Mere delay in intimating insurance company about the theft cannot be a ground to deny insurance claim: SC

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Name of the Case: Gurshinder Singh vs. Shriram General

Case No: Civil Appeal No 653 of 2020

Coram: Hon’ble Justice NV Ramana, R Subhash Reddy and BR Gavai

The Hon’ble Supreme Court has held that the mere delay in intimating the insurance company about the occurrence of the theft cannot be a ground to deny the claim of the insured. 

Issue of the case

Whether delay in informing the occurrence of the theft of the vehicle to the insurance company through the FIR was registered immediately would disentitle the claimant of the insurance claim?

Facts of the case

The appellant in the current matter had got his tractor insured with the respondents on 19.06.2010. On 28.10.2010 the tractor was stolen and the FIR was lodged on the same day. However, the claim was submitted to the respondent on 15.12.2010. It was rejected because intimation was given after 52 days.

The appellant after this reached the consumer dispute redressal forum Punjab and district forum allowed the complaint and directed the respondent to pay the sum of Rs 4,70,000 being the declared insured value of the vehicle to the complainant within one month from the date of copy of the order.

The respondent then filed an appeal to the state information commission in which the case was dismissed. The respondent then filed a review petition in the national commission and national commission also dismissed the compliant relying on the case of New Assurance Co Ltd vs Trilochan Jane. Hence this appeal was filed in the Hon’ble Supreme Court. 

Supreme Court verdict

“If the reason for the delay in making a claim is satisfactorily explained, such a claim cannot be rejected on the ground of delay. It is also necessary to state here that it would not be fair and reasonable to reject genuine claims which had already been verified and found to be correct by the Investigator,” the bench said.

The Hon’ble Supreme Court agreed on the above views of the court in the case of Om Prakash vs Reliance General Insurance. The owner indeed has to intimate the insurer immediately after the theft of the vehicle. However, this condition should not bar settlement of genuine claims particularly when the delay in intimation or submission of documents is due to unavoidable circumstances. The decision of the insurer to reject the claim has to be based on valid grounds, the apex court said.

When the insured has lodged the FIR immediately after the theft of the vehicle occurred and when the police after investigation have lodged a final report after the vehicle was not traced and when the investigator appointed by the insurance company has found the claim of the theft to be genuine than mere delay in intimating the insurance company about the occurrence of the theft cannot be a ground to deny the claim of the insured.

Edited by Vartika Gajendra Singh

Approved & Published – Sakshi Raje

Shubhang Gomasta
I am Shubhang Gomasta currently pursuing my master's in Law from MATS University, Raipur. I am a law graduate from Tamil Nadu National Law University. Not a book worm exactly but an enthusiastic writer and a blogger. I have a deep interest in areas such as Arbitration, Competition Law and Securities Law. In my free time, my activities include analyzing current affairs especially governmental policies and decisions.