If Terms On Exclusion Of Policy Are Not Communicated To Insured, Insurer Cannot Rely On Them To Repudiate Claim

In CIVIL APPEAL NO(S). 3912 OF 2019, BHARAT WATCH COMPANY vs NATIONAL INSURANCE CO. LTD., the insurer based on the finding of the surveyor repudiated the claim of theft on the ground that the insurance policy excludes claim against theft/burglary without forcible and violent entry to and/or exit from the premises as in the present case. The District as well as the State Forum allowed the claim as the exclusion clause had not been intimated to the insured. On appeal, NCDRC however rejected the claim and allowed the appeal filed by the insurer.

The Supreme Court decided that the fact that  there was a contract of insurance is not in dispute and has never been in dispute. The only issue is whether the exclusionary conditions were communicated to the appellant. The District Forum came to a specific finding of fact that the insurer did not furnish the terms and conditions of the exclusion and special conditions to the appellant and hence, they were not binding. When the case travelled to the SCDRC, there was a finding of fact again that the conditions of exclusion were not supplied to the complainant. In the circumstances, the NCDRC was in error in reversing the decisions of the District Forum and the SCDRC which were grounded on a pure finding of fact that the terms of exclusion were not made known to the insured. The Court also rejected the argument of the insurer that since the insured has been holding this policy for over 10 years, he must be aware of the exclusion clause.