1.      This revision petition under the Consumer Protection Act, 1986 (in short, the ‘Act’) assails order dated 07.10.2016 in First Appeal No. 2110 of 2010 of the State Consumer Disputes Redressal Commission, Madhya Pradesh, Bhopal (in short, the ‘State Commission’) setting aside the order dated 15.06.2010 of the District Consumer Disputes Redressal Forum, Morena (in short, the ‘District Forum’) in Consumer Complaint no. 94 of 2009.

2.      The brief conspectus of facts is that the petitioner purchased a Scorpio car with financing from Mahindra & Mahindra Finance Ltd., Morena and obtained insurance from 20.02.2006 to 19.02.2007 from the respondent. A temporary registration was obtained from the Regional Transport Officer (RTO), Gwalior. On 12.02.2007 the vehicle was stolen in Dholpur. As the FIR was not registered by the Police, petitioner obtained an order from the Judicial Magistrate First Class, Dholpur to register an FIR. An order of theft was registered by the Court. The claim of the petitioner for loss was rejected on 28.01.2008 as “No Claim” on the ground that requisite papers were not submitted. The District Forum allowed the complaint upholding deficiency in service which was set aside in appeal by the State Commission on the ground that the vehicle was not registered as required under section 39 of the Motor Vehicles Act, 1988 as well as a fundamental breach of the terms and conditions of the Policy. The petitioner has impugned this order by way of this revision petition.

3.      I have heard the learned counsel for both the revision petitioner and the respondent and perused the material on record. The moot issue is whether a vehicle with an expired temporary registration under the Motor Vehicles Act, 1988 (MV Act) can be considered to be covered under an insurance policy and whether the repudiation of the claim under an insurance policy in such a case amounts to deficiency in service under the Consumer Protection Act, 1986.

4.     Learned counsel for the petitioner vide IA No.9260 of 2021 has filed an application seeking amendment in the memo of parties along on the ground that petitioner – Kishan Singh Jadaun has since expired on 31.08.2021. Learned counsel for the petitioner argued that the legal heirs of the petitioner may kindly be allowed to bring on record.  The same is allowed and the amended memo of parties filed on 23.11.2021 vide dy no.23511 is taken on record.

5.      The case of the petitioner is that the State Commission has erred in upholding the appeal since permanent registration although a necessity under the MV Act is not an essential requirement under the insurance policy. Therefore, not having a permanent registration of a vehicle is not a fundamental breach of the policy of insurance to result in its repudiation. It is argued that insurance of a vehicle is a contract between the insured and the insurer as per the contract of insurance and in the instant case there is no pre-condition of insurance that the vehicle should have a permanent registration with the RTO. The only condition with regard to theft in the Policy is that the car should be owned by the insured and that intimation of theft should be made to the insurance company. Since both these conditions were met and there was no breach of conditions, the repudiation was not in order. Reliance is placed on the judgment of Hon’ble Supreme Court in National Insurance Co. Ltd. Vs Swaran Singh, (2004) 3 SCC 297 wherein it was held that

(vi): Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards insured unless the said breach or breaches on the conditions of driving licence is/ are so fundamental as are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply ‘the rule of main purpose’ and the concept of ‘fundamental breach’ to allow defences available to the insured under section 149 (2) of the Act

(Emphasis added)

Petitioner also relied upon judgment of Hon’ble Supreme Court in National Insurance Co. Ltd. Vs Nitin Khandelwal, (2008) 11 SCC 259 wherein it was held that:

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.

It is argued that the ratio of this judgment applies to the present case and the State Commission has erred in not following it and relying instead on Surinder Singh Vs. New India Assurance Co., Ltd., 2014 (3) CPR 609 which relates to an accident case and not theft.

6.      Reliance is also placed on this Commission’s judgment in Iffco Tokio General Insurance Vs. Pratima Jha, in RP No.171 of 2012 decided on 27.04.2012 which related to violation of Section 39 of the MV Act and the consequences under Section 177 of non-registration.  The Apex Court rejected the contention that violation of these provisions would result in the failure of the policy as below:

9.       The above stand in the revision petition, in our view is an unconvincing attempt on the part of the revision petitioner to circumvent a concurrent finding of fact given by both the fora below. We therefore, have no hesitation in rejecting it at threshold itself. We may point out that in HDFC Chubb General Insurance Co. Ltd. Vs. ILA Gupta and ors. 1(2007) CPJ 274 this Commission had held that the Insurance Co. is not entitled to repudiate the claim merely on the ground that the vehicle had not been registered. This view has again been affirmed by this Commission in Oriental Insurance Co. Ltd. Vs. Swami Devi Dayal Hi Tech Education Academy (Revision Petition No.497 of 2012) in the order pronounced on 14.2.2012.

