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In the case of theft of vehicle, breach of condition is not germane

In CHOLAMANDALAM MS GENERAL INSURANCE COMPANY LTD. vs TANUSREE MONDAL, the appeal was filed by the insurer against the concurrent findings of the District Forum and the State Commission wherein the two fora below found deficiency in service on the part of the insurance co.

In this case, the respondent/insured's car was stolen against which she filed FIR. The insurer disputed her claim on the sole ground that the complainant intimated about the theft of vehicle after expiry of 14 days and as such she had violated the conditions of the insurance policy.

The  respondent/insured complained before the District Forum which allowing the complaint held that the reason for rejection by the insurer is too fragile to merit acceptance. A man of common prudence shall primarily lay emphasis on extensive search of the stolen vehicle. Complainant left no stone unturned in search of the vehicle. Local P.S. was informed, P.S. case was started. This prompt action on the part of the complainant must not go unrewarded. She was definitely in perplexed state of mind when she found it stolen. Naturally this delay of 14 days to inform O.P. no. 2 cannot be regarded fatal to extinguish her hope for reimbursement of the insured sum.

The State Forum on appeal agreeing the District Forum and referring to the judgment of the Supreme Court in National Insurance Company Limited Vs. Nitin Khandelwal, held that in the case of theft of vehicle, breach of condition is not germane. In case of material breach of policy terms and conditions, an Insurer has definite ground to repudiate a claim, otherwise not.  In the case of a theft related case, if there is nothing to suspect the bona fide of a claim, Insurance Company should not act contrary to the spirit of the policy that envisages indemnification of loss arising out of such peril. NCDRC was of view that in case of a theft claim what is relevant and material for adjudicating the claim is whether the theft had indeed taken place or not and whether the occurrence took place within the subsistence of the insurance policy or not.

A revision petition was filed by the insurer before the National Commission which also sided with the lower tribunals and made some important observation on compensation which has been highlighted here.

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