Page 52 - The Insurance Times March 2025

sued to the insured by the respondent-insurer for a sum Following this, the Appellant appealed to the Supreme
lesser assured being Rs.25 lakh only." Court.
In view of this, the Court found that the repudiation was Before the Supreme Court, the appellant argued that the
improper and it directed to release all benefits under the All India Permit (National Permit) was issued with having
policy along with an interest of 9% per annum to the appel- validity period with effect from 14.10.2012 to 13.10.2017,
lant. As an upshot, the appeal was allowed and the im- and for the State of Bihar, the permit was in force from
pugned orders were set aside. 13.10.2012 to 13.10.2013 meaning thereby, on the date the
Case Name: MAHAVEER SHARMA v. EXIDE LIFE INSUR- truck caught fire on 08.06.2014, there was a valid National
ANCE COMPANY LIMITED & ANR., Arising out of SLP Permit in existence.
(Civil) No. 2136 OF 2021 Opposing the appellant's claim, the insurance company ar-
Citation : 2025 LiveLaw (SC) 253 gued that while the national permit fee was paid for the
period from 13.10.2012 to 13.10.2017, the authorization fee
Non-payment of authorization fee when for the state permit was not paid beyond 14.10.2013. There-
fore, they contended that without the renewal of the state
vehicle was within its registered state permit, the national permit could not be considered valid.
won't invalidate its national permit : Upon hearing parties at length, the judgment authored by
Supreme Court Justice SC Sharma noted that because the national permit
of the Appellant's truck was valid, the insurance company
The Supreme Court held that insurers cannot deny claims could not deny the claim merely because the authorization
solely due to non-renewal of a state permit if a valid na- fees for the state permit were not paid.
tional permit is in place. The Court clarified that if a vehicle Noting that the incident took place in the vehicle's regis-
catches fire within its registered state, non-payment of
authorization fees for a state permit would not invalidate tered state and having a valid national permit during the
the claim. insurance period, the Court stressed that the lack of an
updated authorization fee for a state permit did not invali-
The Court added that the authorization fee for renewal of date the national permit.
state permit is only necessary when the vehicle is moved
outside the State. Since the vehicle caught fire in its regis- “This Court has carefully gone through the permit which is
tered state (Bihar), the insurance company cannot deny the on record and the National Permit is certainly valid up to
claim citing lack of renewal of state permit when national 13.10.2017. The authorization fee was required to be paid
only when the truck was moving out of State of Bihar as it
permit is in existence.
was registered in the State of Bihar and the truck caught
The Court rejected the insurance company's argument that fire on account of short-circuit on 08.06.2014 in the State
non-payment of authorization fees for the state permit in- of Bihar itself and, therefore, the respondent company could
validates the existing national permit for securing insurance not have repudiated the claim on such a frivolous ground.
claims. Instead, it said that a National Permit remains valid The permit in question was issued by the competent author-
even if an authorization fee is not paid, provided the vehicle ity in Bihar and, therefore, there was no requirement of
is used within its home state paying authorization fee when the truck was being used in
A bench of Justices B.V. Nagarathna and S.C. Sharma heard the State of Bihar and as per the terms and conditions of
the case in which the appellant's insurance claim for his the National Permit, authorization fee was required to be
Bihar-registered truck, which caught fire on June 8, 2014, paid only when the truck was moving out of State of Bihar.”,
due to an electrical short circuit during the policy's validity, the court observed.
was denied by the insurance company on the grounds that "Thus, in the considered opinion of this Court, the appellant
the truck's national permit had expired and was not re- was certainly entitled for the insurance claim as held by the
newed.
State Commission and, therefore, the order passed by the
The Appellant filed a complaint before the State Consumer National Commission, dated 19.08.2020, deserves to be set
Disputes Redressal Commission, Bihar, Patna, which directed aside and is accordingly set aside.”, the court added.
the Respondent to settle the claims of the Appellant.
Accordingly, the appeal was allowed.
In an appeal, the National Consumer Disputes Redressal Case Title: Shri Binod Kumar Singh Versus National In-
Commission (NCDRC) overturned the State Consumer surance Company Ltd.
Forum's decision holding that the insurance claim cannot be
allowed in the absence of any valid permit. Citation : 2025 LiveLaw (SC) 171

The Insurance Times March 2025 47