Chandigarh

StateCommission

A/247/2024

JASVINDER SINGH - Complainant(s)

Versus

ORIENTAL INSURANCE COMPANY LIMITED - Opp.Party(s)

DEVINDER KUMAR

29 Oct 2024

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

UNION TERRITORY, CHANDIGARH

 

 

Appeal No.	247 of 2024
Date of Institution	09.07.2024
Date of Decision	29.10.2024

 

Sh. Jasvinder Singh @ Jaswinder Singh (Aged 54 years) son of Sh. Sarwan Singh R/o Village Jalalpur, Post Office Dappar, Police Station Llalru, Tehsil Derabassi, District SAS Nagar (Mohali), Punjab.

.…..Appellant/Complainant.
 

Versus

Oriental Insurance Company Limited, Regional Office through its Regional Manager, SCO No.109-111, Sector 17D, Chandigarh.

...Respondent/Opposite Party.

 

BEFORE:  JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                SH. RAJESH K. ARYA, MEMBER

               

Argued by:- 

 

Sh.  Ashwani Arora, Advocate & Sh. Devinder Kumar, Advocate for the appellant.

Sh Arjun Kundra, Advocate for the respondent.

 

PER RAJESH K. ARYA, MEMBER

              The instant appeal has been filed by the complainant  - Sh. Jasvinder Singh @ Jaswinder Singh, appellant herein, against order dated 03.06.2024, rendered by District Consumer Disputes Redressal Commission-I, U.T., Chandigarh, (hereinafter to be called as the District Commission only), vide which, his Consumer Complaint bearing No.407 of 2023 has been dismissed.

2]           The case of the appellant/complainant before the Ld. District Commission was that the appellant, registered owner of an Eicher Canter (Registration No. PB-65-AZ-6437), insured with the respondent/opposite party under a policy valid from 29.1.2023 to 28.1.2024, met with an accident on 6.3.2023 near Kanpur, UP, while trying to avoid a stray cow. The incident caused significant damage to the vehicle and a DDR (Annexure C-3) was recorded with the police. He transported the damaged vehicle to Swami Auto Care, Derabassi, paying Rs.21,500/- for transport and Rs.6,06,891/- for repairs, covering the initial costs while awaiting the insurance claim settlement. The respondent was informed of the accident on 10.3.2023 and a surveyor was assigned but the claim decision was delayed. Despite providing all necessary documents, the respondent eventually repudiated the claim on 17.7.2023 (Annexure C-8), citing issues with the vehicle’s RC fitness and the driver’s license validity for driving a transport vehicle. The complainant averred that he held a valid light motor vehicle license and had applied for a transport license with a learner’s permit since 21.9.2022 undergoing the necessary training. He claims that the respondent’s denial of the claim constituted a deficiency in service and unfair trade practice.

3]           On the other hand, while contesting the consumer complaint, the respondent acknowledged that the appellant insured the subject vehicle with it under policy (Annexure R-2) valid from 29.1.2023 to 28.1.2024. However, it pleated that at the time of the accident, the appellant did not possess a valid fitness certificate for the vehicle, which constituted a fundamental breach of the policy’s terms and conditions, leading to the claim’s repudiation. Additionally, the respondent pleaded that the appellant did not hold a valid driving license to operate a commercial vehicle with a laden weight of 11,990 kg, as he only had a light motor vehicle license.

