Supreme Court Restores Full Insurance Payout in Car Accident Dispute.


17 December 2024 Insurance >> Personal Law  

This case of Rajesh Kumar v/s National Insurance Co. Ltd. involves a dispute between a consumer (appellant) and an insurance company (respondent) regarding the payout of an insurance claim following an accident. The appellant had purchased a car insurance policy from the respondent, which covered a maximum insured amount of Rs. 5,02,285. During the policy period, the appellant’s car met with an accident, resulting in it capsizing into a ditch. Following the accident, the vehicle was left unattended for a period, and a short-circuit caused further damage.

The appellant sought the full insurance payout, while the respondent denied the claim due to the delay in reporting the incident and the car being left unattended. The District Commission partly allowed the claim, granting 75% of the insured amount. The State Commission, however, directed the insurer to pay the full insured value. The respondent then filed a revision petition with the National Commission, which reduced the payable amount to Rs. 53,543, citing policy conditions about unattended vehicles.


 

 

On appeal, the Supreme Court observed that the National Commission had exceeded its revisional jurisdiction by interfering with the concurrent factual findings of the lower commissions. It found that both the District and State Commissions had reasonably excused the delay in reporting and had properly evaluated the circumstances surrounding the vehicle’s damage. The Supreme Court emphasized that the National Commission had not demonstrated any patent illegality or material irregularity in the lower courts' findings.

The Court also ruled that the insurer's exclusionary clause in the policy (Condition No. 4) did not apply, as the appellant had left the vehicle due to compelling circumstances, i.e., rushing a co-passenger to the hospital. The Court concluded that the delay in reporting and the subsequent short-circuit damage did not invalidate the claim.

The Supreme Court thus restored the State Commission’s decision, directing the insurer to release the full insured amount of Rs. 5,02,285 with 9% interest, dismissing the National Commission’s revised order.