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SC's ruling on stolen vehicle's insurance claim The Supreme Court has ruled that even if there are certain breach of conditions, the insurance company was under an obligation to indemnify the insurer for the theft of a vehicle. "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," a bench of Justices Tarun Chatterjee and Dalveer Bhandari observed. The apex court passed the ruling while dismissing an appeal filed by the National Insurance Company against a State Consumer Commission order which ordered it to pay 75 percent of the insured amount to the insurer Nitin Khandelwal. The insurance company had sought to repudiate the claim of the insured Nitin Khandelwal on the ground that the vehicle Mahindra Scorpio insured by him as a private vehicle was used as taxi. The vehicle was taken away by some armed men in Rajasthan on 27th September 2003 and could not be traced by police following which the insurance claim was made by Khandelwal. It was the contention of the insurance company that as the vehicle was let out as a taxi in violation of the conditions, it was not liable for paying the insured amount. Though the District Forum, Gwalior upheld the insurance company's contention, the Madhya Pradesh State Consumer Forums on an appeal from Khandelwal directed it to pay 75 percent of the insured amount to the claimant. The insurance company challenged the direction before the National Consumer Redressal Commission which rejected the appeal following which it approached the apex court. Refusing to interfere with the directions of the consumer forums, the apex court said the present case was not related to any third party risk claims. “It is not a case of third party risk. In the instant case, the vehicle has not been recovered. It is also incorporated in the counter affidavit that it is not disputed that the vehicle was comprehensively insured.” "Since the vehicle in question had been stolen, therefore, in the case of theft of vehicle, the breach of condition is not germane," the apex court observed while dismissing the appeal.
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