2023 INSC 659 REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4758 OF 2023

[ARISING OUT OF SLP (CIVIL) NO. 25256 OF 2018]

Ashok Kumar …Appellant (s)

Versus

New India Assurance Co. Ltd. ...Respondent(s)

J U D G M E N T

K.V. Viswanathan, J.

1.Leave granted.

2.The present appeal arises from the final judgment and order

dated 24.01.2018 passed by the National Consumer Disputes

Redressal Commission (for short “the National Commission”),

New Delhi in Revision Petition No. 3415 of 2016. By the said

judgment, the National Commission reversed the concurrent

judgments of the District Consumer Disputes Redressal Forum

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(for short “the District Forum”) and the State Consumer Disputes

Redressal Commission (for short “the State Commission”). The

Fora below, while allowing the original complaint had directed

the New India Assurance Company Limited (for short “the

Insurance Company”) to indemnify the Claimant on non-standard

basis to the extent of 75% of the sum assured, which was

Rs.8,40,000/-.

Facts

3.The brief facts, necessary for adjudication of this Appeal,

are as follows:-

a)The appellant was the owner of the truck (dumper)

(hereinafter referred to as “the vehicle”) bearing Registration No.

HR-55C-5385 and had a valid insurance policy (Policy No.

354101/31/07/01/00013342) for the Insured Declared Value of

Rs.8,40,000/- for the period 20.02.2008 to 19.02.2009.

b)On 26.06.2008, the appellant’s driver – Mam Chand had to

unload stone dust at Mittal’s Farm at Shankar ki Dhani. He

parked the vehicle to find out the address. The admitted case is

2

that he left the key in the key hole when he got out of the vehicle

to look around for the address.

c)In the letter of repudiation which referred to the statement

of the driver Mam Chand, it was mentioned that Mam Chand

alighted from the vehicle and went to enquire about Mittal’s

Farm, after leaving the key of the said vehicle inside the key hole.

When he had gone some distance, he heard the sound of starting

of the vehicle and he came back and noticed that two persons

were sitting on the driver’s seat of the vehicle and a car was at the

back of the said vehicle in which three persons were there. He

had further stated that they stole and took away the vehicle.

d)On 27.06.2008 itself, the appellant registered an FIR No.

77 at the Bilaspur Police Station, Gurgaon under Section 379 of

the IPC. On 02.07.2008, the Appellant intimated the respondent-

Insurance Company about the theft. On 11.06.2009, the appellant

filed a complaint CPA No. 515 of 2009 before the District Forum,

Gurgaon alleging that the respondent was delaying the settlement

of the claim and, as such, committed deficiency in service. Para

3

4 of the said complaint and the prayers made are important,

which are set out herein below:

“4. That the complainant had already been submitted all the

relevant papers/forms with the opposite party, but illegally,

malafidely and without any right, title and interest, lingering the

matter on one pretext to the another while the complainant has

hired the services of the Opp. party by paying consideration of

the premium for insured amount of Rs.8,40,000/- and therefore,

the Opp. party has totally failed to render sufficient services to

the complainant.”

xxx xxx xxx

"a) Direct the opposite party to pay the insured amount of the

theft vehicle i.e Rs. 8,40,000/- along with interest @ 18% per

annum from the date of theft till realization.

b) Direct the opposite party to pay, a sum of Rs.20,000/- on

account of mental agony, delay, the harassment etc. suffered by

the complainant."

e)What is significant is that on the date of the complaint, the

Insurance Company had not repudiated the claim. It appears

from the record that the Insurance Company had appointed an

agency named “Delta Detectives” to investigate the matter and

the said agency, on 27.10.2008, had recommended repudiation of

the claim.

f)After the complaint CPA No. 515 of 2009 was lodged on

11.06.2009, it was only on 15.10.2009 that the respondent-

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Insurance Company issued a letter repudiating the claim. The

relevant portion of the repudiation letter reads as follows:-

“2.You, vide an intimation letter dt. 02.07.2008, informed, for

the first time, that your above said Dumper No. HR-55C-5385

had been stolen on 26.06.2008.

