United India Insurance Co. Ltd. vs Sushil Kumar Godara on 30 September, 2021


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Supreme Court of India

United India Insurance Co. Ltd. vs Sushil Kumar Godara on 30 September, 2021

Author: Uday Umesh Lalit

Bench: Uday Umesh Lalit, S. Ravindra Bhat, Hon’Ble Ms. Trivedi

                                                            1

                                                                                      REPORTABLE


                                        IN THE SUPREME COURT OF INDIA
                                        CIVIL APPELLATE JURISDICTION

                                         CIVIL APPEAL NO. 5887 OF 2021


      UNITED INDIA INSURANCE CO. LTD.                                            ...APPELLANT(S)

                                                        VERSUS

      SUSHIL KUMAR GODARA                                                         ....RESPONDENT(S)



                                                           ORDER

S. RAVINDRA BHAT, J.

1. Counsel for parties were heard, with their consent, for final disposal of the

appeal. The appellant (hereby “insurer”) questions the judgment and order of the

National Consumer Disputes Redressal Commission, New Delhi1 (“hereafter the

NCDRC”). In the impugned order, the NCDRC dismissed the appellant’s revision

petition, that challenged the order2 of the Rajasthan State Consumer Disputes

Redressal Commission, Circuit Bench at Bikaner (hereafter “the State Commission”).

2. The respondent-complainant obtained an insurance policy3 from the insurer for

his Bolero car, somewhere in Punjab, though he was a resident of Sri Ganganagar,

Rajasthan. The vehicle had a temporary registration (No. PB-11-T-5101 from 20-06-
Signature Not Verified

Digitally signed by Dr.
Mukesh Nasa
Date: 2021.09.30
12:26:18 IST
Reason:

1

Dated 11/12/2020 in Revision Petition No. 1984/ 2015
2
dated 20/03/2015, in FA No. 244/2013
3
bearing policy no. 200104/31/11/0100000947
2

2011 to 19-07-2011). The sum insured was ₹ 6,17,800/-. The temporary registration

of the vehicle, however, expired on 19-07-2011.

3. As the respondent/complainant was engaged in business as a private contractor,

for business purposes he had to be outside the city. On 28-07-2011 the complainant

went to Jodhpur for business purposes; and stayed in Geeta Guest House at night.

Whilst there, his vehicle was parked outside the guest house premises. When the

respondent awoke in the morning, he found that the Bolero car had been stolen. He

lodged a first information report (FIR) on 29-07-2011 with PS Ratanada, Jodhpur

alleging commission of offences under Section 379, IPC. However, on 30-09-2011

the police lodged a final report stating that the vehicle was untraceable.

4. The respondent claimed the loss, from the appellant/insurer. The insurance

claim, however was repudiated by order dated 23-01-2013 on three grounds:

(i) Intimation of theft of vehicle was given to the insurer after delay which was

in violation of the policy condition.

(ii) The temporary registration of the vehicle expired on 19-07-2011 and the

respondent did not get the vehicle permanently registered; and

(iii) The complainant left the vehicle unattended outside the guesthouse in

violation of the policy conditions.

5. Aggrieved by the repudiation of his claim the respondent/complainant filed a

complaint before the District Forum Consumer Protection, Shri Ganganagar

(hereafter the “District Forum”) for a direction that the insurer ought to pay him the
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sum insured for the vehicle with rent amount of ₹1,40,000/- and also claimed relief

for mental agony and costs of litigation.

6. The insurer’s position before the District Forum was that till the incidence of

theft, the complainant’s vehicle was not registered which was in violation of

conditions of insurance policy; the insurer therefore requested for dismissal of the

complaint. The District Forum dismissed the complaint against the insurer while

observing that on 28-07-2011 (date of the incident) the vehicle’s temporary

registration had expired and relying upon two previous orders of the NCDRC had

concluded that if at the time of theft, the vehicle was not registered then the claim

was not payable to the complainant. It was held that repudiation of the claim by the

insurer did not amount to deficiency in service on its part. Aggrieved by the dismissal

of his complaint, the respondent/complainant approached the State Commission. The

