The National Consumer Disputes Redressal Commission (NCDRC), headed by Presiding Member Inder Jit Singh, has recently emphasized that vehicle owners possessing insurance coverage but failing to register their vehicles in compliance with the Motor Vehicles Act and regulations will not be able to pursue insurance claims. This announcement underlines that neglecting to register a vehicle constitutes both a violation of the stipulations in the Motor Vehicle Act of 1988 and a fundamental breach of the conditions set forth in the Motor Insurance Policy.
The clarification emerged from a case involving Rajiv Kumar, who had acquired a Chevrolet TAVERA through a Hire Purchase Agreement with Regent Automobiles via ICICI Bank Ltd. The vehicle was insured with HDFC Ergo General Insurance for a sum of Rs.6,57,000/-. Kumar's complaint alleged that the car was stolen from his residence's parking area on February 22, 2007, and he duly reported the theft to the insurance company. However, HDFC Ergo General Insurance declined the claim, asserting that the vehicle was being operated on a public road without valid registration at the time of theft, thus violating the terms of the policy.
Subsequently, Kumar lodged a complaint with the District Consumer Disputes Redressal Commission in New Delhi, which ruled in his favor, directing the insurance company to reimburse him Rs. 6,57,000/-, along with 9% interest from the date of the claim submission until the amount was fully paid. Additionally, the District Commission ordered the insurance company to pay Kumar Rs. 25,000/- as compensation for his inconvenience and legal expenses. Dissatisfied with this verdict, HDFC Ergo General Insurance appealed to the State Consumer Disputes Redressal Commission in Delhi, but their appeal was denied on September 11, 2017.
As a result, the insurance company escalated the matter to the National Consumer Disputes Redressal Commission (NCDRC) through a revision petition. The insurance company argued that the State Commission had overlooked the established principle that an uninsured vehicle, due to non-registration, falls outside the protective ambit of an insurance policy. They contended that the vehicle lacked registration at the time of the theft and cited Section 39 of the Motor Vehicle Act, which mandates vehicle registration and disqualifies uninsured vehicles from coverage.
Regent Automobiles, the dealer, countered by stating that it was their responsibility to deliver a registered vehicle to Kumar, and they had not provided temporary registration during the vehicle handover. On the contrary, Kumar contended that he had paid the insurance premium, thereby expecting coverage for risks. He claimed that Regent Automobiles exhibited negligence by failing to arrange for registration before delivering the vehicle.
The NCDRC pronounced that Kumar's use of the vehicle on public roads without valid registration flagrantly violated the Motor Vehicle Act and corresponding regulations. The commission agreed with the insurance company's standpoint, affirming that insurance coverage is a prerequisite for vehicle registration and that non-registration stands as a barrier to policy coverage. This stance was rooted in multiple legal judgments, including those issued by the Supreme Court and the NCDRC, which established the necessity of vehicle registration for policy coverage and the implications of driving an unregistered vehicle.
Citing legal precedents such as Kaushalendra Kumar Mishra Vs. Oriental Insurance Co. Ltd., where it was determined that illegal vehicle use negates insurance protection, and Classic Bakery & Anr. Vs. Tata AIG Gen. Ins. Co. Ltd. & Anr., where a temporary registration had lapsed, the NCDRC maintained that non-registration contravenes not only the Motor Vehicle Act but also the fundamental terms of a Motor Insurance Policy.
Additionally, referencing Narinder Singh Vs. New India Ass. Co. Ltd. & Ors., the NCDRC highlighted that operating an unregistered vehicle on public roads constitutes both a legal offense and a significant breach of policy terms and conditions. Taking these legal principles into account, the NCDRC concluded that Kumar's usage of the unregistered vehicle on public roads infringed upon the law and policy conditions. Consequently, the NCDRC validated the insurance company's refusal of the claim, overturning the rulings of the District Commission and State Commission. The revision petition was granted, with each party responsible for their respective costs.
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