xxx xxx xxx

“5. That, thus, from the above facts as disclosed by you and your

driver, it is quite clear that the theft of your Dumper No. HR-55C-

5385 was totally the result of your and your driver Mam Chand's

total negligence in not safeguarding the said vehicle properly. It

is quite clear that had the said Dumper would not have been left

un-attended and further the key of the said Dumper would not

have been left inside the key hole of the said Dumper, then, the

same could not have been taken away by any person. In view of

above contraventions and violations of the terms and conditions

of the subject insurance policy, the Co. is not liable to pay any

claim in respect of the said Dumper. Therefore, the competent

authority of the Co. has repudiated your claim. It may please be

noted.”

g)When the matter stood thus, the complaint CPA No. 515 of

2009 came up before the District Forum on 22.11.2020 when the

following statement appears to have been recorded of the

advocate for the appellant, in CPA No. 515 of 2009:

“I, Surender Kumar Gulia, Advocate, state that I do not want to

proceed with my case. It may be dismissed.

Sd/- Sd/-

Surender Kumar Gulia, Adv. Member

RO & AC DCDRF, GGN”

5

Recording the statement, separately, the District Forum on

22.11.2010 disposed of the said complaint in the following

terms:-

“Statement of the learned counsel for the complainant for

withdrawal of the complaint recorded, separately. In view of the

statement, the complaint of the complainant is hereby dismissed

as withdrawn. File be consigned to record room after due

compliance.”

h)Faced with the repudiation, which is dated 15.10.2009, the

Claimant, desperate to indemnify himself and get the fruits of his

insurance policy, filed a fresh complaint being C.C. No. 134 of

2012. In the said complaint, the appellant averred that, after

filing the earlier complaint, since the counsel for the opposite

party viz., the Insurance Company took numerous dates for

arguments on one pretext or the other, his counsel got annoyed

with the attitude of the said Advocate and, by mistake, withdrew

the case on 22.11.2020. It was expressly pleaded that the

withdrawal of the said complaint was unfortunate, and that the

appellant should not be made to suffer for the wrong deeds of the

counsel. In the complaint, the appellant prayed for a direction to

the Insurance Company to pay the insured an amount of

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Rs.8,40,000 with interest @ 18% p.a. and further prayed for an

amount of Rs.20,000/- on account of mental agony, delay and

harassment.

i)The Insurance Company, in its reply, objected to the

maintainability of the present complaint in view of the earlier

proceedings in CPA No. 515 of 2009. It also contended that the

terms and conditions of the insurance policy were violated. Apart

from this, the plea of limitation was also taken.

j)The objections were overruled by the District Forum. The

plea of the complaint, being barred by limitation, was addressed

by recording a finding that the delay, if any, was already

condoned, by the Forum, by order dated 06.03.2012 under

Section 24A of the Consumer Protection Act. The plea about

violation of the conditions of the policy was overruled and on

non-standard basis, a sum to the extent of 75% of the sum

assured was awarded. No finding was recorded on the aspect of

the bar in filing the present complaint after the order dated

22.11.2010 dismissing CPA No. 515 of 2009 as withdrawn. The

7

Insurance Company carried the matter in Appeal to the State

Commission.

k)Before the State Commission, only two contentions were

urged. There was no contention raised on the issue of the

withdrawal of the earlier complaint. It was contended that the

intimation of the theft was given to the Insurance Company only

on 02.07.2008 i.e., six days after the theft, therefore it was argued

that Condition No.1 of the insurance policy was violated. Apart

from this, violation of Condition Nos. 5 of the policy was also

argued. Their point about the delay of six days in intimation was

brushed aside by referring to the Circular Ref: IRDA/ HLTH/

MISC/ CIR/ 216/ 09/ 2011 dated September 20

th

, 2011 issued by

Insurance Regulatory Development Authority (for short

“IRDA”), which stated that even if there was a condition in the

policy regarding delay in intimation, the insurer cannot take it's

shelter to repudiate the claim, which is otherwise proved to be

genuine.

