‘Can’t reject theft claim over route permit’: How truck owner got Rs 3.6 lakh payout

According to the case, Deepak Goel had obtained a Commercial Vehicle Package Policy from the insurer for his Tata truck from November 23, 2021, to November 22, 2022. The truck was stolen on the intervening night of November 25 and 26, 2021, while it was parked in a locked condition outside his office at Daria, Chandigarh. Goel reported the theft to the police and the insurance company and submitted the requisite documents for the claim.

The insurance company repudiated the claim on September 18, 2023, citing, among other grounds, the absence of a valid route permit at the time of the theft and an alleged failure by Goel to take reasonable care of the insured vehicle. It also raised the issue of delay in lodging the FIR and intimation of the claim.

The insurer argued before the state commission that Goel had himself stated in the FIR that the vehicle was old and could be opened or started by any key, “which showed that Goel had failed to take reasonable care of the vehicle”. It also relied on the absence of a route permit and non-handing over of the second key.

The commission noted that the insurance policy was valid when the truck was stolen and that the theft had been reported through an FIR dated November 26, 2021. It said the issue before it was whether the insurer was justified in repudiating the claim.

The commission found that the theft was genuine, noting that the finding was supported by an investigation report dated January 17, 2022, submitted by an investigator appointed by the insurer itself. The investigator had concluded that the theft was genuine and recommended that the claim be decided as per the terms and conditions of the policy.

On the route permit issue, the commission observed, “We find no merit in the said contention. Admittedly, the vehicle had been stolen while lying parked in a stationary condition. The absence of a valid route permit neither contributed to nor had any nexus whatsoever with the occurrence of the theft. It is now well settled that an insurer can avoid its liability only where the breach of a policy condition is fundamental in nature and has a direct or proximate nexus with the loss suffered. In the present case, the alleged absence of a route permit had absolutely no causal connection with the theft of the insured vehicle. The District Commission has, therefore, rightly rejected the said plea, and we find ourselves in complete agreement with the said finding.”

The commission also examined the insurer’s contention that Goel had failed to hand over the second key and that his statement in the FIR about the vehicle being old and capable of being opened by any key demonstrated negligence. It noted that the FIR, read in its entirety, showed that Goel’s consistent case was that unknown thieves had broken the window glass and thereafter stolen the vehicle.

The commission observed, “The mere statement that the vehicle was old and could be opened by any key cannot be read in isolation so as to infer negligence on the part of the insured or to conclude that the theft had actually been committed by using another key. The said recital is only a descriptive statement regarding the age and condition of the vehicle and not an admission that the vehicle had been left unsecured or that the theft occurred because of the said circumstance. More importantly, the appellants (insurance company) have not produced any technical report, expert opinion or any other cogent evidence to establish that the vehicle could, in fact, be opened or started by any ordinary key or that such alleged condition facilitated the commission of theft.”

On the second key, the commission said, “Likewise, the plea regarding non-submission of the second key, as noticed in the repudiation letter, is also devoid of substance. There is nothing on record to establish that the theft was committed by using the original or duplicate key or that the respondent deliberately withheld the second key to conceal any material fact. Mere non-production of the second key, without establishing any causal connection between the said circumstance and the theft, cannot be treated as a fundamental breach of the policy conditions. It is well settled that repudiation cannot be founded on mere suspicion or technical lapses unless the insurer establishes that the alleged breach had a direct bearing upon the occurrence of the insured peril.”

The commission further observed, “Significantly, it is not even the case of the appellants that the theft was committed in connivance with the respondent (owner) or that he had deliberately facilitated or staged the theft. No material has been placed on record to establish fraud, collusion, dishonesty or any wilful act attributable to the respondent. On the contrary, the investigator appointed by the appellants, in his report dated January 17, 2022, found the theft to be genuine. Once the occurrence of theft during the currency of the insurance policy stands established and the insurer fails to prove any deliberate or fundamental breach of the policy conditions having a direct nexus with the loss suffered, repudiation of the claim cannot be sustained. The grounds relied upon by the appellants are based more on assumptions than on legally admissible evidence.”

Emphasising the consumer-protection aspect, the commission observed, “The Consumer Protection Act is a beneficial legislation enacted to safeguard consumers against arbitrary denial of legitimate claims.”

The state commission added, “…We are in complete agreement with the conclusion reached by the District Commission that neither the absence of a valid route permit, nor the alleged non-submission of the second key, nor the recital contained in FIR No.0218 dated November 26, 2021 that the vehicle, being old, could be opened by any key, constitutes a legally sustainable ground to repudiate the insurance claim in the facts and circumstances of the present case….”

Holding that the district commission’s order was based on proper appreciation of evidence and law, the state commission observed that it did not suffer from any illegality or perversity warranting interference. The appeal was consequently dismissed.