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Delhi District Court

3 vs Iffco­Tokio General Insurance Company ... on 27 February, 2020

 IN THE COURT OF SH. M. P. SINGH, ADDITIONAL DISTRICT JUDGE­
       03, EAST DISTRICT, KARKARDOOMA COURTS: DELHI
CS No. 432/17
Sh. Anand Kumar,
S/o Sh. Ghanyam Das,
R/o H.No. W/A­84, F/F/Kh. No. 785
Shakar Pur, Delhi ­ 92                                         ................ Plaintiff

                                             Versus

Iffco­Tokio General Insurance Company Ltd.,
Registered Office 'Iffco Sadan'
C­1, District Center, Saket,
New Delhi                                   ................... Defendant
                             Suit filed on ­ 06.07.2017
                        Arguments concluded on ­ 18.02.2020
                        Judgment pronounced on - 27.02.2020
                                         JUDGMENT

1. Facts, as per plaint, are as follows: Plaintiff carries on transport business in the name and style of M/s New M. K. Transport Company, Shop no. 99, Container Wire House, Village Gazipur, Delhi. He is the registered owner of a brown colour truck, make Tata, bearing registration no. HR 38G7184, engine no. 697TC45BXZ859506, chasis no. 373341BX204903, model 2002. This truck was insured with the defendant vide policy no. 80470778. The total insured value is Rs. 3.30 lacs. On 01.10.2012 few unknown persons stole this truck from Gazipur Government School, near the boundary wall of Container Wire House. On plaintiff's complaint, FIR no. 363/12 under section 379 of IPC was registered at PS Gazipur, Delhi against unknown persons. Plaintiff then filed a compensation claim of Rs. 3,30,000/­ with the defendant vide claim no. 33375565, but the latter turned it down vide its letter dt. 14.07.2014 (Mark Y) on the ground that on the date of theft there was no fitness certificate. Plaintiff avers that defendant has breached the insurance policy contract. On these CS no. 432/17 Anand Kumar v. Iffco­Tokio General Insurance Co. Ltd. Page 1 of 8 averments, he seeks compensation of Rs. 3,30,000/­ from the defendant with interest of 24% from the date of filing of claim till realisation.

2. Defendant in its written statement states that plaintiff's claim was repudiated due to statutory and contractual violations as the vehicle on the date of reported theft was being plied sans a valid fitness certificate; that section 56 of Motor Vehicles Act mandates that a vehicle with no valid fitness certificate would not be considered a registered vehicle; that a combined and harmonious reading of sections 84, 39, 59 and 60 of Motor Vehicles Act would show that a transport vehicle is required to have a fitness certificate for safety of passengers or goods; that if the vehicle is put to use on road in violation of these statutory requirements then the insurance company has a right to resist the claim by taking recourse to section 149 (2) (a) (i) of Motor Vehicles Act; that using a vehicle on public road without registration is not only an offence punishable under section 192 of Motor Vehicles Act, but also a fundamental breach of terms and conditions of policy contract. Defendant seeks dismissal of the suit.

3. Plaintiff in his replication has reaffirmed his averments as set out in the plaint and refuted those of the defendant as set out in its written statement.

4. Issues are as follows: ­

1. Whether the plaintiff is entitled for compensation, if so, to what amount?

OPP

2. Whether the plaintiff is entitled to interest and if so, on what rate and for what period? OPP

3. Whether the plaintiff was in breach of statutory and contractual norms, and if so, its effect? OPD

4. Relief.

5. In plaintiff's evidence, plaintiff Anand Kumar (PW1) was the sole witness. Defendant led no evidence.

6. Arguments heard. Record perused.

7. Issuewise findings are as follows.

8. Issue no.3 - The issue is whether the plaintiff was in breach of statutory and contractual norms, and if so, its effect on the suit. Onus to prove this issue was on the defendant. Record shows that the fitness certificate of plaintiff's truck had expired on 22.03.2010. Insurance with the defendant was with effect from 25.06.2011 to 24.06.2012 and thereafter from 25.06.2012 till 24.06.2013. Vehicle was stolen on 01.10.2012 for which an FIR bearing no. 363/12 under section 379 of IPC was registered on 01.10.2012 itself. What is clear is that the vehicle did not have a valid fitness certificate as on the date on which it insured. It neither had a valid fitness certificate as on the date on which it was stolen.

