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S. Sohan Singh S. Ishar Singh v. Liverpool And London And Globe Insurance Co. Ltd., Calcutta .
Concise Analytical Summary of the Opinion
Factual and Procedural Background
The appellant, Sohan Singh (proprietor of a firm formerly of Rawalpindi), insured goods with the Liverpool and London and Globe Insurance Company Limited of Calcutta for Rs. 60,000. The policy came into force on 17-8-1946 and was renewed for one year on 17-8-1947. The appellant claimed Rs. 50,716-3-3 for damage alleged to have occurred in October 1947 and filed a claim under Section 18 of Act 70. A Tribunal constituted under Act 70 dismissed the appellant's claim on a preliminary point. The Company had objected that the policy was not “entered into before and in force on 15-8-1947” as required by Section 18 because the renewal from 17-8-1947 was a fresh contract; the Tribunal upheld this contention and dismissed the application. The appellant appealed to the court whose opinion is summarized here.
Legal Issues Presented
- Whether a policy which was originally entered into before 15-8-1947 but which expired on 17-8-1947 and was renewed for a further year on 17-8-1947 can be said to be a contract "entered into before the 15th day of August, 1947" and "in force" on 15-8-1947 for the purpose of Section 18(1) of Act 70.
- Whether the order of the Tribunal dismissing the application constitutes a "decree" such that an ad valorem court-fee (based on the amount in dispute) was payable on the memorandum of appeal, or whether the memorandum was properly stamped by payment of the usual court-fee of Rs. 4/-.
Arguments of the Parties
Appellant's Arguments
- The appellant sought recovery of Rs. 50,716-3-3 under Section 18 of Act 70 for loss or damage to insured property alleged to have occurred in October 1947.
- Implicit in the appeal is the contention that the policy should be treated as qualifying under Section 18(1) because it was entered into before 15-8-1947 and was in force at the time when the loss occurred (i.e., the appellant contends entitlement to benefits under S.18(1)).
Respondent/Company's Arguments
- The Company raised a preliminary objection that the policy was not one which could be enforced under Section 18 because, although the property was insured before 15-8-1947, the original contract expired on 17-8-1947 and the renewal from that date constituted a fresh contract (i.e., the contract in force at the time of loss was not the contract "entered into before the 15th day of August, 1947").
- Separately, the Company contended that the Tribunal's order dismissing the application amounted to a decree; consequently an ad valorem court-fee should have been paid on the appeal because the amount in dispute exceeded Rs. 50,000, and the memorandum of appeal therefore required a higher stamp than Rs. 4/-.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Stockell v. Heywood, (1897) 1 Ch. 459 | Held, in the context of a personal accident insurance policy, that each annual renewal amounted to a fresh contract. | The Tribunal relied on this authority (via Preston & Colinvaux). The court distinguished it because it dealt with personal accident insurance and a different factual and legal context; the court held it did not decide the statutory question under Section 18(1) and therefore was not applicable to deny the appellant the benefits of S.18(1). |
| Ram Singh v. Century Insurance Co. Ltd., 1933 Cal 170 | Decision that renewal of a fire policy was a fresh contract; the renewal received after the property was destroyed was void and the company was not liable. | The lower court followed this decision. The appellate court distinguished it on the facts and on the ground that it did not involve a statutory provision like Section 18(1); thus it was not determinative of whether a displaced person should obtain benefits under S.18(1). |
| Sita Ram v. Mool Chand, 1954 All 672 | Support for the view that certain Tribunal orders may amount to a decree for the purpose of court-fees. | The opinion noted this decision as providing some support to the Company's court-fee contention, but it did not adopt this approach for the present case. |
| Kishandas v. Parasram, 1955 Raj 81 | Held that an appeal against an order of a Tribunal could be treated as an appeal against a decree (Article 1, Sch. I), because S.9 of the Act contemplated the passing of a decree. | The opinion acknowledged this decision and its reasoning as supporting the Company's contention on court-fee, but ultimately the court preferred a contrary view for the facts and procedural posture in the present case. |
| Krishan Gopal v. Sant Ram, 56 Pun LR (SN) 9 | Held that an order dismissing a displaced creditor's application under S.10 is merely a final order, not a decree, and therefore does not require a decree-sheet or ad valorem fee. | The court expressed agreement with Khosla J.'s view in this case and followed it in deciding that the present memorandum of appeal was sufficiently stamped and that the Tribunal's dismissal on a preliminary point did not amount to a decree necessitating an ad valorem fee. |
Court's Reasoning and Analysis
The court undertook a step-by-step analysis focused on two discrete questions: (1) the legal effect of the renewal of the insurance policy for the purpose of Section 18(1) of Act 70, and (2) whether the Tribunal's order amounted to a "decree" attracting ad valorem court-fees on appeal.