8

l)To appreciate the State Commission’s finding with regard

to violations of the conditions of the policy, it is necessary to

extract Condition Nos. 1 and 5 of the policy, which reads as

follows:

“l. Notice shall be given in writing to the Company immediately

upon the occurrence of any accidental loss or damage and in the

event of any claim and thereafter the insured shall give all such

information and assistance as the Company shall require. Every

letter claim writ summons and/or process or copy thereof shall

be forwarded to the Company immediately on receipt by the

insured. Notice shall also be given in writing to the Company

immediately the insured shall have knowledge of any

impending prosecution inquest or Fatal Inquiry in respect of any

occurrence which may give rise to a claim under this policy, in

case of theft or criminal act which may be the subject of a claim

under this Policy the insured shall give immediate notice to the

police and co-operate with the Company, in securing the

conviction of the offender.

xxx xxx xxx

5. 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.”

m)The State Commission clearly recorded that, soon after the

theft of the vehicle on 26.06.2008, the FIR was lodged on

27.06.2008 with the Police and the Insurance Company was

9

informed. It was also recorded that no cogent evidence was

produced by the Insurance Company to prove that there was a

delay of six days in giving intimation. Going further, the State

Commission recorded that Condition No.1 of the Insurance

policy applied only to occurrence of an accident and not to theft

cases. Insofar as Condition No.5 was concerned, it was held

relying on the judgments of this Court in National Insurance

Company Limited vs. Nitin Khandelwal, [(2008) 11 SCC 259]

and Amalendu Sahoo vs. Oriental Insurance Company

Limited, [(2010) 4 SCC 536] that even if there was a breach of

that clause, the claim could not have been repudiated in toto

and, applying the yardstick in Amalendu Sahoo (supra),

75% of the claim as the admissible amount, on non-standard

basis, was awarded. Holding thus, the State Commission

dismissed the Appeal of the Insurance Company.

n)Undaunted, the Insurance Company carried the matter in

revision to the National Commission. Here, it was primarily

argued that the withdrawal of Complaint No. 515 of 2009

foreclosed the Complainant from filing a fresh complaint. This

10

plea was accepted relying on the bar under Order XXIII Rule (1)

(4) of the Code of Civil Procedure

1

(CPC). Further, dealing with

the merits about the breach of Condition No.5, the National

Commission found that Condition No.5 was breached because

the vehicle was unattended on the road side with keys in the key

hole. However, there was no further discussion on the

applicable law with regard to the consequences of the breach

and there is no whisper in the order of the National Commission

about the precedents discussed in the orders of the fora below.

Equally so, with regard to the argument on the breach of

Condition No.1, it was recorded that there was an obligation of

the claimant to give intimation in writing of the theft of the

vehicle. The National Commission, thus, allowed the Revision

Petition.

1 Withdrawal of suit or abandonment of part of claim.- (1) At any time after the institution of

a suit, the plaintiff may as against all or any of the defendants abandon his suit or abandon

a part of his claim:

Provided that where the plaintiff is a minor or other person to whom the provisions

contained in Rules 1 to 14 of Order XXXII extend, neither the suit nor any part of the claim

shall be abandoned without the leave of the Court.

(4) Where the plaintiff-

(a) abandons any suit or part of claim under sub-rule(1), or

(b) withdraws from a suit or part of a claim without the permission referred to in sub-

rule (3),

he shall be liable for any such costs as the Court may award and shall be precluded

from instituting any fresh suit in respect of such subject-matter or such part of the claim.

11

4) We have heard Ms. Kunika, learned counsel for the

appellant, who presented the case very ably before us and Mr.

J.P. Sheokand, learned counsel for the respondent-Insurance

Company, who left no stone unturned while making his

submissions.