9. Section 39 of Motor Vehicles Act, 1988 mandates that a vehicle shall not be driven unless the same is registered. Section 56 (1) of this Act mandates that a transport vehicle shall not be deemed to be validly registered, unless it carries a fitness certificate. Section 2 (47) of the Act defines transport vehicle to mean a public service vehicle, a goods carriage, an educational institution bus or a private service vehicle. As per section 2 (14) of the Act goods carriage means any motor vehicle constructed or adapted for use solely for the carriage of goods, or any motor vehicle not so constructed or adapted when used for the carriage of goods. Thus, a truck would fall within the definition of transport vehicle as defined in section 2 (47) of the Act. Consequently, in terms of sections 56 (1) and 39 of the Act plaintiff's truck is deemed not to have been validly registered once its fitness certificate expired on 22.03.2010. Thus, it is held that there was breach of statutory norms by the plaintiff. In Narinder Singh v. New India Assurance Company Ltd., (2004) 9 SCC 324, which was relied upon by defendant's counsel, it has been held that a vehicle on public CS no. 432/17 Anand Kumar v. Iffco­Tokio General Insurance Co. Ltd. Page 3 of 8 road without any registration is an offence punishable under section 192 of the Act and the same is also a fundamental breach of the terms and conditions of the policy contract. However, in the case at hand the vehicle was not being plied on the public road at the time of its theft. It is rather parked. The insurance policy contract between the parties does not say that the defendant would not be liable to indemnify for want of fitness certificate in case of theft from parking. Given this, this Court is of the view that there was a breach of the statutory norms by the plaintiff. However, this Court is of the view that there was no breach of the contractual norms by the plaintiff. The effect on the present suit of the breach of the statutory norms by the plaintiff shall be dealt with in the discussion in issue no. 1. This issue accordingly stands decided.

10. Issue no.1 - The issue is whether plaintiff is entitled for compensation, and if so, to what amount. Onus to prove this issue was on the plaintiff. Lack of fitness certificate is not a contributory factor for theft. Lack of fitness certificate had nothing to with the settlement of claim. In National Insurance Co. Ltd. v. Nitin Khandelwal, (2008) 11 SCC 259 it has been held that in case of vehicle theft, breach of condition is not germane and the insurance company is liable to indemnify the vehicle owner when the insured had obtained comprehensive policy. This was a case where as per the claimant his Mahindra Scorpio vehicle on its way to Jaipur was robbed by some unknown people. However, the insurance company took the stand that the vehicle was being used as taxi and four passengers who had hired the same, on the way, snatched the vehicle from the driver. Apex Court observed as follows: ­

10. Pursuant to the notice issued by this Court, the respondent has filed a comprehensive counter­affidavit. The appellant relied upon the judgment of this Court in National Insurance Co. Ltd. v. Kusum Rai [(2006) 4 SCC 250 : (2006) 2 SCC (Cri) 214]. According to the re­ spondent, this case has no application so far as the instant case is con­ cerned. The aforesaid case relates to the accident where the main or CS no. 432/17 Anand Kumar v. Iffco­Tokio General Insurance Co. Ltd. Page 4 of 8 contributory cause of accident was negligent driving at the relevant time of the accident. The instant case relates to the theft of the car. It is not a case of third­party risk. In the instant case, the vehicle has not been recovered. It is also incorporated in the counter­affidavit 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 ve­ hicle, the breach of condition is not germane. In Kusum Rai case [(2006) 4 SCC 250 : (2006) 2 SCC (Cri) 214], Jitendra Kumar v. Ori­ ental Insurance Co. Ltd. [(2003) 6 SCC 420] and National Insurance Co. Ltd. v. Swaran Singh [(2004) 3 SCC 297 : 2004 SCC (Cri) 733] were also considered. This Court in Jitendra Kumar case [(2003) 6 SCC 420] in paras 9 and 10, observed as under:

9. ... The question then is: Can the Insurance Company repudi­ ate a claim made by the owner of the vehicle which is duly in­ sured with the Company, solely on the ground that the driver of the vehicle who had nothing to do with the accident did not hold a valid licence? The answer to this question, in our opinion, should be in the negative. Section 149 of the Motor Vehicles Act, 1988 on which reliance was placed by the State Commis­ sion, in our opinion, does not come to the aid of the Insurance Company in repudiating a claim where the driver of the vehicle had not contributed in any manner to the accident. Section 149 (2) (a) (ii) of the Motor Vehicles Act empowers the Insurance Company to repudiate a claim wherein the vehicle in question is damaged due to an accident to which driver of the vehicle who does not hold a valid driving licence is responsible in any man­ ner. It does not empower the Insurance Company to repudiate a claim for damages which has occurred due to acts to which the driver has not, in any manner, contributed i.e. damages incurred due to reasons other than the act of the driver.

10. ... It is the case of the parties that the fire in question which caused damage to the vehicle occurred due to mechanical failure and not due to any fault or act, or omission of the driver.

Therefore, in our considered opinion the Insurance Company could not have repudiated the claim of the appellant."

11. Similarly, in Swaran Singh [(2004) 3 SCC 297 : 2004 SCC (Cri) 733] this Court has held as under:

"89. ... If on facts, it is found that the accident was caused solely because of some other unforeseen or intervening causes like mechanical failures and similar other causes having no nexus with the driver not possessing requisite type of licence, the insurer will not be allowed to avoid its liability merely for technical breach of conditions concerning driving licence."

