2. Brief facts of the case are that the Respondent No. 1/Complainant purchased a Swaraj Tractor 735 on 30.11.2012 from Tomar Tractor/Respondent No. 2, an Authorised Dealer of Swaraj Tractors by making cash payment. At the time of purchase, the Complainant was informed that the vehicle would be insured and registered by the Dealer on down payment of total amount. The Complainant was further assured that he would get the insurance and registration papers within one-two weeks. The Complainant paid Rs. 700/- for registration, Rs. 8,400/- for insurance and Rs. 5,65,000/- towards the purchase of the vehicle, thus in total Rs. 5,74,000/-.  After the purchase, the Complainant parked the vehicle in front of his residence at Village Balthari under P.S. Kuchaikot.  The  Complainant   used  the tractor on assurance by the Respondent No. 2 that the vehicle has been insured and registered.  On 03.12.2012, the Complainant slept at his residence, but on waking up in the night he did not find the tractor in front of his residence and it went traceless. Thereafter, he lodged an FIR No. 317/12 in respect of theft at P.S. Kochaikot on 04.12.2012. After investigation, Charge Sheet No. 87 dated 13.04.2014 was filed in the Court, finding the case of theft to be true. The Complainant then requested the Respondent No. 2 to give registration and insurance amount, but they did not give any papers. It was later found by the Complainant by enquiring from the Transport Office that the registration of the vehicle had not been done till date. The Complainant approached the Petitioner at its office in Patna and the Branch Manager assured the Complainant that the claim will be processed expeditiously but there was no further response. After a lapse of six months, on 29.06.2013 the Complainant sent a Legal Notice to the Opposite Parties and on getting no response, he filed the Complaint before District Forum, Gopalganj. 

3. The Petitioner filed Written Statement before the District Forum and stated that at the time of theft of tractor, it was not registered and intimation of theft was given after a delay of 44 days. That further, the Driving License submitted by the Complainant did not authorise driving of an agricultural tractor,  and there was also mismatch in the version of FIR and statement given to Surveyor. That the vehicle was registered after 23 days of theft. For these reasons, the Petitioner had repudiated the claim.

4. The District Forum vide its Order dated 30.03.2016 allowed the Complaint. The relevant extracts of the Order of the District Forum are set out as below –

5. Aggrieved by the Order of the District Forum, the Petitioner filed its Appeal before the State Commission. The State Commission partly allowed the Appeal of the Petitioner vide the impugned Order dated 13.02.2018. The relevant extracts of the Order of the State Commission are set out as below - 

6. Aggrieved by the Order of the State Commission, the Petitioner filed the present Revision Petition raising the following key issues –

a. That the State Commission failed to consider the fact that the registration of vehicle is mandatory under Section 39 of the Motor Vehicle Act and therefore non-registration of the insured vehicle at the time of theft takes the insured beyond the protection of the insurance policy;

b. That the State Commission erred in passing the impugned Order without taking into consideration the law laid down by the Hon’ble Supreme Court in “Narinder Singh v. New India Assurance Co. Ltd., CA No. 8463/2014” and judgment of this Hon’ble Commission in “Kaushalendra Kumar Mishra v. The Oriental Insurance Co. Ltd., RP No. 4043 of 2008”, “Niranjan Kumar Yadav v. National Insurance Co. Ltd., RP No. 2926 of 2010”, wherein it has been held that non-registration of a vehicle under Section 39 of the Motor Vehicle Act, 1988 goes to the root of the insurance policy. The Narinder Singh judgment has been affirmed by the Hon’ble Supreme Court in “B.A. Lokesh Kumar v. Bharti AXA General Insurance Co. Ltd., SLP(C) No. 9053/2014”;

c. That the State Commission failed to appreciate that not only the Respondent No. 1 but the Respondent No. 2 (being authorised dealer) as well had done blatant violation of the provisions of the MV Act by handing over the insured vehicle to Respondent No. 1 without any registration, hence there is deficiency on the part of Respondent No. 2 and negligence on the part of Respondent No. 1;

d. That the State Commission erred in ignoring the fact there was delay of more than 44 days in intimation of the claim to the Petitioner and this delay was not validly explained. This Hon’ble Commission has affirmed that delay in intimation of claim is a valid ground for repudiation in “New India Assurance Co. Ltd. v. Trilochan Jane, FA No. 321/2005”; 