On the renewal question, the court first examined the authorities relied upon by the Tribunal (including the passage in Preston & Colinvaux and the English case Stockell v. Heywood, and the Calcutta decision Ram Singh v. Century Insurance Co.). It observed that:
- Stockell concerned personal accident insurance and a question of entitlement to payment where renewals had taken place; the court in that case held renewals amounted to fresh contracts for the purposes of that legal context.
- Ram Singh concerned a fire policy where renewal was accepted after the property had been destroyed; the Calcutta court treated the renewal as void in those circumstances and denied liability.
- Neither Stockell nor Ram Singh involved a statutory provision comparable to Section 18(1) of Act 70; they were decided on quite different factual and legal bases and therefore did not control the present statutory question.
The court then analyzed the facts of the present case: the policy originally commenced on 17-8-1946 and was renewed on 17-8-1947; the renewal appears to have been effected with the Company's Rawalpindi representative on the due date and a receipt was issued from Calcutta on 4-9-1947 describing the payment as received "for the continuance of the policy" from 17-8-1947 to 17-8-1948. The alleged loss occurred in October 1947.
Turning to statutory purpose, the court emphasized the general purpose of Act 70 — to benefit displaced persons and relieve hardships of displacement — and concluded that Section 18(1) was intended to protect displaced persons whose property in West Pakistan insured before 15-8-1947 suffered loss while the contract of insurance was in force. The court found it inequitable that eligibility under Section 18 should turn on the technicality that a renewal fell due a few days after 15-8-1947 and was renewed before loss. Therefore, even though a renewal might, for some legal purposes, constitute a fresh contract, the court was not prepared to hold that the renewal should be treated as a fresh contract for the limited purpose of determining whether a case is cognizable under Section 18(1) and whether a displaced person is entitled to the statute's benefits.
On the court-fee objection, the court considered conflicting authorities. It noted decisions (Sita Ram; Kishandas) supporting the Company's contention that certain Tribunal orders amount to decrees attracting ad valorem fees, but also noted Krishan Gopal, where Khosla J. held that an order dismissing an application under S.10 is a final order, not a decree, and thus does not require a decree-sheet or ad valorem fee. The court expressed the view that it was never intended that displaced persons should have to pay ad valorem court-fees on appeals against orders dismissing their applications, particularly where dismissal was on a preliminary point without consideration of merits.
Consequently, the court concluded that the memorandum of appeal in the present case was sufficiently stamped by payment of the usual Rs. 4/- fee and that the Tribunal's dismissal on a preliminary point did not amount to a decree for the purposes of requiring an ad valorem court-fee.
Holding and Implications
Holding:
The court's final disposition was to SET ASIDE the order of the Tribunal dismissing the application under Section 18 of Act 70 and to accept the appellant's memorandum of appeal as sufficiently stamped. The court ordered the matter remitted to the Tribunal for further proceedings on the merits and directed the parties to appear before the Tribunal on 13-2-1956. The court awarded costs to the appellant, including a counsel's fee of Rs. 50.
Implications:
- Direct effect: The Tribunal's dismissal was set aside; the claim under Section 18 is to be investigated on the merits by the Tribunal on the appointed date, and the appellant recovers costs and a counsel fee as ordered.
- On the statutory interpretation issue, the court held (for the purposes of deciding cognizability under Section 18(1)) that a renewal which had been effected in the circumstances of this case should not be treated as a technical bar to a displaced person's entitlement under Section 18(1). The court declined to apply precedents dealing with different factual and legal contexts so as to deny Section 18 benefits in this case.
- Court-fee consequence: The court held that the memorandum of appeal was sufficiently stamped with the ordinary fee of Rs. 4/- and that the Tribunal's order dismissing the application on a preliminary point did not require payment of an ad valorem fee.
- No broader binding pronouncement beyond the decision's reasoning on these specific issues is stated in the opinion; the direct legal effects are confined to the relief granted in this appeal (set-aside, costs, and remittal to the Tribunal).
Order accordingly.
