NATIONAL INSURANCE CO. LTD vs RAM DIYA

This revision is directed against the order of the State Commission Haryana Panchkula dated 19.07.2013 in First Appeal No. 347 of 2013 whereby the State Commission dismissed the appeal of the petitioner insurance company against the order of the District Forum Hissar in complaint no. 201 of 2012.

The instant consumer complaint has arisen because of repudiation of insurance claim filed by the respondent complainant in respect of theft of his Bolero vehicle which was insured for Rs. 6,52,900/-. At the time of insurance, the vehicle was having temporary registration no. HR- JL (T) 2967. It is undisputed that on 09.08.2011 subject vehicle was stolen from the parking of N C Jindal Hospital, Model Town, Hisar. FIR in respect of theft was lodged at PS Civil Lines and the petitioner opposite party was informed. According to the opposite party, the claim of the complainant was rejected vide repudiation letter dated 14.08.2012 for the reason that the temporary registration of vehicle had lapsed and the complainant had failed to obtain the proper registration from the concerned registration authority, which amounted to violation of the provisions of Motor Vehicles Act, 1988 ( in short, the Act).

The District Forum on appraisal of the pleadings of the parties and the evidence allowed the complaint and ordered thus: "So, we partly allow this complaint direct the opposite party to pay claim amount of Rs.6,20,255/- with interest @ 7% per annum from date of filing of complaint till realization and further to pay compensation and litigation expenses of Rs.5,000/-. Order be complied within 45 days from the date of receipt of copy of this order, failing which opposite party will pay interest @ 11% from the date of filing of complaint till realization. Further at the same time we direct to complainant to execute all necessary documents in favour of opposite party and cooperate with insurance company if it wants to take legal action against parking owner. Copy of this order be supplied to both the parties free of cost as required under Sub Rule 10 Rule 4 of the Haryana Consumer Protection Rules, 1988. File be consigned after due compliance."

Being aggrieved of the order of the District Forum, petitioner insurance company preferred an appeal and the State Commission Haryana vide impugned order dismissed the appeal. This led to filing of revision petition.

Ms. Meenakshi Midha, Advocate for the petitioner insurance company has assailed the impugned order on two counts; firstly, it is contended that foras below have passed the impugned order in utter disregard of general exception 3 (a) of the terms and conditions of the insurance policy. Consequently, it is contended that the foras below have failed to appreciate that the insured vehicle at the time of theft was unregistered, meaning thereby that it was used by the complainant in violation of Section 39 of the Motor Vehicles Act, 1988, which is an offence punishable under section 192 of the said Act. Therefore, also, repudiation of claim was justified. In support of her contention, learned counsel for the petitioner has relied upon the judgment of the Supreme Court in the matter of Narinder Singh Vs. New India Assurance Company Ltd. & Others being Civil Appeal No. 8463 of 2014 arising out of SLP ( Civil) No. 26308 of 2013 as also the judgment of this Commission in the matter of Sukhwinder Singh Vs. Cholamandalam - MS General Insurance Company Ltd. & Anr. IV (2013) CPJ 218 (NC).

Learned counsel for the respondent on the contrary has argued in support of the impugned orders and relied upon the judgment of this Commission in the matter of Oriental Insurance Company Limited & Anr. Vs. Pearls Buildwell Infrastructure ltd. & Ors. II (2012) CPJ 102 (NC).

So far as first contention of the petitioner is concerned, it will be useful to have a look on the general exception clause 3 (a) of the terms and conditions of the insurance policy which reads as under: "General Exception

(Applicable to all Sections of the Policy) The Company shall not be liable under this Policy in respect of

any accidental loss damage and/or liability caused sustained or incurred whilst the vehicle insured herein is (a) being used otherwise than in accordance with the ''Limitations as to Use''"

On reading of the above, it is clear that in order to get benefit of the above general exception, insurance company is required to show that the insured vehicle was stolen while being used in violation of "Limitations as to Use". The said "Limitations as to Use" are reproduced on the first page of the insurance policy which is reproduced as under: "Limitation as to Use:

The policy covers use of the vehicle for any purpose other than:

a. Hire or Reward

b. Carriage of Goods other than samoles or personal luggage.

c. Organized racing.

d. Pace making

e. Speed Testing and reliability trials

f. Use in connection with Motor Trade"

Above note "Limitations as to Use" clause of the insurance policy provides for no prohibition on the use of unregistered vehicle. Therefore, by no stretch of imagination it can be said that the insurance claim of the respondent complainant is hit by general exception clause 3 (a) of the terms and conditions of the insurance policy.

Coming to the second limb of the argument. It is undisputed that at the time of insurance, the subject vehicle was carrying a temporary registration number. As per section 43 (2) of the Act, the validity of temporary registration is only for a period of 30 days and it is not renewable. Admittedly, on the date of theft of the vehicle, the temporary registration had expired and the owner had failed to get the vehicle registered with the concerned registration authority. Contention of petitioner is that admittedly unregistered car was driven from the premises of the insured to the parking lot of the N C Jindal Hospital, which amounted to violation of Section 39 of the Act and is an offence punishable under section 192 of the Act. Thus, the insurance claim was rightly repudiated in view of the above rendered judgments.

