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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.8463 OF  2014 (Arising out of Special Leave Petition (Civil) No.26308 of  

2013)

Narinder Singh                                        …Appellant (s)

                Versus

New India Assurance Company Ltd.  and others … Respondent(s)

JUDGMENT

M.Y. Eqbal, J.:

  Leave granted.

2. This  appeal  by  special  leave  is  directed  against  the  

judgment and order dated 12.4.2013 passed by the National  

Consumer  Disputes  Redressal  Commission,  New  Delhi  (in  

short,  “National  Commission”)  whereby  Revision  Petition  

No.4951  of  2012  of  the  appellant  herein  was  dismissed  

upholding  the  judgment  of  the  State  Consumer  Disputes  

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Redressal  Commission,  Shimla  (in  short,  “State  

Commission”),  which had dismissed the complaint and set  

aside the order of the District Consumer Disputes Redressal  

Forum, Shimla (in short, “District Forum”) granting the claim  

on non-standard basis.

3. The facts of the case lie in a narrow compass.

4. The petitioner-complainant had purchased a Mahindra  

Pick UP BS-II 4WD vehicle and got it insured for an amount of  

Rs.  4,30,037/-  with  respondent  no.1–M/s.  New  India  

Assurance  Company  Ltd.  for  the  period  12.12.2005  to  

11.12.2006.  The vehicle was temporarily registered for one  

month  period,  which  expired  on  11.1.2006.   However,  on  

2.2.2006,  the  vehicle  met  with  an  accident  and  got  

damaged.  The complainant lodged FIR and informed about  

it to the respondent-Company, which appointed a surveyor  

and assessed the loss at Rs.2,60,845/- on repair basis.  The  

insurance claim was, however,  repudiated by the opposite  

party on the ground that the person Rajeev Hetta, who was  

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driving  the  vehicle  at  the  time  of  the  accident,  did  not  

possess a valid  and effective driving licence and also  the  

vehicle  had  not  been  registered  after  the  expiry  of  the  

temporary registration.  Consequently, the appellant filed a  

consumer complaint before the District Forum.

5. After hearing parties on either side and scanning the  

record of the case meticulously, the District Forum allowed  

the  complaint  and  directed  the  respondent-Company  to  

indemnify  the  complainant  to  the  extent  of  75%  of  

4,30,037/- along with interest at the rate of 9% per annum  

thereon with effect from the date of filing of the complaint.  

Aggrieved by the decision of the District Forum, Respondent-

Company as well as the appellant-complainant approached  

State Commission by way of appeal.  The State Commission  

by its common order disposed of both the appeals, allowing  

appeal of the Company and dismissing the complaint of the  

Complainant  due  to  which  the  appeal  preferred  by  the  

appellant-complainant was dismissed as infructuous.

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6. Aggrieved by the decision of the State Commission, the  

appellant  preferred  revision  petition  before  the  National  

Commission under Section 21(b) of the Consumer Protection  

Act,  1986,  which  also  stood  dismissed.   The  National  

Commission observed thus:

“We have  examined  the  entire  material  on  record  and  given  our  thoughtful  consideration  to  the  arguments  advanced  before  us.   The  State  Commission, after a careful examination of the facts  of this case and after examining the Licence Clerk of  the  Theog  Licencing  Authority  came  to  the  conclusion  that  the  licence  possessed  by  Rajeev  Hetta had been endorsed for HGV with effect from  20.4.2002,  which  was  valid  for  three  years.   The  licence  was  also  endorsed  for  LMV-Transport  with  effect from 7.6.2003, which was also valid for three  years.  The accident had taken place on 2.2.2006, on  which date the licence for HGV had expired, but it  remained  valid  for  LMV-transport.   It  is  clear,  therefore,  that the driver had a valid and effective  licence.  However, it is also clear from the facts on  record that the temporary registration of the vehicle  done by the Registration Authority of UT, Chandigarh  had expired on 11.01.2006.  At the time of accident  on  2.2.2006,  the  vehicle  was  being driven  without  registration, which is prohibited under Section 39 of  the Motor Vehicles Act, 1988 and is also an offence  under Section 192 of the said Act.”

Hence,  present  appeal  by  special  leave  by  the  

complainant.

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7. We  have  heard  learned  counsel  for  the  

parties.   

