Insurance Company Cannot Repudiate Claim Merely For Delay In Intimating It About The Occurrence Of The Theft If The FIR Was Lodged Immediately: Supreme Court

The Supreme Court observed that the Insurance Company cannot repudiate a claim merely on the ground that there was a delay in intimating the Insurance Company about the occurrence of the theft if the FIR was lodged immediately.

The vehicle of the complainant which was insured with Insurance Company was robbed. The next day, an FIR was registered by the complainant for the offence under Section 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 untraceable report. Thereafter, the complainant lodged the claim with the Insurance Company with regard to the theft of the vehicle in question. The Insurance Company, however, failed to settle the claim within a reasonable time, and therefore, the complainant filed a complaint before the District Consumer Disputes Redressal Forum, Gurgaon. During the pendency of the complaint, the insurance Company repudiated the claim on the ground that the complainant had committed the breach of Condition No. 1 of the Insurance Contract, which read as follows: "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."

Though the District Forum allowed the complaint and later the State Consumer Disputes Redressal Commission dismissed the insurer's appeal, the National Consumer Disputes Redressal Commission allowed the revision petition. In appeal before the Apex Court, the issue was whether the Insurance Company could repudiate the claim in toto, made by the owner of the vehicle, which was duly insured with the insurance company, in case of loss of the vehicle due to theft, merely on the ground that there was a delay in informing the company regarding the theft of vehicle?

In this regard, the bench noted that the same issue fell for consideration before a three judges bench in Gurshinder Singh vs. Shriram General Insurance Company Ltd. & Another 2020 (11) SCC 612. It was held thus: 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 court, while allowing the appeal, observed thus:

It is pertinent to note that the Insurance Company has not repudiated the claim on the ground that it was not genuine. It has repudiated only on the ground of delay. 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.

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