Section 39 of the Act deals with necessity for registration and it reads as under:

"39. Necessity for registration.-No person shall drive any motor vehicle and no owner of a motor vehicle shall cause or permit the vehicle to be driven in any public place or in any other place unless the vehicle is registered in accordance with this Chapter and the certificate of registration of the vehicle has not been suspended or cancelled and the vehicle carries a registration mark displayed in the prescribed manner: Provided that nothing in this section shall apply to a motor vehicle in possession of a dealer subject to such conditions as may be prescribed by the Central Government"

Bare reading of section 39 suggests that driving of unregistered motor vehicle by any person in any place or any other place is prohibited. The section casts an obligation on the owner of the motor vehicle not to permit the vehicle to be driven in any public place or any other place. Violation of this provision is an offence as defined under section 192 of the Act. Case of the petitioner is that since the vehicle was unregistered, the respondent insured had violated section 39 of the Act which is an offence punishable under section 192 of the Act.

We do not find merit in the above contention of learned counsel for the petitioner in view of the peculiar facts and circumstances of this case It cannot be disputed that subject vehicle on the fateful day was unregistered and it was driven from the house of complainant to N.C.Jindal Hospital, Model Town, Hisar where the complainant was admitted for treatment. No doubt, while the vehicle was being driven upto N.C.Jindal Hospital, it violated section 39 of the Act and an offence under section 192 of the Act was committed. Admittedly, on reaching the hospital, subject car was parked in the parking lot, meaning thereby that the Commission of offence under section 192 of the Act came to an end. Thus, the question arises whether the Commission of offence under section 192 of the Act prior to the theft would justify repudiation of insurance claim?

Answer to the above question is in the negative. Admittedly, at the time of insurance, subject vehicle was having temporary registration. Despite that insurance company instead of providing insurance cover only for the period till the temporary registration was valid, insured the vehicle for full one year and charged the premium for the same. If at all there was any intention on the part of the insurer that in the event of any single violation of Section 39 of the Act, the insurance cover to the subject vehicle would stand withdrawn, the insurance company was expected to make a clear stipulation in this regard in the insurance contract. This, however, is not the case. We have gone through the terms and conditions of the insurance contract as also the provisions of the Act. There is nothing in the contract or the Act to provide that in the event of any single violation of provision of Section 39 of the Act, the insured shall loose insurance cover if loss / damage to the vehicle is caused subsequent to the commission of said violation punishable under section 192 of the Act. Therefore, in our view, the insurance company cannot take advantage of offence under section 192 r/w section 39 of the Act committed by the insured by driving the vehicle from his residence to the hospital much earlier to the theft of the vehicle which was parked in the parking lot of the hospital. As such, the repudiation of the claim is not justified.

Learned counsel for the petitioner has tried to justify the repudiation of the claim on the strength of the law laid down by the Supreme Court in the matter of Narinder Singh Vs. New India Assurance Company Ltd. (supra). In our opinion, aforesaid judgment is not applicable to the facts and circumstances for the reason that in the said judgment, the insurance claim was in respect of damage caused to the unregistered vehicle in an accident, meaning thereby that at the

relevant time, the vehicle was being driven in violation of mandate of Section 39 of the Act. In the instant case, admittedly at the time of theft, subject vehicle was not being driven by anyone. Thus, at the time of theft, respondent was not violating Section 39 of the Act. Therefore, we are of the view that repudiation of insurance claim by the insurance company is unjustified and as such, order of the foras below cannot be faulted.

Looking from a different angle. The basis of repudiation is that the respondent has violated the mandate of Section 39 of the Act which is punishable under section 192 of the Act. On perusal of section 192 of the Act, we find that violation of Section 39 of the Act in the event of first offence is punishable with a fine which may extend to Rs.5000/- but shall not be less than Rs.2000/- and for the second or the subsequent offence, it is punishable with imprisonment upto one year or with fine which may extend to Rs.10,000/- but not less than Rs.5000/-. It is not clear from the record whether the alleged offence of driving the vehicle from the house of the complainant to the hospital was the first offence or the subsequent offence. Thus, for the prosecution under section 192 r/w Section 39 of the Act, the complainant could be fined between Rs.2000/- to Rs.5000/-. Denial of the insurance cover running into Rs.6,20,755/- for violation of Section 39 of the Act to the complainant would thus amount to imposing a punishment much higher than the punishment prescribed under section 192 of the Act. Therefore, also, repudiation of the claim is not justified.

In view of the discussion above, we are of the opinion that petitioner has failed to point out any jurisdictional error or material irregularity in the impugned order which may call for interference by this Commission in exercise of revisional jurisdiction. Revision petition is, therefore, dismissed.