Tarkeshwar Nath, J.:— This letters patent appeal by the defendant is directed against the judgment in Second Appeal No. 886 of 1956 decreeing the suit of the plaintiff as was done by the trial Court and reversing the judgment and decree of the lower appellate court.
2. The facts giving rise to this appeal are shortly these. The plaintiff (Bihar State Co-operative Bank Ltd.) instituted the suit giving rise to this appeal for recovery of Rs. 1398-14-9 as the price of a bale of cotton and Rs. 32 for the expenses incurred in serving a notice. The plaintiff was a registered society having its registered office at Patna. The defendant (The New Asiatic Insurance Co. Ltd.) also was a registered company having its registered office at New Delhi. The plaintiff used to make purchases of cloths at Bombay and distribute them through its local agents to different societies in the State of Bihar. According to the directions of the plaintiff, its commission agent Messrs Ganesh Narain Mahadeo Lal of Bombay despatched one bale of cotton bearing No. 869 of ‘Hirjee Mill’ to Messrs Nasriganj Co-operative Development and Cane Marketing Union Ltd., Bikramganj, under railway receipt No. 4040/45 dated 1-5-1951 ex Wadi Bunder to Bikramganj. These goods were insured with the defendant under policy No. P/50/4/IT dated 2-8-1950 and according to the terms of the said policy, the defendant was liable to reimburse the plaintiff for the loss in case of rail accident, theft, pilferage, including risk of non-delivery of the said bale. This bale was not delivered to the plaintiff's agent at Bikramganj in time and the plaintiff's agent was informed by the stationmaster, Bikramganj, on 9-6-1951 that the said bale was stolen from the railway godown at Bikramganj.
3. On receiving this information, plaintiff lodged a claim with the Railways and sent a copy of it to the defendant. The district Traffic Superintendent, Arrah-Sasaram Light Railway Calcutta, informed plaintiff by his letter dated 22-8-1951 that a gang of armed dacoits entered the Bikramganj station, over-powered me chowkidar on duty, opened the station godown and decamped with the said consignment along with other goods. The stationmaster lodged a first information at the Bikramganj Police Station on 8-6-1951 and a case was instituted under section 457/380 of the Indian Penal Code. The Superintendent of Police, Shahabad, informed the plaintiff by his letter dated 14-3-1952 that four bales of cloth kept in the goods shed were stolen from the godown and the case was investigated but no clue of the stolen articles haying been found, final report was filed in that case. The plaintiff pressed the claim against the Railways, but the District Traffic Superintendent refused to entertain it. The plaintiff served a notice on the defendant about its claim, but the latter gave an evasive reply on 22-9-1952 and subsequently refused to accept the claim in another letter dated 14-12-1952. The said policy covered the risk of theft as well an hence the defendant was liable to pay the price of that bale amounting to Rs. 1398-14-9. The plaintiff claimed Rs. 51 more as being the expenses incurred in serving a notice and accordingly the total claim came to Rs. 1430-14-9. The plaintiff instituted the suit on 29-4-1954.
4. The defendant took several pleas, but for the purposes of this appeal it is necessary to mention only one of the grounds of objection. The defendant asserted that the risk was to last only for three days after the arrival of the train at the destination and notice had to be given to the defendant within 10 days of the expiry of the said risk, but the plaintiff not having given the said notice within the time stipulated it was not entitled to claim any loss.
5. The Munsif decreed the plaintiff's suit holding the defendant was liable for the loss incurred by the plaintiff according to the terms of the policy exhibit 1(a). On appeal by the defendant, the learned Additional Subordinate Judge took the view that the risk in the present case expired on 12-6-1951, but the plaintiff did not serve any notice on the defendant within 10 days of the expiry of the risk and hence the plaintiff was not entitled to a decree. He thus allowed the appeal, set aside the judgment and decree of the Munsif and dismissed the plaintiff's suit. Being aggrieved by the said decree, the plaintiff preferred a second appeal. The learned Judge held that the plaintiff did not give any notice but that was not a valid ground for absolving the defendant from the liability and it was impossible for the plaintiff to comply with the term regarding notice mentioned in the said policy. His Lordship further held that it was for the defendant to show as to when the plaintiff learnt of the arrival of the train at Bikramganj Railway station so that it was possible for the plaintiff to comply with the terms regarding notice. In this view of the matter, the plaintiff succeeded, the suit was decreed with costs throughout and the judgment and decree of the learned Subordinate Judge were set aside. Hence, the defendant has preferred this letters patent appeal.
