2025 (2) TMI 413 - SC - Indian Laws

Insurance claim - valid permit or not - absence of non-depositing of authorization fee - HELD THAT - This Court has carefully gone through the permit which is on record and the National Permit is certainly valid up to 13.10.2017. The authorization fee was required to be paid only when the truck was moving out of State of Bihar as it was registered in the State of Bihar and the truck caught fire on account of short-circuit on 08.06.2014 in the State of Bihar itself and therefore the respondent company could not have repudiated the claim on such a frivolous ground. The permit in question was issued by the competent authority in Bihar and therefore there was no requirement of paying authorization fee when the truck was being used in the State of Bihar and as per the terms and conditions of the National Permit authorization fee was required to be paid only when the truck was moving out of State of Bihar. Thus in the considered opinion of this Court the appellant was certainly entitled for the insurance claim as held by the State Commission and therefore the order passed by the National Commission dated 19.08.2020 deserves to be set aside and is accordingly set aside. Appeal allowed.

Summary

The Supreme Court granted leave to appeal against an order issued by the National Consumer Disputes Redressal Commission in First Appeal No. 1778 of 2017. The case involved an appellant who owned a truck insured by the respondent National Insurance Company. The truck caught fire due to a short-circuit during the insurance coverage period. The State Consumer Disputes Redressal Commission directed the insurance company to settle the claim based on a previous judgment involving a theft case. However, the National Commission overturned this decision, citing a different case involving damage by fire and the absence of a valid permit.The key issue in the case was whether the appellant was entitled to an insurance claim for the damaged truck based on the validity of the National Permit. The appellant argued that the National Permit was valid until 13.10.2017, including the date of the fire incident in Bihar. The respondent contended that the authorization fee was not deposited beyond 14.10.2013, making the permit invalid.The Court examined the terms of the permit and found that it was indeed valid until 13.10.2017, with the authorization fee required only for out-of-state travel. Since the truck caught fire in Bihar, where the permit was issued, the respondent's refusal to honor the claim based on the authorization fee was deemed unjustified. Therefore, the Court set aside the National Commission's decision and directed the insurance company to process the claim and pay the appellant within 60 days. Additionally, the appellant was entitled to interest at a rate of 9% per annum from the date of the complaint to the date of payment.In conclusion, the Court allowed the appeal, with no costs awarded, and disposed of any pending applications. The core principle established was that the validity of the National Permit and the payment of authorization fees were crucial factors in determining the entitlement to an insurance claim for the damaged truck. The final determination was in favor of the appellant, emphasizing the importance of honoring valid insurance claims based on the terms of the policy and relevant permits.