Case Study 25 - Insurers will be liable to pay damages to theft cases, only on forcible entry

The case of theft dated back to 1995, when nearly Rs 3 lakh was stolen from the safe of the cooperative society, which lodged a complaint naming its cashier and manager as suspects, who, however, were released later due to lack of evidence.
The police during its probe into the case found no evidence that cooperative society had been burgled as its entry gate was found intact and even the lock on the safe from which the money had gone missing, was found intact. The safe had been opened using a duplicate key, the police concluded in its investigation.
Accordingly, the insurance company refused to pay any damage to the cooperative society, saying its premises had not been burgled against which it was insured.
The cooperative society, in turn, moved the district consumer forum, which, however, ordered the insurance firm to pay over Rs 2 lakh as damages for theft.
The district consumer forum's ruling was largely endorsed by the state consumer commission, promoting the insurance firm to move the country's apex consumer forum.
The apex consumer forum set aside the state commission order saying, the insurance company, rightly repudiated the claim for damages as the terms of the policy stipulated forcible entry into premises as one of the prerequisite for realisation of claims.