Case Study 13 Claim repudiated vehicle insured for private purpose but used commecial

UNITED INDIA INSURANCE CO. LTD. v/s DEEPAK KUMAR MANUBHAI PATEL
The complaint had a Maruti car insured with the United India Insurance Co. which was stolen during night time in September 90.
The insurance co. Repudiated the claim of the insured on the ground that the said vehicle was being used for commercial purpose by giving the same for hire. The insurance policy clearly provided the limitation as to use of the said vehicle being limited to social, domestic and pleasure purpose. The district forum held that the vehicle being stolen could not be connected with its being given on hire. The main contract of insurance could not be terminated in the manner in which the insurer had done and therefore allowed the claim the complainant. In appeal before the state commission the court took into consideration a number of decisions of the Hon’ble Supreme Court and observed that the policy of insurance in the present case was for a vehicle meant for private use, which differs from the insurance policy meant for a vehicle for commercial use in respect of the following:
• Premium amount.
• Permit regulation under Motor Vehicle Act.
• Driving License of the driver is also different in both cases.
The present policy also clearly highlighted the nature of use of the vehicle in question. The court also observed that it amounted to the fundamental breach on the face of agreement. It could be visualized that if a private vehicle is given for hire purpose, the vehicle is apparently exposed to the risk of being stolen where unknown passengers are taken for hire in the vehicle. This exactly happened in the case above. The driver of the vehicle was carrying such unknown passenger for hire and they had stolen the car. Thus it was held that the breach of the basic condition of the policy of insurance in question is fundamental in nature on the face of it.

Held: The complaint of the insured was dismissed and appeal of insurance company allowed.