6. There are certain facts about which there can be no dispute. On 1-5-1951, one bale of cotton was booked at Wadi Bunder by railway receipt No. 4040/45 and it had to be sent to Bikramganj station in the Arrah Sasaram Light Railway. This bale was insured with the defendant on 2-8-1950. On 9-6-1951 the stationmaster of Bikramganj informed the plaintiff that the said bale was stolen from the railway godown at Bikramganj. The plaintiff then lodged a claim with the Railway and that was within six months of the date of the issue of the railway receipt. On 1-9-1951, the plaintiff sent its claim to the defendant (vide the entry in the claim bill book, exhibit 5). The question for consideration is as to whether the defendant is liable in accordance with the terms of the policy, exhibit 1(a) for the loss suffered by the plaintiff. The relevant terms of this policy, exhibit 1(a) are these:
“This insurance commences with the loading of each bale or package into the truck and covers the risk of loss or damage occasioned by fire, collision, breakage of bridges, derailment or accidents of a like nature whilst being conveyed by train. Risk to cease three days after arrival of train at destination or on delivery by railway whichever may first occur. Warranted that no liability shall attach to the company under this policy in respect of goods lost or damaged whilst in custody of the Railway unless a claim provisional or otherwise, has been lodged by the insured against the railway concerned within six months of the date of issue of the railway receipt.
The risk expires 3 days after arrival of train at the destination or on delivery by carriers whichever first occurs. No liability for loss attaches unless notice is given within 10 days of the expiry of the risk to the company.”
7. There is still another term as follows:
“Theft, Pilferage and Non-delivery (insured value) Clause.
(A) It is hereby agreed that this policy covers the risk of theft and/or pilferage irrespective of percentage. No liability for loss to attach hereto unless notice of survey has been given to under-writers' agents within 10 days of the expiry of risk under the Policy.”
8. The copy (Ex. A/2) of the letter dated 22-8-1951 sent by the District Traffic Superintendent of the plaintiff indicates that the consignment in question was looted on 8-6-1951 when a gang of armed dacoits entered Bikramganj Station, overpowered the chowkidar on duty, broke the station godown and decamped with that consignment along with some other goods. The Superintendent of Police, Shahabad sent a letter (Ext. 2) dated 14-3-1952 to the Officer in charge. Bihar State Co-operative Bank Ltd. Patna, that four bales of cloth kept in the goods shed at Bikramganj were stolen by cutting sendh in the godown, but in spite of the investigation there was no clue of the stolen articles. There can thus be no doubt that the bale in question was received at Bikramganj and the goods train carrying that bale reached its destination. Thereafter, the said bale was kept in the goods shed but it was looted on 8-6-1951.
9. Learned counsel for the appellant urged that according to the terms of the policy the risk expired three days after the arrival of the train at the destination and the plaintiff not having given any notice within 10 days of the expiry of the risk the appellant (defendant) was not liable for the loss. It is not necessary to consider the other terms, inasmuch as there was no loss or damage in course of the transit. Learned counsel further pointed out that the plaintiff gave a notice of the claim on 1-9-1951 but that was very much beyond time and as such the defendant was not all liable for the loss sustained by the plaintiff. It was contended before the learned Judge who heard the second appeal that the third clause relating to the giving of the notice was not applicable at all because the said term could not possibly be complied with in view of the fact that the plaintiff got knowledge of the loss of the goods only on 9-6-1951. Learned Judge accepted this contention and held that it was impossible for the insured to comply with this term of the policy. Learned Judge referred to In re an Arbitration between Coleman's Depositories Ltd. and the Life and Health Assurance Association1 and learned counsel for the respondent as well relied upon this case.
