JUSTICE V.K.JAIN, PRESIDING MEMBER (ORAL)

          The complainant/respondent owned a vehicle which he had got insured with the petitioner company.  During the subsistence of the aforesaid policy, the vehicle was allegedly stolen on 27/28^th August 2006, when a couple, travelling in the vehicle, offered sweet to the driver who came unconscious after consuming the said sweet.  A claim in terms of the insurance policy was filed with the insurance company.  Vide letter dated 22.01.2007, the claim was repudiated.  The said letter, to the extent it is relevant, reads as under:

          This is with reference to the subject claim.  We are in receipt of the claim documents, Investigation Report and all relevant Police Papers.  On close scrutiny of these documents, our observation is as follows:

1. As per Registration Certificate, the subject vehicle is registered as a Private Vehicle-

2. As per Police Records, the vehicle was being used for Hire & Reward at the time of theft.The rate was fixed at Rs.6.00/Km and the vehicle was hired for visiting Mount Abu & Pushkar.

3. As per Policy Terms & Conditions – Limitations as to use – The Policy covers use of the vehicle for any purpose other than (a) hire Or reward.

    

2.      Being aggrieved from the repudiation of the claim, the complainant approached the concerned District Forum by way of a Consumer Complaint.  The complaint was resisted by the petitioner company on the ground on which the claim had been repudiated. 

3.      The District Forum, vide its order dated 23.03.2010, dismissed the complaint on the ground that the complainant had committed breach of the policy conditions by using the vehicle for hire purpose.  Being aggrieved from the order passed by the District Forum, the complainant approached the concerned State Commission by way of an appeal.  Vide impugned order dated 08.11.2018, the State Commission allowed the appeal and directed the petitioner company to pay an amount of Rs.6,38,158/- to the complainant alongwith interest and compensation quantified at Rs.10,000/-.  Being aggrieved from the order passed by the State Commission, the petitioner is before this Commission by way of this petition. 

4.      Though it is submitted by the learned counsel for the petitioner company that the theft of the vehicle had not been proved, this was not a ground for repudiation of the claim.  A perusal of the repudiation letter would show that the claim had been repudiated solely on the ground that the vehicle was being used for hire or reward at the time of theft.  In view of the decision of the Hon’ble Supreme Court in ‘Galada Power and Telecommunication Limited Vs. United India Insurance Company Limited & Anr.’ (2016) 14 SCC 161, the insurer cannot be allowed to travel beyond the ground on which the claim is being repudiated.  In any case, even in the written version filed by the District Forum, there is no averment that the vehicle was not stolen. 

5.      The second contention of the learned counsel for the petitioner that the complainant had committed a breach of policy conditions by using the vehicle as a taxi.  The said issue is no more res integra in view of the decision of the Hon’ble Supreme Court in National Insurance Company Limited Vs. Nitin Khandelwal (2008) 11 Supreme Court Cases 259.  In Nitin Khandelwal (supra), the vehicle was being used as a taxi and four passengers had hired the vehicle from going to Gwalior to Karoli.  They snatched the vehicle from the driver on the way to Karoli.  Since the claim had been repudiated, the complainant approached the concerned District Forum by way of a Consumer Complaint which was dismissed by the District Forum.  However, on an appeal filed by the complainant, the State Commission allowed the complaint and directed the insurer to pay 75% of the sum insured with interest.  The Revision Petition preferred by the insurer having been dismissed by this Commission, the insurer approached the Hon’ble Supreme Court.  Rejecting the appeal preferred by the insurer, the Hon’ble Supreme Court inter-alia held as under:

12. In the case in hand, the vehicle has been snatched or stolen.  In the case of theft of vehicle, breach of condition is not germane.  The appellant Insurance Company is liable to indemnify the owner of the vehicle when the insurer has obtained comprehensive policy for the loss caused to the insurer.  The respondent submitted that even assuming that there was a breach of condition of the insurance policy, the appellant Insurance Company ought to have settled the claim on non-standard basis.  The Insurance Company cannot repudiate the claim in toto in case of loss of vehicle due to theft.

13. In the instant case, the State Commission allowed the claim only on non-standard basis, which has been upheld by the National Commission. On consideration of the totality of the facts and circumstance in the case, the law seems to be well settled that in case of theft of vehicle, nature of use of the vehicle cannot be looked into and the Insurance Company cannot repudiate the claim on that basis.

14. In the facts and circumstances of the case, the real question is whether, according to the contract between the respondent and the appellant, the respondent is required to be indemnified by the appellant. On the basis of the settled legal position, the view taken by the State Commission cannot be faulted and the National Commission has correctly upheld the said order of the State Commission.

6.      In view of the above referred authoritative pronouncement of the Hon’ble Supreme Court, the claim was required to be paid by the insurer on non-standard basis.  The Revision Petition is therefore, disposed of by directing the petitioner company to pay 75% of the sum insured alongwith interest on that amount @ 9% per annum w.e.f. six months from the date of lodgment of the claim till the date of payment.  The Revision Petition stands disposed of.