NCDRC Upholds Order Granting 75% Insurance Claim to Family of Accident Victim, Says Driving Licence Technicality Not a Fundamental Breach

Moneylife Digital Team 26 November 2025

Consumer Interest

Dismissing a second appeal filed by United India Insurance Company Ltd, the national consumer disputes redressal commission (NCDRC) upheld a state commission order directing payment of 75% of the insured amount to the family of a man who died in a road accident. The NCDRC bench of presiding member Dr Inder Jit Singh and member Dr justice Sudhir Kumar Jain delivered the order on 11 November 2025.

Citing the 2010 Supreme Court judgement in Amalendu Sahoo vs Oriental Insurance Company Ltd, the bench says, "(We) are of the considered view that, considering the deceased was having a light motor vehicle (LMV) licence entitling him to drive a four-wheeler, driving a two-wheeler without specific endorsement of the same in the licence cannot be termed as a fundamental breach of rule. Hence, the state commission was justified in allowing the claim on a non-standard basis at 75% of the sum insured."

The dispute arose after United India Insurance repudiated the claim on 18 January 2021, arguing that the deceased, Omprakash Gurjar, who died while riding a motorcycle, did not hold a valid licence to drive a two-wheeler. He held a licence for an LMV, which covers four-wheelers, but not motorcycles with or without gear under Section 10(2) of the Motor Vehicles Act. The Jodhpur district consumer commission had originally dismissed Mr Gurjar's family’s complaint on these grounds.

However, the state commission in Jodhpur reversed that decision on 5 August 2025, holding that the absence of a specific two-wheeler endorsement did not amount to a fundamental breach of the policy. It ruled that the complainants—Sunita Gurjar and her children—were entitled to receive 75% of the ₹15 lakh insured amount, coming to ₹11.25 lakh, along with 9% annual interest from the date of repudiation.

United India Insurance filed a second appeal before NCDRC with a delay of 47 days, which the commission condoned in the interest of justice before examining the case on merits. United India Insurance argued that the state commission had misapplied the law and cited Supreme Court judgments in Amalendu Sahoo vs Oriental Insurance and Ashok Kumar vs New India Assurance, contending that the deceased had committed a fundamental breach by driving a vehicle he was not licensed to operate.

After reviewing the records, NCDRC rejected the insurer’s arguments. The commission relied on the Supreme Court’s ruling in Amalendu Sahoo, which held that the absence of a specific licence endorsement for the class of vehicle driven at the time of an accident does not automatically constitute a fundamental breach warranting complete repudiation. The bench observed that the deceased possessed a valid LMV licence and that driving a two-wheeler in such circumstances does not justify denial of the claim in full.

The commission noted that insurance companies are permitted to settle such cases on a non-standard basis at 75% of the sum insured, particularly where policy conditions such as limitations of use are breached without wilful misconduct. It agreed with the state commission’s reasoning that the complainants were entitled to compensation and backed its direction to pay 75% of the insured amount with interest.

Finding no illegality or material irregularity in the state commission’s order, NCDRC dismissed the insurer’s appeal and upheld the compensation awarded to the Gurjar family. All pending applications were disposed and the registry was directed to send a free certified copy of the order to both parties.

(Second Appeal No729 of 2025 Date: 11 November 2025)

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