The bench of Dr. Inderiit Singh of the national consumer disputes redressal commission (NCDRC) set aside the order of Lower Fora and State Commission and held that the owner of a vehicle insured who is not registered in accordance with the Motor Vehicles Act cannot file an insurance claim.

The bench said "We agree that insurance is a pre-requisite for registration in view of Rule 47 of the central motor vehicle rules. It is a normal practice that for any new vehicle to be delivered to the purchaser, and to allow the vehicle to come on the road, insurance, which is a mandatory requirement, is issued based on chassis and engine number. Generally, the registration number is added later on either in the form of an endorsement or by way of issuing a revised policy document. Merely holding a valid insurance policy but plying the vehicle in violation of motor vehicle rules and act will make a claim under the insurance policy, which is valid otherwise, non-admissible."

It further said "Hence, we find that the action of the petitioner insurance company in repudiating the claim on the ground that on the date of the incident, the vehicle was not registered is justified and a lawful action and both the fora below committed a material irregularity.”

Noting down the facts of the case the bench observed that on 23 January 2007, one Rajiv Kumar Agarwal based in Delhi bought a Chevrolet Tavera from Regent Automobiles on a hire-purchase agreement through ICICI Bank Ltd. The vehicle was insured with HDFC Ergo General Insurance Company Ltd. The HDFC issued a policy from the date of purchase till 22 January 2008.

However, it was alleged by the owner of the Car on 22 February 2007, that his car was stolen from the parking lot of his residence. He lodged an FIR at Vivek Vihar police station and also intimated HDFC Ergo General Insurance about the theft, and submitted an insurance claim.

HDFC Ergo General Insurance repudiated the claim stating that the vehicle was being driven on the public road without any valid registration certificate at the time of the theft, therefore, the terms and conditions of the policy were not complied with. 

The complainant filed a complaint before the district consumer disputes redressal forum VI, New Delhi which directed the insurer to pay Rs6.57 lakh with an interest of 9%.

The appeal of HDFC was dismissed by the Delhi State Consumer Disputes Redressal Commission. The insurance company then filed a revision petition before NCDRC.

HDFC Ergo General Insurance contended that the vehicle was not registered on the date of theft. "The state commission did not consider the fact that registration of the vehicle is a mandatory obligation under section 39 of the motor vehicle act and absence of registration of vehicle does not entitle the insured for coverage under the policy.”

It was contended on behalf of the respondent/complainant before the NCDRC that the moment he paid the policy premium, the risk is covered and the insurer is duty bound to indemnify against the loss of the vehicle by burglary, theft, and as per the law when a policyholder purchases the policy and pays the premium, the contractual responsibility as a consumer with the company is established.

Case Details:-

Revision Petition No453 of 2018

HDFC ERGO GENERAL INSURANCE COMPANY LTD.          

Versus 

RAJIV KUMAR AGARWAL & ANR.