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United India Insurance Co. Ltd. Vs. Anita Devi and Ors. - (High Court of Delhi) (17 Jan 2022)

In order to avoid the liability, the insurer must establish that there was a willful breach on the part of the insured



Appellant impugns award to the limited extent that it grants recovery rights against the driver of the vehicle. Learned counsel for the appellant submits that since the vehicle was stolen and driver was a professional thief there was no liability on the insurance company to pay the amount.

The question that arises for consideration is as to whether the insurance company is absolved of the liability to pay the amount in a case where the vehicle is stolen and unauthorisedly being driven by somebody else.

The Supreme Court of India in United India Insurance Company vs. Lehru and Ors, has held that in order to avoid the liability, the insurer must establish that there was a willful breach on the part of the insured.

Admittedly in the present case the insurance company has not been able to show any breach on the part of the insured to avoid its liability.

Furthermore, if the proposition of the insurance company was accepted, it would militate against the very concept of a beneficial legislation for the victims of an accident. If such a finding were to be returned then the effect would be that even though a vehicle is insured but is stolen, not only would the insurance company be entitled to avoid its liability but the owner of the vehicle who has insured his vehicle against theft and accident would be saddled with a liability for no fault of his. Alternatively, the claimants would be left without any remedy to seek compensation.

In view of the judgment of the Supreme Court in United India Insurance Company vs. Lehru and Ors., which lays down that unless the insurance company is able to show that there is a willful breach of the policy on the part of the insured, insurance company cannot avoid its liability. In the instant case, Tribunal has found that the vehicle was stolen and there was no willful breach of the terms and conditions of the insurance policy by the insured. There is no infirmity in the impugned award. Appeal dismissed.


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