Theft of the motor vehicle under Indian Penal Code (IPC) and insurance contract.

Imagine, for a moment, any of the following scenarios:

1. Your driver reports for duty in the morning and collects the car keys from home while you getting ready. You come out and discover that both the driver and car are missing.
2. You are going for dinner with your family to a restaurant that offers valet parking. You hand over the keys to the attendant/valet spend the evening and return to find the valet has decamped with your car.
3. You are going downtown, where the parking lot is full. The parking lot contractor/attendant asks you to hand over the car keys. On your return, you find the vehicle is missing.

Two recent cases that have been decided by the NCDRC open up a disturbing gap in the cover available under the Motor Package/Comprehensive insurance policy. In a nutshell, in both the cases, the NCDRC has ruled that the theft of a vehicle by a driver or by a parking lot attendant amounts to "criminal breach of trust" which is not covered under the policy. 

The judges who have given their verdicts in these two cases have relied on the fact that the FIR has been lodged by the police under Sec 407 of the IPC (this is Criminal Breach of Trust by Carrier, etc) and not under Sec 378 of the IPC (Theft).

A reading of the Sec 378 of the IPC,  “Theft” is defined as “Whoever, intending to take dishonestly any moveable property out of the possession of any person without that per­son’s consent, moves that property in order to such taking, is said to commit theft.”

That means “theft” can only happen to property being in the POSSESSION of the owner. Above cases the owner is willingly handed it over to a third party’s custody-care.  

At the time of an adverse incident of this nature, the hapless owner is expected to not only file a police complaint but also be aware of the various provisions of the IPC (difference between Sec 378 and Sec 406 etc) and file the incident under the correct section.