7. Ld. Counsel for Petitioner has argued that the State Commission failed to consider the fact that the registration of a vehicle is mandatory under Section 39 of the Motor Vehicle Act, therefore non-registration of the insured vehicle takes the insured beyond the protection of the Insurance Policy.  Hence the Petitioner has rightly repudiated the claim of the Respondent No. 1; That the vehicle was stolen on 03.12.2012 while it was purchased on 30.11.2012. The vehicle was being used without registration from the date of purchase till the date of theft and this fact has been admitted by the Respondent No. 1 himself in Para 6 of his Complaint; That the State Commission erred in directing the Petitioner to pay the claim on a non-standard basis by relying on judgments which are not applicable in the present case; That it is settled law that the dealer, Respondent No. 2 is negligent to the extent of 50% if the vehicle has been handed over to the insured without any registration, and the Respondent No. 1 is negligent to the tune of 50% for plying the vehicle at a public place without valid registration.  Therefore, liability, if any, should be fastened against the dealer Respondent No. 2 and that too only upto 50% of the claim amount; The Ld. Counsel for Petitioner cited the judgments in “Amalendu Sahoo v. Oriental Insurance Co. Ltd”; “HDFC Ergo GIC Ltd. v. Rajiv Kumar Agarwal & Anr., RP/453/2018”, “Ramesh Patel v. Managar, Bajaj Allianz GIC Ltd., RP/1161/2015”; “Nitin Khandelwal (supra), Kaushalendra Kumar Mishra” (supra) and “B.A. Lokesh Kumar” (supra) in support of his contentions.

8. Neither of the Respondents appeared in the proceedings despite being served notice.

9. This Commission has heard the Ld. Counsel of the Petitioner; perused the material available on record.

10. The Insurance Claim was repudiated by the Petitioner vide its Repudiation Letter (Annexure – G) dated 26/09/2013 on the ground that the vehicle was used by the Complainant in violation of Section 39 of the Motor Vehicles Act, 1988, inasmuch as it had been ‘driven in a public place’ before it had been registered in terms of the relevant chapter of the Motor Vehicles Act, and that even the theft had occurred on 03/12/2012, which was 23 days before the vehicle had been registered, and which thereby violated Rule 47 which prescribes that application for registration of a motor vehicle has to be made within a period of 7 days from the date of taking its delivery. So according to the Insurance Company, since the Complainant had failed to comply with these legal requirements, it was unable to allow the Insurance Claim.

11. Both the Ld. Fora below however, did not go into any discussion or analysis on the validity of the above grounds on which the claim had been actually repudiated. The Ld. District Forum mechanically allowed the Complaint by holding that as the vehicle was stolen away during the validity period of the Insurance, so repudiating the claim on the ground of non-registration of the “vehicle at the time of theft, or not possessing any driving license to drive agricultural tractor and on the ground of delay intimation is not justified.”

12. The Ld. State Commission also did not apply its mind on the question whether repudiation in a situation when the vehicle itself had not actually been registered in accordance with law was lawful or not, simply allowed the Insurance Claim on a Non-Standard basis by summarily noting, “the complainant has cited a decision of the Hon’ble Apex Court in the case of National Insurance Company Limited vs. Nitin Khandelwal in which the court held that in case of theft of vehicle, nature of use of vehicle cannot be looked into and breach of condition is not germane. Insurance Company cannot repudiate the claim on this basis. The claim ought to have been settled on non-standard basis.”

13. In seeking to challenge the decisions of both the Ld. Fora below, the Petitioner/Insurance Company has relied on certain decisions of this Commission, which are taken up for consideration hereafter.

14. In “Kaushalendra Kumar Mishra v. Oriental Insurance Co. Ltd” (supra), this Commission had dismissed the Revision Petition filed by the concerned Complainant against the Orders of lower Fora in a similar situation.  The relevant extracts from the order passed in the concerned judgment are set out as below –

“7. In our view, these arguments are neither legally correct nor acceptable. Registration of the vehicle is mandatory requirement of the law. The relevant provision, Section 39 of the Motor Vehicles Act 1988, reads:

“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.” 

8. Clearly therefore, till the vehicle receives this certification of registration from the competent authority, it is not legally useable on roads. Averments in the complaint petition itself show that the Motorcycle was used by the Complainant for dropping his uncle to the Railway Station, Satna and that the incident had happened on its return journey. This use of the motorcycle was in clear violation of the statutory requirement of registration. 

9. In view of the above, we find ourselves in complete agreement with the State Commission that use of the vehicle in violation of the law itself will take it beyond the protection of the policy. We accordingly, uphold the view of the State Commission that under the circumstances of the case, the Insurance Company was justified in repudiating the claim of the revision petitioner/complainant. The revision petition is, therefore considered to be devoid of any merit. It is accordingly dismissed on the ground of limitation as well as on merits…..”

15. Similarly, in the case of “The Manager, Bharti AXA General Insurance Co. Ltd. through its Area Manager (Legal)  Vs. B.A. Lokesh Kumar, RP No. 1834 of 2012”,  this Commission had set aside the Order of the Ld. State Commission, Karnataka, which had affirmed the Order of the District Forum allowing the complaint in a similar situation. The relevant extracts from the Order passed by this Commission are re-produced as below-

“3. Having considered the submissions of the parties, the short point that has arisen for our decision is as to whether the two Fora below were right in returning their concurrent finding in favour of the respondent in spite of the undisputed fact that the vehicle in dispute did not have a valid registration number on the date of the accident and hence was being used in violation of the law and condition of the insurance policy.  In this context, we may note that the registration of the vehicle is a mandatory requirement of the law and the relevant provisions as contained in Section 39 of the Motor Vehicles Act, 1988 may be reproduced as under:-

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 to such conditions as may be prescribed by the Central Government. 

