Insurance claim can be rejected without permanent registration – Supreme Court

The apex court on Thursday held that any insurance incident which results in potential liability , there must be proper compliance to the insurance contract by the insured party . Any foundational breach will result in no liability of insurance company .

The bench of justices Uday Lalit , S Ravindra Bhat observed that if on the date of theft , vehicle is driven without valid registration will amount to foundational breach .

The decision has out of facts of the said case , where a bolero car is stolen when party left the car outside building .The car was not registered permanently , it’s temporary registration has expired and plaintiff does not apply for regular registration . After theft took place he went to insurance company and asked for claim , company refused on ground of no registration . Aggrieved to this plaintiff went  to district forum and asking money for insurance claim and mental torture on him , but district forum dismissed his complaint . Against which he approached state consumer redressal commission , which allowed his appeal and made the company liable saying that insurer can’t repudiate the genuine claim on technical and petty grounds of absence of permanent registration certificate and thus escape the liability to indemnify .

In answer to this insurer filed revision petition in national commission from which matter transferred to supreme court .

Court referred the case of NARINDER SINGH V. NEW INDIA INSURANCE COM. (2011)

  • Using vehicle on public road without any registration is not only breach to contract bbut punishable under sec. 192 of Motor Vehicle Act ,1986 .
  • Even if person applied timely for permanent registration after expiry of temporary registration , taking  it on road during this period is a foundational breach .

Thus,  the court concluded that there is nothing on record to suggest that respondent applied for registration , clear violation of section 39& 192 of Motor Vehicles Act ,1986 thus entitling the insurer to repudiate .

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