It is argued that the non-registration of a vehicle is an ‘irregularity’ that can be corrected by getting the registration done and paying a fine for the delay as per Sections 41 and 177 of the MV Act and therefore there is no statutory bar in insurance without registration. The petitioner also relies upon the Hon’ble Supreme Court’s judgment in Amalendu Sahoo Vs. Oriental Insurance Co. Ltd., (2010) 4 SCC 536 that in case of any variation from the policy document or any breach of the policy document, the Insurance company cannot repudiate the claim in toto and should settle the claim on non-standard basis. The petitioner therefore prays for allowing the petition. 

7.      The respondent, on the other hand, contended that (i) no insurance claim can be awarded in absence of registration under Section 39 of the MV Act as no vehicle unless registered can ply on roads; and (ii) violation of law will take a claim beyond the policy and the insurance company will be justified in repudiating the claim as per this Commission’s judgment in Kaushalendra Kumar Mishra Vs. Oriental Insurance Co. Ltd., (2012) CPJ 559 (NC). Respondent relied upon the judgments of the Hon’ble Supreme Court in Narinder Singh Vs. New India Assurance Co. Ltd., (2014) 9 SCC 324 and in United India Insurance Co. Ltd. Vs Sushil Kumar Godara, CA No. 5887 of 2021 decided on 30.09.2021 that laid down that using a vehicle on public road without registration is not only an offence punishable under Section 192 of the MV Act, but also a breach of the fundamentals of the policy contract. In Sushil Kumar Godara (supra) the Hon’ble Supreme Court clarified that it was immaterial that Narinder Singh (supra) was in the context of an accident and that there was a fundamental breach of the terms and conditions of the policy as sections 39 and 192 of the MV Act were violated entitling the insurer to repudiate the policy.

8.      It is not in dispute that the vehicle in question was stolen when its temporary registration under the MV Act had expired although the insurance policy was in force. The District Forum’s order has allowed the loss claim that had been repudiated by the respondent insurance company on the ground that the violation of the MV Act did not entitle the respondent insurance company to do so. However, the State Forum has held that the insurer was entitled to repudiate the claim in terms of Surinder Singh (supra). It is argued by the respondent insurance company, on the strength of Sushil Kumar Godara (supra) that this position be upheld in view of the judgments of the Hon’ble Supreme Court.

9.      The provisions of the MV Act, 1988 read as below:

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

192.   Using vehicle without registration – (1) Whoever drives a motor vehicle or causes or allows a motor vehicle to be used in contravention of the provision of section 39 shall be punishable for the first offence with a fine which may extend to five thousand rupees but shall not be less than two thousand rupees for a second or subsequent offence with imprisonment which may extend to one year or with fine which may extend to ten thousand rupees but shall not be less than five thousand rupees or with both;

Provided that the court may, for reasons to be recorded, impose a lesser punishment.

(2)     Nothing in this section shall apply to the use of a motor vehicle in an emergency for the conveyance of a persons suffering from sickness or injuries or for the transport of food or materials to relieve distress or of medical supplies for a like purpose:

Provided that the person using the vehicle reports about the same to the Regional Transport Authority within seven days from the date of such use.

(3)     The court to which an appeal lies from any conviction in respect of an offence of the nature specified in sub-section (1) may set aside or vary any order made by the court below, notwithstanding that no appeal lies against the conviction in connection with which such order was made.”

10.    There is no provision in the insurance policy that mandates that for the policy of insurance to be valid there should be a valid registration in force. The MV Act, however, mandates that any vehicle plying on the road should have a valid registration. The law laid down in this regard by the Hon’ble Supreme Court in Narinder Singh (Supra) is however, clear that registration is essential.

11.    From the foregoing, it is evident that the registration of a vehicle is a sine qua non for the plying of a vehicle on a public road. A temporary registration is provided under the provisions of the MV Act only to enable the vehicle owner to obtain a permanent registration as mandated under section 39. The insurance policy cannot be contrary to the requirements under the MV Act     since that would render claims under the insurance policy to be in fundamental breach of the terms and conditions of the policy. In the instant case, the vehicle was not registered under the MV Act, 1988 although it was covered under the insurance policy. It was therefore in fundamental breach of the terms and conditions of the policy and is therefore liable to fail.

12.    In view of the aforesaid reasons and in the facts and circumstances of the case, the revision petition is dismissed. Order of the State Commission is upheld. Parties shall bear their own costs. Pending IAs, if any, also stand disposed with this order.