Insurance Claim Can Be Denied If Driver Lacked Valid License At Time Of Accident: NCDRC New Delhi
Pranav B Prem
The National Consumer Disputes Redressal Commission (NCDRC), New Delhi, comprising Dr. Inder Jit Singh (Presiding Member) and Dr. Sadhna Shanker (Member), has held that an insurance company is justified in repudiating a claim if the driver of the insured vehicle did not possess a valid driving license at the time of the accident. The Commission emphasized that the absence of a valid license constitutes a fundamental breach of the insurance policy’s terms and conditions.
The matter arose out of a revision petition filed by Van Mandaladhikari, through its Managing Director, challenging the order of the Madhya Pradesh State Consumer Disputes Redressal Commission, which had overturned the District Forum's decision in the complainant’s favor.
The complainant had insured its vehicle (bearing registration number MP 08 CA 4426) with National Insurance Company Limited for the policy period from February 22, 2015, to February 21, 2016. On December 6, 2015, during the currency of the policy, the vehicle met with an accident while travelling from Jamner to Guna. The accident was caused by a truck that collided with the insured vehicle, leading to its complete damage and the death of its driver, Mahesh Bunkar, a government-trained driver since 1995. An FIR was registered and the insurer was informed promptly.
Following the incident, the complainant submitted an insurance claim on December 22, 2015. However, the claim was repudiated by the insurer on February 23, 2016, citing that the driver’s license had expired on October 10, 2015—nearly two months before the accident. The complainant argued that the driver had been duly licensed and had intended to renew the license, but the accident occurred before he could do so.
The District Consumer Forum, Guna, allowed the complaint and directed the insurer to pay 75% of the damage amount (₹84,907) and also ordered reimbursement of parking charges levied by the workshop. Aggrieved by this order, the Insurance Company filed an appeal before the State Commission, which reversed the District Forum's order and dismissed the complaint.
In the revision petition before the NCDRC, the complainant contended that the driver's license had only recently expired, and that the insurer should have considered settling the claim on a non-standard basis. It was also argued that the driver was hired after due verification and that the lapse in license renewal did not amount to a fundamental breach.
The NCDRC, however, found no merit in the revision petition. Relying on New India Assurance Co. Ltd. v. Suresh Chandra Aggarwal [(2009) 15 SCC 761], the Commission reiterated that a driving license, if not renewed within 30 days of expiry, is no longer valid for the intervening period. Since no renewal application was filed within that time, the driver was deemed to be without a valid license on the accident date.
The Commission also referred to Ashok Kumar v. New India Assurance Co. Ltd. [(2024) 1 SCC 357], where the Supreme Court held that only in the absence of a fundamental breach can the claim be considered on a non-standard basis. Further support was drawn from National Insurance Co. Ltd. v. Jarnail Singh [(2007) 15 SCC 28], which reaffirmed that licenses renewed beyond 30 days from expiry do not cure the intervening period’s illegality.
Given the admitted fact that the driver’s license had expired and was never renewed, the NCDRC concluded that there was a fundamental breach of the policy. Therefore, the insurer was well within its rights to repudiate the claim, and such repudiation did not amount to any deficiency in service. Accordingly, the NCDRC upheld the order of the State Commission and dismissed the revision petition.
Appearance
For The Petitioner: Mr. Ritesh Khare, Advocate
For The Respondent: Mr. Mansimran Singh, Advocate for R-1 Nemo for R-2
Cause Title: Van Mandaladhikari V. National Insurance Company Limited and Anr.
Case No: NC/RP/1902/2024
Coram: Hon'ble Dr. Inder Jit Singh [Presiding Member], Hon'ble Dr. Sadhna Shanker [Member]
[Read/Download order]
