Whether insurance claim for theft can be refused if there is delay in intimation of theft?

It is common knowledge that a person who lost his vehicle may not straightaway go to the Insurance Company to claim compensation. At first, he will make efforts to trace the vehicle. It is true that the owner has to intimate the insurer immediately after the theft of the vehicle. However, this condition should not bar settlement of genuine claims particularly when the delay in intimation or submission of documents is due to unavoidable circumstances.

The decision of the insurer to reject the claim has to be based on valid grounds. Rejection of the claims on purely technical grounds in a mechanical manner will result in loss of confidence of policy-holders in the insurance industry. If the reason for delay in making a claim is satisfactorily explained, such a claim cannot be rejected on the ground of delay.

It is also necessary to state here that it would not be fair and reasonable to reject genuine claims which had already been verified and found to be correct by the Investigator. The condition regarding the delay shall not be a shelter to repudiate the insurance claims 8 which have been otherwise proved to be genuine. It needs no emphasis that the Consumer Protection Act aims at providing better protection of the interest of consumers. It is a beneficial legislation that deserves liberal construction. This laudable object should not be forgotten while considering the claims made under the Act.

SUPREME COURT OF INDIA

Om Prakash Vs. Reliance General Insurance and ANR.

[Civil Appeal No. 15611 of 2017 arising out of SLP (C) No.742 of 2015]

S.ABDUL NAZEER, J.

Dated:October 4, 2017.

Citation:(2017) 9 SCC 724

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Whether transferee of vehicle is entitled to get benefit of insurance policy if there is theft of vehicle?

The relevant observations made by the
Hon'ble Supreme Court in para 10 of its judgment in Mallamma's case
(supra), which can be gainfully followed in the present case, read as under:-
“Before us, learned counsel for the appellants
relying upon Section 157 of the M.V. Act, contended that
there is an admitted transfer of ownership of the vehicle as
proved before the Commissioner. Once the ownership of
the vehicle is admittedly proved to have been transferred to
Jeeva Rathna Setty, the existing insurance policy in respect
of the same vehicle will also be deemed to have been
transferred to the new owner and the policy will not lapse
even if the intimation as required under Section 103 of the
M.V. Act is not given to the insurer, hence the impugned
order passed by the High Court is contrary to law. In
support of this contention, learned counsel for the
appellant has relied upon a judgment of this Court in G.
Govindan Vs. New India Assurance Co. Ltd . (1999) 3
SCC 754.”
When the abovesaid ratio of the law laid down in Mallamma's
case (supra), is considered in the factual context of the present case, same
squarely applies in favour of respondent No.1 and against the petitioner-

Insurance Company. In this view of the matter, it can be safely concluded
that learned Permanent Lok Adalat was well justified, while placing reliance
on the judgment of the Hon'ble Supreme Court in Mallamma's case (supra)
and the impugned order deserves to the upheld for this reason also.
 IN THE HIGH COURT OF PUNJAB AND HARYANA
 AT CHANDIGARH
Civil Writ Petition No. 14086 of 2016
Date of Decision: 11.8.2016
The Oriental Insurance Company Limited and others

Vs.
Abhishek Kumar and another

CORAM :  MR. JUSTICE RAMESHWAR SINGH MALIK
Citation: 2017(2) ALLMR(JOURNAL)23

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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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