Customer Care No.

91-1145562222

Whether Forcible Entry is

essential for a claim to be
allowed under the Policy
for Burglary?
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The insurance policy under the Burglary and House Breaking
Insurance (Business) Premises provides cover against loss or
damage by Burglary or House breaking, i.e., (theft following an
actual, forcible and violent entry of and/or exit from the premises)
in respect of contents of offices, warehouses, shops, etc., and
cash in safe or strong room and also damage caused to the
premises.
The insurance policy is a contract between the parties. Both
parties are bound by the terms of the contract. As per the
definition of the word "burglary", followed by violence, makes it
clear that if any theft is committed it should necessarily be
preceded with violence, i.e., entry into the premises for
committing theft should involve force or violence or threat to
insurer or to his employees or to the members of his family.
Therefore, the elements of force and violence are conditions
precedent for burglary and housebreaking.
Introduction
1.Insurance contract, like any other contract, should also have
basic conditions that go to satisfy Law of Contracts, but in
Customer Care No. 91-11addition, it needs far more openness as indicated by the words

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General insuranceor non-life insurance policies, indemnify the insurer depending on the loss
from a particular financial event. The object of general insurance is to provide indemnity for
such losses as are caused by insured perils. For example, if goods are burnt and the cause of
loss is fire which is covered under a fire policy then the claim is payable. If the goods are stolen,
the loss is not payable under the fire policy, as 'burglary' is not a peril covered. This is based on
the principles of 'Proximate cause' and 'Remote cause'.
Among various products of general insurance offered by the insurance companies, one such
product is related to the Burglary and House Breaking. This Policy is designed to cover business
premises only like godown, factory, office, etc. It covers the loss or damage to the property
insured bytheft following actual, forcible and violent entryinto the premises and
damages to the premises following entry as above or any attempt thereat. The words used
'theft following upon actual, forcible and violent entry' are very much relevant in the
context of the present article. The article elaborates that thecontract 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 into the premises. A plain reading of the policy would show
that a forcible entry should precede the theft. Unless they are proved, the claim cannot be
accepted.
The matter has drawn the attention of the Supreme Court in deciding a casetitled as
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2. Case ofIndustrial Promotion & Investment Corporation of Orissa Ltd.(supra)
Facts of the case
2.1Industrial Promotion & Investment Corporation of Orissa Ltd. (IPICO), the Appellant in the
case, was a wholly owned Public Sector Undertaking of the Government of Orissa. IPICO
finances medium and large scale industries within the State of Orissa and was also involved in
setting-up of joint sector industries with private entrepreneurs.
IPICO extended a term loan of Rs. 40,74,000 to M/s. Josna Casting Centre Orissa Pvt. Ltd. As the
loan amount was not repaid, IPICO exercising its power under Section 29 of the State Finance
Corporation Act, 1951, took over the assets of M/s. Josna Casting Centre Orissa Private Limited
on 14-02-1992. On 23-01-1996, IPICO insured the said assets with New Indian Assurance Co.
Ltd (Assurance Co), Respondent No. 1 for a sum of Rs. 46,00,000 under the Miscellaneous
Accident Policy, Rs. 60,40,000 under the Fire Policy and Rs. 46,00,000 under the Burglary and
House Breaking Policy.
The seized assets were put to auction by IPICO on 22-1-1997 at which point of time it was
detected that some parts of the plant and machinery were missing from the factory premises.
IPICO registered an FIR on 25-1-1997 in the Remona Police Station, Balasore regarding the
theft/burglary of the plant and machinery.
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On 7-2-1997, IPICO informed Assurance Co. about the theft and requested for issuance of a
claim form. A claim was lodged with the Assurance Co. on 16-12-1997 for an amount of Rs.
34,40,650 under the Burglary and House Breaking Policy. The valuation reports given by GEC,
Calcutta, the machines supplier and Alpha Transformer Ltd., Bhubaneswar were relied upon by
the IPICO. The claim of the IPICO was repudiated by the Assurance Co. on 31-3-1998 on the
ground that the alleged loss would not come within the purview of the insurance policy.
IPICO filed compensation application No. 45 of 2001 under Section 12-B, read with Section 36Aof
the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969, which was rejected by the
MRTP Commission, New Delhi by its Order dated 17-8-2005. Aggrieved by the said Order, IPICO
preferred the present Appeal.

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