4. In view of the aforesaid requirement of law, it is clear that both the fora below gravely erred in ignoring and rejecting the plea taken by the petitioner while returning their concurrent finding accepting the complaint. They should have appreciated that the use of the vehicle in question was in violation of the law itself and hence would take it beyond the protection of the insurance policy. We have therefore no hesitation in setting aside the impugned order and accepting the revision petition. The present case is squarely covered by the ratio of the two judgments relied upon by the counsel for the petitioner. We, therefore, allow the revision petition and set aside the impugned order leaving the parties to bear their own cost.”

16. Again, in “HDFC Ergo Insurance Company Ltd.  Vs. Rajiv Kumar Agarwal & Anr., RP No. 453 of 2018”, where the complaint filed in a similar situation by the Complainant Insured had been allowed, this Commission had set aside the Orders of the lower Fora by relying on the earlier decision in “Kaushalendra Kumar Mishra” (supra) and certain other decisions being “Classic Bakery & Anr.  Vs. Tata AIG General Insurance Co. Ltd. & Anr., FA No. 362 of 2015 decided on 26.4.2019”,  “Narinder Singh Vs. New India Assurance Co. Ltd. & Ors. (2014) 9 SCC 324”, “The Manager, Bharti AXA GIC Ltd.  Vs. B.A. Lokesh Kumar, MANU/CF/0488/2013”, “Oriental Insurance Co. Ltd. & Anr.  Vs. Vikram Kanada (RP No. 1264 of 2014)”, “Lokesh Kumar  Vs. Bharti AXA GIC Ltd., SLP (C ) 9053 of 2014”. The Revision Petition was finally allowed with the following observations –

“12. We have carefully gone through the entire facts and circumstances of the case, rival contentions of the parties, the relevant provisions of the Motor Vehicles Act / Rules and related case laws cited by the parties and are of the view that action of respondent no.1 / complainant in taking the vehicle on public road without valid registration, either temporary or permanent, is in clear violation of the provisions of Motor Vehicle Act / Rules and as per the case laws laid down by Hon’ble Supreme Court in various cases. This will take the vehicle beyond the protection of the insurance policy. Further, we agree that insurance is a pre requisite for registration in view of Rule 47 of the Central Motor Vehicle Rules, 1989. 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 mandatory requirement, is issued based on chasis and engine number. Generally registration number is added later on either in the form of endorsement or by way of issuing revised policy document. Merely holding of a valid insurance policy but plying the vehicle in violation of Motor Vehicle Rules / Act will make the claim under insurance policy, which is valid otherwise, non admissible. Hence we find that action of the petitioner Insurance Company in repudiating the claim on the ground that on the date of incident vehicle was not registered, is justified and is a lawful action and both the Fora below committed a material irregularity, District Forum in allowing the complaint of the complainant and State Commission in dismissing the First Appeal of the Petitioner herein. Accordingly, both the orders of District Forum and State Commission are, hereby, set aside. The Revision Petition is allowed. The repudiation order dated 11.01.2008 of the Petitioner is upheld.”

17. The facts and circumstances of the present case are squarely covered by the ratio of all the decisions cited on behalf of the Petitioner Insurance Company.  In this case also, the theft had occurred on the night of 3.12.2012 when the Insured vehicle had itself not been registered.  The failure to have the same registered and driven through a public place in taking the same to his own premises from that of Authorised Dealer (Respondent No. 2) certainly was an act which took the matter beyond the protection of the Insurance Policy, and that at the most, the contributory negligence could have been on the part of the Authorised Dealer himself in having delivered custody of the unregistered vehicle to the Complainant for which he could have been liable for proportionate compensation in view of the decision of this Commission in the case of “Ramesh Patel  Vs. Manager, Bajaj Allianz GIC Ltd., RP No. 1161 of 2015”.  But, clearly no liability could have been fastened upon the Petitioner Insurance Company as driving of the vehicle and moving away the same before its registration was effected in accordance with law, took it outside the protection of the Insurance Policy.

18. For the aforesaid reasons, this Commission is of the opinion that both the Ld. Fora had acted with material irregularity in first allowing the original complaint at the District Forum level, and thereafter allowing the same with some modification at the Appellate stage, although in view of all the earlier decisions of this Commission which have already been referred to in the preceding paragraphs, protection of the Insurance Policy cover was not in existence at the time of its theft, since the vehicle itself had not been registered as required by law, and had also been unlawfully driven through a public place by the Complainant. 

19. Consequently, the present Revision Petition is allowed after setting aside the impugned Order of the Ld. State Commission and the original complaint filed by the Respondent/Complainant accordingly stands dismissed.  Parties to bear their own costs. 

20. Pending application(s), if any, also stand disposed off as having been rendered infructuous.