The insured's liability under an insurance policy is not absolute, and the interpretation of policy clauses should consider the factual circumstances and willful acts of the insured.

K. KANNAN J. (ORAL)

1. The writ petition challenges the award passed by the Permanent Lok Adalat for a claim arising out of a term of the policy that enabled the insured to make a claim for loss of vehicle by theft. The principal ground of attack on the award of the Permanent Lok Adalat was that on the admitted case, the insured had left the keys in the car itself and he had contributed to the loss and therefore, committed a breach of terms of the policy. The award passed by the Permanent Lok Adalat made a deduction of 25% from the assured amount payable to the insured for contributing to the loss. The challenge in the writ petition is that no part of the insured amount could have been awarded to the insured. Learned counsel appearing for the insurance company places reliance on Clause 5 of the insurance company that reads thus:-

“The insured shall take all reasonable steps to safeguard the vehicle insured from loss or damage and to maintain it in efficient condition and the Company shall have at all times free and full access to examine the vehicle insured or any part thereof or any driver or employee of the insured. In the event of any accident or breakdown, the vehicle insured shall not be left unattended without proper precautions being taken to prevent further damage or loss and if the vehicle insured be driven before the necessary repairs are effected, any extension of the damage or any further damage to the vehicle shall be entirely at the insured's own risk.”

2. This clause, I would understand, would mean that the insured shall take reasonable steps for protection. Retention of a key in the car ought not to be at all times taken as constituting so serious a breach as to disentitle the insured to make the claim under the policy. It all depends on facts of the case. The car was said to have been lost at the time when the driver had taken the vehicle and parked the vehicle in front of the house of his relative but did not remove keys. The particular Clause 5 extracted above shall be read in the context of a person deliberately doing an act that resulted in theft. If no willful act could be attributed to the insured then, in my view, this clause cannot operate to exclude the liability of the insurance company. A human fallibility to forget is not the same as committing violation of terms of the policy. The Permanent Lok Adalat had taken care to cast some portion of liability on the insured and has denied to him the 25% of the sum insured under the policy. Thankfully for the insurance company, the claimant himself has not come by means of any writ petition seeking for the entire amount. Learned counsel also refers to the fact that the award itself is not competent since it was signed only by the Presiding Officer and other Members of the Permanent Lok Adalat had not joined. I do not find any such objection being taken in the writ petition and I will not allow the petitioner to spring a surprise on the respondent to enable him to join issues on the particular circumstances, under which only the signature of the Presiding Officer is found in the order.

3. Learned counsel for the insurance company also contends that a case related to claim for theft and in terms of Section 22-C, there was an exclusion of liability for any material relating to an offence not compoundable under law. This clause was considered by the Hon'ble Supreme Court in United India Insurance Company Limited Vs. Ajay Sinha and another (2008) 7 SCC 454 where the Court was considering the issue of a fact of theft was in denial by the insurance company and an adjudication was required to be undertaken whether the criminal act had been committed or not. In such a case, the clause would operate and it would also be applicable in cases where the claimant himself is guilty of a criminal act and the matter for adjudication related to such offence. The insured's claim arising for a loss covered under the policy for recovery of value of goods lost on account o