10. It appears that on December 28, 1904, the employer signed a proposal form for the insurance and received a covering note to which no conditions were attached. On January, 3, 1905 the insurers sealed, and on January 9, delivered to the employer the policy in question, which expressed that it was to be in force from January 1, 1905, to January 1, in the following year. On January 2, 1905, a workman in the employ of the assured was injured by an accident which was believed to be slight, and of which notice was not given at the time to the insurers. Dangerous symptoms supervened, and the injured, workman died in March 15, notice of the accident was given by the employer to the insurers on March 14, the day before the workman's death. The insurers repudiated all liability under the policy, on the ground (among others) that immediate notice of the accident was not given by the employer in accordance with the condition in the policy, and that the condition was a condition precedent to the right of the employer to recover. A claim for compensation by the widow was properly settled by the employer for a reasonable sum and the claim of the latter against the insurers was referred to an arbitrator under the arbitration clause in the policy.
11. The arbitrator took the view that the condition as to giving immediate notice of injury was a condition precedent, but stated his award in the form of a special case for the opinion of the Court, which reversed the arbitrator's decision. There was an appeal by the insurers. It was held (majority view) that, in the absence of evidence that the employer either knew of or had the opportunity of knowing of, the existence of the condition at the date of the accident the condition was one with which it was impossible to comply; that as regards a risk which resulted in a claim before the insured and knowledge of the condition, the true inference was that the insurers never imposed the condition on the employer, and that the latter was therefore, entitled to recover on the policy. It is important to notice that on December 28, 1904, the employer signed the proposal form in that case but at that time no condition was attached to it. The position thus was that the employer at the time of signing the proposal did not agree to any condition. It further appears that the accident took place on January 2, 1905 but even on that date the employer had no opportunity of knowing the existence of any condition with regard to giving an immediate notice of an injury received by any workman. In these circumstances, it was held that the insurer had never imposed any condition on the employer. This case is thus of no assistance to the plaintiff-respondent.
12. Learned counsel for the respondent urged that the provision in the policies of an insurance company should be construed against the company, that is the insurers and in favour of the insured. In support of it, he referred to Co-operative Assurance Co. Ltd., Lahore v. Sachdev. It was observed in that case by Tekchand, J. that if the terms of a policy were couched in ambiguous language, that interpretation should be favoured which was beneficial to the assured, and the underlying principle was that the terms of the policy being the language of the company must be interpreted against it. In the present case, the terms of the policy are not ambiguous and therefore, the question of the interpretation of the terms against the company (defendant) does not arise. Learned counsel referred to T.G Rajan v. Asiatic Government Security Life Assurance Co. Ltd. . A.I.R 1939 Mad. 159.. A question arose in that case as to how the days of grace for the payment of a premium had to be computed. The quarterly premium due on 3-7-1933 was paid by the assured on 2-8-1933. According to the conditions and terms of the policy, 30 days of grace were allowed for the payment of annsal half yearly and quarterly premiums while only 15 days of grace were allowed in case of monthly premiums. It was held that the premium paid on 2-8-1933 was paid in time and the insurer had no right to forfeit the said policy. The facts of that case are entirely different, but it was observed that the provisions relating to forfeiture should be construed in favour of the assured and against the company.
13. Learned counsel for the appellant referred to South British Fire and Marine Insurance Co. v. Brojo Nath Shaha . I.L.R 36 Cal. 516., and this case has been referred to in the judgment under appeal as well. In that case the suit was instituted by the plaintiff against the defendants to recover a sum under a policy of assurance issued by the latter in favour of the former on a cargo of jute said by the plaintiff to have been shipped at Ghiur on 14-9-1906 but destroyed by fire on the night of 14-10-1906. The policy in question dated 11-10-1906 provided inter alia that in the event of loss the Manjee or Charandar must report to the nearest police station within 24 hours and must state that the cargo was insured. This was the stipulation in Cl. 9(a) of that policy. The defendants took several pleas and they did not admit that a report was made to the nearest station within 24 hours stating that the cargo was insured. The plaintiff's suit was decreed by Chitty, J. and against that decree the defendants appealed.
