Whether driver of truck giving lift to some persons amounts to fundamental breach of insurance policy?

In Lakhmi Chand case (supra), this Court held that to avoid its liability, the insurance company must not only establish the defence that the policy has been breached, but must also show that the breach of the policy is so fundamental in nature that it brings the contract to an end.

7. In the present case, the Appellant who is the owner, was not at fault. His driver gave a lift to some passengers. Carrying such passengers may be a breach of the policy, but it cannot be said to be such a fundamental breach as to bring the insurance policy to an end and to terminate the insurance policy. The driver, on a cold wintery night, gave lift to some persons standing on the road. It was a humanitarian gesture. It cannot be said to be such a breach that it nullifies the policy. No doubt, these passengers turned against the driver and stole the truck, but this, the driver could not have foreseen. In the cases cited above, such claims where there is breach of policy, have been treated to be non-standard claims and have been directed to be settled at 75%.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 21552 of 2017 (Arising out of Special Leave Petition (C) No. 34605 of 2015)

Decided On: 08.12.2017

 Manjeet Singh Vs National Insurance Company Ltd. and Ors.

Hon'ble Judges/Coram:

Madan B. Lokur and Deepak Gupta, JJ.

Citation: (2018) 2 SCC108

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Whether insurance company can repudiate insurance claim for theft of vehicle if theft is not promptly intimated?

 We have considered the rival contention and perused the record. On perusal of complaint we find that it is the case of the complainant that he reported the theft of subject vehicle to the concerned Police Station on the same day and gave oral information of theft to the petitioner insurance company. It is not the case of the complainant that he gave immediate intimation of theft of vehicle in writing to the insurance company. Thus, the question is whether the Fora below were justified in allowing in the consumer complaint ignoring condition no. 1 of the insurance contract, which reads as under:

“1. Notice shall be given in writing to the company immediately upon the occurrence of any accidental loss or damage in the event of any claim and thereafter the insured shall give all such information and assistance as the company shall require. Every letter claim writ summons and/or process or copy thereof shall be forwarded to the company immediately on receipt by the insured. Notice shall also be given in writing to the company immediately the insured shall have knowledge of any impending prosecution, inquest or fatal inquiry in respect of any occurrence which may give rise to a claim under this policy. In case of theft or criminal act which may be the subject of a claim under this policy the insured shall give immediate notice to the police and co-operate with the company in securing the conviction of the offender.”

 8. Similar issue came up before the Coordinate Bench of this Commission in the mater of Reliance General Insurance Co. Ltd. v. Jai Prakash, Revision Petition No. 2479 of 2015 decided on 11.01.2016. In the said matter, the Coordinate Bench of this Commission took the view that on account of failure of the complainant to perform his contractual obligation to intimate the theft of vehicle to the insurer, repudiation of contract was justified. Similar view was taken by Bench No. 4 of this Commission in Revision Petition No. 2391 of 2015 titled Reliance General Insurance Co. Ltd. v.Harbhajan Khaira.

 9. We do not find any reason to differ with the aforesaid view taken by Coordinate Benches. Accordingly, we hold that Fora below have committed a grave irregularity by passing the impugned order in utter disregard of law laid down by the Supreme Court of Parvesh Chander Chadha (supra). Thus, we have no hesitation in holding that as the insured has failed to fulfil his obligation to intimate the theft of vehicle to the insurer in writing immediately after the theft, insurance company was justified in repudiating the insurance claim.

National Consumer Disputes Redressal Commission, New Delhi

(Before Ajit Bharihoke, Presiding Member and S.M. Kantikar, Member)

Reliance General Insurance Co. Ltd.

V

Arun Kumar Singh & anr.

Revision Petition No. 1054 of 2016

Decided on January 3, 2017

Citation:2017 SCC OnLine NCDRC 1

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How to appreciate evidence in case of repudiation of insurance policy?

 I have perused the record and considered submissions as well as case law cited with the able assistance of learned counsel for the parties. It emerges that neither the affidavit of the doctor was produced on the record by the petitioner for reasons best known to it nor of the investigator. Non filing of affidavit of the investigator and more importantly of the doctor demolishes the case of the petitioner as in the absence of affidavit of the doctor and investigator, suppression of material facts and consequentially, grounds of repudiation are legally unsustainable.

The doctor on whose alleged statement reliance has been placed mentioning therein a number of ailments which the insured was stated to have been suffering from made the statement before the investigator Kundan Singh. However, neither Kundan Singh nor Dr. B.A. Butt were examined nor their affidavits produced.

 In the circumstances, the affidavit of the Vice President of the Company, which had been given the task of investigating the claim, is of no avail on account of the fact that the Vice President, who filed the affidavit, had no personal knowledge with regard to the recording of statement of the doctor and the signatures on the said statement etc.

 In the circumstances, neither the report of the investigator nor the statement of Dr. B.A. Butt relied upon by the petitioner can be looked into. For the same reasons, even suppression of material facts is also not established. 

 Citation: 2015(3)JKJ301,AIR 2016(NOC)145 J&K.

IN THE HIGH COURT OF JAMMU AND KASHMIR AT JAMMU

OWP No. 77/2010 and CMA No. 83/2010

Decided On: 27.07.2015

Kotak Mahindra Old Mutual Life Insurance Ltd.

Vs.

J & K State Consumer Disputes Redressal Commission, Jammu and Ors.

Hon'ble Judges/Coram:B.S. Walia, J.

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Repudiation of Insurance policy should be in exceptional circumstances

 Learned counsel for Respondent No. 2 also relied on paragraph No. 16 of the decision in Life Insurance Corporation of India & Ors. v. Smt. Asha Goel & others - MANU/SC/0804/2000 : 2001 (2) SCC 160 to contend that Respondent No. 2 has been put to untold harassment by the mechanical and routine approach of the LIC. Relevant extract is reproduced hereunder:-

"16. In course of time the Corporation has grown in size and at present it is one of the largest public sector financial undertakings. The public in general and crores of policy-holders in particular look forward to prompt and efficient service from the Corporation. Therefore the authorities in-charge of management of the affairs of the Corporation should bear in mind that its credibility and reputation depend on its prompt and efficient service. Therefore, the approach of the Corporation in the matter of repudiation of a policy admittedly issued by it should be one of extreme care and caution. It should not be dealt with in a mechanical and routine manner."

Equivalent Citation: 2015(3)JKJ301,AIR 2016(NOC)145 J&K.

IN THE HIGH COURT OF JAMMU AND KASHMIR AT JAMMU

OWP No. 77/2010 and CMA No. 83/2010

Decided On: 27.07.2015

 Kotak Mahindra Old Mutual Life Insurance Ltd.
Vs.
J & K State Consumer Disputes Redressal Commission, Jammu and Ors.

Hon'ble Judges/Coram:B.S. Walia, J.

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