In a recent ruling that clarifies the relationship between vehicle insurance and registration, the National Consumer Disputes Redressal Commission (NCDRC) has issued a significant clarification.
The commission, led by Inder Jit Singh, the Presiding Member, has asserted that vehicle owners who possess insurance but have not registered their vehicles in accordance with the Motor Vehicles Act and rules are not eligible to file insurance claims. The commission emphasized that non-registration of a vehicle not only violates the provisions of the Motor Vehicle Act 1988 but also constitutes a fundamental breach of the terms and conditions of a Motor Insurance Policy.
The case that led to this clarification involved Rajiv Kumar, who purchased a Chevrolet TAVERA from Regent Automobiles through ICICI Bank Ltd. The vehicle was insured with HDFC Ergo General Insurance for Rs. 6,57,000. Unfortunately, the vehicle was stolen, prompting a claim to the insurance company. However, HDFC Ergo General Insurance repudiated the claim on the grounds that the vehicle was being operated on public roads without valid registration at the time of the theft, thus violating the policy's terms. The dispute escalated to various consumer dispute redressal fora before reaching the NCDRC.
The commission's ruling was based on a careful examination of legal principles and previous judgments. It affirmed that insurance is a prerequisite for vehicle registration, as Rule 47 of the central motor vehicle rules dictates. While it is common practice for new vehicles to be insured based on their chassis and engine numbers before registration, non-registration and operation of a vehicle on public roads violate both the Motor Vehicle Act and insurance policy terms. Therefore, any claim under an insurance policy for a vehicle used in violation of motor vehicle rules and acts becomes non-admissible.
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