12. In the case in hand, the vehicle has been snatched or stolen. In the case of theft of vehicle, breach of condition is not germane. The ap­ pellant Insurance Company is liable to indemnify the owner of the ve­ hicle when the insurer has obtained comprehensive policy for the loss caused to the insurer. The respondent submitted that even assuming that there was a breach of condition of the insurance policy, the appel­ lant Insurance Company ought to have settled the claim on non­stan­ dard basis. The Insurance Company cannot repudiate the claim in toto in case of loss of vehicle due to theft.

13. In the instant case, the State Commission allowed the claim only on non­standard basis, which has been upheld by the National Commission. On consideration of the totality of the facts and circum­ stance in the case, the law seems to be well settled that in case of theft of vehicle, nature of use of the vehicle cannot be looked into and the Insurance Company cannot repudiate the claim on that basis.

14. In the facts and circumstances of the case, the real question is whether, according to the contract between the respondent and the ap­ pellant, the respondent is required to be indemnified by the appellant. On the basis of the settled legal position, the view taken by the State Commission cannot be faulted and the National Commission has cor­ rectly upheld the said order of the State Commission.

15. The State Commission has allowed only 75% claim of the re­ spondent on non­standard basis. We are not deciding whether the State Commission was justified in allowing the claim of the respondent on non­standard basis because the respondent has not filed any appeal against the said order. The said order of the State Commission was up­ held by the National Commission.

11. National Insurance Company Limited v. Nitin Khandelwal (supra) is very clear that if there is a comprehensive insurance policy and the vehicle is stolen then insurance company cannot escape its liability to indemnify. In the instant case, there is no doubt that plaintiff's vehicle was stolen on 01.10.2012 and for which FIR was registered on 01.10.2012. Admittedly, the vehicle was insured with the defendant as on the date of its theft. Therefore, insurance company is liable to indemnify the plaintiff for loss of vehicle. The vehicle had been insured for Rs. 3,30,000/­ and vehicle has not been traced out as yet. It is not in dispute that the insurance policy in the instant case is a comprehensive one. This Court is of the view that the plaintiff is therefore entitled to recover CS no. 432/17 Anand Kumar v. Iffco­Tokio General Insurance Co. Ltd. Page 6 of 8 the amount to the tune as mentioned in the insurance policy. The defendant wrongly repudiated plaintiff's claim.

12. Repudiating plaintiff's claim would in fact amount to imposing a penalty/punishment higher than what is prescribed under section 192 of the Act. If any penal offence has been made out for not possessing a valid fitness certificate, the owner may be prosecuted under section 192 of the Act which is punishable with imprisonment or fine. But the fact that the same may be a penal offence can be no ground to repudiate the claim for it would amount to imposing a higher penalty/punishment.

13. Ld. Counsel for the defendant relied on the judgment of National Insurance Co. Ltd. v. Challa Bharathamma & Ors., AIR 2004 SC 4882 in support of his arguments. This judgment is apparently distinguishable. This judgment was rendered in a case of motor vehicle accident. It was not rendered in a case of motor vehicle theft. The law with regard to insurance claim in motor vehicle theft has been set out in National Insurance Co. Ltd. v. Nitin Khandelwal (supra). Further, in the judgment of National Insurance Co. Ltd. v. Nitin Khandelwal (supra) the case of Kusum Rai (supra) was distinguished primarily on the ground that the same was not a case of motor vehicle theft involving no third party risk, but a case relating to motor vehicle accident where the main or contributory cause of accident was negligent driving at the relevant time of the accident. On the very same reasoning the judgment being relied upon by the defendant is distinguishable.

14. The present suit, filed on 06.07.2017, is within limitation for the reason that plaintiff's claim was repudiated vide defendant's letter dt. 14.07.2014 (Mark Y).

15. Counsel for the defendant had submitted that the suit was one for CS no. 432/17 Anand Kumar v. Iffco­Tokio General Insurance Co. Ltd. Page 7 of 8 compensation which was not maintainable. This argument is without any merit. Whether the suit be treated to be one for compensation or to be indemnified with the insurance claim amount would hardly be of any consequence. The semantics will not affect the merits of the case. It would be akin to indulging in hair splitting technicalities of law to delve into such an aspect. It is the substantial justice which has to be kept in mind.

16. Answer to this issue is concluded by holding that the defendant is liable to indemnify the plaintiff to the tune of Rs. 3,30,000/­. This issue is accordingly answered in plaintiff's favour and against the defendant.

17. Issue no.3 - This issue concerns the interest to be awarded. This Court is of the view that pendente lite and future interest of 6% per annum on the amount of Rs. 3,30,000/­ would be justified. This issue is accordingly answered in plaintiff's favour and against the defendant.

18. Relief - This suit stands decreed in plaintiff's favour and against the defendant in the sum of Rs. 3,30,000/­ with pendente lite and future interest of 6% per annum thereon. Costs of the suit is awarded to the plaintiff. Decree sheet be drawn up. File be consigned to record room.

Announced in the open Court on 27.02.2020 (M. P. SINGH) Addl. District Judge­03 (East) Karkardooma Courts, Delhi CS no. 432/17 Anand Kumar v. Iffco­Tokio General Insurance Co. Ltd. Page 8 of 8