14. It was urged on behalf of the plaintiff that as there might be no police station within 24 hours distance or the Manjee or Charandar or both of them might be drowned, the condition 9(a) was one which might be impossible of fulfilment and, therefore, it should be neglected. This contention was accepted by Chitty, J. but this view of the learned Judge was not accepted by the Full Bench. Maclean, C.J observed that this condition was one of the essential conditions on the footing of which the defendants contracted with the plaintiff and by inserting it the parties must be taken to have considered it of importance, and it was only on the fulfilment of this and other conditions that the liability of the defendants attached. Another observation was that the fact that the condition might be impossible of fulfilment could not affect this liability, if it were intended to do so qualifying words should have been introduced into the contract. Reliance was placed on the case of Worsley v. Wood . 1796 6 T.R 710.. Harrington J. also observed that the plaintiff was bound to prove a compliance with the warranties on the face of the contract as a condition precedent to his right to recover. The result was that the plaintiff's suit failed, as he did not comply with clause 9(a) and a few other clause of that policy.
15. The question, however, as to what would be the consequences, if one of the conditions in a policy is impossible of fulfilment does not arise in the present case. The position in the present case was that after the booking of the consignment the railway receipt was sent to the consignee and the consignee had to make enquiries about the arrival of the train carrying that consignment. The stationmaster at Bikramganj was under no obligation to inform the plaintiff about the arrival of the train. The plaintiff could very well depute one of its agents or an employee to find out from the stationmaster, Bikramganj about the arrival of the train and the receipt of the consignment in question, in order to take delivery of the said consignment as soon as possible and to avoid the payment of any demurrage, but the plaintiff has not shown that proper steps were taken in this direction. The plaintiff knowingly agreed to a condition that risk would last for three days only after the arrival of the train at the destination and that no liability for loss would attach unless notice was given within 10 days of the expiry of the risk to the company. Having agreed to a term like this the plaintiff ought to have been diligent and found out for itself as to when the train arrived at Bikramganj. In fact a demand for the delivery of the consignment could have been made on the day of the arrival of the train itself if the plaintiff would have been vigilant, but the position is different and the plaintiff has not been able to state in the present suit as to when the train arrived at Bikramganj.
16. It is important to keep in view that even if there was a loss or damage on account of fire, collision, derailment, or accident of a like nature, risk was to last for three days only after the arrival of the train at destination, or on delivery by railway, whichever might occur first. There was thus a clear stipulation that the defendant company took the risk upto the third day only after the arrival of the train at Bikramganj. The Railway has not been made a party to this suit, but the plaintiff could easily find out from the stationmaster Bikramganj as to when the train in question had arrived. The stationmaster would have been able to furnish that information after examining his registers but the plaintiff does not seem to have made any effort for finding out the date of the arrival of the train. The subsequent term with regard to giving a notice within 10 days of the expiry of the risk is equally important and this condition has to be fulfilled before saddling the defendant with any liability for the loss. I am, therefore, of the view that it was incumbent on the plaintiff to give notice to the defendant within 10 days of the expiry of the risk and it was not impossible for the plaintiff to comply with this term of the policy.
17. Learned counsel for the respondent referred to section 28 of the Indian Contract Act, which provides that “every agreement, by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary Tribunals, or which limits the time within which he may thus enforce his rights is void to that extent.” It is not necessary to quote the exceptions to that section. This section prohibits agreements which restrain a person from enforcing his right in a court of law. Contracts which curtail a period of limitation are specially prohibited by this section. Section 28 makes void only those agreements which absolutely restrict a party to a contract from enforcing the rights under that contract in ordinary Tribunals. The terms of this Policy, exhibit 1(a) do not envisage deprivation of the usual remedies in a court of law to the enforcement of legal rights. In Girdharilal Hanumanbux v. Eagle Star & British Dominion Insurance Co. Ltd., it was held that section 28 of the Contract Act aimed only at covenants not to sue at any time, or for a limited time, and was not aimed at a provision extinguishing the right to sue in certain events.
