Burglary, as it is commonly understood, is an act of breaking into a premises to commit theft. Now a burglar may use some instrument to break the lock of the building and decamp with valuables. But as far as insurers are concerned, a burglary should have a mandatory component—violent or forcible entry and exit. In the absence of this component, they refuse to indemnify losses caused on account of burglary. It is for this reason that many claims pertaining to burglary insurance end up as a dispute between the policy holder and the insurance company, and come up before the consumer court.
A recent decision of the apex court defining what constitutes ‘forceful or violent entry and exit’ should go a long way in protecting the rights of policy holders. The apex court in this case made two highly relevant points : (a) if the entry is effected by exercise of any force, howsoever slight, it is sufficient to constitute a forcible entry as defined in the policy; (b) an entry obtained by picking the lock or forcing back the latch by means of an instrument involves the use of violence and, therefore, is covered under the definition of burglary.
This particular case pertained to a rejection of the claim by the insurer for a burglary that had taken place way back in 1992, on the ground that it was a case of theft and not burglary. So the main issue before the court was whether the incident at the insured's premises fell within the meaning of burglary as defined by the insurance company. Referring to the decision of the Supreme Court in the case of United India Insurance Co Ltd vs Harichand Rai Chandanlal, the National Consumer Disputes Redressal Commission pointed out that here the court had clearly held that if the entry is effected by exercise of any force, howsoever slight, it was sufficient to constitute an entry within the meaning of the policy.
Such an entry can be described as violent in nature and character. The Supreme Court also referred to a passage from Halsbury's Laws of England, wherein it was observed that an entry obtained by picking the lock or forcing back the latch by means of an instrument involved the use of violence. Observed the Supreme Court in this case: "The determination of what constitutes visible marks or visible evidence within the meaning of such a provision, and of where such marks or evidence must be located in order to satisfy the policy requirement, is to a great extent dependent upon the particular facts involved in relation to the specific requirements imposed by the policy. Where, for example, a burglary or theft policy requires that there must be visible marks of force or violence ‘at the place of entry’ into the premises, this requirement has been held complied with if the visible marks are only on one of the outer doors to the insured's premises, which the burglars or thieves must have used to accomplish their deed."
On the basis of these observations, the National Consumer Disputes Redressal Commission said it agreed with the view of the lower courts that this was a case of burglary and not theft. The burglars had entered by removing a roofing sheet and had exited by breaking the lock. This constituted forceful entry and exit, the court concluded. It, therefore, directed the insurance company to make good the loss assessed at Rs 2,37,500 along with 10 per cent interest calculated six months from the date of the burglary till the date of payment.
Another important order
of the apex court on the subject was given in the case of New India
Assurance Company vs Sakar Iron Industries. Here the insurance company
had repudiated the claim on the ground that there were no signs of
breaking into the premises and that neither the door nor the lock was
broken. The courts in this case dismissed such a contention of the
insurance company. Referring to the dictionary meaning of the word ‘violent’,
the court said: "It was characterised by forcible, vehement,
rapid and often sudden movement, requiring exhibiting of a powerful
voluntary exertion of muscular strength, violent efforts".
Pointing out that in this case the culprit had entered the casting
department of the factory through a small open gap above the locked
gate, the court said this was an unlawful, unnatural entry requiring
exercise of great physical force to push through the gap above the
gate. The insurance company was, therefore, liable to pay Rs 2,29,991
along with interest, the commission had said.