Holding

The use of a vehicle without a valid registration at the time of loss is a fundamental breach of the insurance contract, entitling the insurer to repudiate the claim.

Summary

The appellant, United India Insurance Co., denied the claim of the respondent, Sushil Kumar Godara, for the theft of his Bolero car, arguing that the vehicle was being used without a valid registration, constituting a fundamental breach of the insurance contract. The car had a temporary registration that expired on 19-07-2011, yet the respondent drove it to Jodhpur on 28-07-2011 where it was stolen. The lower consumer forums held that the insurer could not repudiate the claim on the ground of lack of permanent registration, but the National Consumer Disputes Redressal Commission upheld that view. The Supreme Court examined the applicability of the earlier judgment in Narinder Singh v. New India Assurance and the NCDRC decision in Naveen Kumar v. National Insurance, concluding that using an unregistered vehicle on a public place is a fundamental breach, regardless of whether the loss was due to theft. Consequently, the Court set aside the orders of the State Commission and the NCDRC, dismissed the respondent’s complaint, and allowed the appeal, permitting the insurer to repudiate the claim.

Issues considered

Whether the use of a vehicle with an expired temporary registration constitutes a fundamental breach of the insurance policy, justifying repudiation of the claim.
Whether the precedent set in Narinder Singh v. New India Assurance, which involved an accident, is applicable to a theft scenario.
Whether the decision of the National Consumer Disputes Redressal Commission erred in overlooking the binding Supreme Court judgment on registration violations.

Legislation cited

Motor Vehicles Act, 1988s. 192, s. 39

Subjects

insurance claimtemporary registrationfundamental breachMotor Vehicles Actrepudiationconsumer protectiontheftregistration expiry

Judgment

[2021] 9 S.C.R. 251 251

UNITED INDIA INSURANCE CO. LTD. A
v.
SUSHIL KUMAR GODARA
(Civil Appeal No. 5887 of 2021)
SEPTEMBER 30, 2021 B
[UDAY UMESH LALIT, S. RAVINDRA BHAT AND
BELA M. TRIVEDI, JJ.]
Motor Vehicles Act, 1988: ss.39 and 192 – Insurance claim –
Repudiation of – Respondent-complainant obtained an insurance C
policy for his Bolero car, in Punjab, though he was a resident of
Rajasthan – The vehicle had a temporary registration (from
20-06-2011 to 19-07-2011) – On 28-07-2011, he travelled outside
his residence, to Jodhpur, in his car, and stayed overnight in a guest
house and parked the car outside the guest house premises in
D
Jodhpur – Next morning, he discovered that the car was stolen –
Claim for loss – Held: When an insurable incident occurs that
potentially results in liability, there should be no fundamental breach
of the conditions contained in the contract of insurance – The
temporary registration of the respondent’s vehicle had expired on
19-07-2011 – However, not only was the vehicle driven, but also E
taken to another city, where it was stationed overnight in a place
other than the respondent’s premises – There is nothing on record
to suggest that the respondent had applied for registration or that
he was awaiting registration – It is of no consequence, that the car
was not plying on the road, when it was stolen; the material fact is
F
that concededly, it was driven to the place from where it was stolen,
after the expiry of temporary registration – But for its theft, the
respondent would have driven back the vehicle – On the date of
theft, the vehicle was driven/used without a valid registration, which
amounted to a clear violation of ss.39 and 192 of the Motor Vehicles
Act, 1988 – There was fundamental breach of the terms and G
conditions of the policy, as held in *Narinder Singh entitling the
insurer to repudiate the policy – Consumer Protection – Insurance
claim.
*Narinder Singh v. New India Assurance Co. Ltd. (2014)
9 SCC 324 : [2014] 9 SCR 551 – relied on. H
251
252 SUPREME COURT REPORTS [2021] 9 S.C.R.

