Insurers may deny a car insurance claim if the vehicle involved did not have valid registration at the time, India’s Supreme Court has ruled.
The country’s highest court issued the decision on Thursday, as it rejected a claim for the theft of a car which had expired temporary registration, The Economic Times reported.
The bench, headed by Justice U U Lalit, said that an insurance claim can be denied if there is a fundamental breach of the policy’s terms and condition.
“What is important is this court's opinion of the law, 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,” the decision said.
The court ruled in favour of United India Insurance, which appealed the decisions of the National Consumer Disputes Redressal Commission (NCDRC) and the Rajasthan State Consumer Disputes Redressal Commission that ordered the insurer to pay the disputed claim.
The claim was lodged by Rajasthan resident Sushil Kumar Godara for his car, which was insured for INR617,000 (SG$2,900). The car’s temporary registration had expired on July 19, 2011.
On July 28, 2011, Godara drove to Jodhpur for business and stayed at a guest house. The next morning, he found out that his car, which was parked outside the guest house’s premises, was stolen.
United India Insurance denied the complainant’s claim, on the grounds that the temporary registration was expired. The complainant raised the issue to the state-level and national consumer commissions, which ruled in his favour.
However, the Supreme Court noted that the vehicle was driven without a valid registration, which meant the complainant violated sections 39 and 192 of the Motor Vehicles Act, 1988. This meant that the NCDRC’s order cannot be sustained, the court ruled.
