ASHOK KUMAR versus NEW INDIA ASSURANCE CO. LTD. on 31 July 2023

1240

[2023] 9 S.C.R.

A

ASHOK KUMAR

v.

NEW INDIA ASSURANCE CO. LTD.

(Civil Appeal No. 4758 of 2023)

BJULY 31, 2023

[J. K. MAHESHWARI AND K. V. VISWANATHAN, JJ.]

Consumer Protection Act, 1986: s. 24 A – Insurance Claim –Repudiation of – Theft of insured vehicle of the appellant – FIRlodged by the appellant – Insurance company intimated about theCtheft on the sixth day – Complaint filed by the appellant before thedistrict forum alleging that the Insurance Company was delayingthe settlement of the claim – During pendency, repudiation of theclaim by the Insurance Company – Thereafter, the complaintdismissed as withdrawn– Filing of the fresh complaint – Award ofD75% of the sum assured to the complainant on a non-standard basis– Upheld by the State Commission – However, the NationalCommission set aside the same – On appeal, held: Having notargued, before the State Commission, as regards the complaint beingbarred in view of the withdrawal of the earlier complaint, theNational Commission not justified, in allowing the InsuranceECompany to urge that point – Moreover, the National Commissionwas under the wrong impression that the earlier complaint hadchallenged the order of repudiation – Complaint was withdrawn bythe counsel on the pretext of the case being prolonged by theadvocate of the Insurance Company, without having expressFinstructions for withdrawal – For the fault of the counsel, thecomplainant cannot be made to suffer – Thus, the complaint cannotbe thrown out on the threshold of Or.XXIII r.1(4) – Any violation ofthe condition should be in the nature of a fundamental breach –There was timely intimation to the insurance company about loss ordamage – Time gap between the driver alighting from the vehicleGand noticing the theft, was very short – It cannot be said that leavingthe key of the vehicle in the ignition was an open invitation to stealthe vehicle – Even if there was some carelessness, it was not afundamental breach of the condition warranting total repudiation– On facts, fit case to award the claim at 75% on a non-standard H

basis – District Forum and State Commission rightly ordered so –Code of Civil Procedure, 1908 – Or. XXIII r. 1(4).

Allowing the appeal, the Court

HELD : 1.1 Having not argued, before the StateCommission, the point of the present complaint being barred inview of the withdrawal of the earlier complaint, the NationalCommission was not justified, on the facts of the instant case, inallowing the respondent-Insurance Company to urge that pointtherefrom. It is very clear from the order of the State Commissionthat only two points were argued by the Insurance Company. [Para5][1250-D-E]

Conclusion

1.2 In any event, interest of justice requires that theappellant, in the peculiar facts and circumstances of this case,should not be non-suited on the ground that his earlier complaintwas withdrawn. The National Commission was under the wrongimpression that the original Complaint was filed in respect ofrepudiation of the insurance claim and it proceeded on theerroneous premise that having challenged the repudiation in theComplaint, the withdrawal of the complaint unconditionally on22.11.2010 was fatal to the appellant. The original Complaint wasfiled on 11.06.2009 and the respondent-Insurance Companyrepudiated the claim only on 15.10.2009. The complaint was filedafter theft due to non–settlement of claim by the InsuranceCompany. The repudiation of the claim was made during thependency of the said complaint, purportedly due to breach ofcondition no. 1 and 5. The said complaint was withdrawn by theadvocate of the complainant on the pretext of the case beingprolonged by the advocate of the Insurance Company, withouthaving express instructions for withdrawal of the said complaint.However, for the fault of the advocate, the complainant cannotbe made to suffer. Finally, the dismissal of the complaint was madeby the National Commission under the wrong pretext that theearlier complaint had challenged the order of repudiation. Thus,the complaint cannot be thrown out on the threshold of OrderXXIII Rule (1)(4) CPC and in the peculiar facts, it requiresconsideration on merits. [Paras 7, 8][1250-G; 1252-A-E]

1.3 A careful perusal of Condition No.1 shows that notice isto be given in writing to the Insurance Company immediately ABC

DEFG

H

Aupon occurrence of any accidental loss or damage. The later partof the clause says that in case of theft or criminal act, which maybe subject of a claim under the policy, the insured shall giveimmediate notice to the police and cooperate with the InsuranceCompany in securing the conviction of the offender. [Para 9][1252-F-G]B

1.4 There was no breach of Condition No.1 in the instantcase. After the incident of theft, FIR was registered the next day.The intimation was also given to the Insurance Companyadmittedly on 02.07.2008, after six days. The Police have alsoreported the vehicle as untraced as the records indicate. [ParaC10][1255-E-F]

1.5 As regards the alleged breach of Condition No.5 isconcerned, it is seen from the record that the driver of the claimantleft the key in the keyhole of the vehicle when he got down tosearch the location where he had to unload the stone dust. TheDinvestigator recommended the repudiation of claim because,according to him, steps to safeguard the vehicle insured werenot taken by the driver. [Para 11][1255-F-G]