Withdrawal of the earlier complaint

5)At the very outset, we would like to record that, having

not argued, before the State Commission, the point of the

present complaint being barred in view of the withdrawal of the

earlier complaint, the National Commission was not justified, on

the facts of the present case, in allowing the respondent-

Insurance Company to urge that point therefrom. It is very clear

from the order of the State Commission that only two points

were argued by the Insurance Company.

6) Para 6 of the order of the State Commission is extracted

hereinbelow:-

“Learned counsel for the Appellant-Insurance Company has

assailed the order of the District Forum by raising two-fold

arguments. Firstly, that there was delay of 6 days in giving

intimation to the Insurance Company and secondly that the

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ignition key was left in the truck by driver and the truck was

left unattended on the road.”

7)In any event, we are convinced that interest of justice

requires that the appellant, in the peculiar facts and

circumstances of this case, should not be non-suited on the

ground that his earlier complaint was withdrawn. We say so for

the following reasons:-

(i)Firstly, the original Complaint No. 515 was filed on

11.06.2009 when the Insurance Company had not taken any

decision on the claim. In fact, the Complainant had alleged that

the Insurance Company was lingering on with the issue and had

complained of not rendering “sufficient service”;

(ii)Secondly, pending that complaint, it was on 15.10.2009

that the repudiation letter was issued on purported breach of

Condition Nos. 1 & 5 of the Policy;

(iii)Thirdly, we find that a separate proceeding has been drawn

up recording the statement of only the lawyer of the

Complainant. The statement of the lawyer stated that “I,

Surender Kumar Gulia, Advocate, state that I do not want to

proceed with my case. It may be dismissed”.

13

(iv)Fourthly, in the complaint filed on 06.03.2012, the

appellant avers that since the lawyer for the opposite party –

Insurance Company was taking numerous dates for arguments,

his counsel getting annoyed with the attitude of the advocate of

the opposite party withdrew the above said case by mistake.

(v)Fifthly, the appellant further avers that the withdrawal was

unfortunate and he ought not to have prejudiced for the deeds of

his lawyer.

(vi)Sixthly, the finding of the National Commission is also

factually erroneous, on this score. The learned counsel for the

appellant drew our attention to para 9 of the order of the

National Commission wherein the following erroneous finding

was recorded.

“9. It is not disputed that earlier also, the complainant had

filed consumer complaint no. 515 of 2009 against the opposite

party/Insurance company on the same cause of action.

Perusal of record would show that aforesaid complaint filed

by the complainant in respect of repudiation of insurance

claim regarding the same theft was withdrawn by the

complainant unconditionally on 22.11.2010. Copy of the

relevant order in CC No. 515 of 2009 is on the record. The

order is reproduced as under:

"Statement of learned counsel for the complainant

for withdrawal of the complaint recorded separately.

In view of the statement, the complaint of the

14

complainant is hereby dismissed as withdrawn. File

be consigned to record room after due compliance."

It will be noticed that the National Commission was under the

wrong impression that the original Complaint No. 515 of 2009

was filed in respect of repudiation of the insurance claim and it

proceeded on the erroneous premise that having challenged the

repudiation in Complaint No. 515, the withdrawal of the

complaint unconditionally on 22.11.2010 was fatal to the

appellant. The original Complaint No. 515 of 2009 was filed on

11.06.2009 and the respondent-Insurance Company repudiated

the claim only on 15.10.2009.

8)In view of the foregoing, it has to be reiterated that the

complaint No. 515 was filed after theft due to non-settlement of

claim by the Insurance Company. The repudiation of the claim

was made during the pendency of the said complaint,

purportedly due to breach of condition no. 1 and 5. The said

complaint was withdrawn by the advocate of the complainant on

the pretext of the case being prolonged by the advocate of the

Insurance Company, without having express instructions for

15

withdrawal of the said complaint. However, for the fault of the

advocate, the complainant cannot be made to suffer. Finally, the

dismissal of the complaint was made by the National

Commission under the wrong pretext that the earlier complaint

had challenged the order of repudiation. Thus, in our view, the

complaint cannot be thrown out on the threshold of Order XXIII

Rule (1)(4) CPC and in the peculiar facts, it requires

consideration on merits.

