Parhlad Kumar v. Permanent Lok Adalat And Others
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Before we analyze this case any further, we need to observe the rules of interpretation applicable to a contract of insurance. Generally, an insurance
2 contract is governed by the rules of interpretation applicable to the general contracts. However, due to the specialized nature of contract of insurance, certain rules are tailored to suit insurance contracts. Under the English law, the development of insurance jurisprudence is given credence to Lord Mansfield, who developed the law from its infancy. Without going much into the development of the interpretation rules, we may allude to Neuberger J. in Arnold v. Britton, which is simplified as under:
(1) Reliance placed in some cases on commercial common sense and surrounding circumstances was not to be invoked to undervalue the importance of the language of the provision which is to be construed.
(2) The less clear the words used were, the more ready the court could properly be to depart from their natural meaning, but that did not justify departing from the natural meaning.
(3) Commercial common sense was not to be invoked retrospectively, so that the mere fact that a contractual arrangement has worked out badly, or even disastrously, for one of the parties was not a reason for departing from the natural language.
(4) A court should be very slow to reject the natural meaning of a provision as correct simply because it appeared to be a very imprudent term for one of the parties to have agreed.
(5) When interpreting a contractual provision, the court could only take into account facts or circumstances which existed at the time that the contract was made and which were known or reasonably available to both parties.
(6) If an event subsequently occurred which was plainly not intended or contemplated by the parties, if it was clear what the parties would have intended, the court would give effect to that intention. 10.
A perusal of the aforesaid shows that this contract is to be interpreted according to the context
1 involved in the contract. The contract we are interpreting is a Commercial Vehicle Package Policy. There is no gainsaying that in a contract, the bargaining power is usually at equal footing. In this regard, the joint intention of the parties is taken into consideration for interpretation of a contract. However, in most standard form contracts, that is not so. In this regard, the Court in such circumstances would consider the application of the rule of contra preferatum, when ambiguity exists and an interpretation of the contract is preferred which favors the party with lesser bargaining power. 11.
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.
A perusal of the wordings used in this part would reveal, that all the things which are required to be done under this part are related to an occurrence of an accident. On occurrence of an accidental loss, the insured is required to immediately give a notice in writing to the company.
3 This appears to be so that the company can assign a surveyor so as to assess the damages suffered by the insured/vehicle. It further provides, that any letter claim writ summons and/or process or copy thereof shall be forwarded to the company immediately on receipt by the insured. As such, the intention would be clear.
The question of receipt of letter claim writ summons and/or process or copy thereof by the insured, would only arise in the event of the criminal proceedings being initiated with regard to the occurrence of the accident. It further provides, that the insured shall also give a notice in writing to the company immediately if the insured shall have the knowledge of any impending prosecution inquest or fatal inquiry in respect of any occurrence which may give rise to a claim under this policy. It will again make the intention clear that the immediate action is contemplated in respect of an accident occurring to the vehicle.
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 co-operate 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.
As observed by the bench of two learned Judges in the case of Om Prakash, after the vehicle is stolen, a person, who lost his vehicle, would immediately lodge an FIR and the immediate conduct that would be expected of such a person would be to assist the police in search of the vehicle. The registration of the FIR regarding the theft of the vehicle and the final report of the police after the vehicle is not traced would substantiate the claim of the claimant that the vehicle is stolen. Not only that, but the surveyors appointed by the insurance company are also required to enquire whether the claim of the claimant regarding the theft is genuine or not. If the surveyor appointed by the insurance company, upon inquiry, finds that the claim of theft is genuine then coupled with the immediate registration of the FIR, in our view, would be conclusive proof of the vehicle being stolen.
17.
xxx xxx xxx 18.
xxx xxx xxx 19.
xxx xxx xxx 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."
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