18. Learned counsel for the respondent referred to Governor General in Council v. Firm, adri Das Gauri Dutt. It appears that two suits were instituted for recovery of the loss suffered by the plaintiff-respondent firm. Various pleas were taken in defence. The trial Court held that since the plaintiff had not given notice under section 77, Railways Act, within the period of six months plaintiff could not recover any damages for the loss due to short delivery and on account of rain, and the claim on these counts was dismissed. But the claim with regard to loss on account of delay in making the delivery was decreed. It was held that the market rate had gone down and the plaintiff had suffered a loss on that score. The lower appellate court confirmed the decree of the trial Court. A question arose in the second appeals as to whether the plaintiff was entitled to recover damages on account of delay in making open delivery.
19. Clause (4) of the rules printed at the back of the railway receipt under which the consignments were booked provided that all claims against the railway for loss or damages to goods must be made to the clerk in charge of the station to which they had been booked before delivery was taken and a written statement of the description and contents of the Articles missing or of the damages received, must be sent forthwith to the Chief Traffic Manager, Bombay or to the District Traffic Superintendent of the District in which the forwarding or receiving station was situated; otherwise the railway would be freed from responsibility. It was held that this rule was a rule of guidance and not of law and it was not open to the railway to repudiate its liability if the claim was not made immediately to the clerk incharge and was not forwarded to the Traffic Manager forthwith, inasmuch as the observation of that rule would be contrary to the provisions of section 28 of the Contract Act. These observations were made while considering the claim against the Railway in that case. In the present case there is a definite contract of insurance between the plaintiff and the defendant and the parties have to abide by the terms thereof. It cannot be said that the stipulation of giving notice was only a rule of guidance. Learned counsel referred to Dominion of India v. Rupchand Heerachand. But in that case as well a question arose about the general liability of the Railway and reliance was placed on the decision in Governor General in Council's case referred to above. In the present suit the plaintiff is not enforcing its claim against the Railway and the liability of the defendant company alone is to be considered.
20. Learned counsel for the respondent submitted that although the parties had stipulated for giving a notice within 10 days, of the expiry of the risk yet it was not a condition precedent to the enforcement of the plaintiff's right on the basis of the policy Ext. 1(a). He urged that the plaintiff's right to institute this suit was not in any way curtailed by the said term of the policy. In support of it he relied on Stoneham v. Ocean, Rly. and General Accident Insurance Co.. In that case a policy of insurance covered death caused by accident happening in the United Kingdom. One of the conditions was that in the event of non-fatal injury by an accident occurring to the assured notice thereof in writing shall be given to the company within seven days of the occurrence thereof. Another condition was that in case of fatal accident, notice thereof must be given to the company at the head office in London within the like time of 7 days. The assured was accidentally drowned in Jersey, and notice was not, and under the circumstance of the case could not have been given to the company in accordance with the last mentioned condition. The first point arose as to whether Jersey was a part of the United Kingdom. It was held that Jersey was a part of the United Kingdom. The other point was as to whether giving a notice of the fatal accident within 7 days was a condition of liability. It was held that this clause about notice was probably inserted in order to save the company from the extra expense which they would incur if they had to investigate the circumstances of the accident at long intervals after their occurrence and the giving of notice of the accident within 7 days was not a condition precedent to the enforcement of the policy. In other words, the notice was not stated to be a condition of liability nor was there any stipulation that if no notice was given the policy shall be deemed to be void. The condition in the case cited was as follows:
“In case of fatal accident notice thereof must be given to the company at the head office in London within the like time of 7 days.”
21. This condition did not provide that if notice was not given the company would not be liable. The condition in the policy, exhibit 1(a), which is the subject matter of consideration, is worded differently and it clearly provides that no liability for loss would attach unless notice was given within 10 days of the expiry of the risk to the company. Accordingly, this decision cannot be of any avail to the plaintiff.
22. Learned counsel for the respondent further urged that the onus in the present case lay on the defendant-appellant to prove as to when the train which carried this consignment arrived and when did the risk expire. This contention was accepted by the learned Judge in the second appeal and reference was made to Samuel L. Levy v. Assicurazioni General. In that case, there was a contract of insurance against the loss or damage by fire. It was observed that as a matter of agreement between the parties the onus of proof of any particular fact or of its non-existence could be placed on either party in accordance with the agreement made between them. One of the terms of the said contract was as follows:
“In any action, suit or other proceeding where the company alleges that by reason of the provisions of this condition any loss or damage is not covered by this insurance the burden of proving that such loss or damage is covered shall be upon the insured.”