8. It has been contended on behalf of the appellant that in  

case  of  an  accident  of  a  vehicle,  when insured,  uses  the  

vehicle contrary to conditions under Section 66 of the Motor  

Vehicles Act (in short,  ‘Act’)  or  when the driver is holding  

improper licence contrary to requirement under Section 3 of  

the  Act,  claims  are  required  to  be  dealt  on  non-standard  

basis  by  insurance  companies.   It  has  been  further  

contended  that  similar  yardstick  had  to  be  taken  into  

account in case of improper registration of vehicle contrary  

to requirement under Section 39 of the Act and the claims  

ought  to  be  settled  on  non-standard  basis  rather  than  

outright repudiation of policy and rejection of claim in toto.

9. It is the case of the appellant that even when a vehicle  

is used without registration having been done, it does not  

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amount to violation of any statutory requirement and in such  

a case, if the accident takes place, the insured is entitled to  

claim  benefit  under  the  insurance  policy.   There  is  no  

statutory bar in insuring the vehicle without registration and  

hence there is no bar in making payment of insured sum in  

the eventuality of an accident.   Appellant submitted that the  

Apex Court in the case of  Amalendu Sahoo vs. Oriental  

Insurance Company Ltd., (2010) 4 SCC 536, has held that  

in  case  of  any  variation  from  the  policy  document/any  

breach  of  the  policy  document,  the  Insurance  company  

cannot  repudiate  the  claim  in  toto  and  the  claim  of  the  

complainant ought to be settled on non-standard basis.  It is  

further  contended  that  the  main  purpose  of  any  

temporary/permanent registration is to have identification of  

the vehicle in the records of the Government authorities so  

as to identify the vehicle, particularly, in case of any motor  

accident and for tracing the owner of the vehicle, and in this  

case, there was a temporary registration number (although  

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its date expired) affixed on the vehicle, which would lead to  

the owner and other details as required in law.

10.  Per contra, respondent’s case is that the vehicle can be  

driven only after proper registration and in the present case,  

the  vehicle  being  driven  without  registration,  which  is  in  

contravention to Section 192 of the Act.  Further, there is no  

endorsement on the driving licence of Rajiv Hetta for driving  

HGV, which was valid up to 20.4.2002, and as such, there is  

violation of the terms and conditions of the insurance policy  

as the vehicle in question was being driven by a person who  

was not authorized to drive the same.

11. We  have  perused  the  order  passed  by  the  three  

Forums.  The only issue for consideration is, as to whether  

the National Commission is correct in law in holding that the  

appellant is not entitled to claim compensation for damages  

in respect of the vehicle when admittedly the vehicle was  

being  driven  on  the  date  of  accident  without  any  valid  

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registration as contemplated under the provisions of Section  

39  and  Section  43  of  Motor  Vehicles  Act.  For  better  

appreciation, Section 39 and Section 43 which are relevant  

are quoted herein below:-

“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  dealer  subject  to  such  conditions  as  may  be  prescribed by the Central Government.  

"43.  Temporary  registration.—(1)  Notwithstanding anything contained in section  40 the owner of a motor vehicle may apply to  any  registering  authority  or  other  prescribed  authority  to  have  the  vehicle  temporarily  registered in the prescribed manner and for the  issue in the prescribed manner of a temporary  certificate  of  registration  and  a  temporary  registration mark."  (2) A registration made under this section shall  be valid  only for  a period not exceeding one  month, and shall not be renewable:  

Provided  that  where  a  motor  vehicle  so  registered is a chassis to which a body has not  been attached and the same is detained in a  workshop beyond the said period of one month  

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for being fitted with a body or any unforeseen  circumstances  beyond  the  control  of  the  owner,  the  period  may,  on  payment  of  such  fees, if any, as may be prescribed, be extended  by  such  further  period  or  periods  as  the  registering  authority  or  other  prescribed  authority, as the case may be, may allow.  

(3) In a case where the motor vehicle is held  under  hire-purchase  agreement,  lease  or  hypothecation,  the  registering  authority  or  other  prescribed  authority  shall  issue  a  temporary  certificate  of  registration  of  such  vehicle,  which  shall  incorporate  legibly  and  prominently the full name and address of the  person with whom such agreement has been  entered into by the owner.”  

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.  

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.  

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The proviso to Section 43 clarified that  the period of  one  

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 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  

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 as temporary registration on the ground  

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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 policy contract.

15. In the aforesaid premises, we do not find any infirmity  

in  the  order  passed  by  the  State  Commission  and  the  

National Commission.

16. For the reasons aforesaid, this appeal has no merit and  

is liable to be dismissed.

…………………………….J. [ M.Y. Eqbal ]  

…………………………….J [Pinaki Chandra Ghose]

New Delhi September 04, 2014

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