In the facts of the present case, the main question that falls

for consideration is: Whether the delay of 6 days in intimating

the Insurance Company about the theft comes within the

purview of breach of Condition No. 1 and also whether on facts

there was breach of condition No. 5 of the insurance policy to

justify the rejection of the claim in toto?

9)A careful perusal of Condition No.1 shows that notice is to

be given in writing to the Insurance Company immediately upon

occurrence of any accidental loss or damage. The later part of

the clause says that in case of theft or criminal act, which may

16

be subject of a claim under the policy, the insured shall give

immediate notice to the police and cooperate with the Insurance

Company in securing the conviction of the offender. In support

of this interpretation to Condition No.1 and to bolster her plea

that the appellant-Claimant did not breach Condition No.1,

learned counsel for the appellant relied on the recent judgment

of this Court in Jaina Construction Company vs. Oriental

Insurance Company Limited and Another, [(2022) 4 SCC

527], wherein relying on and reiterating the judgment of a three-

Judge Bench in Gurshinder Singh vs. Shriram General

Insurance Co. Ltd. [(2020) 11 SCC 612], this Court held as

follows:-

“10. At the outset, it may be noted that there being a conflict of

decisions of the Bench of two Judges of this Court in Om

Prakash v. Reliance General Insurance, [(2017) 9 SCC 724] and

in Oriental Insurance Co. Ltd. v. Parvesh Chander Chadha,

[(2018) 9 SCC 798], on the question as to whether the delay

occurred in informing the Insurance Company about the occurrence

of the theft of the vehicle, though the FIR was registered

immediately, would disentitle the claimant of the insurance claim,

the matter was referred to a three-Judge Bench.

11. The three-Judge Bench in Gurshinder Singh v. Shriram

General Insurance Co. Ltd., [(2020) 11 SCC 612] in similar case

as on hand, interpreted the very Condition 1 of the insurance

contract and observed as under : (SCC pp. 618-21, paras 9-15, 17

& 20)

17

xxx xxx xxx

12. In our view, applying the aforesaid principles, Condition

1 of the standard form for commercial vehicles package

policy will have to be divided into two parts. The perusal of

the first part of Condition 1 would reveal that it provides that

“a notice shall be given in writing to the company

immediately upon the occurrence of any accidental loss or

damage”. It further provides that in the event of any claim

and thereafter, the insured shall give all such information and

assistance as the company shall require. It provides that every

letter, claim, writ, summons and/or process or copy thereof

shall be forwarded to the insurance company immediately on

receipt by the insured. It further provides that a notice shall

also be given in writing to the company immediately by the

insured if he shall have knowledge of any impending

prosecution inquest or fatal inquiry in respect of any

occurrence, which may give rise to a claim under this policy.

13. ***

14. We find that the second part of Condition 1 deals with the

‘theft or criminal act other than the accident’. It provides that

in case of theft or criminal act which may be the subject of a

claim under the policy, the insured shall give immediate

notice to the police and cooperate with the company in

securing the conviction of the offender. The object behind

giving immediate notice to the police appears to be that if the

police is immediately informed about the theft or any

criminal act, the police machinery can be set in motion and

steps for recovery of the vehicle could be expedited. In a case

of theft, the insurance company or a surveyor would have a

limited role. It is the police, who acting on the FIR of the

insured, will be required to take immediate steps for tracing

and recovering the vehicle. Per contra, the surveyor of the

insurance company, at the most, could ascertain the factum

regarding the theft of the vehicle.

15. It is further to be noted that, in the event, after the

registration of an FIR, the police successfully recovering the

vehicle and returning the same to the insured, there would be

no occasion to lodge a claim for compensation on account of

the policy. It is only when the police are not in a position to

trace and recover the vehicle and the final report is lodged by

the police after the vehicle is not traced, the insured would be

in a position to lodge his claim for compensation.

