1973 Supreme(Bom) 136

IN THE HIGH COURT OF BOMBAY
Chandurkar M.N.and Dharmadhikari C.S., JJ.
Appellants: The New India Assurance Co. Ltd.
Vs.
Respondent: Radheshyam Motilal Khandelwal and Ors.
F.A.F.O.D. No. 4 of 1965Decided On: 12.09.1973
Counsels:
For Appellant/Petitioner/Plaintiff: V.R. Manohar and J.P. Pendse, Advs.
For Respondents/Defendant: V.R. Padhye and R.M. Joharapurkar, Advs.

Headnote:

INSURANCE - MACHINERY INSURANCE - CONTRACT - TERMS AND CONDITIONS - STANDARD POLICY FORM - BINDING NATURE - KNOWLEDGE OF INSURED - REPUDIATION OF CLAIM - NOTICE - LIMITATION - WAIVER - ESTOPPEL.

Fact of the Case:

Plaintiffs claimed to be partners of a partnership firm carrying on the business of million rice in the mill known as Alibhai Rice Mills at Gondia. Admittedly, in November, 1959 plaintiff No.1 Radheshyam purporting to act on behalf of Messrs. Alibhai Rice Mills, Gondia, signed an inventory of the property to be insured with the defendant Company, with an endorsement that only engine risk was to be covered and that plaintiff No. 1 Radheshyam should be informed as to how much premium would be required to be paid. The inventory referred to two items:(1) Ruston Oil Engine Make, Ruston Hornsby Lincoln Ltd., England, and (2) Rice Mill Automatic Plant, one ton Behares Industrial Work, Dehanu Road. Against the first item the sum insured was shown as Rs. 35,000/- and against the second item it was shown to Rs. 25,000/-. the form of inventory is on the reverse of the form which is really a form of proposal for machinery insurance. It contains several items of information to be supplied by the proposed. It also contains a column for the proposers signature but the plaintiff No. 1 has not signed this proposal form and his signature appears in the column "proposers signature" at the foot of the inventory of the property to be insured.

Finding of the Court:

The trial Court found that the plaintiffs formed a partnership under the India Partnership Act, that plaintiff No. 1 Radheshyam had entered into a contract of insurance of the rice mill with the defendant company. it further held that the machinery of the rice mill was damaged due to an accident., The trail court took the view that the defendant had failed to prove that the policy was delivered to the plaintiff No. 1. It also found that Ex. 101 which was a receipt issued by Dhomney (D.W.1) did not lay down any conditions subject to which the proposal for insurance was to be accepted by the defendant company and, therefore, the acceptance of the proposal under Ex. 101 was absolute and unconditional. The trail Court also took the view that since Ex. 101 did not contain any terms of the policy, the terms of the policy as per the specimen copy of the policy did not form the terms of the contract between the parties, more so when those terms were not proved to have been brought to the notice of the plaintiff No. 1 or any of the plaintiffs before the acceptance of the contract under Ex. 101 and no consent on the part of the plaintiffs to those terms could be inferred. The trail Court no doubt, found that the term in condition No. 11 was not void and did not violate the provisions of Section 28 of the Contract Act, but on the view which it took that the terms of the policy were not shown to have been known to the plaintiffs before the completion of the contract, it was though unnecessary by the trail Court to discuss the question whether the claim was repudiated by the defendant company as alleged by them. With rearguard to the breakdown, the trail Court took the view that on the evidence of plaintiff No. 1 Radheshyam (P.W.1) and Sarman (P.W.2) it was proved that the breakdown was due to an accident as claimed by the plaintiffs. The trial Court found that the production of Ex. 121 which purported to be a receipt for Rs. 5,095.00 issued by Asha Engineering Works, the burden was on the defendant to show that no payment was made to Asha Engineering Works and the trail Court, therefore, rejected the case of the defendant that the voucher (Ex. 121) was a bogus one. Accepting the evidence of Deorambhai (P.W. 9), Harubhai and Dhirubhai, the trial Court found that Rs. 9,971.84 were paid by the plaintiff No. 1 to K. Ramanlal and the goods so purchased were brought by a truck of Azad Goods Transport Company, Gondia and the transport charges of Rs. 101/- were paid under receipt (Ex. 128) to Bharatlal (P.W 4). In view of these findings, the trial Court held that the claim made by the plaintiffs as per Schedule A to the plaint was proved and that the plaintiffs were entitled to interest at 6 percent. per annum from the date when they spent the amount for purchasing the machinery and the spare parts and for re-fitting the machinery. The amount of interest, according to the trial Court, came to Rs. 1,326.96 and it, therefore, passed a decree for Rs, 16, 493.80 P. and proportionate costs of the suit with future interest on Rs, 15, 167.84 P. at 6 per cent. per annum from the date of suit till realization. This decree is now challenged by the defendant in this appeal.

Issues: None

Ratio Decidendi: 1. A machinery insurance policy is a unilateral undertaking by the happening of a specified event and it is unless and until rectified, the exclusive record of the contract. It is a term applied by those carrying on the business of insurance to the formal document in which they set out the terms of their obligation in consideration of the stipulated premiums and it is in this sense that the word is still normally used. 2. In every case of a contract of insurance there is an obligation on the insurer to issue an insurance policy. 3. The policies are drawn out in standard forms which an insurer is under an obligation to forward to the Controller of Insurance. 4. The almost perfected stage which the insurance business has reached and the statutory requirements of the Insurance Act clearly point out that an insurer has in his business standard policy are to be incorporated either at the instance of the insurer or the insured, normally the insurance policy will be taken out in the standard form.

Final Decision: Appeal allowed.