1.6 Any violation of the condition should be in the nature ofa fundamental breach so as to deny the claimant any amount. [ParaE14][1256-D]

1.7 It is noticed in the repudiation letter that the driverhad, after alighting from the vehicle, gone to enquire about thelocation of and that after he went some distance, he heard thesound of the starting of the vehicle and it being stolen away. TheFtime gap between the driver alighting from the vehicle andnoticing the theft, is very short as is clear from the facts of thecase. It cannot be said that leaving the key of the vehicle in theignition was an open invitation to steal the vehicle. [Para 15][1257-A-B]

1.8 The present case was an eminently fit case, where theGclaim at 75% ought to have been awarded on a non–standardbasis. Even if there was some carelessness, on the peculiar factsof this case, it was not a fundamental breach of Condition No.5warranting total repudiation. It was rightly so ordered by theDistrict Forum and affirmed by the State Commission. [ParaH16][1258-E-F]

1.9 Where there is some contributory factor, a proportionatededuction from the assured amount would be all that the InsuranceCompany can aspire to deduct. The plea of the appellant isaccepted that in the case at hand, on the facts governing thescenario, Clause (iii) of the table set out in Amalendu Sahoo’scase is attracted and the District Forum and the State Commissionwere justified in awarding the entire 75% of the admissible claim.The judgment of the National Commission is set aside and thatof the District Forum as affirmed by the State Commission isrestored. [Paras 19, 20][1259-G-H; 1260-A-B]

National Insurance Company Limited vs. NitinKhandelwal (2008) 11 SCC 259 : [2008] 7 SCR 1047;Amalendu Sahoo vs. Oriental Insurance CompanyLimited (2010) 4 SCC 536; Jaina ConstructionCompany vs. Oriental Insurance Company Limited andAnother (2022) 4 SCC 527; Gurshinder Singh vs.Shriram General Insurance Co. Ltd. (2020) 11 SCC612 : [2020] 2 SCR 564; Manjeet Singh vs. NationalInsurance Company Limited and Another (2018) 2 SCC108 : [2017] 12 SCR 90; B.V. Nagaraju vs. OrientalInsurance Co. Ltd., Divisional Officer, Hassan (1996)4 SCC 647 : [1996] 3 Suppl. SCR 22; NationalInsurance Co. Ltd. Vs. Swaran Singh and Others (2004)3 SCC 297 : [2004] 1 SCR 180; Lakhmi Chand vs.Reliance General Insurance (2016) 3 SCC 100 – reliedon.

Kanwarjit Singh Kang vs. M/s ICICI Lombard GeneralInsurance Co. Ltd. & Anr. SLP (C) No. 6518 of 2018dated 29.03.2022– referred to.

David Topp vs. London Country Bus (South West)Limited, [1993] EWCA Civ 15; P.Perl (Exporters) Ltd.vs. Camden London Borough Council [1984] QB 342– referred to.

A

B

C

D

E

F

G

H

CIVIL APPELLATE JURISDICTION : Civil Appeal No.4758of 2023.

CFrom the Judgment and Order dated 24.01.2018 of the NationalConsumers Disputes Redressal Commission, New Delhi in REVPNo.3415 of 2016.

Ms. Kunika, Ms. Srishti Singh, Advs. for the Appellant.

J. P. Sheokand, Kuldeep Singh Kuchaliya, Ajay Pal, Advs. for theDRespondents.

The Judgment of the Court was delivered by

K. V. VISWANATHAN, J.

1. Leave granted.

E

2. The present appeal arises from the final judgment and orderdated 24.01.2018 passed by the National Consumer Disputes RedressalCommission (for short “the National Commission”), New Delhi inRevision Petition No. 3415 of 2016. By the said judgment, the NationalCommission reversed the concurrent judgments of the District ConsumerFDisputes Redressal Forum (for short “the District Forum”) and the StateConsumer Disputes Redressal Commission (for short “the StateCommission”). The Fora below, while allowing the original complainthad directed the New India Assurance Company Limited (for short “theInsurance Company”) to indemnify the Claimant on non-standard basisto the extent of 75% of the sum assured, which was Rs.8,40,000/-.G

Facts

3. The brief facts, necessary for adjudication of this Appeal, areas follows:-

a) The appellant was the owner of the truck (dumper) (hereinafterHreferred to as “the vehicle”) bearing Registration No. HR-55C-5385

and had a valid insurance policy (Policy No. 354101/31/07/01/00013342)for the Insured Declared Value of Rs.8,40,000/- for the period 20.02.2008to 19.02.2009.

b) On 26.06.2008, the appellant’s driver – Mam Chand had tounload stone dust at Mittal’s Farm at Shankar ki Dhani. He parked thevehicle to find out the address. The admitted case is that he left the keyin the key hole when he got out of the vehicle to look around for theaddress.