A Naveen Kumar v. National Insurance Company Ltd.
[RP/250/2019] decided on 26.11.2019 – referred to.
Case Law Reference
[2014] 9 SCR 551 relied on Para 4
B CIVIL APPELLATE JURISDICTION: Civil Appeal No.5887 of
2021.
From the Judgment and Order dated 11.12.2020 of the National
Consumer Dispute Redressal Commission in RP No.1984 of 2015.
Amit Kumar Singh, Mrs. K. Enatoli Sema, Ms. Chubalemla Chang,
C Advs. for the Appellant.
Ms. Gauri Puri, Adv. for the Respondent.
The Order of the Court was passed by
S. RAVINDRA BHAT, J.
D 1. Counsel for parties were heard, with their consent, for final
disposal of the appeal. The appellant (hereby “insurer”) questions the
judgment and order of the National Consumer Disputes Redressal
Commission, New Delhi1 (“hereafter the NCDRC”). In the impugned
order, the NCDRC dismissed the appellant’s revision petition, that
E challenged the order2 of the Rajasthan State Consumer Disputes
Redressal Commission, Circuit Bench at Bikaner (hereafter “the State
Commission”).
2. The respondent-complainant obtained an insurance policy3 from
the insurer for his Bolero car, somewhere in Punjab, though he was a
F resident of Sri Ganganagar, Rajasthan. The vehicle had a temporary
registration (No. PB-11-T-5101 from 20-06-2011 to 19-07-2011). The
sum insured was 6,17,800/-. The temporary registration of the vehicle,
however, expired on 19-07-2011.
3. As the respondent/complainant was engaged in business as a
G private contractor, for business purposes he had to be outside the city.

1
Dated 11/12/2020 in Revision Petition No. 1984/ 2015
2
dated 20/03/2015, in FA No. 244/2013
3
bearing policy no. 200104/31/11/0100000947
H
UNITED INDIA INSURANCE CO. LTD. v. SUSHIL KUMAR 253
GODARA [S. RAVINDRA BHAT, J.]

On 28-07-2011 the complainant went to Jodhpur for business purposes; A
and stayed in Geeta Guest House at night. Whilst there, his vehicle was
parked outside the guest house premises. When the respondent awoke
in the morning, he found that the Bolero car had been stolen. He lodged
a first information report (FIR) on 29-07-2011 with PS Ratanada, Jodhpur
alleging commission of offences under Section 379, IPC. However, on
B
30-09-2011 the police lodged a final report stating that the vehicle was
untraceable.
4. The respondent claimed the loss, from the appellant/insurer.
The insurance claim, however was repudiated by order dated
23-01-2013 on three grounds:
C
(i) Intimation of theft of vehicle was given to the insurer after
delay which was in violation of the policy condition.
(ii) The temporary registration of the vehicle expired on
19-07-2011 and the respondent did not get the vehicle permanently
registered; and D
(iii) The complainant left the vehicle unattended outside the
guesthouse in violation of the policy conditions.
5. Aggrieved by the repudiation of his claim the respondent/
complainant filed a complaint before the District Forum Consumer
Protection, Shri Ganganagar (hereafter the “District Forum”) for a E
direction that the insurer ought to pay him the sum insured for the vehicle
with rent amount of 1,40,000/- and also claimed relief for mental agony
and costs of litigation.
6. The insurer’s position before the District Forum was that till
the incidence of theft, the complainant’s vehicle was not registered which F
was in violation of conditions of insurance policy; the insurer therefore
requested for dismissal of the complaint. The District Forum dismissed
the complaint against the insurer while observing that on 28-07-2011
(date of the incident) the vehicle’s temporary registration had expired
and relying upon two previous orders of the NCDRC had concluded
G
that if at the time of theft, the vehicle was not registered then the claim
was not payable to the complainant. It was held that repudiation of the
claim by the insurer did not amount to deficiency in service on its part.
Aggrieved by the dismissal of his complaint, the respondent/complainant
approached the State Commission. The State Commission set aside the
H
254 SUPREME COURT REPORTS [2021] 9 S.C.R.