16. ***

18

17. That the term “cooperate” as used under the contract

needs to be assessed in the facts and circumstances. While

assessing the “duty to cooperate” for the insured, inter alia,

the court should have regard to those breaches by the insured

which are prejudicial to the insurance company. Usually,

mere delay in informing the theft to the insurer, when the

same was already informed to the law enforcement

authorities, cannot amount to a breach of “duty to cooperate”

of the insured.

18.-19. ***

20. We, therefore, hold that when an insured has lodged the

FIR immediately after the theft of a vehicle occurred and

when the police after investigation have lodged a final report

after the vehicle was not traced and when the

surveyors/investigators appointed by the insurance company

have found the claim of the theft to be genuine, then mere

delay in intimating the insurance company about the

occurrence of the theft cannot be a ground to deny the claim

of the insured.”

12. In the opinion of the Court the aforestated ratio of the judgment

clinches the issue involved in the case on hand. In the instant case

also, the FIR was lodged immediately on the next day of the

occurrence of theft of the vehicle by the complainant. The accused

were also arrested and charge-sheeted, however, the vehicle could

not be traced out. Of course, it is true that there was a delay of

about five months on the part of the complainant in informing and

lodging its claim before the Insurance Company, nonetheless, it is

pertinent to note that the Insurance Company has not repudiated the

claim on the ground that it was not genuine. It has repudiated only

on the ground of delay. When the complainant had lodged the FIR

immediately after the theft of the vehicle, and when the police after

the investigation had arrested the accused and also filed challan

before the court concerned, and when the claim of the insured was

not found to be not genuine, the Insurance Company could not have

repudiated the claim merely on the ground that there was a delay in

intimating the Insurance Company about the occurrence of the

theft.”

10)The above judgments put the matter and the controversy to

rest. There was no breach of Condition No.1 in the present case.

19

In the present case, after the incident of theft on 26.06.2008, FIR

was registered on 27.06.2008. The intimation was also given to

the Insurance Company admittedly on 02.07.2008. The Police

have also reported the vehicle as untraced as the records

indicate.

11)Insofar as the alleged breach of Condition No.5 is

concerned, it is seen from the record that the driver of the

claimant left the key in the keyhole of the vehicle when he got

down to search the location of “Mittal Farm”, where he had to

unload the stone dust. The investigator recommended the

repudiation of claim because, according to him, steps to

safeguard the vehicle insured were not taken by the driver. It is

contended by the appellant that breach of condition No.5, if any,

cannot result in total repudiation of the claim. It is argued that

the claim ought to be settled on non-standard basis, as was

ordered by the District Forum and the State Commission.

Reliance is placed on Nitin Khandelwal (supra) and Amalendu

Sahoo (supra).

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12)The learned Counsel for the Insurance-Company

vehemently opposed these submissions and prayed for dismissal

of the Appeal. It is argued by him that, while in Nitin

Khandelwal (supra) and in Amalendu Sahoo (supra) the cause

of repudiation was not germane to the theft, in the present case,

the cause was germane to the theft. The learned Counsel

supported the findings as recorded in the order impugned.

13)A reading of the facts of the case in Nitin Khandelwal

(supra), reveal that the repudiation was on the ground that the

vehicle was being used as a taxi and in Amalendu Sahoo

(supra), it was on the ground that the vehicle was being used on

hire. In our view, that would not make any difference to the ratio

that is deducible from those judgments.

