Keasri Devi v. Cholamandalam

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from 06/03/2024 to 05/03/2025. On 07/05/2024, while the vehicle was parked on the roadside near the Complainant's residence, it was severely damaged and crashed by stray animals. The Complainant brought the damaged vehicle to the workshop of Opposite Party No.2 on 18/05/2024, where the dealer advised her to intimate the insurer. The Complainant registered a claim through Toll-Free No. 18002085544. Consequently, Opposite Party No.1 appointed a surveyor, Mr. Ankush Thakur, who visited the spot, inspected the vehicle, and estimated the loss to be approximately Rs.20,000/-. The Opposite Party No.1 repudiated the insurance claim vide letter dated 28/05/2024 on the sole ground that the vehicle lacked temporary or permanent registration at the material time of the accident. The Complainant asserts that because the e-cycle is a certified "SLOW SPEED, NON-RTO Category" vehicle with a speed limit of 25 km/h, it is exempt from mandatory registration under the Central Motor Vehicles Rules. Therefore, the repudiation of the claim by Opposite Party No.1 is arbitrary, illegal, and constitutes a clear deficiency in service. The Complainant has prayed for refund of Rs.12,500/- representing the actual assessed loss/repair cost of the vehicle, alongwith compensation and litigation cost.

2. Upon notice, opposite party No.1 appeared through counsel and contested the complaint taking preliminary objections of maintainability and cause of action. On merits, it is submitted that the vehicle was not legally registered with the Regional Transport Office at the time of the accident, which violates the mandatory provisions of the Motor Vehicles Act, 1988. It denied that the vehicle was exempt from registration. It admitted the appointment of the surveyor, but denied that the surveyor assessed the loss at Rs.20,000/-. Opposite Party No.1 contended that since the vehicle was operated without registration, there is a fundamental violation of the terms and conditions of the insurance policy. Thus, the claim was rightly and legally repudiated and the complaint deserves dismissal.

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3. Opposite party No.2 also filed separate reply taking preliminary objections of maintainability and cause of action. On merits, Opposite Party No.2 admitted that the vehicle is indeed a SLOW SPEED, NON-RTO Category vehicle and confirmed that there is no requirement of RTO registration for this category of electric cycles. It further stated that after the accident on 07/05/2024, it assisted the Complainant by writing several emails to Opposite Party No.1 urging them to process and settle the claim. Opposite Party No.2 submitted that there is no deficiency of service on its part.

4. The complainant has filed rejoinder denying the contents of the reply filed by opposite party(s) and reiterating those of complaint.

5. The parties were called upon to produce their evidence in support of their contentions and parties have adduced their respective evidence.

6. We have carefully examined the pleadings, evidence, and arguments presented by all parties. The dispute in this case lies in a narrow compass: whether the insurance company (Opposite Party No. 1) was legally justified in repudiating the comprehensive insurance claim of the Complainant's electric e-cycle on the sole ground of non-registration.

7. Opposite Party No. 1 has resisted the claim by asserting that operating the vehicle without RTO registration violates the mandatory provisions of the Motor Vehicles Act, 1988, thereby breaching the core terms of the insurance policy. However, this contention completely ignores the established statutory exemptions under Indian law.

8. Under the Central Motor Vehicles Rules (CMVR), 1989, electric two-wheelers are legally classified as "Non-Motorised Vehicles" and are completely exempt from the requirement of registration, driving licenses, and mandatory third-party insurance, provided they strictly satisfy two conditions simultaneously: the

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maximum 30-minute power output of the electric motor is 250 Watts or less, and the maximum speed of the vehicle is electronically capped at 25 km/h or less. This statutory exemption is further cemented by the official Gazette Notification dated 24th April 2014 (Annexure OP2-2), which categorically exempts this class of slow- speed electric vehicles from RTO registration.

9. A review of the documentary evidence placed on record clearly supports the Complainant's case. Annexure C-3 establishes that the Complainant's vehicle a Komki XGT-X4 SLOW SPEED (NON- RTO Category) is certified as a low-speed electric cycle with its speed restricted to 25 km/h.

10. The insurance policy (Annexure C-2) issued by Opposite Party No. 1 clearly lists the vehicle as an "electrical vehicle" under the "SLOW SPEED, NON-RTO" category. Furthermore, Opposite Party No. 2 (the dealer) has explicitly admitted in their reply that the vehicle falls under the non-RTO category and requires no registration, even actively supporting the consumer by writing emails to the insurer to process the claim.

11. Therefore, the insurer (Opposite Party No. 1) was fully aware of the nature, category, and non-RTO status of the vehicle at the time of issuing the comprehensive insurance policy and accepting the premium. It is highly contradictory and a clear sign of bad faith for an insurance company to collect a premium to comprehensively insure a certified "Non-RTO Category" vehicle, only to later repudiate a legitimate damage claim on the ground that the vehicle was not registered with the RTO. The ground of repudiation vide letter dated 28/05/2024 is entirely flimsy, arbitrary, and legally unsustainable, constituting a glaring deficiency in service and an unfair trade practice on the part of Opposite Party No. 1. Thus complaint deserves to be allowed against Opposite Party No. 1.

12. Regarding the quantum of compensation, the surveyor, Mr. Ankush Thakur, appointed by Opposite Party No. 1, assessed the net loss at Rs. 15,526.50/- (after deducting the standard policy excess clause) vide the Surveyor Report (Annexure OP1-1). Since

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this is the formal, documented assessment on record, the Complainant is legally entitled to this assessed amount. No deficiency in service is established against the dealer (Opposite Party No. 2), as they assisted the Complainant in escalating the claim, meaning the complaint against them must be dismissed.

13. In view of the detailed discussion above, the present complaint is allowed against Opposite Party No.1 and dismissed against Opposite Party No. 2.

14. The Opposite Party No. 1 is hereby directed to pay a sum of Rs.15,526.50/- to the Complainant, representing the net loss assessed by the surveyor under Annexure OP1-1. This amount of Rs.15,526.50/- shall carry interest @ 9% per annum from the date of filing of this complaint till its actual realization. Additionally, Opposite Party No.1 shall pay Rs.5,000/- to the Complainant as compensation for the mental agony, harassment, and inconvenience caused due to the illegal repudiation, along with Rs.5,000/- towards the costs of litigation.

15. Applications pending, if any, stand disposed of in terms of the aforesaid order.

16. A copy of this order be provided to all the parties free of cost as mandated by the Consumer Protection Act, 1986/2019. The order be uploaded forthwith on the website of the Commission for the perusal of the parties.

17. File be consigned to record room along with a copy of this order.

(Hemanshu Mishra)

President

(Sneh Lata) (Joginder Mahajan)

K.D* Member Member