INSURANCE CLAIM FOR TRUCK CAUGHT FIRE

National Permit or All India Permit is a type of registration provided to transporters by the Transport Department of each State Government for goods carriage to operate through-out India. State Governments can issue two types of permits for goods carriage, one being State Permit and the other National Permit. A National Permit provides authorisation for a vehicle to ply across India, the State in which the permit was issued, the Union Territory and at least a minimum of four other States. Normally the truck owners insure their vehicles with the insurance companies to get compensation in case of accidence, get in fire, lost etc.

The claims of the vehicle owners may be sanctioned or rejected by the insurance companies.  In such cases the owners can file a complaint before the Consumer Forum under the Consumer Protection Act.

In SHRI BINOD KUMAR SINGH VERSUS NATIONAL INSURANCE COMPANY LTD. - 2025 (2) TMI 413 - SUPREME COURT, the appellant is a truck owner. The appellant insured the truck with the National Insurance Company Limited for the period from 18.09.2013 to 17.09.2014.   On 08.06.2014 the truck caught fire for short circuit.  The accident occurred during the validity of the insurance policy.

The appellant filed claim before the respondent insurance company.  The claim of the appellant was rejected by the respondent company.  Therefore, the appellant filed a complaint before the State Consumer Disputes Redressal Commission (‘State Commission’ for short).  The State Commission, on considering the case of both the parties, directed the respondent company on 07.07.2017 to settle the claim of the appellant on non-standard basis within a period of 3 months if other requirements were fulfilled by the appellant.

The respondent insurance company filed an appeal before the National Consumer Disputes Redressal Commission (‘National Commission’ for short).  The respondent vehemently opposed the order passed by the State Commission.  The National Commission relied on the judgment of Supreme Court in AMRIT PAUL SINGH AND ORS. VERSUS TATA AIG GENERAL INSURANCE CO. LTD. AND ORS. - 2018 (5) TMI 2189 - SUPREME COURT The National Commission allowed the appeal filed by the Insurance Company on the ground that the insurance claim cannot be allowed in the absence of any valid permit thereby setting aside the order passed by the State Commission.  The National Commission passed its order on 19.08.2020.

Against the order of National Commission, the truck owner field the present appeal before the Supreme Court, challenging the order of National Commission.  The appellant submitted the following before the Supreme Court-

• The All-India Permit (National Permit) was issued having validity period with effect from 14.10.2012 to 13.10.2017.
• On the date the truck caught fire on 08.06.2014, there was a valid National Permit in existence.

The Insurance company submitted the following before the Supreme Court-

• As per the terms and conditions of the permit, the fee was deposited for a period with effect from 13.10.2012 to 13.10.2017 by the appellant.
• However, the appellant did not pay the authorisation fee after 14.10.2013.
• In the absence of non-depositing of authorization fee, National Permit cannot be said to be a valid permit.

The Supreme Court considered the submissions of the appellant and the respondent insurance company.  The Supreme Court gone through the permit which is on record and observed that 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.   The truck caught fire on account of short-circuit on 08.06.2014 in the State of Bihar itself.  Therefore, the insurance company cannot repudiate the claim of the appellant.  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.   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.  Therefore, the Supreme Court was of the view that the appellant is entitled for the insurance claim as held by the State Commission. 

The Supreme Court directed the Insurance Company to process the claim of the appellant and to pay the amount to the appellant within a period of 60 days from the date of its judgment i.e., 07.02.2025.  The Supreme Court, further held that the appellant is eligible for interest from the date of filing the complaint before the State Commission till the entire amount is paid actually to the appellant along with 9% interest.

The Supreme Court allowed the appeal.