State Consumer Disputes Redressal Commission
National Insurance Company Ltd. vs Anil Kumar on 18 May, 2026
1
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
U.T., CHANDIGARH
[ADDITIONAL BENCH]
Appeal No. : 220 of 2025
Date of Institution : 09.07.2025
Date of Decision : 18.05.2026
National Insurance Company Limited, Divisional Office-II, SCO 57, First
Floor, Madhya Marg, Sector 26, Chandigarh through its Divisional Manager
Now through its Authorised Signatory Rita Verma, Assistant Manager and
power of attorney holder of National Insurance Co. Ltd., Regional Office,
SCO 332-334, Sector 34-A, Chandigarh
......Appellants/Opposite party
Versus
1] Nirmala Devi, aged about 67 years Wd/o Ram Saroop @ Ram Swaroop
2] Anil Kumar, aged about 42 years S/o Sh. Ram Saroop @ Ram Swaroop
Both are resident of Ward No.1, VPO Mawa Kaholan, Tehsil Ghanari,
District Una (HP), PIN 1772024
.....Respondents/Complainants
BEFORE: MRS. PADMA PANDEY, PRESIDING MEMBER
MR. RAJESH K. ARYA, MEMBER Argued by:
Sh. J. P. Nahar, Advocate for the appellant Sh. Devinder Kumar, Advocate alongwith Sh. Pankaj, Advocate for the respondents PER SH. RAJESH K. ARYA, MEMBER The instant appeal has been filed by the opposite party - National Insurance Company Limited (appellant herein) seeking setting aside of order dated 02.06.2025 passed by the District Consumer Disputes Redressal Commission-I, U.T., Chandigarh, whereby the consumer complaint filed by the complainants (respondents herein) bearing No.446 of 2024 has been partly allowed by granting following relief:-2
"4. In the light of the aforesaid discussion, the present consumer complaint succeeds, the same is hereby partly allowed and OP is directed as under :-
(i) to pay ₹15,00,000/- to the complainants alongwith interest @ 9% per annum (simple) from the date of repudiation of the claim onwards
(ii) to pay ₹20,000/- to the complainants as compensation for causing mental agony and harassment;
(iii) to pay ₹10,000/- to the complainants as costs of litigation.
5. This order be complied with by the OP within a period of 45 days from the date of receipt of certified copy thereof, failing which the amount(s) mentioned at Sr.No.(i) & (ii) above shall carry penal interest @ 12% per annum (simple) from the date of expiry of said period of 45 days, instead of 9% [mentioned at Sr.No.(i)], till realisation, over and above payment of ligation expenses."
2. It was the case of the complainants before the District Commission that the deceased insured, Dayanand, son of Complainant No.1 and brother of Complainant No.2, had purchased a new Maruti Swift Dzire VXI CNG bearing registration No.PB-01-D-3711 and got the same insured with the Opposite Party by paying a premium of ₹25,245/-, under a policy valid from 22.02.2023 to 21.02.2024, copies whereof along with DL Verification Report and RC were annexed as Annexures C-1 to C-3. It was further averred that after purchase of the vehicle, the deceased insured applied for registration before the State Transport Authority, SAS Nagar, Mohali and deposited ₹2,000/- towards fresh permit fee, ₹200/- towards permit application fee, ₹300/- as Society Fee and ₹3,300/- towards Motor Vehicle Tax, as reflected in Form 24 annexed as Annexure C-4, pursuant whereto the authorities issued Registration Certificate and later All India Tourist Permit valid from 17.05.2023 to 16.05.2028, mentioning the registration date as 16.03.2023. It was further averred that on the intervening night of 03/04.05.2023, the deceased insured had gone to drop certain passengers from City Park Airport Road, Mohali to Phase-7, Mohali but did not return, whereafter, Complainant No.2 lodged DDR No.36 and subsequently FIR No.83 dated 10.05.2023 under Section 346 IPC at Police Station Mataur, District SAS Nagar. Thereafter, on 15.05.2023, during investigation, accused Resham Singh and Punjabdeep Singh were arrested 3 and Sections 302, 201 and 34 IPC were added, followed by filing of challan before the competent Court, copies of DDRs, FIR, Post Mortem Report, Death Certificate, Police Challan and Commitment Order dated 02.12.2023 were annexed as Annexures C-6 to C-11. It was further averred that the Opposite Party had charged an additional premium of ₹275/- for Personal Accident Cover of ₹15,00,000/- for owner-driver and after the death of the insured, the complainants submitted claim form and requisite documents, Annexures C-12 to C-19 but the claim was repudiated vide letter dated 21.02.2024. The complainants further averred that though a complaint was also filed before the Insurance Ombudsman, the same was disposed of by a non-speaking order, despite the police challan specifically recording that the murder of the deceased took place inside the vehicle and that the vehicle had also suffered damage at the hands of the accused persons.