A order of the District Forum and allowed the appeal, and held that as the
insurer had covered the complainant’s vehicle with particular engine
and chassis number, and issued a policy during the currency of which,
the vehicle was stolen it could not repudiate the insured’s genuine claim
on technical, petty and frivolous grounds of absence of permanent
registration certificate from the competent authority and thus escape its
B
liability to indemnify the insured for the loss of the vehicle. The State
Commission directed the insurer to pay to the respondent/complainant
an amount of 6,17,800/- (Rupees Six Lakhs Seventeen Thousand Eight
Hundred Only) along with 9% interest per annum from the date of filing
of the complaint and also pay to the respondent/complainant 20,000/-
C as litigation costs. The insurer preferred a revision petition before the
NCDRC which was dismissed, affirming the State Commission’s
reasoning.
7. This Court issued notice; despite service, the respondent did
not cause appearance to be entered. In the circumstances, Ms. Gauri
D Puri was appointed to assist the Court, as amicus curie. The Court
heard the learned counsel for the petitioner Mr. Amit Singh, AOR and
learned amicus.
8. It was argued by Mr. Amit Singh that the NCDRC committed
an error in not appreciating the judgment of this Court in Narinder Singh
E Vs. New India Assurance Co. Ltd4. He also relied on a previous order
of the NCDRC, i.e., Naveen Kumar Vs. National Insurance Company
Ltd5. It was urged that the impugned order should be set aside, since the
NCDRC ignored a binding judgment of this court, and disregarded the
circumstance that the vehicle in question, had no registration. This
constituted a fundamental breach of the policy, entitling the insurer to
F repudiate the claims under it.
9. The learned amicus, on the other hand, urged that this Court
should not disturb the findings of the State Commission or the NCDRC.
It was argued by the learned counsel that the judgment in Narinder
Singh (supra) pertained to claim for compensation for a damaged vehicle
G on account of accident, and not on account of theft of a vehicle, and was
thus not applicable to the present case. She urged that in the present
case, it could not be said that the policy holder’s vehicle was an

4
(2014) 9 SCC 324.
5
H [RP/250/2019] decided on 26.11.2019
UNITED INDIA INSURANCE CO. LTD. v. SUSHIL KUMAR 255
GODARA [S. RAVINDRA BHAT, J.]

unregistered one; rather a temporary number had been assigned to it, A
but a few days after its expiry, the theft occurred. In the given
circumstances, the preclusion of liability, in the manner expressed in
Narinder Singh (supra) by this court, was inapplicable.
10. What is discernible from the above narration of facts, is that
the policy holder had purchased a new Bolero which had a temporary B
registration. That registration lapsed on 19-07-2011. The respondent/
complainant never alleged or proved that he applied for a permanent
registration, or sought extension of the temporary registration beyond
19-07-2011. He travelled outside his residence, to Jodhpur, in his car,
and stayed overnight in a guest house. In the morning of 28-07-2011, he
discovered that the car had been stolen, when parked outside the guest C
house premises in Jodhpur.
11. In Narinder Singh (supra), the claim was in the context of
an accident, involving a vehicle, the temporary registration of which had
expired. This Court held that the insurer was not liable, and observed
that: D

“12. A bare perusal of Section 39 shows that no person shall
drive the motor vehicle in any public place without any valid
registration granted by the registering authority in accordance
with the provisions of the Act.
E
13. However, according to Section 43, the owner of the vehicle
may apply to the registering authority for temporary
registration and a temporary registration mark. If such
temporary registration is granted by the authority, the same
shall be valid only for a period not exceeding one month.
The proviso to Section 43 clarified that the period of one F
month may be extended for such a further period by the
registering authority only in a case where a temporary
registration is granted in respect of chassis to which body
has not been attached and the same is detained in a workshop
beyond the said period of one month for being fitted with a G
body or unforeseen circumstances beyond the control of the
owner.
14. Indisputably, a temporary registration was granted in
respect of the vehicle in question, which had expired on
11.1.2006 and the alleged accident took place on 2.2.2006
H
256 SUPREME COURT REPORTS [2021] 9 S.C.R.

