For automobile insurance claims, registration and a valid driver's licence are required.

I purchased a new automobile two months ago. It was provided with a one-month temporary registration number. I was supposed to receive a new permanent registration before the temporary license's validity expired, but I got sick with Covid-19 before I could apply. Meanwhile, my son drove the car to a local store to get some fruits, and when he returned, the automobile was gone. The automobile was covered by a comprehensive insurance policy that included theft coverage, but the insurance company is refusing to pay the insured sum since the car did not have a valid registration at the time of theft. Can I take this to the consumer court?

To answer your straightforward question about whether you may dispute this in the consumer court, I would say absolutely. If you believe the insurance company's decision to reject your claim is unjust, you have every right to fight it. You can file a complaint with the consumer court or the insurance ombudsman. However, I hate to inform you that your odds of winning the lawsuit and receiving the insured funds are remote.

On what basis are you saying this?

To begin with, I must emphasise that operating a car in a public area without registration and without displaying that registration is a violation of the Motor Vehicles Act. Section 39 of the Act requires the vehicle's owner to guarantee that no one drives his vehicle in a public place or anywhere else unless it is registered and bears a registration mark displayed in the appropriate way.

The Supreme Court has reaffirmed that driving a car without a certificate of registration is not only a violation of the Motor Vehicles Act, but also a basic infringement of the insurance policy term, and one cannot blame the insurer for rejecting such claims. (United India Insurance Co vs Sushil Kumar Godara - CA No 58879 of 2021, September 30, 2021).

In this case, the complainant's new automobile had a temporary registration from June 20, 2011, to July 19, 2011, as well as insurance coverage for Rs 6,17,800. The complainant travelled to Jodhpur for work on July 28, slept at a guest home, and parked his automobile outside the guest house. The next morning, he discovered the automobile had gone disappeared.

The insurance company denied his claim for loss indemnification on three grounds: (a) the car did not have a registration; (b) notification of the theft was given to the insurer after a delay yet another violation of the policy condition; and (c) he had left the vehicle unattended outside the guest house yet another violation.

The insurer was ordered to pay by both the State Commission and the National Disputes Redressal Commission. The Supreme Court, on the other hand, postponed and overturned the order. It was stated that when the temporary registration of the car expired, the customer not only drove it in a public place but also travelled to another city and parked it overnight somewhere other than his premises. And there was no evidence that he had filed for and was awaiting registration for permanent registration.

The Supreme Court also ruled that the fact that the vehicle was not on the road at the time of the theft was irrelevant. The material truth was that it was driven to a location where it was taken after the temporary registration expired.

The Supreme Court in this case also referred to its binding judgment in Narinder Singh Vs New India Assurance Company (CA No 8463 of 2014) wherein it had dealt with a similar case, except for the fact that in that case the vehicle had met with an accident. Observing that the National Commission should not have overlooked and disregarded its binding order in Narinder Singh case, the Supreme Court reiterated: "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.”

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