c) In the letter of repudiation which referred to the statement ofthe driver Mam Chand, it was mentioned that Mam Chand alighted fromthe vehicle and went to enquire about Mittal’s Farm, after leaving thekey of the said vehicle inside the key hole. When he had gone somedistance, he heard the sound of starting of the vehicle and he came backand noticed that two persons were sitting on the driver’s seat of thevehicle and a car was at the back of the said vehicle in which threepersons were there. He had further stated that they stole and took awaythe vehicle.

d) On 27.06.2008 itself, the appellant registered an FIR No. 77 atthe Bilaspur Police Station, Gurgaon under Section 379 of the IPC. On02.07.2008, the Appellant intimated the respondent-Insurance Companyabout the theft. On 11.06.2009, the appellant filed a complaint CPA No.515 of 2009 before the District Forum, Gurgaon alleging that therespondent was delaying the settlement of the claim and, as such,committed deficiency in service. Para 4 of the said complaint and theprayers made are important, which are set out herein below:

“4. That the complainant had already been submitted all the relevantpapers/forms with the opposite party, but illegally, malafidely andwithout any right, title and interest, lingering the matter on onepretext to the another while the complainant has hired the servicesof the Opp. party by paying consideration of the premium forinsured amount of Rs.8,40,000/- and therefore, the Opp. partyhas totally failed to render sufficient services to the complainant.”

xxx xxx xxx

“a) Direct the opposite party to pay the insured amount of thetheft vehicle i.e Rs. 8,40,000/- along with interest @ 18% perannum from the date of theft till realization.

AB

C

D

E

F

G

H

A

b) Direct the opposite party to pay, a sum of Rs.20,000/- on accountof mental agony, delay, the harassment etc. suffered by thecomplainant.”

e) What is significant is that on the date of the complaint, theInsurance Company had not repudiated the claim. It appears from theBrecord that the Insurance Company had appointed an agency named“Delta Detectives” to investigate the matter and the said agency, on27.10.2008, had recommended repudiation of the claim.

f) After the complaint CPA No. 515 of 2009 was lodged on11.06.2009, it was only on 15.10.2009 that the respondent-InsuranceCCompany issued a letter repudiating the claim. The relevant portion ofthe repudiation letter reads as follows:- “2. You, vide an intimation letter dt. 02.07.2008, informed, for thefirst time, that your above said Dumper No. HR-55C-5385 hadbeen stolen on 26.06.2008.

D

xxx xxx xxx

“5. That, thus, from the above facts as disclosed by you and yourdriver, it is quite clear that the theft of your Dumper No. HR-55C-5385 was totally the result of your and your driver MamChand’s total negligence in not safeguarding the said vehicleEproperly. It is quite clear that had the said Dumper would nothave been left un-attended and further the key of the said Dumperwould not have been left inside the key hole of the said Dumper,then, the same could not have been taken away by any person. Inview of above contraventions and violations of the terms andFconditions of the subject insurance policy, the Co. is not liable topay any claim in respect of the said Dumper. Therefore, thecompetent authority of the Co. has repudiated your claim. It mayplease be noted.”

g) When the matter stood thus, the complaint CPA No. 515 of2009 came up before the District Forum on 22.11.2020 when the followingGstatement appears to have been recorded of the advocatefor theappellant, in CPA No. 515 of 2009:

“I, Surender Kumar Gulia, Advocate, state that I do not want toproceed with my case. It may be dismissed.

H

Recording the statement, separately, the District Forum on22.11.2010 disposed of the said complaint in the following terms:- B

“Statement of the learned counsel for the complainant forwithdrawal of the complaint recorded, separately. In view of thestatement, the complaint of the complainant is hereby dismissedas withdrawn. File be consigned to record room after duecompliance.”

C

h) Faced with the repudiation, which is dated 15.10.2009, theClaimant, desperate to indemnify himself and get the fruits of hisinsurance policy, filed a fresh complaint being C.C. No. 134 of 2012. Inthe said complaint, the appellant averred that, after filing the earliercomplaint, since the counsel for the opposite party viz., the InsuranceCompany took numerous dates for arguments on one pretext or theother, his counsel got annoyed with the attitude of the said Advocateand, by mistake, withdrew the case on 22.11.2020. It was expresslypleaded that the withdrawal of the said complaint was unfortunate, andthat the appellant should not be made to suffer for the wrong deeds ofthe counsel. In the complaint, the appellant prayed for a direction to theInsurance Company to pay the insured an amount of Rs.8,40,000 withinterest @ 18% p.a. and further prayed for an amount of Rs.20,000/- onaccount of mental agony, delay and harassment.

D

E

i) The Insurance Company, in its reply, objected to themaintainability of the present complaint in view of the earlier proceedingsin CPA No. 515 of 2009. It also contended that the terms and conditionsof the insurance policy were violated. Apart from this, the plea of limitationwas also taken.

