The State Consumer Disputes Redressal Commission, Haryana, has dismissed an appeal by Jyoti Sagar, a resident of Karnal, against L&T Insurance Company Limited, over a disputed insurance claim concerning the theft of his tractor. The court upheld the decision of the District Consumer Disputes Redressal Commission, Karnal, which had previously dismissed Sagarโs complaint, citing his failure to register the tractor before it was stolen.
Background of the Case
Jyoti Sagar, the appellant, purchased a Sonalika Tractor on April 3, 2015, with financial assistance from L&T Finance Limited under a Loan-cum-Hypothecation Agreement. The tractor was insured with L&T Insurance Company Limited on the same day, with the insurance valid until April 2, 2016.
On September 2, 2015, the tractor was stolen, leading Sagar to file an FIR under Section 379 of the IPC. He subsequently lodged a claim with L&T Insurance, expecting the insurance amount to be credited to his loan account within two months. However, when the claim was not processed, Sagar pursued legal action, alleging deficiency in service and unfair trade practices by L&T Insurance and L&T Finance.
Legal Issues Involved
The core issues revolved around the insurer’s refusal to honor the claim and the legal implications of Sagar’s failure to register the tractor:
1. Non-Registration of Vehicle: Sagar did not register the tractor in his name within the required 30 days after purchase, which is mandated by law. This non-compliance played a crucial role in the case, as the court determined that this failure constituted a fundamental breach of the insurance policy.
2. Timeliness of Claim: The insurance company argued that no formal claim was lodged, and the FIR was filed 27 days after the theft, raising questions about the validity and timeliness of the claim.
3. Jurisdiction and Arbitration: L&T Finance contended that the complaint was not maintainable as it should have been resolved through arbitration, as per the loan agreement. The company also argued that it had no statutory obligation to fulfill the insurance claim, which was a matter strictly between Sagar and the insurer.
Court’s Observations and Decision
The bench, consisting of Mr. Naresh Katyal, Judicial Member, and Mr. S.C. Kaushik, Member, found no merit in Sagarโs appeal. The court highlighted the following key points:
– Failure to Register the Tractor: The court emphasized that the failure to register the tractor before its theft placed Sagar at risk and peril, nullifying his right to claim benefits under the insurance policy. The court cited the Supreme Court judgment in Narinder Singh vs. New India Assurance Company, which established that operating a vehicle without proper registration constitutes both an offense under the Motor Vehicles Act and a breach of insurance policy terms.
– Non-Response to Legal Notice: Sagarโs argument that the non-response to his legal notice by the insurer and financer constituted an admission of liability was rejected. The court clarified that only facts stated in a written statement or reply could be considered admissions, not those in an unanswered legal notice.
– No Deficiency in Service: The court affirmed that there was no deficiency in service on the part of the respondents, as Sagarโs failure to register the tractor and the delayed filing of the FIR were pivotal in the decision to deny the insurance claim.
The appeal was dismissed, with the court upholding the District Consumer Commission’s decision. The judgment underscores the importance of adhering to statutory requirements, such as vehicle registration, to ensure that insurance claims are valid and enforceable.
Representation
Mr. Gobind Chauhan represented the appellant, Jyoti Sagar, while the respondents, L&T Insurance Company Limited and L&T Finance Limited, were represented by Mr. Vishal Aggarwal and Mr. Gaurav Sharma, respectively.
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Case Details
– Case Number: First Appeal No. 596 of 2018
– Judges: Mr. Naresh Katyal (Judicial Member), Mr. S.C. Kaushik (Member)
– Parties: Jyoti Sagar (Appellant) vs. L&T Insurance Company Limited and L&T Finance Limited (Respondents)
– Date of Judgment: August 16, 2024
