News Citation : 2026 LN (CGSCDRC) 9
February 07, 2026 : In a significant ruling on motor insurance claims, the Chhattisgarh State Consumer Disputes Redressal Commission has directed The New India Assurance Company Limited to settle a truck accident claim on a non-standard basis, awarding 75 percent of the insured declared value to the vehicle owner instead of rejecting the claim outright.
The order was passed on February 6, 2026, in Appeal No. SC/22/FA/90/2025, filed by the insurer against Shri Kewal Singh. The Commission partly allowed the appeal and modified the earlier decision of the District Consumer Commission, Raipur.
Accident During Policy Period
Kewal Singh had insured his goods carrier vehicle bearing registration number CG07CA8415 under a comprehensive motor policy valid from June 3, 2022 to June 2, 2023. The insured declared value was ₹8,20,000.
On June 8, 2022, while transporting cement from Raipur towards Jagdalpur, the truck met with an accident near Netanar. The driver and cleaner died on the spot, and four other persons travelling in the cabin sustained minor injuries. The incident was recorded in the FIR and police final report.
Singh informed the insurance company and submitted a claim form. However, on April 5, 2023, the insurer repudiated the claim on the ground that the vehicle was overloaded with passengers beyond its permitted seating capacity, in violation of the Motor Vehicles Act, 1988 and policy conditions.
Insurer’s Stand: Overloading Caused the Accident
The insurer argued that as per the registration certificate and fitness certificate, the truck cabin had seating capacity for only three persons including the driver. At the time of the accident, six persons were travelling in the cabin.
According to the insurer, carrying excess passengers directly contributed to the accident, as it would have restricted the driver’s movement and control over the vehicle. It also claimed that the insured had suppressed material facts in the claim form regarding the presence of other occupants.
Commission’s Analysis: Breach, But Not Total Forfeiture
After examining the FIR, final report, policy documents and surveyor’s report, the State Commission found that the accident had indeed occurred during the policy period and that six persons were travelling in the cabin, exceeding the permitted capacity.
However, the Commission observed that there was no conclusive evidence establishing that overloading was the direct and sole cause of the accident. While the presence of excess passengers amounted to a breach of policy conditions, it did not justify total repudiation of the claim.
The surveyor’s report assessed repair costs at ₹7,60,000, which exceeded 75 percent of the insured declared value. The vehicle was therefore treated as a case of total loss.
Relying on the Supreme Court’s ruling in Amalendu Sahoo v. Oriental Insurance Company Limited, the Commission noted that in cases involving breach of policy conditions, insurers may settle claims on a non-standard basis, typically at 75 percent of the admissible amount.
Final Directions
Modifying the District Commission’s order, the State Commission directed the insurer to: Pay 75 percent of the insured declared value of ₹8,20,000, which comes to ₹6,15,000, within one month.; Pay ₹10,000 towards compensation for mental and financial hardship and Pay ₹5,000 towards litigation costs.
The appeal was thus partly allowed, reinforcing the principle that while policy breaches may reduce liability, they do not automatically extinguish the insured’s right to compensation.
Case Reference : Appeal No. SC/22/FA/90/2025 – The New India Assurance Co. Ltd. & Anr. vs. Shri Kewal Singh