F

j) The objections were overruled by the District Forum. The pleaof the complaint, being barred by limitation, was addressed by recordinga finding that the delay, if any, was already condoned, by the Forum, byorder dated 06.03.2012 under Section 24A of the Consumer ProtectionAct. The plea about violation of the conditions of the policy was overruledand on non-standard basis, a sum to the extent of 75% of the sum assuredwas awarded. No finding was recorded on the aspect of the bar in filing G

H

Athe present complaint after the order dated 22.11.2010 dismissing CPANo. 515 of 2009 as withdrawn. The Insurance Company carried thematter in Appeal to the State Commission.

k) Before the State Commission, only two contentions were urged.There was no contention raised on the issue of the withdrawal of theBearlier complaint. It was contended that the intimation of the theft wasgiven to the Insurance Company only on 02.07.2008 i.e., six days afterthe theft, therefore it was argued that Condition No.1 of the insurancepolicy was violated. Apart from this, violation of Condition Nos. 5 of thepolicy was also argued. Their point about the delay of six days in intimationwas brushed aside by referring to the Circular Ref: IRDA/ HLTH/ MISC/CCIR/ 216/ 09/ 2011 dated September 20[th], 2011 issued by InsuranceRegulatory Development Authority (for short “IRDA”), which statedthat even if there was a condition in the policy regarding delay inintimation, the insurer cannot take it’s shelter to repudiate the claim,which is otherwise proved to be genuine.

Dl) To appreciate the State Commission’s finding with regard toviolations of the conditions of the policy, it is necessary to extract ConditionNos. 1 and 5 of the policy, which reads as follows:

“l. Notice shall be given in writing to the Company immediatelyupon the occurrence of any accidental loss or damage and in theEevent of any claim and thereafter the insured shall give all suchinformation and assistance as the Company shall require. Everyletter claim writ summons and/or process or copy thereof shall beforwarded to the Company immediately on receipt by the insured.Notice shall also be given in writing to the Company immediatelyFthe insured shall have knowledge of any impending prosecutioninquest or Fatal Inquiry in respect of any occurrence which maygive rise to a claim under this policy, in case of theft or criminalact which may be the subject of a claim under this Policy theinsured shall give immediate notice to the police and co-operatewith the Company, in securing the conviction of the offender.

G

xxx xxx xxx

5. The Insured shall take all reasonable steps to safeguard thevehicle insured from loss or damage and to maintain it in efficientcondition and the Company shall have at all times free and fullaccess to examine the vehicle insured or any part thereof or any H

driver or employee of the insured. In the event of any accident orbreakdown, the vehicle insured shall not be left unattended withoutproper precautions being taken to prevent further damage or lossand if the vehicle insured be driven before the necessary repairsare effected, any extension of the damage or any further damageto the vehicle shall be entirely at the insured’s own risk.”

m) The State Commission clearly recorded that, soon after thetheft of the vehicle on 26.06.2008, the FIR was lodged on 27.06.2008with the Police and the Insurance Company was informed. It was alsorecorded that no cogent evidence was produced by the InsuranceCompany to prove that there was a delay of six days in giving intimation.Going further, the State Commission recorded that Condition No.1 ofthe Insurance policy applied only to occurrence of an accident and notto theft cases. Insofar as Condition No.5 was concerned, it was heldrelying on the judgments of this Court in National Insurance CompanyLimited vs. Nitin Khandelwal, [(2008) 11 SCC 259] and AmalenduSahoo vs. Oriental Insurance Company Limited, [(2010) 4 SCC536] that even if there was a breach of that clause, the claim could nothave been repudiated in toto and, applying the yardstick in AmalenduSahoo (supra), 75% of the claim as the admissible amount, on non-standard basis, was awarded. Holding thus, the State Commissiondismissed the Appeal of the Insurance Company.

n) Undaunted, the Insurance Company carried the matter inrevision to the National Commission. Here, it was primarily argued thatthe withdrawal of Complaint No. 515 of 2009 foreclosed the Complainantfrom filing a fresh complaint. This plea was accepted relying on the barunder Order XXIII Rule (1)(4) of the Code of Civil Procedure[1] (CPC).

1 Withdrawal of suit or abandonment of part of claim.- (1) At any time after theinstitution of a suit, the plaintiff may as against all or any of the defendants abandon hissuit or abandon a part of his claim:

Provided that where the plaintiff is a minor or other person to whom theprovisions contained in Rules 1 to 14 of Order XXXII extend, neither the suit nor anypart of the claim shall be abandoned without the leave of the Court.

(4) Where the plaintiff-

(a) abandons any suit or part of claim under sub-rule(1), or (b) withdraws from a suit or part of a claim without the permission referred toin sub-rule (3), he shall be liable for any such costs as the Court may award and shall beprecluded from instituting any fresh suit in respect of such subject-matter or such partof the claim.

AB

C

D

E

F

G

H

AFurther, dealing with the merits about the breach of Condition No.5, theNational Commission found that Condition No.5 was breached becausethe vehicle was unattended on the road side with keys in the key hole.However, there was no further discussion on the applicable law withregard to the consequences of the breach and there is no whisper in theorder of the National Commission about the precedents discussed in theBorders of the fora below. Equally so, with regard to the argument on thebreach of Condition No.1, it was recorded that there was an obligationof the claimant to give intimation in writing of the theft of the vehicle.The National Commission, thus, allowed the Revision Petition.

