Can’t deny insurance if car robbed by lift-taker: Supreme Court

New Delhi: If a driver offers lift to a passenger and the latter robs the vehicle en route, the insurance company cannot deny theft insurance claim to the vehicle owner, the Supreme Court has ruled.

A bench of Justices Madan B. Lokur and Deepak Gupta gave the consumer-friendly decision on Friday on the plea of Manjeet Singh, a truck owner, who was denied theft insurance claim on the grounds that the vehicle’s driver breached the policy by giving a lift to passengers who robbed it during the journey.

The apex court slammed the vehicle insurer and said, “The driver, on a cold winter night, gave lift to some persons standing on road. It was a humanitarian gesture. It cannot be said to be such a breach that nullifies the policy.”

In such claims, where there is breach of policy, they have been treated to be non-standard claims and have been directed to be settled at 75 per cent of the insured amount, the bench said.

The arbitration proceedings between the financer and the insurer, relating to recovery of the loan amount, cannot negate the rights of the insured against the insurance company, it said.

The bench allowed Mr Singh’s appeal, setting aside orders of the National Consumer Disputes Redressal Commission, and directed the National Insurance company to pay him 75 per cent of the insured amount of `7.28 lakh, along with interest at the rate of 9 per cent per annum from the date of filing the claim petition.

In addition, the insurance company was directed to pay `1 lakh as compensation to the vehicle owner.

Mr Singh purchased a second-hand open truck through a financier and  insured it for Rs 7.28 lakh. The vehicle’s one-year theft insurance policy was valid from September 25, 2004. On December 12, 2004, truck driver Sanjay Kumar was signalled to stop by some pedestrians on national highway near Karnal, Haryana. They requested the driver to give them lift up to Yamuna Nagar since no other mode of transport was available. Since it was cold, the driver agreed to help and allowed them to board the vehicle.

After a little while, one of the passengers requested the driver to stop the truck on the pretext that he had to answer the call of nature. When the vehicle stopped, the three passengers assaulted the driver and fled with the vehicle.

Mr Singh was denied benefit of theft insurance by the company, forcing him to drag the insurer to consume court. He moved apex court after the national  consumer commission rejected his claim.