IMPORTANT POINTS
(1) Definition of Fundamental Breach – An insurance company can only deny a claim in its entirety if there is a “fundamental breach” of policy conditions. A delay in reporting is generally considered a procedural lapse rather than a fundamental breach of the contract’s essence.
(2) The “Theft” Threshold – Under Section 378 of the IPC, theft is the dishonest removal of property without consent. If the insurance company does not prove that the owner consented to or connived in the removal, the claim must be addressed, even if the owner was somewhat careless (e.g., leaving keys in the ignition or delayed reporting).

JUDGMENT

AVM J. Rajendra, AVSM, VSM (Retd.), Member.—The present Revision Petition has been filed under Section 21(b) of the Consumer Protection Act, 1986 (“the Act”) against the Bihar State Consumer Disputes Redressal Commission, Patna (“the State Commission”) order dated 20.06.2017 in FA No.49/2016 partly allowing the Appeal filed by the OP/Petitioner and modified the District Consumer Disputes Redressal Forum, Siwan (“the District Forum”) order dated 22.12.2015 in C.C. No.3276/2013.

2. As per the Registry report, there is 119 days delay in filing this Revision Petition. For the reasons stated in IA/5926/2018, the delay is condoned.

3. For convenience, the parties are referred to as placed in the original Complaint filed before the District Forum.

4. Brief facts of the case, as per the Complainant, are that the Complainant got his tractor Registration No. BR-29-G-5458 insured with the OP on 17.11.2012 for an assured sum of Rs.4,00,000. Subsequently, the said tractor was stolen on 08.12.2012. In this regard, Case No. 05/13 under Section 379 IPC was registered at Police Station Siwan Mufsil. After due investigation, the police submitted a Final Report in the matter. Thereafter, on 14.05.2013, the Complainant submitted all relevant documents pertaining to the insured tractor, including the true copy of the order of the Chief Judicial Magistrate, to OP. The OP informed the complainant that the papers had been forwarded to Patna Office and assured that the claim would be settled within two months. However, despite repeated visits and follow-up by the Complainant, the claim was not settled. Left with no alternative, the complainant sent a legal notice to the OP through his advocate. Due to the OP’s failure to make payment of the legitimate insurance claim, he filed a Consumer Complaint before District Forum seeking the assured sum and Rs.4,99,000/- for financial, mental and physical loss etc.

5. In the written version, the OP contended that the Complainant did not intimate about the theft of the vehicle to the insurance company as well as to the police. The said intimation was received by the police with a delay of 25 days and 16 days to the insurance company which is violation of condition of the policy in question.

6. The learned District Forum vide Order dated 22.12.2015 allowed the complaint and relevant portion is as under:—

“On the basis of aforesaid discussion, Forum finds that the respondent by not paying the assured sum of tractor to the complainant have committed negligence and deficiency in service. Hence, respondents are directed that they pay to the complainant within two (2) months the assured sum of tractor and Rs.ten (10) thousands towards financial mental and physical loss and cost of case.

In case of not complying the order within the time limit, the Forum shall get the order complied through penal action.” (Extract from translated copy)

7. Being aggrieved by the District Forum order, the Petitioner/OP- Insurer filed Appeal No.49/2016, and the State Commission vide order dated 20.06.2017 partly allowed the Appeal and modified the order dated 22.12.2015 of the District Forum with the following observations:—

“6. Having considered the grounds of appeal, submissions of parties, materials available on record and on perusal of the order passed by the District Forum, it appears that the Tractor of the respondent was stolen on 8.12.2012 which was insured for Rs.4,00,000/- by the appellant company. There is 25 days delay in lodging F.I.R and 16 days delay in informing the Insurance Company. It is violations of the terms and conditions of the Insurance policy. At that situation in the light of decision by the Apex court in the case of National Insurance Vs Nitin Khandwal the claim can be considered to be settled on Non-standard basis i.e 75% of the Insurance amount. So, the appellants are directed to pay the respondent (Rs. 4,00,000 x 75%=) Rs.3,00,000/- (Three lacs only) as insurance amount with Rs.10,000/- as comp