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Insurance case laws of Supreme Court on theft of vehicle

(Querist) 22 May 2008 This query is : Resolved 
want to know the latest case laws of supreme court of india on insurance claims about theft of vehicle.

Prakash Yedhula (Expert) 23 May 2008
Appeal (civil) 3409 of 2008

PETITIONER:National Insurance Co. Ltd

RESPONDENT:Nitin Khandelwal

DATE OF JUDGMENT: 08/05/2008

BENCH:Tarun Chatterjee & Dalveer Bhandari





CIVIL APPEAL NO. 3409 OF 2008. (Arising out of SLP (Civil) No.20902 of 2006)

National Insurance Co. Ltd. .. Appellant


Nitin Khandelwal .. Respondent


Dalveer Bhandari, J.

1. Leave granted.

2. This appeal is preferred against the order dated 21st September, 2006 passed by the National Consumer Disputes Redressal Commission, New Delhi (hereinafter referred to as the National Commission) in R. P. No. 2638 of 2006.

3. Brief facts of the case which are necessary to dispose of

the matter are recapitulated as under:-

4. The respondent Nitin Khandelwal had purchased the

vehicle Mahindra Scorpio bearing No.HR-18-8743 on

28.5.2003. On 27.9.2003, he had sent his vehicle to bring his

children from Jaipur. On the way, some unknown people

stopped the vehicle, tied the driver and dumped him on the

way and snatched away the vehicle. The report was lodged by

the driver at the police station and the appellant Insurance

Company was informed of the same. Thereafter, on

2.10.2003, the respondent filed an insurance claim, which

was rejected by the Insurance Company.

5. The appellant's version was that the vehicle was being

used as a taxi and the four passengers had hired the vehicle

for going from Gwalior to Karoli and those passengers, on the

way, snatched the vehicle from the driver. The vehicle was

insured for personal use and it was being used by the

respondent as a taxi. According to the appellant, the

respondent had violated the terms of the insurance policy and,

therefore, rejected the claim. The respondent filed a complaint

before the District Consumer Disputes Redressal Forum,

District Gwalior, M.P. (hereinafter referred to as "the District


6. According to the District Forum, the respondent had

violated the terms and conditions of the insurance policy and

that the appellant Insurance Company was justified in

rejecting the claim of the respondent. The respondent,

aggrieved by the said order of the District Forum, filed an

appeal before the M.P. State Consumer Disputes Redressal

Commission (hereinafter referred to as "the State


7. The State Commission observed that the theft of the

vehicle has not been denied by the Insurance Company.

However, the claim of the respondent under the policy was

repudiated by the Insurance Company solely on the ground

that the vehicle though registered and insured as a private

vehicle, at the time of theft, was being used as a taxi for

carrying passengers on payment. So, the said vehicle was

being used contrary to the terms and conditions of the

insurance policy.

8. The State Commission placed reliance on the decision of

United India Insurance Co. Ltd. v. Gian Singh [2006 CTJ

221 (CP) (NCDRC)] wherein it was held by the National

Commission that in a case of violation of condition of the

policy as to the nature of use of the vehicle, the claim ought to

be settled on non-standard basis. Similar view was taken by

the State Commission in Appeal No.1463 of 2004 (Track Way

Securities & Finance Pvt. Ltd. v. National Insurance Co.

& Others) decided on 23.3.2006. Relying on the said

judgment, the State Commission observed that the claim of

the respondent herein ought to be settled on non-standard

basis and the complainant respondent was thus entitled to

the 75% of the sum insured. Consequently, the State

Commission directed the appellant herein to pay 75% of the

amount i.e. Rs.4,83,000/- with interest @ 6% from the date of

the complaint till payment.

9. The appellant, aggrieved by the

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