3. On the other hand, the opposite party, while resisting the consumer complaint by filing their written version before the District Commission, admitted that the subject car was got insured by deceased insured from the opposite party and the insurance policy was valid w.e.f. 22.02.2023 to 21.02.2024. It was pleaded that the subject car was insured as "Commercial Vehicle Passenger Carrying" and the subject policy covered use only under the permit within the meaning of Motor Vehicle Act. It was further pleaded that validity of the permit as per Permit verification report is valid from 17/5/2023 to 16/5/2028 & National permit is valid from 31/5/2023 to 30/5/2024, whereas the date of loss/murder was 03/05/2023 i.e. date of loss/murder was not covered by permit validity. Therefore, the claim was not payable due to non-existence of valid Permit at the time/date of accident which was clear cut violation of the terms and condition of insurance policy. It was further pleaded that the opposite party rightly repudiated the claim as the insured vehicle was being used without permit on the date of loss, thus, the use of the vehicle without permit was the violation of the Motor Vehicle Act and terms and conditions of the Insurance Policy.
4. The complainants filed replication before the District Commission wherein they reiterated the averments contained in their 4 complaint and repudiated those as stated in the written version of the opposite party.
5. The parties led evidence in support of their respective cases before the District Commission.
6. After considering the rival contentions of the parties and going through the material available on record, the District Commission partly allowed the complaint as stated above.
7. The order of the District Commission has been assailed by the appellant/opposite party on the ground that the District Commission has wrongly and illegally held in para 3(iv) of the impugned order that the appellant was not justified in repudiating the claim on the ground of permit when the insured had deposited the fees prior to date of accident. It has been contended by the appellant that admittedly, the incident had occurred on 03.05.2023 and the permit is effective from 17.05.2023 to 16.05.2028, Annexure C-5, meaning thereby that the insured was not in possession of any permit on the date of incident. It has further been contended that the authorization certificate Form-2, Annexure C-5 mentions that the 'Period of base state permit validity from 17-May-2023 to 16-May-2028' and the All India Tourist Vehicle Authorisation Certificate is valid from 31.05.2023 to 30.05.2024 and the amount had been deposited on 31.05.2023, thus, the fact remains that the permit is valid from 17.05.2023 to 16.05.2028 and the incident has occurred on 03/04.05.2023. It has further been argued that the District Commission has wrongly held that the fees was deposited prior to accident whereas the complainants have neither filed the copy of the application of permit nor receipt of fees for obtaining the permit to prove the said contention. It has further been contended that though not admitted yet assuming for the sake of argument, the fee was deposited, still the insured could not have driven the vehicle unless the permit was in possession of the owner of the vehicle. In support of its arguments, the appellant has relied on the judgment of Hon'ble Punjab and Haryana High Court in FAO No.75555 of 2015 titled M. S. Middle High School Vs. Usha and others decided on 26.09.2017, SLP preferred against which order, was dismissed by Hon'ble Supreme Court on 22.11.2017. Further reliance has been placed by the appellant on the judgment of Hon'ble Supreme Court in 'Amrit Paul singh v.
5Tata AIG General Insuracne Co. Ltd.', (2018) 7 SCC 558. Lastly prayer for allowing the appeal and setting aside the impugned order has been made by the appellant.
8. On the other hand, on behalf of the respondents/complainants, it has been contended that the District Commission has rightly rejected the pleadings raised by the opposite party and allowed the complaint after due appreciation of facts and the documentary evidence on record. It has further been stated that the grounds raised in appeal by the appellant - opposite party are totally unsustainable in the eyes of law and just to shred its liability to comply with the impugned order. It has further been stated that the case of Amrit Paul Singh (supra), relied upon by the appellant, is clearly distinguishable on facts and is not applicable in the present case as in the said case, the vehicle was registered and registration & permit fee was deposited after the accident and that permit was also issued after the date of incident whereas in the case of the respondents/complainants, date of issuance of registration certificate and the date of deposit of permit free i.e. 16.03.2023 was prior the date of the accident i.e. 03.05.2023 and thus, the vehicle was lawfully authorized for commercial use. It has further been argued that the District Commission has rightly allowed the complaint after going through all the facts of the case. It has further been argued that prior to filing the consumer complaint before the District Commission, the complainant had filed a complaint before the Insurance Ombudsman, Chandigarh, who categorically held that the issue of permit cannot be treated as a valid ground for denial of the personal accident claim and the only relevant consideration for settlement of the claim is whether the death of the insured arose out fo the issue of the vehicle and since the police challan clearly established that the murder of the deceased took place inside the insured vehicle, the claim was squarely covered under the policy. It has further been argued that the Insurance Ombudsman allowed the case and directed the opposite party to settle the claim as per the terms ad conditions of the insurance contract. It has further been argued that the District Commission rightly held that the repudiation of the personal accident claim by the opposite party was unjustified and imposed liability upon the insurance company to pay the claim to the respondents/complainants.