23. In view of this condition, it was held that the onus lay on the plaintiff to prove the facts in support of the claim made in the suit. The question of onus, however, has to be decided on the facts and circumstances of each case and the terms of contract, if there be any, between the parties. In the present case, the plaintiff was not able to get delivery of the consignment as it was stolen from the godown of the railway, but the facts entitling the plaintiff to a relief were within the plaintiff's knowledge and the burden lay on the plaintiff to disclose them and prove them to the satisfaction of the court. The railway receipt was with the plaintiff and it had to be presented by the plaintiff or any of its agents for taking delivery of the consignment at the Bikramganj railway station. The plaintiff was in a position to adduce evidence as to when the said railway receipt was presented for taking delivery of the goods. Plaintiff could as well find out as to when the train carrying that consignment had arrived so that the period of three days could be calculated after the day of arrival. Similarly, the plaintiff alone was competent to adduce evidence with regard to the giving of the notice and to prove that the said notice was given within 10 days of the expiry of the risk. These facts had to be proved by the plaintiff before making the defendant liable in respect of this claim. These facts being specially within the knowledge of the plaintiff the burden of proving them was upon the plaintiff (vide section 106 of the Evidence Act). The test for ascertaining on whom the burden of proof lies is to consider first which party would succeed if no evidence was given on either side.
24. In the present case, if there would have been no evidence on either side, the plaintiff could not succeed merely on the allegations made in the plaint. I am, therefore, of the view that the onus of proof lay on the plaintiff, but that onus has not been discharged. The position thus is that the plaintiff not having given the notice within 10 days of the expiry of the risk there was no liability on the defendant for the loss sustained by the plaintiff and the plaintiff is not entitled to a decree.
25. In the result, the appeal is allowed, the judgment and decree of the second appeal are set side and the plaintiff's suit is dismissed; but, in the circumstances of the present case, parties will bear their own costs throughout.
Misra, J.— I agree that this appeal should be allowed. I may add, however, that the condition in the insurance policy exhibit 1(a) with regard to the risk to the goods insured lasting only for a period of three days after the arrival of the consignment at the railway station of destination was an essential condition. The insurer undertook the liability, obviously, to last only for a period of three days because the object of the insurance of the present kind is to cover the risk in transit of goods. Once the goods are delivered at the station of destination, beyond a reasonable period (that being three days from the date of receipt of the goods in this case) as stipulated, the insurer cannot make himself liable for the loss of goods. If, for instance, in the present case evidence were on record to establish as to when the goods arrived at Bikramganj railway station, and if that period would be beyond three days from the date when the goods were removed by the dacoits, obviously, the defendant-appellant would not be liable for it in terms of the insurance policy. The plaintiff having failed to bring on record evidence to that effect as has been observed by my learned brother, the plaintiff would not be entitled to a decree.
26. As for the other condition, however, in the insurance policy that information of loss of the insured goods must be conveyed to the insurance company within a period of ten days from the date of loss whether it is an essential condition or not, appears to me to be not free from difficulty. It may well be urged that this too is an essential condition, because the object of this condition was to enable the insurer to institute an enquiry as to the circumstances of the loss and the date of loss; and in that view the condition would be essential. There is, however, the other point of view that once loss has occurred the insurance liability has accrued and any condition as to the period within which information of the loss should be given to the insurer may not be regarded as an essential condition non-fulfilment of which would entail the forfeiture of the right of the plaintiff to claim compensation under the policy of insurance as was held in Stoneham's case. My learned brother has observed that this too is an essential condition like the other one with regard to the period during which liability of the insurer would continue which in this case was the course of transit and three days thereafter when the goods would be received at the station of destination. I would, however, reserve my opinion on this matter. With this observation, I agree that the appeal should be allowed and the plaintiff's suit dismissed as I have already stated.
27. Appeal allowed.