SC: Insurance Company cannot Repudiate Claim of Insured based on Delay in Intimation of theft

Mitali Palnitkar

Published On: February 14, 2022 at 16:50 IST

The Supreme Court reiterated that Insurance Company cannot repudiate a Claim on the ground of delay in intimation of theft of an insured vehicle.

The Division Bench comprised of Justices Sanjiv Khanna and Bela M Trivedi. It was hearing an Appeal against the National Consumer Disputes Redressal Commission (NCDRC) Order of 2016, which had allowed an insurance company to deny a Claim to Appellant on ground of delay.

The Appellant’s truck was insured by the Insurance Company (Respondent). In 2007, the truck was stolen, following which a First Information Report (FIR) was registered based on Complaint made by Appellant. Later, Police Arrested the Accused but failed to trace the stolen vehicle. In 2008, it filed an untraceable report.

The Appellant lodged a Claim with the Respondent about the vehicle, but the Respondent failed to settle the Claim within reasonable time. The Appellant was aggrieved and approached the District Consumer Disputes Redressal Forum.

During the course of pendency of Complaint, the Respondent repudiated the Claim on the ground of delay in informing about the loss or damage caused. However, the Appellant’s Claim was allowed by the District Forum.

The Respondent approached the State Consumer Disputes Redressal Forum which dismissed the same. The NCDRC allowed the Respondent’s Plea which led to the Appeal before the Supreme Court.

The Supreme Court relied on its decision in Gurshinder Singh v Shriram General Insurance Company Limited and Another, wherein it was held that when an Insured lodges FIR immediately after theft of vehicle and the Police lodge a final report after Investigation, then mere delay in intimating insurance company cannot be the ground to deny the Claim of Insured.

The Court considered the facts and ruled that, “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.”