4) We have heard Ms. Kunika, learned counsel for theCappellant,who presented the case very ably before us and Mr. J.P.Sheokand, learned counsel for the respondent-Insurance Company, wholeft no stone unturned while making his submissions.

Withdrawal of the earlier complaint

D5) At the very outset, we would like to record that, having notargued, before the State Commission, the point of the present complaintbeing barred in view of the withdrawal of the earlier complaint, theNational Commission was not justified, on the facts of the present case,in allowing the respondent-Insurance Company to urge that pointtherefrom. It is very clear from the order of the State Commission thatEonly two points were argued by the Insurance Company.6) Para 6 of the order of the State Commission is extractedhereinbelow:- “Learned counsel for the Appellant-Insurance Company hasFassailed the order of the District Forum by raising two-foldarguments. Firstly, that there was delay of 6 days in giving intimationto the Insurance Company and secondly that the ignition key wasleft in the truck by driver and the truck was left unattended on theroad.”

7) In any event, we are convinced that interest of justice requiresGthat the appellant, in the peculiar facts and circumstances of this case,should not be non-suited on the ground that his earlier complaint waswithdrawn. We say so for the following reasons:-

(i) Firstly, the original Complaint No. 515 was filed on 11.06.2009when the Insurance Company had not taken any decision on the claim.H

In fact, the Complainant had alleged that the Insurance Company waslingering on with the issue and had complained of not rendering “sufficientservice”;

(ii) Secondly, pending that complaint, it was on 15.10.2009 thatthe repudiation letter was issued on purported breach of Condition Nos.1 & 5 of the Policy;

(iii) Thirdly, we find that a separate proceeding has been drawnup recording the statement of only the lawyer of the Complainant. Thestatement of the lawyer stated that “I, Surender Kumar Gulia,Advocate, state that I do not want to proceed with my case. It maybe dismissed”.

(iv) Fourthly, in the complaint filed on 06.03.2012, the appellantavers that since the lawyer for the opposite party – Insurance Companywas taking numerous dates for arguments, his counsel getting annoyedwith the attitude of the advocate of the opposite party withdrew theabove said case by mistake.

(v) Fifthly, the appellant further avers that the withdrawal wasunfortunate and he ought not to have prejudiced for the deeds of hislawyer.

(vi) Sixthly, the finding of the National Commission is also factuallyerroneous, on this score. The learned counsel for the appellant drew ourattention to para 9 of the order of the National Commission wherein thefollowing erroneous finding was recorded.

“9. It is not disputed that earlier also, the complainant had filedconsumer complaint no. 515 of 2009 against the opposite party/Insurance company on the same cause of action. Perusal of recordwould show that aforesaid complaint filed by the complainant inrespect of repudiation of insurance claim regarding the same theftwas withdrawn by the complainant unconditionally on 22.11.2010.Copy of the relevant order in CC No. 515 of 2009 is on the record.The order is reproduced as under:

“Statement of learned counsel for the complainant forwithdrawal of the complaint recorded separately. In view ofthe statement, the complaint of the complainant is herebydismissed as withdrawn. File be consigned to record room afterdue compliance.”

A

B

C

D

E

F

G

H

A

AIt will be noticed that the National Commission was under thewrong impression that the original Complaint No. 515 of 2009 was filedin respect of repudiation of the insurance claim and it proceeded on theerroneous premise that having challenged the repudiation in ComplaintNo. 515, the withdrawal of the complaint unconditionally on 22.11.2010was fatal to the appellant. The original Complaint No. 515 of 2009 wasBfiled on 11.06.2009 and the respondent-Insurance Company repudiatedthe claim only on 15.10.2009.

8) In view of the foregoing, it has to be reiterated that the complaintNo. 515 was filed after theft due to non-settlement of claim by theInsurance Company. The repudiation of the claim was made during theCpendency of the said complaint, purportedly due to breach of conditionno. 1 and 5. The said complaint was withdrawn by the advocate of thecomplainant on the pretext of the case being prolonged by the advocateof the Insurance Company, without having express instructions forwithdrawal of the said complaint. However, for the fault of the advocate,Dthe complainant cannot be made to suffer. Finally, the dismissal of thecomplaint was made by the National Commission under the wrong pretextthat the earlier complaint had challenged the order of repudiation. Thus,in our view, the complaint cannot be thrown out on the threshold ofOrder XXIII Rule (1)(4) CPC and in the peculiar facts, it requiresconsideration on merits.E

In the facts of the present case, the main question that falls forconsideration is: Whether the delay of 6 days in intimating theInsurance Company about the theft comes within the purview ofbreach of Condition No. 1 and also whether on facts there wasbreach of condition No. 5 of the insurance policy to justify theFrejection of the claim in toto?

