S from Indore, purchased a Jeep Compass from its Authorised Dealer in Mumbai 24th April, 2019 for a sum of ₹ 21,24,000. The vehicle bearing registration No. MP-09-UA-1413 was insured comprehensively from 24th April, 2019

The stand taken at first instance by the Insurance Company to repudiate liability on the ground that the vehicle was used as a Taxi by 'S' is totally baseless and is not based on facts which have emerged in the present case. The liability under the policy therefore, was clear and the Insurance Company should have honoured its liability rather than going to the various forums initially and thereafter in a review petition before the National Forum. Though the Supreme Court in 2008 in "Nitin Khandelwal Case" had already laid down that "In a case, where the vehicle had been snatched or stolen, the breach of condition is not germane and the Insurance Company is liable to indemnify the owner of the vehicle where the insured owner had taken a comprehensive policy for the vehicle in question". The Court had taken a view that the breach of the policy condition regarding the hire of the vehicle for a commercial purpose has no bearing on its theft and, hence, would be irrelevant. The Supreme Court in "Nitin Khandelwal Case" left the question "whether the State Commission was justified in allowing the claim of the respondent on the non-standard basis" open as the claimant had not filed any appeal against the said order. The insurance company would be bound to pay the insured declared value of the vehicle and not 75% on non-standard basis. Further, the National Consumer Disputes Redressal Commission in case of "Rekha Sardana vs. Oriental Insurance Co. Ltd. & Ors" held the same as mentioned above. Thus, keeping in mind the above, the stand taken ultimately by the insurance company to settle the claim on non-standard basis was not justified. Therefore, the non-standard settlement of the clause is not justified. The Supreme Court has held in "Nitin Khandelwal Case" in 2008 that "where the vehicle is snatched or stolen, the breach of condition of policy is not germane, that the insurance company is liable to indemnify the owner of the vehicle when the insurer has obtained comprehensive policy for the loss caused to the insurer". If the Supreme Court's decision is viewed in totality, it becomes clear that in case of theft of a vehicle the nature of use of the vehicle cannot be looked into and the breach of such a condition is not germane and hence the Insurance Company is liable to indemnify the owner for the loss suffered by him. However, in the present case, since there is no evidence of breach of usage condition, the claim will have to be paid. Further, as per rules, even if it is presumed that there is a breach of any condition, a claim cannot be rejected for breach of a policy condition unless such breach is the cause of the loss. When there is no nexus between the breach and the loss, the claim has to be settled on a non-standard basis. Therefore, in the present case, as there is no evidence of misuse of vehicle as taxi, the claimant is liable for total loss payment and not only the total loss suffered by him as a result of theft and not merely settlement on 75% "Non-Standard basis", as the present facts of the case do not qualify under the guidelines for non-standard claims as mentioned below: Where a breach of warranty or policy condition arises and where such breach is of a technical nature or is evidently beyond the control or knowledge of the insured or is considered after rectifying the policy and collecting additional premium where due. In settling the claim, a deduction may be made from the assessed claim amount equivalent to the extra premium due for three years or three times the additional premium due for voyage which would have been charged had correct information been available originally.