Many products in the market are harmful for the health of consumers and there are many sellers and manufacturers of goods and services in the market who engage in unfair trade practises or corrupt and unethical business activities. These are some of the concerns that need to be addressed in order to protect consumers. Thus, the government of India has enacted many Consumer protection laws from time to time in order to prevent unsafe or unethical trade activities such as false weight, adulteration, or malfunctioning products etc.

Consumers are  treated like  Kings as they bring business to the sellers or manufacturers. Consumers must have access to reliable, unbiased information about the products and services they buy from the sellers and service providers. This enables the consumers to take the better decisions for their own interests and protects them from being exploited or mislead by businesses. Consumer protection policies aims to improve consumer welfare by allowing businesses to be held accountable an by giving consumers the right to seek consumer redressal.

A consumer, according to the Consumer Protection Act, is someone who buys products or services for personal use rather than for resale. The  Consumer Protection Act includes all goods and services including banking, e-commerce, telecommunications, insurance, electricity, and transportation in private as well as public sector. Thus, it means that the Consumer Protection Act would also protect consumers from fraud and unfair tactics while availing insurance. The case of Manjeet Singh v. National Insurance Company Ltd. & Anr. is the landmark case which involves the conflict between a consumer and insurance company.


Manjeet Singh, the appellant in this case, had purchased a second-hand truck under a Hire Purchase agreement. Insurance company, the respondent in this case, provided the insurance of the truck. The driver of the appellant namely Sanjay Kumar was driving the vehicle on the National Highway near Karnal when some persons signalled the driver to stop the vehicle. These persons then requested the driver to give them lift because no other method of transportation was available and the weather was cold. The driver gave a lift to these persons. After a short while, one of the passengers requested the driver to stop the truck and when the truck driver stopped the truck, the three passengers assaulted the driver and fled away with the truck.

The theft of the truck was reported to the police station and an FIR was lodged and the insurance company was informed about the theft. The complainant had also provided to the insurance company a letter of authority to negotiate and settle the claim. However, no settlement was arrived at and the claim was denied due to the breach of terms of the policy. The owner-complainant filed a claim petition before the District Consumer Disputes Redressal Forum arguing that the insurance company was responsible for compensating him for the damage he suffered as a result of the truck’s theft.

The insurance company contended that the driver of the truck had violated the terms of the policy by providing a lift to the passengers, and as a result, there was breach of policy and the insurance company was not liable. The District Forum accepted this contention and rejected the claim of the owner-complainant. The District Forum also rejected the claim on the ground that the arbitration proceedings had been initiated by the finance company against the complainant and they were at the final stage. The claimant then filed an appeal before the State Consumer Disputes Redressal Commission and this appeal was also denied and then the claimant filed revision before the National Consumer Disputes Redressal Commission but it was also rejected. Finally, he filed an appeal to the Supreme Court.


The Supreme Court held that the appellant in this case, who is the owner, was not at fault. His driver gave a lift to some passengers. Carrying such passengers may be a violation of the policy, but it cannot be argued to constitute a fundamental breach that would result in the insurance policy being terminated. On a cold wintery night, the driver gave a lift to some people who were standing on the road. It was an act of kindness. It cannot be stated that it’s a serious enough breach to render the policy null and void.. These passengers undoubtedly turned against the driver and stole the truck, but the driver could not have anticipated this.

The Supreme Court set aside the orders of the courts below and direct the respondent, the insurance company to pay 75% of the insured amount of Rs.7,28,000/- along with interest at the rate of 9% per annum from the date of filing the claim petition till the deposit of the amount. In addition, the insurance company was also ordered to pay another sum of Rs.1,00,000/- as compensation.


The Supreme Court stated that in this case there was  no proper appreciation of the policy’s scope and extent by the District Forum. In order to bar claimant from claiming any amount the breach of the condition should be a fundamental breach. The violation of carrying passengers has consistently been held not to be a fundamental breach, and  the Court refer to it’s judgments in the case of  National Insurance Co. Ltd. V. Swaran Singh, (2004) 3 SCC 297, National Insurance Co. Ltd. V. Nitin Khandelwal, (2008) 11 SCC 259, Lakhmi Chand v. Reliance General Insurance, (2016) 3 SCC 100 and B.V. Nagaraju v. Oriental Insurance Co. Ltd., (1996) 4 SCC 647.

The Supreme Court in case of Lakhmi Chand v. Reliance General Insurance, held that if an insurance company wants to avoid liability it should not only show that the policy has been breached, but must also show that the breach of the policy is so fundamental in nature that it ends the contract.

Also the ground on which the District Forum rejected the claim was that there was arbitration proceedings between the finance company and the complainant and they were at the final stage . The Supreme Court concerning to this point stated that “we fail to understand how the arbitration proceedings between the financer and the insurer, relating to recovery of the loan amount, can in any way, negate the rights of the insured against the insurance company”.


  • Manjeet Singh v. National Insurance Company Ltd., (2018) 2 SCC 108.

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.


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In the year 2021, we wrote about 1000 Inspirational Women In India, in the year 2022, we would be featuring 5000 Start Up Stories.

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