I (2013) CPJ 32B (NC) (CN)

NATIONAL CONSUMER DISPUTES

REDRESSAL COMMISSION, NEW DELHI
Hon’ble Mr. Justice R.C. Jain, Presiding Member & Mr. S.K. Naik, Member
ORIENTAL INSURANCE CO. LTD.—Petitioner
versus
K.M. THIRUNAVUKKARASU—Respondent
Revision Petition No. 2472 of 2007 against Order dated 5.4.2007 in Appeal No. 364 of 2004 of
Tamil Nadu State Consumer Disputes Redressal Commission, Chennai—Decided on 5.7.2012
ORDER
R.C. Jain, Presiding Member (Oral)—Aggrieved by the concurrent findings and orders
passed by the fora below i.e. order dated 21.5.2004 passed by the District Consumer Disputes
Redressal Forum, Dindigul and thereafter by the Tamil Nadu Consumer Disputes Redressal
Commission dated 05.4.2007, the Oriental Insurance Company who was arrayed as opposite
party in the complaint filed by the respondent herein has filed this petition purportedly under
Section 21-B of the Consumer Protection Act, 1986 (for short 'the Act'). The consumer dispute
raised in the complaint related to non-settlement of insurance claim in respect of an insured
motor vehicle (car) which met with an accident within about three months of its purchase and
insurance. The insurance company repudiated the claim primarily on the ground that the insured,
had committed violation of terms and conditions of the insurance policy, in particular, that at the
time of the accident causing damage to the vehicle, the insured vehicle in question was not
registered within the meaning of Section 39 of the Motor Vehicles Act, 1988 (for short the 'Act
of. 1988'). The District Forum held the repudiation unjustified and allowed the complaint,
thereby directing the insurance company to settle the claim of the complainant by paying a sum
of Rs. 4,12,183/- with 6% interest from the date of complaint i.e. 19.11.2003 till realization with
cost of the proceedings amounting to Rs. 1,000/-.
2. Aggrieved by the said order, insurance company filed appeal before the State
Commission but without success. The State Commission dismissed the appeal by a brief order
and repelled the plea put forth on behalf of the appellant-insurance company by observing as
under:
“An accident took place before the vehicle was registered. However, there was
insurance cover. The opposite party took the stand that there was violation of the Motor
Vehicles Act; that the complainant had driven the vehicle without registration and in
these circumstances they should be made liable to meet the claim . of the complainant
or the expenditure.
The fact remains that during the relevant time, there was insurance cover. When there
was insurance cover, in our view, the opposite party was not justified in repudiating the
claim. It is not the case of the opposite party that the complainant did not have a valid
licence to drive a car. It required some time for registration formalities to be completed.
The accident took place between the date of purchase and before registration. Merely,
because there was no registration number given to the vehicle, it would not mean that
the insurer was not obliged to honour the claim. If the vehicle was driven without a
valid permit, the competent authority had to take action. The opposite party had issued
an insurance cover. The very purpose of issuing a cover note would be defeated if the
 claim during the period could not be maintained. The opposite party had attempted to
be too technical. When they had received the premium and also issued a cover note, it
was not open to them to repudiate their liability. The view taken by the District Forum
is correct. We have taken an identical view in A. P. No. 192/2004 order dated
23.03.2007. There are no merits in the Appeal.
In the result, the Appeal fails and the same is dismissed. No costs.”
3. The facts and circumstances which led to the filing of the complaint are amply noted in
the order of the District Forum and need no repetition at our end. Counsel for the petitioner-
insurance company would assail the impugned order primarily on the ground that both: the fora
below have failed to appreciate the consequences of the legal position in regard to the non-
registration of the vehicle in question on the date of the accident and has brushed aside the
contention of the insurance company, on wholly untenable ground. On the other hand, Mr.
