No claim is payable in Burglary Insurance Policy where no mark of force entry found

INDUSTRIAL PROMOTION & INVESTMENT CORPORATION OF ORISSA LTD v. NEW INDIA ASSURANCE CO. LTD & ANR [SC]
SUPREME COURT OF INDIA -Civil Appeal No. 1130 of 2007
DATED: 22/08/2016

HELD THAT

No claim is payable in Burglary Insurance Policy ,where no mark of force entry found.

BRIEF FACTS

1. The Appellant exercising its power under Section 29 of the State Finance Corporation Act, 1951, took over the assets of M/s. Josna Casting Centre Orissa Private Limited, which had been insured with Respondent No. 1 for a sum of Rs. 46,00,000/- under the Miscellaneous Accident Policy, Rs. 60,40,000/- under the Fire Policy and Rs. 46,00,000/- under the Burglary and House Breaking Policy.

2. The seized assets were put to auction by the Appellant, at which point of time it was detected that some parts of the plant and machinery were missing from the factory premises.

3. A claim was lodged with Respondent No. 1 for an amount of Rs. 34,40,650/- under the Burglary and House Breaking Policy.

4. The claim of the Appellant was repudiated by Respondent No. 1 on the ground that the alleged loss did not come within the purview of the insurance policy.

5. The Appellant filed compensation application No. 45 of 2001 under Section 12-B read with Section 36-A of the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969, which was rejected by the MRTP Commission, New Delhi by its Order dated 17-08- 2005.

6. Aggrieved by the said Order, the Appellant has preferred the present Appeal.

7. Decision: Appeal dismissed.

8. REASON

i) Having considered the submissions made on both sides, we are of the opinion that there is no error committed by the MRTP Commission in rejecting the Claim of the Appellant.

ii) It is clear from the facts of the present case that the Appellant has made out a case of theft without a forcible entry. The case of the Appellant is that forcible entry is not required for a claim to be made under the policy.

iii) Following the well- accepted principle that a contract of insurance which is like any other commercial contract should be interpreted strictly, we are of the opinion that the policy covers loss or damage by burglary or house breaking which have been explained as theft following an actual, forcible and violent entry from the premises.

iv) A plain reading of the policy would show that a forcible entry should precede the theft, and unless they are proved, the claim cannot be accepted.

v) It is wellsettled law that there is no difference between a contract of insurance and any other contract, and that it should be construed strictly without adding or deleting anything from the terms thereof. On applying the said principle, we have no doubt that a forcible entry is required for a claim to be allowed under the policy for burglary/house breaking.

vi) This court in General Assurance Society Ltd. v. Chandmull Jain and Anr., reported in [1966] 3 SCR 500 held that there is no difference between a contract of insurance and any other contract except that in a contract of insurance there is a requirement of uberima fides, i.e., good faith on the part of the insured and the contract is likely to be construed contra proferentes, i.e., against the company in case of ambiguity or doubt.

vii) It was further held in the said judgment that the duty of the Court is to interpret the words in which the contract is expressed by the parties and it is not for the Court to make a new contract, however reasonable.

viii) For the aforementioned reasons, we uphold the order of the MRTP Commission and dismiss the Appeal with no order as to costs.

CONCLUSION

Burglary is defined as a forced entry to a house /home or company to steal something. It means for burglary claim there must be a forced entry or forced exit from the premise of the insured. The key clause in burglary insurance is “ The cover is granted subject to the following two clause: The loss of cash abstracted from the safe following the use of the key to said safe or any duplicate thereof belonging to the insured is not covered unless such key has been obtained by violence or threats of violence. The burglary means the unforeseen and unauthorized entry to or exit from the Premises by aggressive and detectable means with the intent to steal Contents therefrom.