1. This is an appeal filed by Sohan Singh, the proprietor of a firm formerly of Rawalpindi, against the order of the Tribunal set up under Act 70 of 1951 dismissing the petitioner-appellant's claim filed under Section 18 of the Act against the Liverpool and London and Globe Insurance Company Limited of Calcutta, for recovery of Rs. 50,716-3-3. The facts of the case are that the petitioner-appellant had insured his goods with the respondent Company for Rs. 60,000/- against loss or damage including loss or damage due to not or civil commotion by a policy which came into force on 17-8-1946 and was renewed for a further period of one year on 17-8-1947, the alleged damage, amounting to the sum claimed, being alleged to have occurred in October 1947.
2. The preliminary objection raised by the Company was that the petitioner could not enforce his claim under Section 18 of Act 70 because the policy was not one which was entered into before and was in force on 15-8-1947. This contention was upheld by the Tribunal which dismissed the application.
3. In order to understand the nature of the point involved it is necessary to set out relevant portion of Section 18(1) which reads:
“Where any property in West Pakistan belonging to a displaced person was insured with any insurance company before the 15th day of August, 1947, against any risk arising out of fire or theft or not and civil commotion and there has been a loss in respect of such property arising out of any such risk at a time when the contract of insurance was in force, such company shall not be entitled to refuse payment of the sum due under any claim in relation thereto on the ground that ………………”
4. Sub-section (2) provides how claims covered by sub-section (1) are to be dealt with by the Tribunal.
5. The highly technical point was raised on behalf of the Company that although the property in respect of which compensation for loss and damage is being, claimed was insured before 15-8-1947 the contract expired on the 17th August and the renewal which took place for a further period of one year from that date was a fresh contract and not a continuation of the original contract.
6. In upholding the Company's objection on this point the Lower Court followed a passage on page 354 of the Law of Insurance by Preston and Colinvaux, the English case — ‘Stockell v. Heywood’, (1897) 1 Ch. 459 (A) and the decision in — ‘Ram Singh v. Century Insurance Co. Ltd.’, 1933 Cal 170 (AIR V 20) (B).
7. Actually the passage from Preston's is simply taken from the case — ‘Stockell v. Heywood (A)’, which relates to personal accident insurance. The question for consideration in that case was whether a sum of £ 500/- payable on an accident insurance policy should be paid to the executors of the will of the deceased who died an accidental death, or to certain trustees to whom he had assigned his assets for the benefit of his creditors about two years before he met his death.
8. It was held by Kekewich, J. that an accident policy of this kind is different from a life insurance policy and that each annual renewal amounts to a fresh contract. In these circumstances the amount was not payable to the trustees as the policy had been renewed since the assignment was made.
9. The facts in the Calcutta case are that a term in a fire insurance policy read:
“The Company hereby agree with the insured that if, after payment of the premium, the property above described shall be destroyed or damaged by fire, or lightning at any time between 3-11-1927 and 4 O'clock in the afternoon of 3-11-1928, or during any subsequent period for which the insured shall pay to the company and the company shall accept the sum required for the renewal of the policy, the company will pay or make good all such loss or damage”.
10. The policy was not renewed on the date of its expiry, but the premium for its renewal was sent by the insured from Abbotabad, where the property was situated, to the company at Calcutta on the 18th November and was received and accepted on the 26th November. The property was destroyed by fire on the 20th November and the claim was sent on the 22nd November and received on the 28th November, when the company intimated that it cancelled the renewal.
11. In a suit by the insured it was held by Rankin C.J and C.C Ghose J. that the renewal of a policy is a fresh contract dating back to the date of the expiry of the original contract and the acceptance of the premium on the 26th being under a mistake, as the property was non-existent on that date, the transaction of renewal was void and the company was not liable.
12. The present policy contains rather a similar clause to that set out above, but the other somewhat sinister facts do not exist in the present case, in which it appears that the policy was renewed with the Rawalpindi representative of the Company on the due date and a receipt was issued from Calcutta on 4-9-1947, the same being described as received “for the continuance of the policy” from 17-8-1947 to 17-8-1948.
13. It will be seen that neither in the English case nor in the Calcutta case was the Court considering a statutory provision like Section 18(1) of Act 70. In one case the Court was deciding who should receive the amount admittedly payable and actually paid into Court by the company, and in the other case the company was seeking to evade liability on the ground that when the policy was renewed the property had already been destroyed.
14. No question similar to that decided in either of these cases arises in the present proceedings, in which the Company is not at this stage seeking to evade liability under the policy but merely seeking to deny the claimant the benefits of the provisions of Section 18 of the Act.