1.            After hearing the Counsel for the parties and going through the evidence and record of the case, the Ld. District Commission dismissed the complaint, as stated above.
2. The order of the Ld. District Commission has been assailed by the appellant/complainant on the ground that the Ld. District Commission made an error in holding that non-holding of fitness certificate is a fundamental breach and it totally ignored the fact that there was no willful delay or lapse on the part of the appellant as he had gone to RTO, Mohali to pay the requisite fee for renewal of fitness certificate of the vehicle but the same was not accepted by the said authority as there was a challan dated 23.07.2021 reflected in the system. The appellant paid the challan fee on 20.02.2023 and the same was ultimately cleared online on 04.03.2023 and the accident took place on 06.03.2023. It has been stated that there was no intentional breach on the part of the appellant as the fitness was renewed later on 29.05.2023. It has been argued that the respondent could repudiate the claim of the appellant, had there been any breach of the policy condition/conditions and the breach was fundamental or material so as to vitiate the insurance contract. To say so, the appellant cited the judgment of Hon’ble National Consumer Disputes Redressal Commission, New Delhi in case titled ‘G. Kothainachiar Vs. The Branch Manager, United India Insurance Co. Ltd. & Ors.’, Revision Petition No.1503 of 2004 decided on 29.10.2007.
3.             On the other hand, the respondent prayed for dismissal of the appeal contending that the Ld. District Commission rightly dismissed the complaint of the appellant by passing a reasoned order in view of law laid down by Hon’ble Supreme Court of India and Hon’ble National Consumer Disputes Redressal Commission, New Delhi in catena of judgments.
4.            After considering the rival contentions of the parties and going through the impugned order and material available record and the written arguments carefully, we are of the considered view that the appeal is liable to be dismissed for the reasons to be recorded hereinafter. It may be stated here that per record, it is established that on the date of accident on 06.03.2023, the fitness certificate of the vehicle in question had already expired. The appellant emphasizes that there was no deliberate breach of policy terms, as the delay in renewing the fitness certificate was due to circumstances beyond his control. The fitness certificate was eventually renewed on 29.05.2023, after the accident. In case G. Kothainachiar Vs. The Branch Manager, United India Insurance Co. Ltd. & Ors. (supra) relied upon by the appellant, the accident took place on 20.06.1995 and the fitness certificate of the vehicle in question was valid till 30.05.1995. The same could not be obtained because of the physical ill-health of the insured. However, as per the RTO Inspectors report, the vehicle was in good condition for plying at the time of accident. The Hon’ble National Commission, after discussing the policy conditions and law on the subject as settled by Hon’ble Supreme Court of India in various judgments, held that the Insurance Company cannot repudiate the claim when there is no breach of terms of the policy because the insurance is a matter of contract between the parties. It further observed that claim can be repudiated only in those cases where there is a breach of a policy condition and the breach is fundamental or material so as to vitiate the insurance contract. After the aforesaid judgment of Hon’ble National Commission in case G. Kothainachiar Vs. The Branch Manager, United India Insurance Co. Ltd. & Ors. (supra), much water has flown with regard to the controversy involved in the instant appeal. Identical issue, whether driving the vehicle on public road without valid fitness certificate is violation of Motor Vehicle Act and whether plying vehicle on road without required fitness certificate constitute an offence punishable under Motor Vehicle Act, 1988 on the same footing as driving without a valid registration, either temporary or permanent, which are in clear violation of Section 39 and 192 of Motor Vehicle Act, came up before the Hon’ble National Commission in case titled ‘UNITED INDIA INSURANCE CO. LTD. & ANR. Vs. AMANDEEP SINGH & ANR.’ Revision Petition No.303 of 2022 decided on 03.06.2024. The Hon’ble National Commission, while setting aside the orders of both the Fora below i.e. the District Commission & the State Commission, held that under section 56, if the transport vehicle is not having a certificate of fitness, it shall not be deemed to be validly registered for the purpose of Section 39. This alone becomes a valid ground for Insurance Company to repudiate the claim. Hence, in considered view of Hon’ble National Commission, plying the transport vehicle on road without a valid fitness certificate is in violation of provisions of Motor Vehicle Act entitling the Insurance Company to repudiate the claim as these constitute fundamental breach of conditions of the policy. The Hon’ble National Commission, while allowing the revision petition, also discussed the judgment relied upon by the appellant in the instant appeal in case G. Kothainachiar Vs. The Branch Manager, United India Insurance Co. Ltd. & Ors. (supra). Relevant Paras 11 to 15 of the said judgment reads thus:-

“11.       District Forum has allowed the complaint relying on the judgment of the Commission in RP 1503 of 2004- G. Kothainachiar Vs. the Branch Manager, United India Insurance Co. & Ors. decided on 29.10.2007, and State Commission upheld the order of the District Forum.  This Commission in RP 2340 of 2013 –United India Insurance Co. Ltd. Vs. Surinder Kumar, decided on 23.09.2016 (2016 SCC OnLine NCDRC2542) observed as follows:-

