Registration, valid licence must for car insurance claim

Pushpa Girimaji

Two months back, I bought a new car. It was delivered with a temporary registration number, valid for a month. I was to get a new permanent registration before the expiry of the validity of the temporary licence but before I could apply, I fell sick with Covid-19. Meanwhile, my son took the car to a nearby market to pick up some fruits and when he returned, the car was missing. The car had a comprehensive insurance policy covering theft, but the insurance company is refusing to pay the insured amount on the ground that the car did not have a valid registration at the time of theft. Can I challenge this before the consumer court?

To your simple question on whether you can challenge this before the consumer court, I would say yes you can. You have every right to challenge the decision of the insurance company in repudiating your claim, if you feel it is unfair. You can do so before the consumer court or even the insurance ombudsman. However, I regret to say that your chances of winning the case and getting the insured money are thin.

On what basis are you saying this?

First and foremost, I must emphasise that driving a vehicle in a public place without registration and display of that registration is a violation of the Motor Vehicles Act. Section 39 of the Act casts a responsibility on the owner of the vehicle to ensure that no one drives his vehicle in a public place or anyhere else unless it is registered and the vehicle carries a registration mark displayed in the prescribed manner.

Recently, the Supreme Court reiterated that plying a vehicle without a certification of registration is not only a violation of the Motor Vehicles Act, but also a fundamental breach of the insurance policy condition and one cannot find fault with the insurer for repudiating such claims. (United India Insurance Co Vs Sushil Kumar Godara -CA No 58879 of 2021, order: September 30, 2021)

Here the complainant’s new car had a temporary registration for a month from June 20, 2011, to July 19, 2011, and also an insurance cover for Rs 6,17,800. On July 28, the complainant drove to Jodhpur on work, stayed at a guest house and parked his car outside the guest house. Next morning, he found the car missing.

The insurance company repudiated his claim for indemnification of loss on three grounds: (a) that the car did not have a registration; (b) Intimation of the theft was given to the insurer after a delay — again a violation of the policy condition; and (c) he had left the vehicle unattended outside the guest house — another breach.

Both the State Commission and the National Disputes Redressal Commission directed the insurer to pay. The Supreme Court, however, deferred and set aside the order. While doing so, it pointed out that after the expiry of the vehicle’s temporary registration, the consumer not only drove it in a public place, but also went to another city and parked it overnight in a place other than his premises. And there was nothing on record to show that he had applied for permanent registration and was awaiting registration.

The Supreme Court also said it was of no consequence that at the time the theft took place, it was not plying on the road. The material fact was that it was driven to a place from where it was stolen, after the expiry of the temporary registration.

The Supreme Court in this case also referred to its binding judgment in Narinder Singh Vs New India Assurance Company (CA No 8463 of 2014) wherein it had dealt with a similar case, except for the fact that in that case the vehicle had met with an accident. Observing that the National Commission should not have overlooked and disregarded its binding order in Narinder Singh case, the Supreme Court reiterated: “…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.”

I would like to remind all consumers not to ever use their vehicles without registration, insurance cover and a valid driving licence. And always renew your insurance well in time.

Join Whatsapp Channel of The Tribune for latest updates.