15. Having regard to the general purpose of the Act, which is almost entirely intended to benefit displaced persons and relieve them from the hardships consequent on their displacement, I do not think there can be any doubt that the Act was intended to benefit all displaced persons who had property in West Pakistan which suffered loss or damage and which was covered by an insurance policy entered into before 15-8-1947 and in force at the time when the loss or damage was sustained, whether this occurred before or after the 15th of August.
16. It seems to me to be inequitous that a particular person should be deprived of the benefits of Section 18 simply because his insurance policy fell due for renewal a day or two after the 15th August and was renewed before the loss or damage occurred. Thus although technically the renewal of a policy of this kind may constitute a fresh contract for certain purposes, I am not prepared to hold that this is so for the purpose of deciding whether a case is cognizable by a Tribunal and whether a displaced person is entitled to the benefits contained in S. 18(1) of this Act.
17. I must add that I am somewhat surprised that any insurance company should have sought to raise a technical plea of this kind rather than submit to the investigation of the claim of the insured on its merits.
18. Another technical plea has also been raised on behalf of the Company regarding the appeal on which the usual court-fee of Rs. 4/- has been paid. It is contended that the order of the Tribunal dismissing the application amounts to a decree and that an ‘ad valorem’ court-fee was therefore payable in the appeal on the amount in dispute, which exceeds Rs. 50,000/-. It is contended that the memorandum of appeal falls within the scope of Article 1 of Sch. I to the Court-fees Act which fixes the scale of court-fees payable on the following:
“Plaint, written statement, pleading, a set off or counter-claim or memorandum of appeal (not otherwise provided for in this Act) or of cross-objection presented to any Civil or Revenue Court except those mentioned in S. 3”.
19. It is conceded that no specific provision has yet been made in the Schedule to the Court-fees Act for appeals against the orders of Tribunals set up under Act 70.
20. This view certainly derives some support from the decision of Harish Chandra J. in — ‘Sita Ram v. Mool Chand’, 1954 All 672 (AIR V 41) (O), and the decision of Wanchoo C.J and Modi J. in — ‘Kishandas v. Parasram’, 1955 Raj 81 (AIR V 42) (D).
21. In the latter case an appeal had been filed by a displaced person against the dismissal by the Tribunal of his application under S. 5 of the Act for the adjustment of his debts, and he had paid court-fee in accordance with Article 11 of Sch. 11 to the Court-fees Act, which deals with appeals when the appeal is not from a decree or an order having the force of a decree. It was held that since S. 9 of the Act contemplates the passing of a decree, the appeal was an appeal against a decree and as such covered by Article 1 of Sch. I.
22. In the Allahabad case the appeal was against the dismissal of a displaced creditor's application under S. 13 of the Act. The application had been dismissed because three out of the four respondents who had not appeared and against whom proceedings were being taken ‘ex parte’ were held by the Tribunal to be residing in a place to which the Act did not apply. The order was held to amount to a decree and therefore court-fee was held to be payable on the memorandum of appeal in accordance with Article 1, Sch. I. It was pointed out that the word “decree” is mentioned in sub-ss. (2) and (3) of S. 14 which deal with the procedure in a petition under S. 13.
23. On the other hand in — ‘Krishan Gopal v. Sant Ram’, 56 Pun LR (SN) 9 (E) Khosla J. held that an order dismissing a displaced creditor's application under S. 10 of the Act, which deals with claims by displaced creditors against displaced debtors, is merely a final order with respect to which no decree-sheet needs to be drawn up. He held that the question of drawing up a decree-sheet only arises where a debt is found to be due and a decree for its recovery is passed.
24. Admittedly the point did not arise before him in connection with court-fee payable on the appeal, as the objection taken was that in the case of a dismissed application a copy of the decree-sheet of the Tribunal had also to be filed with the appeal along with a copy of the order.
25. My own view is that it was certainly never anybody's intention that displaced persons, whether debtors or creditors should have to pay ‘ad valorem’ court-fees on appeals against orders dismissing their applications, & I am inclined to share the view of Khosla J. that an order dismissing an application, whether under S. 5 or S. 10 or 13, is merely a final order which does not necessitate the drawing up of any decree-sheet or amount to a decree and more particularly so in the case where an application has been dismissed, as in the present case, on a preliminary point without going into the merits at all. I am therefore of the opinion that the present memorandum of appeal is sufficiently stamped and in view of my finding on the main question in the appeal I accept it and set aside the order of the Tribunal dismissing the application under S. 18 with costs. Counsel's fee Rs. 50. The parties have been directed to appear before the Tribunal on 13-2-1956.
S.L.L
26. Order accordingly.
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