10.    Considering the facts and circumstances on record, it is clearly made out that on the date of accident,  the said commercial vehicle did not have a certificate of fitness, because the said certificate had expired on 11.4.2005, whereas the accident took place on 5.2.2006. The District Forum while passing their order have rightly relied upon Section 56 of the Motor Vehicles Act, 1988, which says that a transport vehicle shall be deemed to be not validly registered,  unless it carries a certificate of fitness. The State Commission has relied upon an order passed by this Commission in G. Kothainachiar vs. United India Insurance Company (supra),  saying that the insurance company cannot repudiate the claim when there is no breach of terms of the policy, although there may be breach of the provisions of Motor Vehicles Act, 1988.  This contention is, however, not valid in view of the order passed by the Hon’ble Supreme Court in Narinder Singh vs. New India Assurance Company Ltd. (2014)  9 SCC 324, in which it has been clearly held that if the vehicle is not validly registered as per the provisions of the Motor Vehicles Act, 1988, it amounted to a fundamental breach of terms and conditions of the policy and the claim is not payable.  As laid down in Section 56 of the said Act regarding certificate of fitness of transport vehicles, it is clearly stated that a vehicle shall not be deemed to be validly registered for the purpose of Section 39,  unless it carries a certificate of fitness as per the prescribed proforma.  It is made out, therefore, that the District Forum rightly dismissed the complaint of the respondent and the view taken by the State Commission is not in accordance with law and hence, the order of the State Commission deserves to be set aside.

11.    Further, in the two cases stated by learned counsel for the insurance company i.e.,  Oriental Insurance Company Ltd. vs. B.A. Nagesh (supra)  and  United Insurance Company Ltd. vs. B. Ugandar (supra),  it was held  that a transport vehicle was required to have a fitness certificate, otherwise the claim was not payable for violation of the statutory requirements laid down in the Motor Vehicles Act.

Similar view was taken by this Commission in RP 622 of 2013 – Baghel Singh Vs. National Insurance Co. Ltd., decided on 16.09.2016.

12.       In United India Insurance Co. vs. Sushii Kumar Godara, Civil Appeal No. 5887/2021, decided on 30.09.2021, Hon’ble Supreme Court held that"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.” In this case, the temporary registration of vehicle had expired on the date of incident, the. respondent had not applied for registration or that he was awaiting registration, the vehicle was not only driven, but also taken to another city, where it was stationed overnight, and got stolen there. Hon’ble Court, applying the ratio. of Narinder Singh vs. New India Assurance Co. Ltd. (2014) 9 SCC 324 observed that this case was in the context of an accident is immaterial. It is of no consequence that the car was not plying on the road, when it was stolen, the material fact is that concededly, it was driven to a place from where it was stolen, after the expiry of temporary registration. But for its theft, the respondent would have driven back the vehicle. In Narinder Singh (Supra) the claim was in the context of an accident, involving a vehicle, the temporary registration of which had expired. The Hon’ble Court held that the insurer was not liable.

13.       In Naveen Kumar vs. National Insurance Co. Ltd. (RP/250/2019, decided on 26.11.2015, NCDRC in a reference, held as follows:-

"9. For the reasons stated hereinabove, the reference is answered in following terms:- (i) If a vehicle without a valid registration is or has been used/driven on a public place or any other place that would constitute a fundamental breach of the terms and conditions of the contract of insurance even if the vehicle is not being driven at the time it is stolen or is damaged: (ii) If a vehicle without a valid registration is used/driven on a public place or any other place, it would constitute a fundamental breach of terms and conditions of the policy even if the owner of the vehicle has applied for the issuance of a registration in terms of S.41 of the Act before expiry of the temporary registration, but the regular registration has not been issued".

14.       In the instant case, the claim  has been repudiated by the Insurance Company on the ground that vehicle was not having  valid fitness as required under section 56 of Motor Vehicle Act, 1988.  The question arises is whether driving the vehicle on public road without valid fitness certificate is violation of Motor Vehicle Act and whether plying vehicle on road without required fitness certificate constitute an offence punishable under Motor Vehicle Act, 1988 on the same footing as driving without a valid registration, either temporary or permanent, which are in clear violation of Section 39 and 192 of Motor Vehicle Act.  Section 56 of Motor Vehicle Act is reproduced below:

 56.  Certificate of fitness of transport vehicles (1) Subject to the provisions of sections 59 and 60, a transport vehicle shall not be deemed to be validly registered for the purposes of section 39, unless it carries a certificate of fitness in such form containing such particulars and information as may be prescribed by the Central Government, issued by the prescribed authority, or by an authorised testing station mentioned in sub-section (2), to the effect that the vehicle complies for the time being with all the requirements of this Act and the rules made thereunder.