State Commission set aside the order of the District Forum and allowed the appeal,

and held that as the insurer had covered the complainant’s vehicle with particular

engine and chassis number, and issued a policy during the currency of which, the

vehicle was stolen it could not repudiate the insured’s genuine claim on technical,

petty and frivolous grounds of absence of permanent registration certificate from the

competent authority and thus escape its liability to indemnify the insured for the loss

of the vehicle. The State Commission directed the insurer to pay to the

respondent/complainant an amount of ₹ 6,17,800/- (Rupees Six Lakhs Seventeen

Thousand Eight Hundred Only) along with 9% interest per annum from the date of

filing of the complaint and also pay to the respondent/complainant ₹ 20,000/- as
4

litigation costs. The insurer preferred a revision petition before the NCDRC which

was dismissed, affirming the State Commission’s reasoning.

7. This Court issued notice; despite service, the respondent did not cause

appearance to be entered. In the circumstances, Ms. Gauri Puri was appointed to

assist the Court, as amicus curie. The Court heard the learned counsel for the

petitioner Mr. Amit Singh, AOR and learned amicus.

8. It was argued by Mr. Amit Singh that the NCDRC committed an error in not

appreciating the judgment of this Court in Narinder Singh Vs. New India Assurance

Co. Ltd4. He also relied on a previous order of the NCDRC, i.e., Naveen Kumar Vs.

National Insurance Company Ltd5. It was urged that the impugned order should be

set aside, since the NCDRC ignored a binding judgment of this court, and disregarded

the circumstance that the vehicle in question, had no registration. This constituted a

fundamental breach of the policy, entitling the insurer to repudiate the claims under

it.

9. The learned amicus, on the other hand, urged that this Court should not disturb

the findings of the State Commission or the NCDRC. It was argued by the learned

counsel that the judgment in Narinder Singh (supra) pertained to claim for

compensation for a damaged vehicle on account of accident, and not on account of

theft of a vehicle, and was thus not applicable to the present case. She urged that in

the present case, it could not be said that the policy holder’s vehicle was an

4
(2014) 9 SCC 324.

5

[RP/250/2019] decided on 26.11.2019
5

unregistered one; rather a temporary number had been assigned to it, but a few days

after its expiry, the theft occurred. In the given circumstances, the preclusion of

liability, in the manner expressed in Narinder Singh (supra) by this court, was

inapplicable.

10. What is discernible from the above narration of facts, is that the policy holder

had purchased a new Bolero which had a temporary registration. That registration

lapsed on 19-07-2011. The respondent/complainant never alleged or proved that he

applied for a permanent registration, or sought extension of the temporary registration

beyond 19-07-2011. He travelled outside his residence, to Jodhpur, in his car, and

stayed overnight in a guest house. In the morning of 28-07-2011, he discovered that

the car had been stolen, when parked outside the guest house premises in Jodhpur.

11. In Narinder Singh (supra), the claim was in the context of an accident,

involving a vehicle, the temporary registration of which had expired. This Court held

that the insurer was not liable, and observed that:

“12. A bare perusal of Section 39 shows that no person shall drive the motor
vehicle in any public place without any valid registration granted by the
registering authority in accordance with the provisions of the Act.

13. However, according to Section 43, the owner of the vehicle may apply to
the registering authority for temporary registration and a temporary registration
mark. If such temporary registration is granted by the authority, the same shall be
valid only for a period not exceeding one month. The proviso to Section
43
clarified that the period of one month may be extended for such a further
period by the registering authority only in a case where a temporary registration
is granted in respect of chassis to which body has not been attached and the same
is detained in a workshop beyond the said period of one month for being fitted
with a body or unforeseen circumstances beyond the control of the owner.

14. Indisputably, a temporary registration was granted in respect of the
vehicle in question, which had expired on 11.1.2006 and the alleged accident took
6

place on 2.2.2006 when the vehicle was without any registration. Nothing has
been brought on record by the appellant to show that before or after 11.1.2006,
when the period of temporary registration expired, the appellant, owner of the
vehicle either applied for permanent registration as contemplated under Section
39
of the Act or made any application for extension of period as temporary
registration on the ground of some special reasons. In our view, therefore, using a
vehicle on the public road without any registration is not only an offence
punishable under Section 192 of the Motor Vehicles Act but also a fundamental
breach of the terms and conditions of policy contract.”