Toms, counsel .for the respondent-complainant submits that there was no violation of the terms
and conditions of the policy or that of the Act of 1988. Therefore short question involved in this
petition is as to whether on the face of the facts and circumstances of the case the insurance
company was justified in repudiating the said claim on the ground of violation of the terms and
conditions of the policy. Section 39 of the Act of 1988 which relates to the necessity for
registration of a motor vehicle with the Registration Authority, Section 41 with regard to the
temporary registration of the vehicle and Section 44 in regard to the procedure to be followed at
the time of the registration are the relevant provisions of 1988 Act and are extracted below:
“Section-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.
Section-41:
Registration, how to be made:
An application by or on behalf of the owner of a motor vehicle for registration shall be
in such form and shall be accompanied by such documents, particulars and information
and shall be made within such period as may be prescribed by the Central Government.
Section-44:
Production of vehicle at the time of registration:
The registering authority shall before proceeding to register a motor vehicle or renew
the certificate of registration in respect of a motor vehicle, other than a transport
vehicle, require the person applying for registration of the vehicle or, as the case may
be, for renewing the certificate of registration to produce the vehicle either before itself
or such authority as to State Government may by order appoint in order that the
registering authority may satisfy itself that the particulars contained in the application
are true and that the vehicle complies with the requirements of this Act and of the rules
 made thereunder.”
On a conspectus of the above provisions,, there is no escape from the legal position that no
motor vehicle can be brought on road unless it has been registered in accordance with the
provisions of Section 39 and the 44. The law provides for a temporary registration upto a
specific period of one month.
4. Coming to the facts of the present case it is not disputed that the vehicle was purchased
by the complainant on 31.1.2001 and a temporary registration obtained within the meaning of
Section 41 of the Motor Vehicle Act, 1988. The said registration at the most was valid for one
month i.e. 02.3.2001 (taking the term month, appearing in Section 41 as 30 days, although
month of February is of 28/29 days), the complainant made no effort and did.not obtain
permanent registration of the vehicle either before that date i.e. 02.3.2001 or uptil 25.3.2001, the
date of accident of the vehicle. That would show that the vehicle in • question remained without
any registration for a period of about 23 days and was on 25.03.2001 also. We have reasons to
disbelieve that it was only taken out on the road only on 25.3.2001 for the purpose of presenting
it to the transport registering authority for the purpose of obtaining permanent registration. Mr.
Toms submits that in view of the requirement of physical production of the vehicle before the
registering authority at the time of registration, it was obligatory for the complainant to take the
car to the authority and the accident was caused and one person died while it was being driven to
the office of the registering authority. Even if we believe this version of the complainant, we are
of the clear view that the complainant cannot seek any benefit of that circumstance from Section
44 of the Motor Vehicles Act, 1988. This shows that there was flagrant violation of the
provisions of Section 39 of 1988 Act as the complainant failed to obtain permanent registration
number for the vehicle before expiry of the temporary registration number or even several days
thereafter. He had taken a calculated risk in not registering the vehicle with the concerned
registering authority and committing clear violation of the terms and conditions of the policy
disentitling the respondent-complainant to indemnification of the insurance claim under the
policy.
5. The State Commission has over simplified the controversy and misdirected in itself by
holding “the fact remains that during the relevant period there was insurance cover. When there
was insurance cover, in our view the opposite party was not justified in repudiating the claim. . .
. . . .. . . .. . . . . . .It is not the case of the opposite party that the complainant did not have a valid
licence to drive a car. . . . . . . . . . Merely because there was no registration number given to the
vehicle, it would not mean that the insurer was not obliged to honour the claim The opposite
party had attempted to be too technical when they had received the premium and also issued a
cover note, it was not open to them to repudiate their liability.”
To say the least, these observations are unacceptable to a judicial, quasi-judicial forum like
a consumer fora. In our view both the for a below have committed grave error of law in allowing
the complaint and the insurance claim on the face of the established violation of terms and
conditions of the policy which was writ large. The order of the fora below has resulted into
miscarriage of justice and needs to be set aside.
6. In the result, the Revision Petition is allowed and the orders passed by the fora below are
set aside and as a consequence complaint dismissed. Any amount received by the complainant
under the orders of the fora below shall be restored to the insurance company No order as to
cost.
Revision Petition allowed.
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