Judgment

CHINNAPPA REDDY, J. :- The Aluminium Corporation of India Limited, the appellant in the civil appeal, has not appeared before us at the hearing. However, Dr. Y. V. Chitale appearing for the Bharat Aluminium Corporation, who were appointed as Authorised Agents on the take over of the Aluminium Corporation of India Limited under the provisions of the Industries Development and Regulation Act, has assisted us and we are greatful to him for his assistance. The question for consideration in the appeal is about the interpretation of a provision of the Emergency Risks (Factories) Insurance Scheme and it arises this way : The Aluminium Corporation of India Limited was obliged to insure its factories, factory buildings, plants, machinery etc., under the Emergency Risks (Factories) Insurance Act, 1962 and the Emergency Risks (Factories) Insurance Scheme made under that Act. A sum of Rs. 2,43,750/- was determined by the Chief Enforcement Officer as the amount payable by the Aluminium Corporation of India Limited towards arrears of premia, Cl. (a) of Para 7 of the Scheme prescribed that the insurable value of property for the purpose of insurance under the Act shall, be, "the actual value in the case of completed works, and the estimated value of the works which are in the course of construction, or additions to property which are anticipated or excepted to be completed, in both cases at the prices prevailing on the relevant dates after making due allowance for any depreciation." In arriving at the valuation, the Chief Enforcement Officer had proceeded on the basis that the actual value meant the market value on the relevant date and not the actual cost to the owner. The Corporation, in an appeal preferred to the Government of India, questioned the determination made by the Enforcement Officer on the ground that actual value meant the actual cost to the owner and not the market value as on the relevant date. The Government of India did not agree with the contention of the appellant-Corporation and rejected the appeal. Thereupon the Corporation preferred the present appeal to this Court under Art. 136 of the Constitution, after obtaining special leave from this Court.

2. We are convinced that on a true construction of the scheme, particularly in the light of the purpose and the provisions of the statute, the expression actual value occurring in the scheme means the market value and not the cost to the corporation. The Emergency Risks (Factories) Insurance Act, 1962 and its sister Act, the Emergency Risk (Goods) Insurance Act, 1962 came into force w.e.f. 1-1-1963 shortly after the proclamation of emergency under Article 352 of the Constitution on October 26, 1962, consequent on the Chinese aggression. The object of the Acts has been explained by this Court in Amadalavalasa Co-operative Society v. Union of India, (1976) 2 SCR 731as follows :-

"It was realised after the Chinese aggression that it was necessary to make provision, if possible on war footing, for reinstating the factories damaged or ruined by enemy action and for reimbursing the loss or damage of goods and continue the commercial and economic activity with a view to stabilize the economy of the country. In view of the magnitude of the task, no private agency in the field of insurance could have undertaken it. By the Acts, the Central Government undertook the task of insuring factories and goods against looss or damage sustained by enemy action. The Acts in substance provided for compulsory insurance against emergency risks .........."

A perusal of the provisions of the Emergency Risks (Factories) Insurance Act makes it clear that the scheme of insurance envisaged by the Act was entirely different from the scheme of a contract of voluntary insurance. Not only was there no element of consensus on any of the fundamental terms of insurance in this scheme, the obligation to take out policy of insurance for the full insurable value of the factory was mandatory and the failure to