12. In Naveen Kumar (supra), NCDRC decided a reference, to its bench, and held
that:

” 9. For the reasons stated hereinabove, the reference is answered in following
terms:-

(i) If a vehicle without a valid registration is or has been used/driven on a public
place or any other place that would constitute a fundamental breach of the terms
and conditions of the contract of insurance even if the vehicle is not being driven
at the time it is stolen or is damaged:

(ii) If a vehicle without a valid registration is used/driven on a public place or any
other place, it would constitute a fundamental breach of terms and conditions of
the policy even if the owner of the vehicle has applied for the issuance of a
registration in terms of S.41 of the Act before expiry of the temporary
registration, but the regular registration has not been issued”.

(emphasis supplied)

13. In the present case, the temporary registration of the respondent’s vehicle had

expired on 28-07-2011. Not only was the vehicle driven, but also taken to another

city, where it was stationed overnight in a place other than the respondent’s premises.

There is nothing on record to suggest that the respondent had applied for registration

or that he was awaiting registration. In these circumstances, the ratio of Narinder

Singh (supra) applies, in the opinion of this court. That Narinder Singh (supra) was

in the context of an accident, is immaterial. Despite this, the respondent plied his

vehicle and took it to Jodhpur, where the theft took place. It is of no consequence,

that the car was not plying on the road, when it was stolen; the material fact is that

concededly, it was driven to the place from where it was stolen, after the expiry of
7

temporary registration. But for its theft, the respondent would have driven back the

vehicle. What is important is this Court’s opinion of the law, that when an insurable

incident that potentially results in liability occurs, there should be no fundamental

breach of the conditions contained in the contract of insurance. Therefore, on the date

of theft, the vehicle had been driven/used without a valid registration, amounting to a

clear violation of Sections 39 and 192 of the Motor Vehicles Act, 19886. This results

in a fundamental breach of the terms and conditions of the policy, as held by this

Court in Narinder Singh (supra), entitling the insurer to repudiate the policy.

14. This Court is of the opinion that the NCDRC’s order cannot be sustained.

Furthermore, the NCDRC should not have overlooked and disregarded a clear

binding judgment of this Court – it also should not have disregarded its ruling in

6

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.

192. Using vehicle without registration.–(1) Whoever drives a motor vehicle or causes or allows a motor vehicle to
be used in contravention of the provisions of section 39 shall be punishable for the first offence with a fine which may
extend to five thousand rupees but shall not be less than two thousand rupees for a second or subsequent offence with
imprisonment which may extend to one year or with fine which may extend to ten thousand rupees but shall not be less
than five thousand rupees or with both:

Provided that the court may, for reasons to be recorded, impose a lesser punishment.

(2) Nothing in this section shall apply to the use of a motor vehicle in an emergency for the conveyance of persons
suffering from sickness or injuries or for the transport of food or materials to relieve distress or of medical supplies for
a like purpose:

Provided that the persons using the vehicle reports about the same to the Regional Transport Authority within seven
days from the date of such use.

(3) The court to which an appeal lies from any conviction in respect of an offence of the nature specified in sub-section
(1), may set aside or vary any order made by the court below, notwithstanding that no appeal lies against the conviction
in connection with which such order was made.

Explanation.–Use of a motor vehicle in contravention of the provisions of section 56 shall be deemed to be a
contravention of the provisions of section 39 and shall be punishable in the same manner as provided in sub-section (1).
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Naveen Kumar (supra), as well. Before parting, this Court expresses its appreciation

for the assistance rendered by the learned amicus, Ms. Gauri Puri.

15. For these reasons, the impugned order and the order of the State Commission

are hereby set aside; the respondent’s complaint is dismissed. The appeal is allowed

in these terms, without order on costs.

……………………………………………….J
[UDAY UMESH LALIT]

……………………………………………….J
[S. RAVINDRA BHAT]

………………………………………………J
[BELA. M. TRIVEDI]

New Delhi,
September 30, 2021.



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