No compensation from Insurance Co. if there is theft without a forcible entry: Apex Court

Insurer cannot claim compensation against theft from insurance company in absence of any forcible entry.

Facts:

a) Appellant had taken insurance on assets taken over from company under the Fire Policy and the Burglary and House Breaking policy.

b) At the time of auction of asset, it was detected that some parts of plant and machinery were missing from factory premises. Thus, appellant filed claim for theft with the insurance company.

c) The claim of appellant was rejected by the insurance company on the ground that the theft was not occurred as result of forcible and violent entry of and/or exit from the premises.

The Apex Court held as under:

1) It was 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 appellant is that forcible entry is not required for a claim to be made under the policy.

2) The contract of insurance which is like any other commercial contract should be interpreted strictly, 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.

3) 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. [2016]72 taxmann.com 296 (SC)