Kerala Court Orders NICL to Pay ₹3.5L for Stolen Car Claim
Kerala Court has ordered National Insurance Company Ltd (NICL) to compensate ₹3.5 lakh to a car owner after rejecting his theft claim. This ruling strengthens consumer rights and clarifies insurance ownership laws.
NICL Denied Insurance Claim Over Ownership Dispute
Syamkumar, an Ernakulam resident, had insured his Tata Indica under a hire purchase agreement. His policy covered the period from November 1, 2011, to October 31, 2012. Unfortunately, thieves stole the car on August 9, 2012. When he filed a claim, NICL refused to compensate him. The company argued that he had sold the vehicle to Reji E V in October 2011 and no longer had an insurable interest.
Kerala Court Upholds Legal Ownership Under MV Act
Despite the sale agreement, Syamkumar’s name remained on the vehicle’s registration certificate. The court referred to a Supreme Court ruling and clarified that under Section 2(30) of the Motor Vehicles Act, 1988, the legal owner is the person listed in the registration records. Since Syamkumar’s name was still on the record, he was entitled to the insurance coverage.
Kerala Court Finds NICL Guilty of Deficiency in Service
NICL argued that the policy was void because Syamkumar failed to disclose the sale when purchasing insurance. However, the court ruled that rejecting the claim on this ground amounted to a deficiency in service. The consumer court bench, comprising Justice B Sudheendra Kumar, Ajith Kumar D, and Radhakrishnan K R, directed NICL to pay ₹3.5 lakh in compensation, along with ₹10,000 as damages.
Kerala Court’s Verdict Strengthens Consumer Rights
This ruling sets a strong precedent for insurance disputes, ensuring that companies cannot deny claims based on technicalities. The judgment emphasizes that insurers must honor valid claims and act in good faith, safeguarding consumer rights.
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