9) A careful perusal of Condition No.1 shows that notice is to begiven in writing to the Insurance Company immediately upon occurrenceof any accidental loss or damage. The later part of the clause says thatin case of theft or criminal act, which may be subject of a claim underGthe policy, the insured shall give immediate notice to the police andcooperate with the Insurance Company in securing the conviction of theoffender. In support of this interpretation to Condition No.1 and to bolsterher plea that the appellant-Claimant did not breach Condition No.1, learnedcounsel for the appellant relied on the recent judgment of this Court inHJaina Construction Company vs. Oriental Insurance Company ASHOK KUMAR v. NEW INDIA ASSURANCE CO. LTD.[K. V. VISWANATHAN, J.]

Limited and Another, [(2022) 4 SCC 527], wherein relying on andreiterating the judgment of a three-Judge Bench in Gurshinder Singhvs. Shriram General Insurance Co. Ltd. [(2020) 11 SCC 612], thisCourt held as follows:-

“10. At the outset, it may be noted that there being a conflict ofdecisions of the Bench of two Judges of this Court in OmPrakash v. Reliance General Insurance, [(2017) 9 SCC 724]and in Oriental Insurance Co. Ltd. v. Parvesh ChanderChadha, [(2018) 9 SCC 798], on the question as to whether thedelay occurred in informing the Insurance Company about theoccurrence of the theft of the vehicle, though the FIR wasregistered immediately, would disentitle the claimant of theinsurance claim, the matter was referred to a three-Judge Bench.

11. The three-Judge Bench in Gurshinder Singh v. ShriramGeneral Insurance Co. Ltd., [(2020) 11 SCC 612] in similarcase as on hand, interpreted the very Condition 1 of the insurancecontract and observed as under : (SCC pp. 618-21, paras 9-15, 17& 20)

xxx xxx xxx

12. In our view, applying the aforesaid principles, Condition 1of the standard form for commercial vehicles package policywill have to be divided into two parts. The perusal of the firstpart of Condition 1 would reveal that it provides that “a noticeshall be given in writing to the company immediately upon theoccurrence of any accidental loss or damage”. It furtherprovides that in the event of any claim and thereafter, the insuredshall give all such information and assistance as the companyshall require. It provides that every letter, claim, writ, summonsand/or process or copy thereof shall be forwarded to theinsurance company immediately on receipt by the insured. Itfurther provides that a notice shall also be given in writing tothe company immediately by the insured if he shall haveknowledge of any impending prosecution inquest or fatal inquiryin respect of any occurrence, which may give rise to a claimunder this policy.

13. ***

A

B

C

D

E

F

G

H

A

B

C

D

E

G

H

14. We find that the second part of Condition 1 deals with the‘theft or criminal act other than the accident’. It provides thatin case of theft or criminal act which may be the subject of aclaim under the policy, the insured shall give immediate noticeto the police and cooperate with the company in securing theconviction of the offender. The object behind giving immediatenotice to the police appears to be that if the police is immediatelyinformed about the theft or any criminal act, the policemachinery can be set in motion and steps for recovery of thevehicle could be expedited. In a case of theft, the insurancecompany or a surveyor would have a limited role. It is thepolice, who acting on the FIR of the insured, will be required totake immediate steps for tracing and recovering the vehicle.Per contra, the surveyor of the insurance company, at the most,could ascertain the factum regarding the theft of the vehicle.

15. It is further to be noted that, in the event, after the registrationof an FIR, the police successfully recovering the vehicle andreturning the same to the insured, there would be no occasionto lodge a claim for compensation on account of the policy. Itis only when the police are not in a position to trace and recoverthe vehicle and the final report is lodged by the police after thevehicle is not traced, the insured would be in a position to lodgehis claim for compensation.

16. ***

17. That the term “cooperate” as used under the contract needsto be assessed in the facts and circumstances. While assessingthe “duty to cooperate” for the insured, inter alia, the courtshould have regard to those breaches by the insured which areprejudicial to the insurance company. Usually, mere delay ininforming the theft to the insurer, when the same was alreadyinformed to the law enforcement authorities, cannot amount toa breach of “duty to cooperate” of the insured.

18.-19. ***

20. We, therefore, hold that when an insured has lodged theFIR immediately after the theft of a vehicle occurred and whenthe police after investigation have lodged a final report afterthe vehicle was not traced and when the surveyors/investigators appointed by the insurance company have found the claim ofthe theft to be genuine, then mere delay in intimating theinsurance company about the occurrence of the theft cannotbe a ground to deny the claim of the insured.”

