1965 Supreme(All) 131

Allahbad High Court
D.P.UNIYAL,S.D.KHARE
Sterling General Insurance Co. Ltd., New Delhi - Appellant
Versus
Lala Bahali Rampuri - Respondent
Decided On : 09/15/1965

Headnote:

DISPLACED PERSONS (DEBTS ADJUSTMENT) ACT, 1951 - SECTION 18 - INSURANCE POLICY - LOSS OF GOODS - CLAIM - APPLICABILITY OF SECTION 18 - INTERPRETATION OF TERMS - LIMITATION - APPLICABILITY OF SECTION 18 TO PROPERTY IN INDIA - APPLICABILITY OF SECTION 18 TO UNLIQUIDATED DAMAGES.

Fact of the Case:

The applicant, a displaced person from Kasur (district Lahore) in Pakistan, had taken up his residence at Muzaffarnagar. He carried on business in sugar in the year 1947 and had opened a cash-credit account with the Kasur Branch of the Bank against the security of the sugar bags placed in the godown and hypothecated by him with the Bank. The hypothecated goods used to be stored in the godowns situate at Mianwala, Bhikkiwind and Usmanwala. An these three godowns were situate in Kasur Tahsil. However, as a result of the partition of India in the year 1947 Usmanwala passed on the Pakistan while Bhikkiwind and Mianwala remained parts of India. The applicant sent a telegram to the Insurance Company within three days of the loot and subsequently made a formal claim to the Company in respect of Rs. 54,175. However, he could recover nothing from the Insurance Company because the Bank and the Insurance Company colluded with each other with the result that respondent No. 1 (the applicant) sustained a loss.

Finding of the Court:

The Tribunal, after having considered the entire evidence led in the case arrived at the conclusion that the goods at all the three places had been looted in the course or the riots which occurred following the partition of India in August, 1947, and that the applicant could claim the sum for which the goods were insured from the Insurance Company. It also held that claim was not barred by time. The Tribunal, therefore, granted a decree for Rs. 20,877/12 with pendente lite interest at 6 per cent per annum against the Insurance Company in respect of the property looted from the godowns situated in Mianwala and Bhikkiwind. If further directed that out of the decretal amount realised two-thirds share will be payable to the Bank and a one-third share to the applicant. With regard to the property in Usmanwala, a place in West Pakistan, the finding of the Tribunal was that the amount of loss was Rs. 30.250, although the insurance was for Rs. 30,860. A preliminary decree was, therefore, passed mentioning those facts and giving the direction that a report be made to the Insurance Claims Board. The Tribunal further ordered that a final decree, will be passed on receipt of the proposals of the Board in respect of the amount for which the claim is to be decreed.

Issues: 1. Whether the applicant was entitled to make any claim and the alleged loss had been established? 2. Whether the claim was barred by time? 3. Whether there was any combined riot and fire policy in favour of the applicant Lala Bahali Rampuri and whether under the terms of the insurance policy he was entitled to file a claim? 4. Whether the applicant lost all rights to lay any claim in respect of the loss suffered by him under the policy because of the special terms contained in the insurance policy? 5. Whether the application under S. 13/18 or the Act is barred by time? 6. Whether the claim is barred by time, because under the terms of the insurance policy which was renewed- (a) the insured had to file within 15 days of the loss a complete claim giving full particulars as envisaged by condition 11 or the policy; and (b) the policy did not cover any loss or damage happening during the existence of abnormal conditions, vide condition (6) of the policy? 7. Whether the claim in respect of the loss to Usmanwala property also must be rejected because the claim for the loss could not be brought within the definition of 'debt' as defined in Cl. (6) of S. 2 of the Act.

Ratio Decidendi: 1. The applicant was entitled to make a claim and the alleged loss had been established. 2. The claim was not barred by time. 3. There was a combined riot and fire policy in favour of the applicant Lala Bahali Rampuri and under the terms of the insurance policy he was entitled to file a claim. 4. The applicant did not lose all rights to lay any claim in respect of the loss suffered by him under the policy because of the special terms contained in the insurance policy. 5. The application under S. 13/18 or the Act was not barred by time. 6. The claim was not barred by time, because under the terms of the insurance policy which was renewed- (a) the insured had to file within 15 days of the loss a complete claim giving full particulars as envisaged by condition 11 or the policy; and (b) the policy did not cover any loss or damage happening during the existence of abnormal conditions, vide condition (6) of the policy. 7. The claim in respect of the loss to Usmanwala property also must not be rejected because the claim for the loss could be brought within the definition of 'debt' as defined in Cl. (6) of S. 2 of the Act.

Final Decision: Appeal partly allowed, the partly preliminary and partly final decree passed in favour of the applicant (respondent No. 1) for Rs. 20,877-12-0 and pendete lite interest in respect of the loss to the sugar kept in the godowns at Mianwala and Bhlkkiwind is set aside, the preliminary decree in respect of the loss to the property kept in the godowns at Usmanwala (Pakistan) is maintained and the appeal against that part of the decree fails and is dismissed. In the circumstances of the case the parties shall bear their own costs in both the courts.