UNITED INDIA INSURANCE CO. LTD. versus M/S. HARCHAND RAI CHANDAN LAL

Citation: [2004] SUPP. 4 S.C.R. 662 · Decided: 24-09-2004 · Supreme Court of India · Bench: S.N. VARIAVA · Disposal: Leave Granted & Allowed

Judgment (excerpt)

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UNITED INDIA INSURANCE CO. LTD. 
V. 
M/S. HARCHAND RAJ CHANDAN LAL 
SEPTEMBER 24, 2004 
[S.N. VARIAVA AND A.K. MATHUR, JJ.] 
Insurance: 
Insurance policy-"Burglary"-Jnsurance policy defined the word 
"burglary" as theft preceded by use of force or violence-During the 
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currency of the insurance policy insured noticed that some bags of food 
grains were stolen-But Insurance company repudiated the claim of the 
insured as theft was not preceded by use of force or violence-However, 
Consumer Forums below allowed the claim of the insured and awarded 
compensation to him-Correctness of-Held: The insurance policy is a 
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contract between the parties and they are bound by its terms-The element 
of force or violence is a condition precedent for burglary-Therefore, in the 
absence of violence or force the insured cannot claim indemnification against 
the insurance company-The terms of the policy have to be construed as they 
are-It is not permissible to add, subtract or substitute something in the terms 
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of the policy-The terms of the policy shall govern the contract between the 
parties-They have to abide by the definition given therein-They cannot rely 
on other definitions given in other enactments like criminal law-Hence, 
compensation awarded set aside-However, no order passed for recovery of 
compensation already given-But suggestions made for suitably amending 
the terms of the policy so that the word "burglary" is given a meaning which 
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is closer to the realities of life so that the common man easily understands 
its meaning-Consumer Protection Act, 1986, Ss. 2(J)(c)(ii), (g) & (o). 
Contract Act, 1872: 
Section 37-Contracts-Terms of-Construction-Obligation of 
G parties-Held; The terms of the contract have to be strictly read-No outside 
aid should be sought unless the meaning is ambiguous. 
Words & Phrases: 
"Theft"-Meaning of-Jn the context of Section 378 of the Penal Code, 
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1860. 
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UNITED INDIA INSURANCE CO. LTD. v. HARCHAND RAI CHANDAN LAL 663 
"Burglary"-Meaning of 
The respondent-insured took out a policy from the appellant-insurer 
against burglary and for housebreaking. The word "burglary" was 
defined in the policy as theft preceded by use of force or violence. During 
the currency of the policy, the respondent had noticed that some bags 
of food grains were stolen. Therefore, the respoudc.ut raised a claim 
against the appellant-insurer under the ·aforesaid policy for incurring 
the aforesaid loss by theft. The appellant repudiated the claim of the 
respondent on the ground that theft was not covered by the insurance 
policy as no burglary took place in the godown by use of force or violence. 
The Consumer Disputes Redressal Forum-II allowed. the 
respondent's claim on the ground that burglary included theft. The 
State Consumer Disputes Redressal Commission and the National 
Consumer Disputes Redressal Commission affirmed this decision. Hence 
the appeal. 
The following question arose before the Court : 
Whether in terms of the insurance policy, the. repudiation of the 
claim of the respondent by the appellant-company was justified or not? 
Allowing the appeal, the Court 
HELD: 1. The definition given in the policy is binding on both the 
parties. The policy is a contract between the parties and both the parties 
are bound by the terms of the contract. The definition of the word 
"burglary", followed with violence makes it clear that if any theft is 
committed it should necessarily precede with violence i.e. entry into the 
premises for committing theft should involve force or violence or threat 
to the insured or to his employees or the members of his family. 
Therefore, the element of force and violence is a condition precedent for 
burglary ·and housebreaking. The term 'burglary' as defined in the 
English Dictionary means an illegal entry into the building with an 
intent to commit crime such as theft. But in the absence of violence or 
force the insured cannot, claim indemnification against the insurance 
company. The terms of the policy have to be construed as they are and 
the Court cannot add or subtract something. Howsoever liberally one 
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may construe the policy' one cannot take liberalism to the extent of H 
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664 
SUPREME COURT REPORTS [2004] SUPP. 4 S.C.R. 
substituting the words, which are not intended. It is true that in common 
parlance the term 'burglary' would mean theft but it has to be preceded 
with force or violence. If the element of forc

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