Union of India vs Jawahar Lal Koul

Tejinder Singh Doabia, J.—The Union of India has been called upon to pay a sum of Rs. 1.50 lacs to the complainant with interest at the

rate of 18 percent. The circumstances under which this liability came to be fastened on the Union of India be noticed : The complainant Jawahar

Lal Koul was carrying on business in Shop No. 35, located in Government Central Market, Srinagar. He was engaged in the business of sale of

shawls and silk goods. The complainant had obtained an insurance cover in the sum of Rs. 1.50 lacs. This was valid upto 20th August, 1990. The

complainant had migrated to Jammu. However, he wanted to renew the insurance policy. He got a bank draft for a sum of Rs. 352/-. This was

obtained from the Jammu and Kashmir Bank Ltd., Chand Nagar, Jammu, payable to the Insurance Company. According to the complainant, this

was sent by a registered post on 20th August, 1990. Then complainant learnt that his shop was destroyed in a fire related incident on 21st January,

1990. He lodged a claim with the Insurance Company. This was not honoured as the Insurance Company informed the complainant that the

premium in question was not received. Accordingly, a complaint was filed. In this, the Divisional Manager, United India Insurance Company,

Srinagar and also the Union of India through Ministry of Postal Services was arrayed as respondent

The Postal Department took shelter behind Section 6 of the Indian Post Office Act and claimed immunity from the liability. As the Union of

India had not taken any stand vis-a-vis receipt of a letter for onward transmission at Post Office, Branch Subash Nagar, Jammu, it was presumed

that the draft in question was prepared by the complainant but on account of I negligence of Union of India and its employees, the same could not

be delivered to the Insurance Company. A finding stands recorded that the complainant had done what he was supposed to do. For the negligence

of the Postal Department, the Union of India has been called upon to meet the loss said to have been caused to the complainant. The findings

which have been recorded are as under:

(i) That the complainant had got prepared a draft on 20th August, 1990. This was for a sum of Rs. 352/-and this was sent by registered post on

the same day.

(ii) That the draft in question was not delivered to the Insurance Company, (iii) That protection of Section 6 of the Indian Post Office Act is not

available.

Taking note of the above factors, the Postal Department through Union of India, as indicated above, has been called upon to meet the liability. The

Union of India has come in appeal.

After having heard learned Counsels for the parties, we are of the opinion that the issue in question required a serious and deeper consideration.

Before fastening the liability on the Union of India, it should have been ascertained :

(i) as to what was the value of goods which are said to have been damaged and as to whether these were lying inside the shop in question;

(ii) as to what was the subject-matter of insurance when the insurance cover was provided at the first instance;

(iii) whether the draft in question was misplaced in the office of Insurance Company or it was lost in transit.

Another question which was required to be gone into was as to what is the effect of the draft having been got prepared and the same having

been dispatched and whether the amount had become available to the Insurance Company and whether the Insurance Company could be made

liable on the analogy that when it receives a cheque, which is ultimately not encashed, it is still liable.

In the complaint, the claim was made for Ruffel shawls, silk sarees and embroidery and also for other goods. The claim for these items was to

the extent of Rs. 1.25 lacs. A sum of Rs. 25,000/- was also claimed for furniture and electric decoration. As indicated above, whether these items

were in fact insured when the original insurance cover was obtained, was required to be gone into. The State Commission should have called upon

the complainant to place on record the original policy so that it could ascertain as to what was actually insured. It was only in that eventuality, the

claim could be settled by the State Commission. We are of the opinion that the State Commission has not recorded any finding as to what was the

exact loss and whether it was covered by the original policy which was said to have been renewed. The State Commission has also not gone into

the question as to whether sending of the draft which is not received by the Insurance Company should be treated on the same footing as is the

case when a cheque is sent to the Insurance Company and it is ultimately not honoured. As findings have been recorded by the Commission which

are not based on facts, we remit the case to the State Commission with a request to examine the original policy so that it may be ascertained as to

what was originally covered by the insurance policy. The further question which would be required to be gone into would be as to what was the

nature of insurance cover which was provided and whether the loss in question was covered by the policy or not. In para 10 of the complaint, it

has been stated that area where the shop was located was engulfed in a fire. Again, there is absolutely no evidence and proof of the fact that the

policy which was obtained and qua which renewal was sought by sending a bank draft covered fire risk also. This was required to be established

as a fact. This has not happened in this case. It be seen that the loss which is said to have been caused by fire was caused when there was a fire in

the market and as to whether this risk was also covered by the policy was also required to be gone into. This could be gone into only if the terms

of the original policy were available. This is missing in the present case. As indicated above, this aspect of the matter has not come on the record,

this issue requires to be reconsidered. In case, there was no insurance cover containing a provision qua covering the risk arising out of a fire, then

the question of burdening the Union of India or for that matter, the Insurance Company would not arise. Again, the interest which has been allowed

at the rate of 18 percent is on the higher side and it could not be more than 12 percent. As on all the above issues, no firm finding has been

recorded, therefore, as indicated above, the matter is remitted to the State Commission, who would go into the questions :

(i) As to whether the original policy regarding which renewal was sought' covered a risk falling under fire related incident ?

(ii) What was the nature of goods described in the insurance policy and which are said to have been covered by the policy in question ?

(iii) The liability of Union of India in terms of Section 6 of the Indian Post Office Act would be examined in the light of decision given by this Court

in the case of Distt. Manager, Telecom Vs. M.L. Raina, . The State Commission would also take notice of the view expressed by a Division

Bench of this Court in the case of C.I.M.A. 58/1996, National Insurance Co. v. Ashok Kumar, decided on 2nd May, 2002 in which,

observations have been made that compensation in a fire related incident can be given only if there is a specific cover provided in this regard.

Parties to appear before the State Commission on 15th July, 2002. The amount which stands disbursed to the complainant shall remain with him

and the surety bond given before the Registrar (Judicial) of this Court shall continue to operate till a decision is given and also for a period of six

months thereafter.

Disposed of accordingly. C.I.M.A. disposed of.