A when the vehicle was without any registration. Nothing has
been brought on record by the appellant to show that before
or after 11.1.2006, when the period of temporary registration
expired, the appellant, owner of the vehicle either applied
for permanent registration as contemplated under Section
39 of the Act or made any application for extension of period
B
as temporary registration on the ground of some special
reasons. In our view, therefore, using a vehicle on the public
road without any registration is not only an offence
punishable under Section 192 of the Motor Vehicles Act but
also a fundamental breach of the terms and conditions of
C policy contract.”
12. In Naveen Kumar (supra), NCDRC decided a reference, to
its bench, and held that:
“9. For the reasons stated hereinabove, the reference is
answered in following terms:-
D
(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:
E
(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
F temporary registration, but the regular registration has not
been issued”.
(emphasis supplied)
13. In the present case, the temporary registration of the
respondent’s vehicle had expired on 28-07-2011. Not only was the vehicle
G
driven, but also taken to another city, where it was stationed overnight in
a place other than the respondent’s premises. There is nothing on record
to suggest that the respondent had applied for registration or that he was
awaiting registration. In these circumstances, the ratio of Narinder
Singh (supra) applies, in the opinion of this court. That Narinder Singh
H (supra) was in the context of an accident, is immaterial. Despite this,
UNITED INDIA INSURANCE CO. LTD. v. SUSHIL KUMAR 257
GODARA [S. RAVINDRA BHAT, J.]

the respondent plied his vehicle and took it to Jodhpur, where the theft A
took place. 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 the place from where it was stolen, after the expiry of temporary
registration. But for its theft, the respondent would have driven back the
vehicle. What is important is this Court’s opinion of the law, that when
B
an insurable incident that potentially results in liability occurs, there should
be no fundamental breach of the conditions contained in the contract of
insurance. Therefore, on the date of theft, the vehicle had been driven/
used without a valid registration, amounting to a clear violation of Sections
39 and 192 of the Motor Vehicles Act, 19886. This results in a fundamental
breach of the terms and conditions of the policy, as held by this Court in C
Narinder Singh (supra), entitling the insurer to repudiate the policy.
14. This Court is of the opinion that the NCDRC’s order cannot
be sustained. Furthermore, the NCDRC should not have overlooked
and disregarded a clear binding judgment of this Court – it also should
not have disregarded its ruling in Naveen Kumar (supra), as well. Before D
6
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 E
dealer subject to such conditions as may be prescribed by the Central Government.
192. Using vehicle without registration.—(1) Whoever drives a motor vehicle or
causes or allows a motor vehicle to be used in contravention of the provisions of section
39 shall be punishable for the first offence with a fine which may extend to five thousand
rupees but shall not be less than two thousand rupees for a second or subsequent
offence with imprisonment which may extend to one year or with fine which may extend
to ten thousand rupees but shall not be less than five thousand rupees or with both: F
Provided that the court may, for reasons to be recorded, impose a lesser punishment.
(2) Nothing in this section shall apply to the use of a motor vehicle in an emergency for
the conveyance of persons suffering from sickness or injuries or for the transport of
food or materials to relieve distress or of medical supplies for a like purpose:
Provided that the persons using the vehicle reports about the same to the Regional
Transport Authority within seven days from the date of such use.
G
(3) The court to which an appeal lies from any conviction in respect of an offence of the
nature specified in sub-section (1), may set aside or vary any order made by the court
below, notwithstanding that no appeal lies against the conviction in connection with
which such order was made.
Explanation.—Use of a motor vehicle in contravention of the provisions of section 56
shall be deemed to be a contravention of the provisions of section 39 and shall be
punishable in the same manner as provided in sub-section (1). H
258 SUPREME COURT REPORTS [2021] 9 S.C.R.

A parting, this Court expresses its appreciation for the assistance rendered
by the learned amicus, Ms. Gauri Puri.
15. For these reasons, the impugned order and the order of the
State Commission are hereby set aside; the respondent’s complaint is
dismissed. The appeal is allowed in these terms, without order on costs.
B

Devika Gujral Appeal allowed.

C

D

E

F

G

H