Mistakenly Leaving Keys Inside Car Is Not Negligent, Insurance Company Can't Reject Claim: H.P. State Commission

Brief Facts:

Atma Ram (“Complainant”) insured his car with National Insurance Company Limited (“Insurance Company”) from 01.07.2014 to 30.06.2015. On 01.06.2015, he parked his car near Jarnail Welding Shop on NH-22 in BCS Shimla, H.P., but forgot the keys inside the car. The next day, he discovered that someone had stolen his car during the night of 01/02.06.2015. He reported the theft to the police and the Insurance Company but the vehicle couldn't be recovered. After completing all the required formalities, the complainant submitted his insurance claim to the Insurance Company. However, the Insurance Company rejected his claim on 01.12.2015, citing the reason that the keys were left inside the vehicle at the time of parking, which they considered as a violation of the policy. As a result, the complainant filed a complaint in District Consumer Disputes Redressal Commission, Shimla (“District Commission”) against the Insurance Company for wrongfully repudiating his claim. After considering the evidence, the District Commission ruled in favor of the complainant and allowed the complaint. Aggrieved by the order, the complainant filed an appeal in the Himachal Pradesh Consumer Disputes Redressal Commission (“State Commission”).

The Insurance Company submitted that the complainant was negligent in leaving the keys inside the vehicle, which led to the theft of the car. Further, the District Commission did not direct the complainant to execute a subrogation letter in favor of the Insurance Company. It further stated that the impugned order is legally flawed as it fails to address the subrogation letter and the cancellation of the vehicle's registration certificate (R/C). The Insurance Company prayed for the impugned order to be set aside, and the appeal to be allowed.

Observations of the Commission:

The State Commission acknowledged that the Insurance Company primarily repudiated the complainant's claim based on the grounds that he had left the keys inside the vehicle, which they considered a violation of the insurance policy. However, the Commission found that the complainant had not intentionally or wilfully left the keys in the car's ignition; it was an inadvertent act at a specific moment and did not necessarily constitute negligence.

The car had been stolen, and this event was beyond the control of the complainant. Considering these facts, the State Commission ruled that the Insurance Company was not legally justified in repudiating the genuine claim of the complainant. Since the stolen vehicle could not be traced until that date, the District Commission had not issued any orders regarding the subrogation letter and the cancellation of the vehicle's registration certificate (RC) in favour of the Insurance Company.

Therefore, the State Commission directed the respondent/complainant to hand over the subrogation letter and the cancelled RC of the vehicle to the Insurance Company within 45 days from the receipt of the order. The appeal was disposed of accordingly, and the impugned order of the District Commission was modified.

Case: National Insurance Company Limited vs Atma Ram

Case No.: First Appeal No. 151/2018

Advocate for the Appellant: Mr. Jagdish Thakur

Advocate for the Respondent: Mr. Dheeraj Bansal

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