NATIONAL INSURANCE COMPANY LTD. versus MEENA AGGARWAL

Citation: [2009] 1 S.C.R. 492 · Decided: 23-01-2009 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed

Judgment (excerpt)

[2009] 1 S.C.R. 492 
A 
NATIONAL INSURANCE COMPANY LTD. 
v. 
MEENA AGGARWAL 
(Civil Appeal No. 396 of 2009) 
B 
JANUARY 23, 2009 
[DR. ARIJIT PASAYAT AND ASOK KUMAR 
GANGUL Y, JJ.] 
+ 
MOTOR VEHICLES ACT, 1988: 
c 
Motor vehicle accident - Vehicle badly damaged -
Insurance claim - Rejected on the grounds that the driver of 
the vehicle did not possess a valid driving licence and though 
the private vehicle was insured for personal use, it was used 
D as a taxi when the accident occu"ed - District Consumer 
Forum rejected the claim - State Commission allowed the 
claim - Upheld by National Commission - On appeal, Held: 
State Commission and National Commission in their orders 
did not indicate reason for coming to the conclusion that there 
E was no fundamental breach of the terms of the insurance 
policy - Hence set aside. 
The appellant Insurance Company rejected the claim 
for damages to an insured vehicle on the grounds that 
the driver of the vehicle did not possess a valid driving 
~ 
F licence and that the insured vehicle was a private vehicle 
insured for personal use, but was used as a taxi when 
the accident occurred. 
The District Consumer Forum also rejected the claim 
G of the insured. The State Commission allowed the appeal 
and held that even if the vehicle was being used as a taxi, 
there was no fundamental breach of the terms of the 
insurance policy. On appeal, the National Commission 
held that even though the vehicle was being used as a 
H 
492 
NATIONAL INSURANCE COMPANY LTD. v. MEENA 
493 
AGGARWAL 
-• 
taxi and the driver did not have a valid driving licence, 
A 
there was no fundamental breach of the terms of the 
policy. Hence the appeal by the Insurance Company. 
Allowing the appeal, the Court 
HELD: 1. In a case of this nature, the owner of a 8 
vehicle cannot contend that he has no liability to verify 
the fact as to whether the driver of the vehicle possessed 
a valid licence or not. [Para 6) [497-C] 
National Insurance Co. Ltd. v. Swaran Singh 2004(3) c 
SCC 297 and National Insurance Corpn. Ltd. v. Kanti Devi 
2005 (5) )SCC 789, relied on. 
National Insurance Co. Ltd. v. Kusum Rai, 2006(4) SCC 
250, distinguished. 
D 
2. The State Commission and the National 
Commission have not practically indicated any reason for 
coming to the conclusion that there was no fundamental 
breach of the terms of the policy. Both the State 
Commission and the National Commission observed that E 
the vehicle was being driven by a person who did not 
have a valid driving licence. In addition to that the vehicle 
which was insured for personal use was used for 
" 
commercial purposes. [Para 9) [497-F] 
3. Looked at from any angle the impugned orders of 
the State Commission and the National Commission are 
unsustainable, deserve to be set aside. [Para 10) [497-G] 
Case Law Reference: 
2004(3) sec 297 
2005(5) sec 789 
2006(4) sec 250 
relied on 
relied on 
distinguished 
Para 4 
Para 5 
Para 7 
F 
G 
H 
494 
SUPREME COURT REPORTS 
[2009] 1 S.C.R. 
A 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 396 
-.,. 
of 2009. 
From the Judgment and final Order dated 3.07.2006 of the 
National Consumer Disputes Redressal Commission, New 
8 Delhi in Revision Petition No. 145 of 2006. 
c 
D 
S.L. Gupta, Ram Lal Kadamb, Goodwill lndeevar and A.V. 
Sharma for the Appellant. 
The Judgement of the Court was delivered by 
DR. ARIJIT PASAYAT, J.1. Leave granted. 
2. Challenge in this appeal is to the order passed by the 
National Consumer Disputes Redressal Commission, New 
Delhi, (in short the 'National Commission'). 
3. Background facts in a nutshell are as follows: 
Respondent was the owner of a vehicle- a Maruti van which 
was the subject matter of insurance with the present appellant 
for a period from 27.1.2003 to 26.1.2004. The Vehicle in 
E question met with an accident on 12.6.2003 and was badly 
damaged. The estimate of the cost of repair was prepared by 
Automobiles Satya of Bilaspur. According to him the estimated 
expenditure on total repair of the vehicle was Rs.2,00,000/-. 
Intimation of the same was given by the complainant to the 
F present appellant and claim was made. The same was 
rejected on the ground that the driver of the vehicle did not 
possess a valid driving licence and the vehicle which was a 
private vehicle was insured for personal use, but was being 
used as a taxi for carrying marriage parties. a marriage party 
G was being transported in the vehicle after charging rent of 
Rs.2100/- when the acc

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