In Theft Case Insurance Claim Cannot Rest on Book Entries Alone: Delhi State Commission Dismisses ₹25 Lakh Theft Claim

“In Absence of Stock Register, Claim Is Without Any Basis” – In a significant ruling reiterating the burden of proof in insurance disputes, the Delhi State Consumer Disputes Redressal Commission has held that a theft claim under a Standard Fire and Special Perils Policy cannot be sustained in the absence of authenticated stock records. The Commission observed that mere book entries and reminders to the insurer do not establish the quantum of loss.

Bench comprising Hon’ble Justice Sangita Dhingra Sehgal (President) and Hon’ble Ms. Pinki (Member – Judicial) dismissed the complaint seeking ₹25,49,120 towards alleged theft loss, holding that no deficiency in service was made out under Section 2(1)(g) of the Consumer Protection Act, 1986.

Theft Claim of ₹25.49 Lakhs

The complainant, M/s. Watch World, had obtained a Standard Fire and Special Perils Policy from National Insurance Company Limited for a sum assured of ₹85 lakhs. During the policy period, a theft allegedly occurred in the shop on the night of 04–05 November 2015. An FIR was lodged immediately, and the insurer was informed.

The complainant assessed its loss at ₹25,49,120 and submitted documents to the surveyor appointed by the insurer, S. Soni & Company. However, the surveyor assessed the loss at only ₹34,723.49.

Subsequently, the insurer repudiated the claim, citing non-submission of requisite documents and failure to substantiate the alleged loss.

Aggrieved, the complainant approached the State Commission alleging deficiency in service and seeking payment of the full claimed amount along with interest and compensation.

“Deficiency Means Fault or Inadequacy in Performance of Contractual Obligation”

Before examining the merits, the Commission referred to Section 2(1)(g) of the Consumer Protection Act, 1986, defining “deficiency” as:

“any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law… or has been undertaken to be performed… in relation to any service.”

The central issue, therefore, was whether repudiation of the claim by the insurer amounted to a fault or inadequacy in service.

Surveyor’s Report: “Insured’s Claim Is Without Any Basis”

The Commission placed significant reliance on Section 18.0 of the Survey Report, which recorded:

“The insured is not maintaining any stock register, hence it is not possible to assess the loss based on stock register vs left over stocks.”

“The insured is not provided any list of stolen item to us as well as the police.”

“The insured’s claim is without any basis.”

“In absence of the stock register, it is not possible to verify the authenticity of the stock statements sent to bank…”

The surveyor concluded that in such circumstances, assessment could only be made on the basis of the trading account, resulting in a drastically lower quantified loss.

The Commission observed that the surveyor was an independent licensed professional appointed in accordance with policy terms and regulatory requirements, and no arbitrariness or mala fides were demonstrated in his assessment.

Calculation Sheet Not Sufficient Proof

The complainant relied upon a calculation sheet reflecting cost price of stock as per books. However, the Commission noted:

“On bare perusal of the aforesaid Calculation Sheet, we find that the same is merely a list of cost price of stock as per books and there is nothing on record that verifies the stock maintained by the Complainant which was subject to loss by theft.”

The Commission further observed that multiple reminder letters sent by the complainant to the insurer could not substitute for documentary proof of actual stock and loss.

Thus, the claim amount of ₹25,49,120 was found to be unsupported by cogent and authenticated evidence.

Burden of Proof in Theft Claims

The ruling underscores a critical principle in insurance jurisprudence: while the occurrence of theft may be established through FIR and police reports, the insured must independently substantiate the quantum of loss through reliable and contemporaneous records.

The absence of a stock register, absence of a detailed list of stolen items, and inability to verify stock statements proved fatal to the complainant’s case.

The Commission concluded that repudiation based on such deficiencies could not be termed arbitrary or illegal.

No Deficiency in Service Established

Answering the central issue, the Commission held:

“Therefore, the submission of the Complainant that the Opposite Party No. 1 is deficient in providing its services is answered in the negative.”

The Commission further held:

“We find no deficiency in service on the part of the Opposite Party No. 1 in repudiating the claim of the Complainant and the Opposite Party No. 1 is not liable to pay the insurance cover for theft as claimed.”

The complaint was dismissed with no order as to costs. All pending applications stood disposed of.

This judgment reinforces the evidentiary discipline required in commercial insurance claims. Maintenance of proper stock registers, authenticated inventory lists, and verifiable financial records is indispensable for substantiating theft losses.

The Delhi State Commission has clarified that surveyor’s reports, when reasoned and unchallenged by credible contrary evidence, carry significant evidentiary value. Repudiation grounded in lack of documentation does not amount to deficiency in service.

For traders and commercial establishments, the ruling serves as a reminder that insurance protection is only as strong as the records maintained to support a claim.

Date of Decision: 19 January 2026