National Insurance Company Limited v. Karam Singh & Anr.

HON’BLE MR. JUSTICE DEEPINDER SINGH NALWA Present: Mr. Nitin Gupta, Advocate, for the appellant. Ms. Kawaljit Kaur Dhillon, Advocate for respondent No.1. SUVIR SEHGAL, J. (Oral) *****

#1. This Intra Court appeal has been filed under Clause X of the Letters Patent, impugning judgment dated 25.04.2023 passed by the learned Single Judge, whereby, writ petition filed by the petitioner-insurance company has been partly allowed and award dated 30.09.2021 (Annexure P-1) passed by Permanent Lok Adalat, (Public Utility Services), UT Chandigarh, (for short ‘PLAPUS’) has been modified.

#2. Brief facts leading to the filing of the present appeal are that respondent No.1, owner of a Tata truck, had got it insured from the appellant-insurance company under a Goods Carrying Package Policy, which was valid for a period of 01 year commencing from 18.10.2017. The vehicle was stolen on 15.12.2017 and FIR No.133 was lodged on

30.12.2017, under Section 379 IPC at Police Station, Banur, District Patiala. Respondent No.1, lodged a claim with the insurance company. An untraced LPA-1118-2023 (O&M) 2 report was submitted by the investigating agency on 11.03.2019, which was supplied to the insurance company, however, the claim was not processed. In this background, respondent No.1 approached PLAPUS by filing an application under Section 22-C of the Legal Services Authorities Act, 1987 (for short the ‘1987 Act’). Upon being served, insurance company filed its reply contesting the claim by raising various objections. Since the dispute could not be amicably settled, PLAPUS adjudicated it on merits. An award dated 30.09.2021 (Annexure P-1) was passed directing the insurance company to make the payment of Rs.9,40,000/- which was the insured declared value of the vehicle along with interest and cost. Insurance company assailed the said award by filing a writ petition, which has been partly allowed by the learned Single Judge by reducing the principal amount by 10% on account of failure of respondent No.1 to take adequate steps to safeguard the interest of the insurance company.

#3. Counsel for the appellant has contended that there was an unexplained delay in the lodging FIR as well as in giving information to the insurance company. He urges that respondent No.1 violated the terms & conditions of the policy and the claim raised by him could not have been entertained.

#4. Opposing him, counsel for respondent No.1 has argued that mere delay in intimating the insurance company cannot be a ground for denying the claim. She urges that after making efforts to locate the vehicle, an FIR was lodged, but the police could not recover the vehicle. She submits that untraced report along with all the requisite documents, were duly LPA-1118-2023 (O&M) 3 supplied to the insurance company which failed to process the claim. She has supported the judgment passed by the learned Single Judge.

#5. We have heard the counsel for the parties and have given a thoughtful consideration to their respective arguments besides extensively examining the documents appended with the paper-book.

#6. It is not in dispute that the vehicle belonging to respondent No.1 was insured with the appellant-insurance company and that it was stolen on 15.12.2017. An FIR was registered, but the vehicle could not be recovered. An untraced report submitted by the investigating agency was supplied to the insurance company, but insurance company resisted the claim on the ground that there has been a violation of Condition No.1 of the insurance policy. This condition requires the insured to give a written intimation to the insurance company immediately upon the occurrence of any loss or damage to the vehicle.

#7. A similar condition in an insurance policy came up for consideration before the Supreme Court in Gurshinder Singh Vs. Shriram General Insurance Company Limited & another, (2020), 11 SCC 612. Apex Court observed that an insured shall give immediate notice of any theft to the police and cooperate with the authorities in securing the conviction of the offender. The object being that if the police is promptly intimated, the police machinery can be set in motion and steps for recovery of the vehicle can be expedited. In cases of theft, insurance company or its surveyor has a very limited role as it is the police, who is acting on the basis of the FIR, are required to take swift action for tracing and recovering the vehicle. It was LPA-1118-2023 (O&M) 4 further observed that a surveyor of an insurance company at the most can ascertain the factum of theft of the vehicle. Supreme Court held that the mere delay in intimating the insurance company about the occurrence of theft cannot be a ground to repudiate the claim.

#8. A similar view has been taken by the Supreme Court in Jaina Construction Company Vs. the Oriental Insurance Company Limited and Anr., (2022) 4 SCC 527. Supreme Court came to the conclusion that even a delay of five months in informing the insurance company, particularly when the insured had immediately lodged the FIR regarding the theft and the accused had been arrested, could not be a ground for denial of the insurance claim.

#9. In Dharamendar Vs. United India Insurance Company Limited and others (2024), 1 SCC 381, Supreme Court observed that the argument regarding delay in lodging the FIR need not be examined as the case of the insurance company throughout had been that there was a delay in intimating the insurance company.

#10. It is evident from the factual position noticed above that the insured gave prompt information to the police about the theft of the vehicle. An FIR was registered after 15 days of the occurrence which cannot be said to be such a long period so as to cast any doubt on the incident or to defeat the claim of the insured. Moreover, FIR was duly investigated and when the vehicle could not be recovered, an untraced report was prepared. Delay in intimating the insurance company is immaterial. A similar plea has been rejected by the Hon’ble Supreme Court in the judgments noticed LPA-1118-2023 (O&M) 5 hereinabove. Claim of respondent No.1 is, therefore, justified and has been rightly granted by the PLAPUS, although the award has been partially modified by the learned Single Judge.

#11. We do not find any illegality, perversity or jurisdictional error in the well-reasoned order passed by the learned Single Judge. Appeal being devoid of merit is dismissed, though with no order as to cost.

#12. Pending miscellaneous application(s), if any, also stands disposed of. (SUVIR SEHGAL) JUDGE JUDGE (DEEPINDER SINGH NALWA)

14.07.2026 Ramandeep Singh Whether speaking / reasoned Whether Reportable Yes Yes