14)It is well settled in a long line of judgments of this Court

that any violation of the condition should be in the nature of a

fundamental breach so as to deny the claimant any amount. [see

Manjeet Singh vs. National Insurance Company Limited and

Another, [(2018) 2 SCC 108]; B.V. Nagaraju vs. Oriental

21

Insurance Co. Ltd., Divisional Officer, Hassan, [(1996) 4 SCC

647], National Insurance Co. Ltd. Vs. Swaran Singh and

Others, [(2004) 3 SCC 297] and Lakhmi Chand vs. Reliance

General Insurance, [(2016) 3 SCC 100] ]

15)It is an admitted position in the Repudiation Letter and the

Survey Report that the theft did happen. What is alleged is that

the Claimant was negligent in leaving the vehicle unattended

with the key in the ignition. Theft is defined in Section 378 of

the IPC as follows:-

“378. Theft.—Whoever, intending to take dishonestly any

moveable property out of the possession of any person without

that person’s consent, moves that property in order to such

taking, is said to commit theft.”

As will be seen from the definition, theft occurs when any person

intended to take dishonestly any moveable property out of the

possession of any person without that person’s consent, moves

that property in order to such taking. It is not the case of the

Insurance Company that the Claimant consented or connived in

the removal of the vehicle, in which event that would not be

theft, in the eye of law. Could it be said, as is said in the

repudiation letter, that the theft of the vehicle was totally the

22

result of driver Mam Chand leaving the vehicle unattended with

the key in the ignition? On the facts of this case, the answer has

to be in the negative. It is noticed in the repudiation letter that

the driver Mam Chand had, after alighting from the vehicle, gone

to enquire about the location of Mittal’s Farm and that after he

went some distance, he heard the sound of the starting of the

vehicle and it being stolen away. The time gap between the

driver alighting from the vehicle and noticing the theft, is very

short as is clear from the facts of the case. It cannot be said, in

such circumstances, that leaving the key of the vehicle in the

ignition was an open invitation to steal the vehicle.

16)The Court of Appeal in England, in the case of David

Topp vs. London Country Bus (South West) Limited, [1993]

EWCA Civ 15 had occasion to consider the issue, though in the

context of liability of the owner of the vehicle for a fatal

accident. The facts as set out in the judgment are as follows:-

“In accordance with usual practice, the driver, Mr. Green, left

the bus in that lay-by at the bus stop at about 2.35 p.m. on 24

th

April 1988. He left it unlocked, with the ignition key in it. He

had then a 40 minute rest period before resuming his duties,

driving a different bus. There was an arrangement under

which the drivers could spend their rest period in the hospital.

23

The expectation was that another driver, about eight minutes

after Mr. Green had left the bus in the lay-by, would pick the

bus up and drive the same route. But the other driver, who

should have picked the bus up at about 2.43 p.m., did not do so

because he was feeling unwell. His shift would have been

non-compulsory overtime, and he did not report for his

overtime. The bus therefore remained in the lay-by. Mr.

Green saw it there later and reported that it was still standing

there. Therefore, there is no doubt that the depot knew that the

bus was there. But, possibly because of shortage of drivers or

available staff, nothing was done to pick the bus up that

evening. It was taken by somebody who has never been traced

just before 11.15 at night, driven for a relatively short distance

until the point where Mrs. Topp was knocked down and killed,

and it was abandoned round the corner from there.”

Referring to the judgment of Lord Justice Robert Goff in P.Perl

(Exporters) Ltd. vs. Camden London Borough Council [1984]

QB 342, the Court of Appeal held as under:-

“In so far as the case is put on the basis that to leave the bus

unlocked and with the key in the ignition on the Highway near a

public house is to create a special risk in a special category, it is

pertinent to refer to a passage in the judgment of Lord Justice

Robert Goff (as he then was) in P. Perl (Exporters) Ltd. V.

Camden London Borough Council [1984] QB 342 at page 359E-F

where he said:

“In particular, I have in mind certain cases where the

defendant presents the wrongdoer with the means to

commit the wrong, in circumstances where it is obvious or

very likely that he will do so – as, for example, where he

hands over a car to be driven by a person who is drunk, or

plainly incompetent, who then runs over the plaintiff…”

But the sort of cases to which Lord Justice Robert Goff was there

referring are far different from the present case. It may be added

that that there is no evidence that the malefactor had been

frequenting the public house that is shown in the picture; we do

not know who he was, nor is there any evidence or presumption

that persons who do frequent that particular public house are

particularly likely to steal vehicles and engage in joy-riding.”

