Violations Must Constitute Fundamental Breach To Deny Insurance Claim: NCDRC Holds Bharti General Insurance Liable For Deficiency In Service

Brief Facts of the Case

The complainant insured their vehicle with Bharti Axa General Insurance/insurer. Subsequently, the vehicle was stolen, and an FIR was filed. The complainant informed the insurer of the theft and provided the required documents and the vehicle's key as requested. The insurer rejected the claim, following which the complaint to file a consumer complaint before the District Forum. The District Forum allowed the complaint and directed the insurance company to pay Rs.7,07,513 with interest @9%. The decision was appealed before the State Commission of Rajasthan, which dismissed the same. Consequently, the insurer filed a revision petition before the National Commission.

Contentions of the Insurer

The insurer admitted the policy was valid but stated that an investigation showed the vehicle was left unsecured, unsupervised, and with the key in it at the time of the theft. They claimed this violated policy terms and rejected the claim, asserting no deficiency in service and seeking dismissal of the complaint.

Observations by the National Commission

The National Commission observed that the central issue in this case was whether leaving the key in the vehicle was a fundamental breach of the insurance policy, justifying the insurer's repudiation of the claim. It was admitted that the insured insured the motor vehicle with the insurer, and it was also admitted that when the key was left in the ignition, the vehicle was stolen. The insurer argued that the breach of Condition No. 4 of the policy entitled it to decline to pay the claim. The insurer's claim that leaving the key in the vehicle caused the theft was questioned, as the theft occurred quickly after the driver left the vehicle, making it unlikely that leaving the key in the ignition was an open invitation for theft. The Court cited the case of David Topp vs. London Country Bus (1993), noting that leaving a vehicle unattended with the key in the ignition did not automatically create a special risk of theft. Based on these facts, the Commission concluded that while the complainant's carelessness was acknowledged, it did not amount to a fundamental breach of the policy.

The National Commission dismissed the revision petition and upheld the decision of the District Forum and State Commission, which had directed the insurer to pay 75% of the insured amount.

Case Title: Bharti Axa General Insurance Company Ltd. Vs. Mool Chand Lalwani

Case Number: R.P. No. 645/2021

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