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2014 Supreme(Cal) 743
High Court of Judicature at Calcutta
DEBANGSU BASAK, J.
Hindusthan Motors Ltd.
Versus
National Insurance Company Limited & Others
C.S.No. 577 of 1987 (Original Side)
Decided on: 22-12-2014
For the Plaintiff:Utpal Bose, Sr. Adv., Ravi Kapur, R. Dutt, Debraj Bhattacharya, Jeevan Ballav Panda, Advocates.
For the Defendants:Pradip Kr. Ghosh, Moloy Kr. Ghosh, Sr. Advs., Swapan Kr. Das, A. Gangopadhyay, S. Dasgupta, S.K. Das, Advocates.
An unstamped cover note cannot evolve into a policy of insurance. It continues to remain as an unstamped cover note, though admitted in evidence and marked as an exhibit. A money decree cannot be passed on the basis of treating such unstamped cover note as a policy of insurance in view of the express bar contained in the General Exemption of Article 47 of Schedule-I of the Indian Stamp Act, 1899.
Headnote:
INSURANCE - Fire Insurance - Interim Protection Note - Unstamped - Legal Effect - General Exemption of Article 47 of Schedule-I of the Indian Stamp Act, 1899 - Insurance Act, 1938 - Section 64VB(2) - Payment of Premium by Bank Guarantee - Surveyor Report - Proof of Contents - Indian Evidence Act, 1872 - Sections 60, 61, 62 and 63.
Fact of the Case:
Plaintiff claimed a money decree against the defendants for loss and damages caused by fire to various items of the insured assets. The plaintiff claimed realization of a sum of Rs.6,13,82,653/- from the defendants along with interest thereon. The defendant denied its liability to pay any sum to the plaintiff.
Finding of the Court:
The plaintiff is not entitled to claim anything under the three interim protection notes being Exhibits ‘C’, ‘D’, and ‘E’ in view of the proviso to General Exemption of Article 47 of Schedule-I of the Indian Stamp Act, 1899. A bank guarantee does not constitute payment of premia for the insurance under consideration in view of Section 64VB of the Insurance Act, 1938. The truth of the contents of Exhibit ‘TT’ has not been proved adequately and, therefore, the plaintiff has not established its claim amount.
Issues: 1. Whether as on the date of the incident of fire, i.e. on 29/6/1986 the subject insurance policy / Interim Protection Note No. 34/65, 34/68 and 34/67 was valid? 2. Whether the Bank Guarantees issued by the Bank of India, 119, Park Street, Kolkata – 700016 (bearing Nos. G/5/50 to G/5/54) were issued for securing the insurance premia against the policies taken by the plaintiff from the 1st defendant? 3. Is the 1st defendant liable to pay to the plaintiff as sum of Rs.4,34,78,287/- or any other sum in respect of loss relating to stock of goods under the contract of insurance covered under the contract of insurance covered under the interim protection note dated 30 April 1986 bearing No. 34/67 as stated in paragraph 21(a) of the plaint? 4. Is the 1st defendant liable to pay to the plaintiff a sum of Rs.90,31,366/- or any other sum in respect of loss relating to building, machinery, contents under the contract of insurance covered under the interim protection note dated 30 April 1986 bearing No. 34/65 as stated in paragraph 21(b) of the plaint? 5. Is the 1st defendant liable to pay to the plaintiff a sum of Rs.88,73,000/- or any other sum in respect of its claim on account of loss of profits and standing charges relating to stock of goods under the contract of insurance covered under the interim protection note dated 30 April 1986 bearing No. 34/68 as stated in paragraph 21(c) of the plaint? 6. Are the 1st and 2nd defendants liable either jointly or severally to pay the aforesaid amount or any portion thereof to the plaintiff? 7. To what other relief, if any, is the plaintiff entitled?
