Delay In Intimating Insurance Company About Theft Not A Ground To Deny Claim: Supreme Court

The Supreme Court observed that mere delay in intimating the insurance company about the occurrence of the theft cannot be a ground to deny the insurance claim.

In this case, the National Consumer Disputes Redressal Commission, set aside the claim of compensation on account of theft of vehicle on the ground that the delay of 78 days in not informing the Insurance Company of the theft is fatal.  

The complainant had purchased a Mahindra & Mahindra Major Jeep which was stolen outside the office of a liquor shop, in which he was a partner. The vehicle was insured with the |United India Insurance Co. Ltd. According to the complainant, he informed the Insurance Company about the theft of vehicle on phone, but the written complaint was made later. The complaint was allowed by the District Consumer Redressal Forum and an award was passed to pay the insured amount, i.e. Rs. 3,40,000/- to the complainant with 12% interest. The appeal filed by the Insurance Company against the said order was dismissed by the State Consumer Disputes Redressal Commission.

The appellant-complainant before the Apex Court relied on the judgment in Gurshinder Singh Vs. Shriram General Insurance Company Ltd. & Anr.,  (2020) 11 SCC 612, in which the following observations were made: "when an insured has lodged the FIR immediately after the theft of a vehicle occurred and when the police after investigation have lodged a final report after the vehicle was not traced and when the surveyors/investigators appointed by the insurance company have found the claim of the theft to be genuine, then mere delay in intimating the insurance company about the occurrence of the theft cannot be a ground to deny the claim of the insured."

The insurance company, on the other hand, contended that delay in lodging an FIR is an important step in examining the claim of the appellant, since as per the appellant himself, the report was lodged after 7 days of the incident. Therefore, the claim filed by the complainant was rightly rejected by the NCDRC. 

The bench of Justices Hemant Gupta and V. Ramasubramanian noted that the case of Insurance Company throughout was based upon delay in intimation to the Insurance Company. Therefore, in respect of the argument that the FIR was delayed, the said arguments need not be examined in this case, the court said while allowing the appeal and restoring the order passed by the District Forum

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