6Lastly prayer for dismissal of the appeal with exemplary cost has been made by the respondent/ complainant.
9. After hearing the Counsels for the parties and going through the material available on record, the impugned order and the written arguments, we are of the considered view that this appeal filed by the appellant is liable to be dismissed for the reasons to be recorded hereinafter.
10. The principal ground raised by the appellant/opposite party for assailing the impugned order is that on the date of the occurrence i.e. 03/04.05.2023, the insured vehicle was allegedly not covered by a valid permit and, therefore, there was violation of the terms and conditions of the insurance policy. However, after thoughtful consideration of the rival submissions and appraisal of the entire record, this Commission finds no merit in the said contention. It was an admitted and undisputed fact that the deceased insured was the registered owner of the subject vehicle and had obtained a valid insurance policy from the appellant/opposite party for the period from 22.02.2023 to 21.02.2024 upon payment of requisite premium. It was equally not in dispute that an additional premium of ₹275/- was specifically charged by the appellant towards compulsory Personal Accident Cover for Owner-Driver to the extent of ₹15,00,000/-. The existence of valid driving licence in favour of the deceased insured was also not disputed by the appellant. Thus, the foundational requirements for availing the benefit under the Personal Accident Cover stood fully satisfied. Per material available on record, it is apparent that immediately after purchase of the vehicle, the deceased insured had approached the competent Transport Authority for obtaining permit and had deposited all requisite charges including ₹2,000/- towards fresh permit fee, ₹200/- towards permit application fee, ₹300/- as Society Fee and ₹3,300/- towards Motor Vehicle Tax as reflected in Form-24 Annexure C-4. Thereafter, the competent authority issued All India Tourist Permit in favour of the deceased insured valid from 17.05.2023 to 16.05.2028. The factual position emerging from the record clearly establishes that the deceased insured had already initiated and completed all procedural formalities well prior to the date of occurrence and there was no deliberate or conscious violation on his part. Rather, the issuance of permit by the statutory authority itself 7 demonstrates that the vehicle was otherwise found eligible and compliant for commercial use.
11. The appellant has attempted to build its entire case on a hyper-technical interpretation of permit validity dates while completely ignoring the true nature of the claim involved in the present case. Significantly, the present matter does not pertain to a claim for own damage caused due to breach of permit conditions nor is it a case where any contributory nexus has been established between the alleged absence of permit and the death of the insured. The claim in question arose under the compulsory Personal Accident Cover for Owner-Driver, which was a contractual benefit attached to the death or bodily injury suffered by the insured arising out of use of the motor vehicle. The record clearly established, through FIR, police investigation, postmortem report and challan papers that the deceased insured was kidnapped and brutally murdered inside the insured vehicle while using the same in the course of his employment/activity. The murder was directly connected with the use of the insured vehicle and therefore, the incident squarely falls within the scope and ambit of the Personal Accident Cover.
12. The District Commission, in our considered view, has rightly observed that the repudiation of the claim solely on the ground of permit was wholly unjustified particularly when the deceased had already deposited the requisite permit charges prior to the occurrence and there existed no prohibition imposed by the Transport Authority against use of the vehicle. Even otherwise, mere absence, delay or technical defect in permit cannot automatically furnish a valid defence to the insurer unless the insurer is able to establish that such alleged breach had direct nexus with the cause of death or materially contributed to the occurrence in question. In this case, the appellant has miserably failed to establish any such nexus. The unfortunate death of the insured was not occasioned due to absence of permit but due to the criminal acts of third persons who kidnapped and murdered him. Therefore, repudiation of the claim on such wholly extraneous and technical ground clearly amounted to arbitrary denial of legitimate insurance benefit.