12. In the opinion of the Court the aforestated ratio of the judgmentclinches the issue involved in the case on hand. In the instant casealso, the FIR was lodged immediately on the next day of theoccurrence of theft of the vehicle by the complainant. The accusedwere also arrested and charge-sheeted, however, the vehicle couldnot be traced out. Of course, it is true that there was a delay ofabout five months on the part of the complainant in informing andlodging its claim before the Insurance Company, nonetheless, it ispertinent to note that the Insurance Company has not repudiatedthe claim on the ground that it was not genuine. It has repudiatedonly on the ground of delay. When the complainant had lodgedthe FIR immediately after the theft of the vehicle, and when thepolice after the investigation had arrested the accused and alsofiled challan before the court concerned, and when the claim ofthe insured was not found to be not genuine, the Insurance Companycould not have repudiated the claim merely on the ground thatthere was a delay in intimating the Insurance Company about theoccurrence of the theft.”

10) The above judgments put the matter and the controversy torest. There was no breach of Condition No.1 in the present case. In thepresent case, after the incident of theft on 26.06.2008, FIR was registeredon 27.06.2008. The intimation was also given to the Insurance Companyadmittedly on 02.07.2008. The Police have also reported the vehicle asuntraced as the records indicate.

11) Insofar as the alleged breach of Condition No.5 is concerned,it is seen from the record that the driver of the claimant left the key inthe keyhole of the vehicle when he got down to search the location of“Mittal Farm”, where he had to unload the stone dust. The investigatorrecommended the repudiation of claim because, according to him, stepsto safeguard the vehicle insured were not taken by the driver. It iscontended by the appellant that breach of condition No.5, if any, cannotresult in total repudiation of the claim. It is argued that the claim ought tobe settled on non-standard basis, as was ordered by the District Forum A

BC

D

E

F

G

H

Aand the State Commission. Reliance is placed on Nitin Khandelwal(supra) and Amalendu Sahoo (supra).

12) The learned Counsel for the Insurance-Company vehementlyopposed these submissions and prayed for dismissal of the Appeal. It isargued by him that, while in Nitin Khandelwal (supra) and in AmalenduBSahoo (supra) the cause of repudiation was not germane to the theft, inthe present case, the cause was germane to the theft. The learnedCounsel supported the findings as recorded in the order impugned.

13) A reading of the facts of the case in Nitin Khandelwal (supra),reveal that the repudiation was on the ground that the vehicle was beingCused as a taxi and in Amalendu Sahoo (supra), it was on the groundthat the vehicle was being used on hire. In our view, that would notmake any difference to the ratio that is deducible from those judgments.

14) It is well settled in a long line of judgments of this Court thatany violation of the condition should be in the nature of a fundamentalDbreach so as to deny the claimant any amount. [see Manjeet Singh vs.National Insurance Company Limited and Another, [(2018) 2 SCC108]; B.V. Nagaraju vs. Oriental Insurance Co. Ltd., DivisionalOfficer, Hassan, [(1996) 4 SCC 647], National Insurance Co. Ltd.Vs. Swaran Singh and Others, [(2004) 3 SCC 297]and LakhmiChand vs. Reliance General Insurance, [(2016) 3 SCC 100]]

E

15) It is an admitted position in the Repudiation Letter and theSurvey Report that the theft did happen. What is alleged is that theClaimant was negligent in leaving the vehicle unattended with the key inthe ignition. Theft is defined in Section 378 of the IPC as follows:- F“378. Theft.—Whoever, intending to take dishonestly anymoveable property out of the possession of any person withoutthat person’s consent, moves that property in order to such taking,is said to commit theft.”

As will be seen from the definition, theft occurs when any personintended to take dishonestly any moveable property out of the possessionGof any person without that person’s consent, moves that property inorder to such taking. It is not the case of the Insurance Company thatthe Claimant consented or connived in the removal of the vehicle, inwhich event that would not be theft, in the eye of law. Could it be said,as is said in the repudiation letter, that the theft of the vehicle was totallyHthe result of driver Mam Chand leaving the vehicle unattended with the key in the ignition? On the facts of this case, the answer has to be in thenegative. It is noticed in the repudiation letter that the driver Mam Chandhad, after alighting from the vehicle, gone to enquire about the locationof Mittal’s Farm and that after he went some distance, he heard thesound of the starting of the vehicle and it being stolen away. The timegap between the driver alighting from the vehicle and noticing the theft,is very short as is clear from the facts of the case. It cannot be said, insuch circumstances, that leaving the key of the vehicle in the ignitionwas an open invitation to steal the vehicle.

16) The Court of Appeal in England, in the case of David Toppvs. London Country Bus (South West) Limited, [1993] EWCA Civ15 had occasion to consider the issue, though in the context of liability ofthe owner of the vehicle for a fatal accident. The facts as set out in thejudgment are as follows:-

“In accordance with usual practice, the driver, Mr. Green, left thebus in that lay-by at the bus stop at about 2.35 p.m. on 24[th] April1988. He left it unlocked, with the ignition key in it. He had then a40 minute rest period before resuming his duties, driving a differentbus. There was an arrangement under which the drivers couldspend their rest period in the hospital. The expectation was thatanother driver, about eight minutes after Mr. Green had left thebus in the lay-by, would pick the bus up and drive the same route.But the other driver, who should have picked the bus up at about2.43 p.m., did not do so because he was feeling unwell. His shiftwould have been non-compulsory overtime, and he did not reportfor his overtime. The bus therefore remained in the lay-by. Mr.Green saw it there later and reported that it was still standingthere. Therefore, there is no doubt that the depot knew that thebus was there. But, possibly because of shortage of drivers oravailable staff, nothing was done to pick the bus up that evening.It was taken by somebody who has never been traced just before11.15 at night, driven for a relatively short distance until the pointwhere Mrs. Topp was knocked down and killed, and it wasabandoned round the corner from there.”

