFCO TOKIO General Insurance Company Limited (“Insurance Company”). Their son, Ankush Sharma, was driving the car with a passenger when an accident occurred which led to his tragic death. The car had valid insurance coverage at the time of the accident. After the accident, the complainants, as legal representatives of their deceased son, filed a claim with the Insurance Company to receive the Personal Accident Cover benefit. However, the Insurance Company repudiated the claim, citing that their deceased son was not the registered owner of the insured vehicle at the time of the accident. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission-II, U.T. Chandigarh (“District Commission”).

According to the Insurance Company, the Personal Accident Cover was intended only for the owner-cum-driver and not for any unnamed person who might use the insured vehicle. They argued that the insurance policy explicitly mentioned that Sh. Khem Chand Sharma had nominated his wife, Neelam Sharma, as the beneficiary to receive the claim in case he died in an accident while driving the insured vehicle.

Observations by the Commission:

The District Commission acknowledged that the insurance policy in question provided Personal Accident Cover for the owner-driver of the insured vehicle. However, it held that the interpretation of "owner-driver" required clarification.

The District Commission referred to the judgment in the case of Ramkhiladi & Anr. Vs. The United India Insurance Company Limited 2020 ACJ 627, delivered by the Supreme Court of India. This judgment held that the borrower of a vehicle effectively steps into the shoes of the owner when operating the vehicle and, therefore, should be entitled to the Personal Accident Cover. Additionally, the commission referred to Punjab & Haryana High Court’s decision in M/s IFFCO TOKIO General Insurance Co. Ltd. vs. Smt. Kavita and Others CWP No. 6472 of 2014 (O&M). In this case, the court upheld the entitlement of the borrower of a vehicle to the Personal Accident Cover as per the terms of the policy.

The District Commission concluded that the deceased driver of the insured car should be considered as stepping into the shoes of the owner, Sh. Khem Chand Sharma, while driving the vehicle. Therefore, as the legal representatives of the deceased driver, the complainants were entitled to the Personal Accident Cover benefit. Thus, the rejection of the claim by the Insurance Company amounted to a deficiency in service.

Accordingly, the District Commission directed the Insurance Company to pay the insured amount of Rs. 15 lakhs with interest under the policy for the insured vehicle to the complainants.

Case Title: Neelam Sharma and Anr. vs IFFCO TOKIO General Insurance Company Limited

Case No.: CC/70/2022

Advocate for the Complainant: Devinder Kumar

Advocate for the Respondent: J.P. Nahar

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