15.       From the above, it is clear that under section 56, if the transport vehicle is not having a certificate of fitness, it shall not be deemed to be validly registered for the purpose of Section 39.  Hence, this alone becomes a valid ground for Insurance Company to repudiate the claim.  Hence, in our considered view, plying the transport vehicle on road without a valid fitness certificate is in violation of provisions of Motor Vehicle Act entitling the Insurance to repudiate the claim as these constitute fundamental breach of conditions of the policy.  This Commission has taken a similar view in RP 2894/2018 – National Insurance Co. Vs. Raje, decided on 19.02.2024 and RP 1199/2022 –Pramod Khuswah Versus The Oriental Insurance Company Ltd. , decided on 23.02.2024.”

1. Thus, in our concerted view, the absence of a valid fitness certificate for a transport vehicle at the time of an accident constituted a fundamental breach of insurance policy terms, as highlighted by various judgments, including those by Hon’ble National Commission and by five Hon’ble Judges Bench judgment of Hon’ble Kerala High Court in the case of ‘Pareed Pillai Vs. Oriental Insurance Co. Ltd.’, MACA No.2030 of 2015 decided on 9.10.2018 as discussed by the Ld. District Commission in its order. These judgments emphasize the importance of maintaining a valid fitness certificate for road safety, linking it directly to the vehicle’s registration and permit validity. Further, it also constitutes a violation of the provisions under the Motor Vehicles Act. A fitness certificate is a critical requirement for any transport vehicle, serving as proof that the vehicle is roadworthy and meets safety standards.  According to Section 56 of the Motor Vehicles Act, a transport vehicle is not considered validly registered without a fitness certificate, which directly impacts its legality to be driven on public roads. The importance of this requirement is underscored by the potential safety risks involved. The fitness certificate ensures that the vehicle is in a condition that does not pose a threat to the safety of passengers, other road users or property. As such, the absence of this certificate at the time of the accident undermines the foundational purpose of both the registration and insurance of the vehicle. Without a valid fitness certificate, the transport vehicle is treated as being unregistered for practical purposes under the law, making any insurance claim arising from an accident during this period subject to repudiation by the insurer. As stated above, legal precedents, such as those set by the Hon'ble National Commission and the Kerala High Court, affirm this interpretation. These rulings highlight that the lack of a valid fitness certificate is not merely a technical lapse but a fundamental breach of the terms of the insurance policy. The courts have consistently emphasized that such a breach impacts the very basis of the insurance contract, as the insurer’s risk assessment is tied to the vehicle’s compliance with legal requirements including having a valid fitness certificate. Therefore, any accident occurring, while the vehicle lacks this certification, may render the insurance claim invalid, allowing the insurer to rightfully reject the claim. In essence, a valid fitness certificate is a non-negotiable condition for the operation of transport vehicles under the Motor Vehicles Act, ensuring compliance with safety standards. The absence of such a certificate at the time of an accident disrupts the terms of the insurance policy, justifying the repudiation of claims on the grounds of a fundamental policy breach. Consequently, the appellant’s failure to hold a valid certificate at the time of the accident, justified the respondent’s decision to repudiate the claim, as it reflected a fundamental, not merely technical, policy breach.
2.            In view of the facts and circumstances of the case, we do not find any infirmity or material irregularity in the impugned order passed by the Ld. District Commission dismissing the consumer complaint of the appellant.
3.          For the reasons recorded above, this appeal, being devoid of merit, fails and the same is dismissed with no order as to costs.
4.          Certified copies of this order be sent to the parties free of charge.
5.          File be consigned to Record Room after completion.

Pronounced.

29.10.2024.

                           [JUSTICE RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

                                                                                

 [RAJESH K. ARYA]

MEMBER

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