Nine years after car theft, United India Insurance asked to pay owner the full value of vehicle

Sushil Kumar Godara had purchased a new Bolero car for Rs 6,17,800. It had a temporary registration valid for one month from June 20 to July 19, 2011. It was covered under an insurance policy issued by United India Insurance.

On the night of July 28, 2011, Godara had parked the car outside a guest house in Jodhpur where he had put up for the night. When he woke up next morning, he found the vehicle missing. He immediately lodged an FIR with the police.

The vehicle could not be traced, and the police submitted a closure report on September 30, 2011. Godara lodged a claim under the policy. The insurer repudiated it on January 23, 2013 on the ground that there was a delay in intimation of the theft. The insurer also stated that the temporary registration had expired, and the vehicle owner did not have a permanent registration when the theft occurred. It also alleged that parking an unattended vehicle outside the guest house would constitute a breach of the terms of the policy, rendering the claim invalid.

Godara approached the district forum, which dismissed the complaint as the vehicle did not have valid registration when the theft occurred. The Rajasthan State Commission observed that it would not be proper to repudiate the claim on such a flimsy and technical excuse, as a parked vehicle was stolen during subsistence of the policy. It held United India liable to pay the full value of the vehicle along with 9% interest, and awarded Rs20,000 as litigation costs. United India challenged this order in a revision petition.

The National Commission held that the law was well settled that a genuine claim cannot be rejected merely for delay in intimation of the loss. Also, a person spending the night at a guest house would have no option but to park the vehicle outside. Since the vehicle was locked and parked, the Commission concluded that it could not be termed as having been left unattended. The Commission also observed that plying a vehicle without valid registration would be against the law, but parking it on the road after expiry of the temporary registration did not constitute a breach in any provision of law. Since the premium had been paid and the policy was in force, the Commission held that the claim for theft of a parked vehicle would have to be honoured. The insurer's revision was dismissed by an order dated December 11, 2020 passed by C Viswanath, and the direction to settle the claim was upheld.