Ratio Decidendi: The legal effect of a cover note not being duly stamped and admitted in evidence is that a plaintiff is entitled to seek an insurance policy on the basis of such cover note and not a money decree. A bank guarantee does not constitute payment of premia for the insurance under consideration in view of Section 64VB of the Insurance Act, 1938. The truthfulness of the contents of the document can be established either by the parties agreeing to its admissibility or a duly conversant witness proving the truthfulness of the contents of it.
Final Decision: C.S. No. 577 of 1987 is dismissed. No order as to costs.
Debangsu Basak, J.
The plaintiff claims a money decree against the defendant nos.1 and 2 on the basis of a contract of insurance.
According to the plaintiff, it had entered into two several contracts of insurance both dated April 1, 1986 with the defendant nos. 1 and 2 whereby and whereunder the plaintiff was indemnified for loss and damages caused, inter alia, by fire to all sorts of vehicles, engines, components, parts, raw materials, accessories lying in or about the factory of the plaintiff. Both the defendants issued interim protection notes on April 30, 1986 with effect on and from April 1, 1986 and valid up to April 1, 1987. Three several interim protection notes were issued in favour of the plaintiff. The premia in respect of the insurance contract was secured by five several bank guarantees issued on behalf of the plaintiff. The plaintiff caused such bank guarantees to be extended till March 31, 1987. According to the plaintiff it paid the premia under the contract of insurance by five several cheques. On September 30, 1986 the defendant no. 1 invoked the bank guarantees and received the premia in respect of the contract of insurance. According to the plaintiff on June 29, 1986 a fire broke out at a portion of the factory of the plaintiff causing severe and extensive damage to various items of the insured assets resulting in loss and damages covered by the contract of insurance. The plaintiff informed the defendant no. 1 as to such incident by a letter dated June 29, 1986. By a letter dated July 2, 1986 the defendant no. 1 informed the plaintiff about the appointment of Surveyors. By a letter dated July 10, 1986 the plaintiff requested the defendant no. 1 to allow the plaintiff time to prepare a detailed estimate. Such extension of time was granted by the defendant no. 1 by its letter dated July 21, 1986. Under cover of letters dated July 27, 1986 and August 11, 1986 the plaintiff submitted its detailed claim amounting to Rs.6,13,82,653/-. The plaintiff claims realization of a sum of Rs.6,13,82,653/- from the defendants along with interest thereon.
The defendant no. 1 has filed written statement and is contesting the instant suit. The defendant no. 1 claims that, the fire occurred at a place which was not covered under the contract of insurance. The defendant denied its liability to pay any sum to the plaintiff.
The issues in the suit were settled by the Order dated July 26, 2010 and are as follows:-
“1. Whether as on the date of the incident of fire, i.e. on 29/6/1986 the subject insurance policy / Interim Protection Note No. 34/65, 34/68 and 34/67 was valid?
2. Whether the Bank Guarantees issued by the Bank of India, 119, Park Street, Kolkata – 700016 (bearing Nos. G/5/50 to G/5/54) were issued for securing the insurance premia against the policies taken by the plaintiff from the 1st defendant?
3. Is the 1st defendant liable to pay to the plaintiff as sum of Rs.4,34,78,287/- or any other sum in respect of loss relating to stock of goods under the contract of insurance covered under the contract of insurance covered under the interim protection note dated 30 April 1986 bearing No. 34/67 as stated in paragraph 21(a) of the plaint?
4. Is the 1st defendant liable to pay to the plaintiff a sum of Rs.90,31,366/- or any other sum in respect of loss relating to building, machinery, contents under the contract of insurance covered under the interim protection note dated 30 April 1986 bearing No. 34/65 as stated in paragraph 21(b) of the plaint?
5. Is the 1st defendant liable to pay to the plaintiff a sum of Rs.88,73,000/- or any other sum in respect of its claim on account of loss of profits and standing charges relating to stock of goods under the contract of insurance covered under the interim protection note dated 30 April 1986 bearing No. 34/68 as stated in paragraph 21(c) of the plaint?
6. Are the 1st and 2nd defendants liable either jointly or severally to pay the aforesaid amount or any portion thereof to the
