4 min readNew DelhiUpdated: Sep 14, 2026 11:30 AM IST
The Delhi State Consumer Commission has directed National Insurance Company Ltd to pay Rs 25.61 lakh to a power transmission company after holding that a delay in reporting part of a theft of power-transmission project material, including conductor wire, was not enough to reject its insurance claim. The commission said the theft involved material spread across a 215-km project, making it difficult to assess the loss immediately.
The body’s president, Justice Sangita Dhingra Sehgal, and member Bimla Kumari heard a consumer complaint filed by the power transmission company over the rejection of an insurance claim arising from theft at its transmission project.
“Rejection of the claim of the Complainant (power transmission company) on the ground of a violation of policy terms and conditions in the form of delay in intimation is a bald averment and amounts to unfair trade practice and deficiency in service on the part of the Opposite Party (insurer),” the commission said on September 7.
The dispute concerned an ‘All Risk Insurance Policy’ issued on March 31, 2016 for a 400 KV double-circuit power transmission project covering 215 km. The policy had a sum insured of Rs 580 crore, and the company had paid a premium of Rs 1.31 crore.
Theft detected in March 2017
The alleged theft took place on March 25, 2017, following which the incident was reported to the police and an FIR was registered on March 30. The insurer was informed about the loss on April 1, 2017, and a claim of Rs 54.40 lakh was raised.
The power company alleged that the insurer repeatedly delayed settlement of the claim before rejecting it through a letter dated October 5, 2020. It then approached the commission seeking payment of the insurance claim, compensation and litigation costs.
The insurer opposed the complaint, arguing that the power company was not a “consumer” under the Consumer Protection Act, 2019 and that the commission lacked territorial jurisdiction. It also alleged that the company had failed to promptly report the theft and had violated the policy conditions.
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The commission examined the relevant policy condition, which required the insured to immediately notify the insurer of an occurrence that might give rise to a claim. The insured was also required to take steps to minimise the loss, preserve affected parts for inspection, provide information and documents sought by the insurer, and inform the police in case of theft or burglary.
The policy further stated that the insurer would not be liable for a loss if it had not received notice within 14 days of detection. The commission found that the loss concerning stretch B, estimated at Rs 42 lakh, was intimated to the insurer on April 19, 2017, 25 days after detection. It held that this was a clear violation of the 14-day policy condition.
The position was different for stretch A. The alleged loss there was approximately Rs 38 lakh, and the commission recorded that the company had intimated the insurer within the 14 days. The forum noted a five-day gap in informing the police about the loss in stretch A. It held that just a five-day delay was not sufficient to justify repudiation of the claim in the circumstances of the case.
Takeaway
Consumers should report theft or loss to the insurer and police promptly and comply with policy timelines. But a delay alone may not justify rejection of a genuine claim if the circumstances explain the delay and the insurer cannot establish a valid ground for repudiation.
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For consumer-related grievances, individuals may contact the consumer helpline in their respective states (Delhi: 1800-11-4000) or call the National Consumer Helpline at 1915 for assistance.
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