Only Delays In Informing Insurance Company Can Be Excused, Filing Of FIR Must Be Immediate In Vehicle Theft Cases: NCDRC

Brief Facts:

The Complainant insured his Bolero pick-up van with National Insurance Co. Ltd. (“Insurance Company”). During the subsistence of the policy, the pick-up van was stolen. After 27 days of the incident, the Complainant registered an FIR with the local police. He took another 30 days to submit a claim with the Insurance Company. However, his claim was rejected on the grounds of delay in informing the police and the Insurance Company. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission, Khagaria, Bihar (“District Commission”) against the Insurance Company,

The District Commission allowed the complaint and directed the Insurance Company to disburse Rs. 5,50,000/- and pay Rs. 20,000/- as compensation and Rs. 10,000/- as litigation costs. Dissatisfied by the decision, the Insurance Company filed an appeal before the State Consumer Disputes Redressal Commission, Bihar (“State Commission”). The State Commission dismissed the appeal and upheld the order of the District Commission.

Subsequently, the Insurance Company filed a revision petition before the National Consumer Disputes Redressal Commission (“NCDRC”). It contended that there was a delay of 27 days in filing the FIR for the vehicle theft and another 30 days in informing the Insurance Company. Further, the vehicle in question was being used for a commercial purpose. The case laws relied on by the Complainant only addressed the situations where there was a delay in informing the insurance companies, not when there was a delay in informing the police or filing an FIR.

Observations by the NCDRC:

The NCDRC observed that there was an undeniable fact of the vehicle theft and a notable delay of 27 days in lodging the FIR. Reliance was placed on Gurshinder Singh vs. Shriram General Insurance Co. Ltd. [Civil Appeal No. 653/2020], where it was emphasized that the insured must give immediate notice to the police in theft cases and cooperate with the insurance company to ensure the conviction of the offender. Prompt notification to the police allows for immediate action to recover the vehicle, which is primarily the police's responsibility, while the insurance company's surveyor plays a limited role in ascertaining the theft.

The NCDRC further noted that if the police successfully recover the vehicle after the FIR is lodged, there would be no need to claim compensation under the policy. It is only when the police fail to trace and recover the vehicle, leading to a final report, that the insured can lodge a claim for compensation.

Consequently, it was held that both the District Commission and the State Commission applied the permissible delay in informing the insurance company of the delay in filing the FIR. The NCDRC clarified that while delays in notifying the insurance company can be excused, filing the FIR must be immediate, as consistently held by the Supreme Court. Conclusively, the Insurance Company's revision petition was allowed, and the orders of the District Commission and the State Commission were set aside.

Case Title: National Insurance Co. Ltd. vs Md. Sallauddin

Case No.: Revision Petition No. 803 of 2020

Advocate for the Petitioner: Mr Pramod Kumar Singh

Advocate for the Respondent: Mr Subodh Kumar Jha and Mr Bineet Kumar Pandey

Date of Order: 02.07.2024