(underlining is ours)

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The above reasoning appeals to us to conclude that the present

case was an eminently fit case, where the claim at 75% ought to

have been awarded on a non-standard basis. Even if there was

some carelessness, on the peculiar facts of this case, it was not a

fundamental breach of Condition No.5 warranting total

repudiation. It was rightly so ordered by the District Forum

and affirmed by the State Commission.

17)Learned counsel for the Insurance Company, in his written

submissions, has placed before us an unreported order dated

29.03.2022 passed by this Court in SLP (C) No. 6518 of 2018

titled Kanwarjit Singh Kang vs. M/s ICICI Lombard General

Insurance Co. Ltd. & Anr. to support his case on the breach of

Condition No.5.

We have carefully perused the order. In the said order, it

is recorded that concurrently the Claimant lost before the fora

below and it is also recorded that the State Commission did not

find the ground of leaving the ignition keys in the vehicle to be a

valid reason to repudiate the claim. However, on the ground of

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unexplained and inordinate delay in lodging the FIR, the

repudiation was upheld. In that case, while the loss was on

25.03.2010, the intimation to Police was only on 02.04.2010 so

clearly it was a breach of Condition No.1. No doubt, in the

penultimate paragraph of the order it is recorded that the want of

reasonable care on the part of the petitioner in that case operated

heavily against the petitioner and it was concluded that the

repudiation could not be faulted. However, the primary reason

for repudiation was the violation of condition No.1 viz. the delay

in intimation to the Police. Further since there was a

fundamental breach of Condition No.1, there was no occasion to

raise points for settlement of claim on non-standard basis. There

is no whisper about the breach of Condition No.5 being not a

fundamental breach. We find the present case, on facts,

completely different as there is no breach of Condition No.1

because the intimation to the police was immediate. There have

been concurrent awards by the District Forum and State

Commission on non-standard basis by applying Nitin

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Khandelwal (supra) and Amalendu Sahoo (supra). Hence, the

order will in no manner assist the respondent-Company.

18)In Amalendu Sahoo (supra), this Court noticed the

guidelines issued by the New India Assurance Co. Ltd. in

settling claims on non-standard basis. The guidelines read as

under:-

Sl.No. Description Percentage of settlement

(i) Under declaration of licensed

carrying capacity.

Deduct 3 years’ difference in

premium from the amount of

claim or deduct 25% of claim

amount, whichever is higher.

(ii) Overloading of vehicles beyond

licensed carrying capacity.

Pay claims not exceeding 75% of

admissible claim.

(iii) Any other breach of

warranty/condition of policy

including limitation as to use.

Pay up to 75% of admissible

claim.”

The above guidelines were followed by this Court in Amalendu

Sahoo (supra) as is clear from para 14 of the said judgment.

The District Forum and the State Commission have rightly

applied Amalendu Sahoo (supra) to the facts of the present case

and awarded 75% on non-standard basis.

19)Nitin Khandelwal (supra) and Amalendu Sahoo (supra)

lay down the correct formula that where there is some

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contributory factor, a proportionate deduction from the assured

amount would be all that the Insurance Company can aspire to

deduct. We are inclined to accept the plea of the appellant that in

the case at hand, on the facts governing the scenario, Clause (iii)

of the table set out in para 14 of Amalendu Sahoo (supra) is

attracted and the District Forum and the State Commission were

justified in awarding the entire 75% of the admissible claim.

20)For the aforesaid reasons, the Appeal is allowed. We set

aside the judgment of the National Commission and restore that

of the District Forum as affirmed by the State Commission. No

order as to costs.

…..…………………J.

(J.K. Maheshwari)

…..…………………J.

(K.V. Viswanathan)

New Delhi;

July 31, 2023.

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