The Hindu : New Delhi News : Insurance company asked to pay for theft

Online edition of India's National Newspaper
Wednesday, Sep 07, 2005

New Delhi

New Delhi

Insurance company asked to pay for theft

Staff Reporter

Theft by 18 persons classified as an incident of riot

NEW DELHI: Classifying a case of theft committed by 18 persons as an incident of riot for insurance coverage, the Delhi High Court has directed Messrs United Insurance Company Limited to pay Rs.1.38 lakhs to Usha International Limited, a manufacturer of consumer durables.

Justice Vikramjit Sen directed the public sector insurance company to pay the amount to the insurance holder with interest at the rate of 5 per cent per year from the date when the insurance claim was preferred within four weeks.

If the payment were not made within the time period set, the insurance company would be liable to pay interest at the rate of 8 per cent per annum together with costs of Rs. 10,000, Mr. Justice Sen said.

The thieves had burgled a large quantity of goods kept in a storehouse of the company at Cuttack in Orissa in November 1999. The company had sought a claim of Rs.7.88 lakhs, 1.38 lakh of which was in respect of the theft.

The insurance company processed a claim of Rs. 6.50 lakhs but it refused to pay the amount sought for the theft on the ground that it was not covered by two policies, which the consumer durables company had taken.

The insurance company stated that since the theft had been committed following damages to the godown due to the cyclone, which had hit Orissa in that year, it was not covered by the policies the company had taken. It further said that the theft was not preceded either by a forcible or violent entry into the godown.

However, the Court rejected the contention of the insurance company. The Court held that the insurance company was liable to pay the claim of Rs. 1.38 lakhs sought by the private company in respect of the theft.

Printer friendly page
Send this article to Friends by E-Mail

New Delhi