813. The reliance placed by the appellant upon the judgment of Hon'ble Supreme Court in the case of Amrit Paul Singh (supra), is wholly misconceived and distinguishable on facts. In the said case, the issue pertained to a claim arising out of an accident involving a transport vehicle which admittedly had no permit whatsoever on the date of accident and the permit as well as registration formalities were completed only subsequent thereto. The Hon'ble Supreme Court, in the peculiar facts of that case, treated the absence of permit as a fundamental statutory infraction in relation to the accident claim itself. However, the facts of the present case stand on an entirely different footing. Herein, the deceased insured had already applied for permit, deposited all requisite fees and taxes much prior to the occurrence and the permit was subsequently issued by the competent authority. More importantly, the present claim pertained to Personal Accident Cover arising out of murder/kidnapping of the insured and not to an own-damage claim or statutory indemnification for vehicular accident attributable to permit violation. Hence, the ratio of the aforesaid judgment does not advance the case of the appellant in any manner.
14. Similarly, the reliance placed upon the judgment of Hon'ble Punjab and Haryana High Court in case M.S. Middle High School (supra) is equally misplaced. The factual matrix and legal controversy involved therein were entirely different and cannot be mechanically applied to the peculiar facts of the present case. It is a settled proposition of law that every judgment has to be appreciated in the context of its own facts and circumstances and a precedent cannot be applied divorced from the factual foundation upon which it was rendered.
15. On the contrary, the observations recorded by the District Commission are fully supported by the legal principles laid down by the Hon'ble Supreme Court in State of Orissa and others Vs. Bijaya C. Tripathy, (AIR 2005 SC 1431) wherein it was categorically held that Section 66 of the Motor Vehicles Act merely restricts use of a transport vehicle without permit but does not prohibit its driving on a public road and that even in absence of permit, the vehicle continues to remain a transport vehicle capable of being used so long as it possesses valid registration and certificate of fitness. The said proposition substantially demolishes the argument raised by the 9 appellant that mere absence of operative permit on the relevant date would ipso facto absolve the insurer from liability under the Personal Accident Cover.
16. Furthermore, the District Commission has rightly taken into consideration the judgment relied upon by the respondents/ complainants wherein it has been held that murder committed in the course of use of a motor vehicle constitutes an accidental murder arising out of use of the motor vehicle, thereby fastening liability upon the insurer. In the present case also, the police investigation and challan categorically establish that the deceased was kidnapped and murdered inside the insured vehicle itself. Thus, the causal connection between use of the vehicle and death of the insured stands fully established.
17. Another significant aspect which cannot be lost sight of is that even the Insurance Ombudsman had reportedly observed that the issue of permit could not be treated as a valid ground for denial of Personal Accident claim and that the relevant consideration was whether the death arose out of use of the insured vehicle. Though the Ombudsman proceedings may not strictly bind this Commission, the observations made therein lend substantial support to the case of the complainants and further expose the arbitrary approach adopted by the appellant in repudiating the genuine claim.
18. It is trite law that insurance contracts, particularly beneficial clauses such as Personal Accident Cover, are required to be interpreted in a purposive and consumer-friendly manner and not in a narrow, pedantic or hyper-technical fashion so as to defeat the legitimate expectations of insured consumers. Consumer jurisprudence consistently discourages repudiation of genuine claims on trivial or technical grounds which have no nexus with the cause of loss. In the present case, the appellant accepted premium for Personal Accident Cover, the insured possessed valid registration and driving licence, the use of vehicle at the relevant time stood established and the death occurred during and arising out of such use. Therefore, repudiation of the claim on the solitary ground relating to permit validity dates was wholly unjustified and clearly amounted to deficiency in service as rightly held by the District Commission.
1019. In view of the aforesaid discussion, this Commission finds no illegality, perversity or jurisdictional error in the well-reasoned order passed by the District Commission warranting interference in appellate jurisdiction. The findings recorded by the District Commission are based upon proper appreciation of pleadings, evidence and settled legal principles and the same do not suffer from any infirmity whatsoever.
20. Consequently, the appeal filed by the appellant/opposite party being devoid of merit deserves dismissal and is accordingly dismissed with no order as to costs. The impugned order dated 02.06.2025 passed by District Commission-I, U.T., Chandigarh is upheld in toto.
21. Pending applications, if any, in this appeal stand disposed of accordingly.
22. Certified copies of this order be sent to the parties free of charge forthwith.
23. Complete record of CC/446/2024 (in safe custody) alongwith certified copy of this order be also sent to District Commission-I, U.T., Chandigarh forthwith.
24. File be consigned to Record Room after completion. Pronounced 18.05. 2026 (PADMA PANDEY) PRESIDING MEMBER (RAJESH K. ARYA) MEMBER Ad 11