Immediate Reporting Of Theft To Police Is Crucial For Insurer Liability In Claims: National Consumer Commission

The National Consumer Disputes Redressal Commission, presided by Subhash Chandra, dismissed a revision petition alleging deficiency of service against Oriental Insurance.

Contentions of the Complainant

The complainant had their car insured with Oriental Insurance Ltd. Later, the car was stolen, and they reported it to the police, but the vehicle couldn't be found. The insurance company was informed, and a claim was submitted, but wasn't settled. Despite sending a legal notice, the claim wasn't resolved. So, the complainant went to the District Forum to seek the insured amount and compensation for the delay. The District Forum ruled in favor of the complainant, stating the insurance company provided deficient service. However, the state Commission overturned this decision, citing that the FIR was filed late(violation of policy condition 1) and that the complainant didn't ensure the vehicle's safety(violation of policy condition 4). Now, the complainant has submitted a revision petition to the national commission against the state commission's decision.

Contentions of the Opposite Party

The insurance company argued that the complainant had purchased a private car package policy from them. They claimed that the FIR was filed 6-7 days after the incident, leading them to reject the insurance contract, alleging a violation of policy condition 1. It was also asserted that the complainant allowed two unknown individuals to take the vehicle with a driver, resulting in its theft, which violated policy condition 4. Additionally, they mentioned that the chassis number in the FIR did not match the one in the Registration Certificate, and the complainant didn't provide a satisfactory explanation despite requests. Therefore, the insurance company believes the State Commission rightfully dismissed the consumer complaint, and there's no need for this Commission to intervene as there was no illegal or irregular conduct.

Observations by the Commission

The Commission referred to a previous case, Shakuntala Devi Vs. United India Insurance Co., where it was established that if theft is not immediately reported to the police, the insurer cannot be held responsible for the claim. Citing another case, Maneet Singh Vs. National Insurance Co., the Commission concluded that the petitioner failed to take reasonable steps to protect the vehicle, allowing unknown persons to accompany the driver who later stole the vehicle. The petitioner did not provide any documents to dispute these arguments despite having the opportunity to do so.

The Commission observed that the State Commission's decision was based on the terms and conditions of the insurance policy, specifically conditions no. 1 and 4. The FIR was filed five days after the theft, and the insurance company was informed only after the FIR was lodged. The District Forum's conclusion of deficiency in service lacked evidence or support from legal precedents. In contrast, the State Commission's order, which set aside the District Forum's decision, was detailed and reasoned, pointing out the grounds for considering the delay in reporting and the insured's negligence in safeguarding the car. The revision petition failed to convincingly counter these grounds. Consequently, the petitioner is likely to be unsuccessful.

The Commission found the revision petition to be without merit and accordingly disallowed it while affirming the order of the State Commission.

Counsel for the Complainant: Adv. Umesh Nagpal

Counsel for the Opposite Party: Adv. Rajesh K Gupta