Read Judgment: Jaina Construction Company V. Oriental Insurance Company Limited & Anr.

Pankaj Bajpai

New Delhi, February 14, 2022: The Supreme Court has recently opined that in a case where  the owner of the insured vehicle had lodged the FIR immediately after the theft of the vehicle, the Insurance Company should not have repudiated the claim in toto, merely on ground that there was a delay in informing the company regarding the theft of vehicle. 

A Division Bench of Justice Sanjiv Khanna and Justice Bela M. Trivedi observed that when the complainant had lodged the FIR immediately after the theft of the vehicle, and when the police after the investigation had arrested the accused and also filed challan before the concerned Court, and when the claim of the insured was not found to be not genuine, the Insurance Company could not have repudiated the claim merely on the ground that there was a delay in intimating the Insurance Company about the occurrence of the theft.

Going by the background of the case, the vehicle in question which was duly insured with Oriental Insurance Company (first Respondent), was robbed by some miscreants which led to filing of an FIR for the offence u/s 395 IPC. The police arrested the accused and also filed the challan against them in the concerned Court, however, the vehicle in question could not be traced and, therefore, the police filed an untraceable report. Thereafter, the complainant lodged the claim with the Insurance Company with regard to the theft of the vehicle in question. Since the Insurance Company failed to settle the claim within a reasonable time, the appellant-complainant filed a complaint before the District Consumer Disputes Redressal Forum. 

However, during the pendency of the complaint before the District Forum, the Respondent Insurance Company repudiated the claim stating that there was a breach of condition of the policy which mandated immediate notice to the insurer of the accidental loss/damage, and that the complainant had intimated about the loss after the lapse of more than five months. The District Forum, however allowed the claim of the complainant by holding that the complainant was entitled to the insured amount on a non-standard basis. On appeal, the State Commission dismissed the claim of the Insurance Company and partly allowed the grounds filed by the complainant by increasing the rate of interest awarded by the District Forum from 6% to 9%. Challenging the same, the Insurance Company preferred the Revision Petition before the NCDRC, which came to be allowed. Hence, the present appeal was filed. 

After considering the submissions, the Top Court found that the FIR was lodged immediately on the next day of the occurrence of theft of the vehicle by the complainant and the accused were also arrested and charge-sheeted, however, the vehicle could not be traced. 

Of course, it is true that there was a delay of about five months on the part of the complainant in informing and lodging its claim before the Insurance Company, nonetheless, it is pertinent to note that the Insurance Company has not repudiated the claim on the ground that it was not genuine, added the Court. 

Therefore, the Apex Court concluded that the NCDRC should not have set aside the orders of the District Forum and the State Commission by holding that the repudiation of the insurance claim by the insurance company was justified.

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