Referring to the judgment of Lord Justice Robert Goff in P.Perl(Exporters) Ltd. vs. Camden London Borough Council [1984] QB342, the Court of Appeal held as under:- ABC

D

EF

G

H

A

A“In so far as the case is put on the basis that to leave the busunlocked and with the key in the ignitionon the Highway near apublic house is to create a special risk in a special category, it ispertinent to refer to a passage in the judgment of Lord JusticeRobert Goff (as he then was) in P. Perl (Exporters) Ltd. V.Camden London Borough Council [1984] QB 342 at page 359E-BF where he said:

“In particular, I have in mind certain cases where the defendantpresents the wrongdoer with the means to commit the wrong,in circumstances where it is obvious or very likely that he willdo so – as, for example, where he hands over a car to beCdriven by a person who is drunk, or plainly incompetent, who then runs over the plaintiff…”

But the sort of cases to which Lord Justice Robert Goff wasthere referring are far different from the present case. It may beadded that that there is no evidence that the malefactor had beenfrequenting the public house that is shown in the picture; we donot know who he was, nor is there any evidence or presumptionthat persons who do frequent that particular public house areparticularly likely to steal vehicles and engage in joy-riding.”

D

(underlining is ours)

E

The above reasoning appeals to us to conclude that the presentcase was an eminently fit case, where the claim at 75% ought to havebeen awarded on a non-standard basis. Even if there was somecarelessness, on the peculiar facts of this case, it was not a fundamentalbreach of Condition No.5 warranting total repudiation. It was rightly soFordered by the District Forum and affirmed by the State Commission.

17) Learned counsel for the Insurance Company, in his writtensubmissions, has placed before us an unreported order dated 29.03.2022passed by this Court in SLP (C) No. 6518 of 2018 titled KanwarjitSingh Kang vs. M/s ICICI Lombard General Insurance Co. Ltd. &GAnr. to support his case on the breach of Condition No.5.

We have carefully perused the order. In the said order, it is recordedthat concurrently the Claimant lost before the fora below and it is alsorecorded that the State Commission did not find the ground of leavingthe ignition keys in the vehicle to be a valid reason to repudiate theHclaim. However, on the ground of unexplained and inordinate delay in

lodging the FIR, the repudiation was upheld. In that case, while the losswas on 25.03.2010, the intimation to Police was only on 02.04.2010 soclearly it was a breach of Condition No.1. No doubt, in the penultimateparagraph of the order it is recorded that the want of reasonable care onthe part of the petitioner in that case operated heavily against the petitionerand it was concluded that the repudiation could not be faulted. However,the primary reason for repudiation was the violation of condition No.1viz. the delay in intimation to the Police. Further since there was afundamental breach of Condition No.1, there was no occasion to raisepoints for settlement of claim on non-standard basis. There is no whisperabout the breach of Condition No.5 being not a fundamental breach. Wefind the present case, on facts, completely different as there is no breachof Condition No.1 because the intimation to the police was immediate.There have been concurrent awards by the District Forum and StateCommission on non-standard basis by applying Nitin Khandelwal(supra) and Amalendu Sahoo (supra). Hence, the order will in nomanner assist the respondent-Company.

18) In Amalendu Sahoo (supra), this Court noticed the guidelinesissued by the New India Assurance Co. Ltd. in settling claims on non-standard basis. The guidelines read as under:- The above guidelines were followed by this Court in AmalenduSahoo (supra) as is clear from para 14 of the said judgment.

The District Forum and the State Commission have rightly appliedAmalendu Sahoo (supra) to the facts of the present case and awarded75% on non-standard basis.

19) Nitin Khandelwal (supra) and Amalendu Sahoo (supra)lay down the correct formula that where there is some contributoryfactor, a proportionate deduction from the assured amount would be allthat the Insurance Company can aspire to deduct. We are inclined toaccept the plea of the appellant that in the case at hand, on the facts AB

C

D

E

F

G

H

Agoverning the scenario, Clause (iii) of the table set out in para 14 ofAmalendu Sahoo (supra) is attracted and the District Forum and theState Commission were justified in awarding the entire 75% of theadmissible claim.

20) For the aforesaid reasons, the Appeal is allowed. We set asideBthe judgment of the National Commission and restore that of the DistrictForum as affirmed by the State Commission. No order as to costs.

C

Nidhi Jain

(Assisted by : Tamana, LCRA)

Appeal allowed.

D

E

F

G

H