UNION OF INDIA Vs. SOHANLAL SAMPATLAL

JUDGEMENT

(1.) This is an appeal by special leave from a judgment of the Bombay High Court made in exercise of its revisional jurisdiction.

(2.) On June 15, 1955 the respondent firm purchased gold coins for an aggregate price of Rs. 2465-14-0 as commission agents for transmission and delivery to their constituents at Bikaner. On the following day the parcel containing the gold coins was handed in at Ramwadi Post Office, Bombay for transmission to the addressee. The parcel was insured for Rs. 2500/-. It was lost in the course of transit. The respondents filed a suit for recovery of about Rs. 2475/- as compensation under the insurance effected by the Union of India, the present appellants represented by its postal department. The appellant denied its liability for the claim on the ground that under section 6 of the Indian Post Office Act. 1898, hereinafter called the "Act", read with Rule 81 (g) of the rules framed thereunder, its liability could arise only if the plaintiff had declared the actual value of the contents on the date of the insurance. As a wrong declaration had been made there was no valid and enforceable contract. The case of the plaintiffs, evidence, however, was that in addition to the price paid for the gold coins a sum of Rupees 9-1-6 had been spent as postal charges and the cost of insurance, packing, commission and brokerage. Profit was added to this at 1% and the total value came to Rs. 2499-11-6 and it was for that reason that the parcel was got insured for Rs. 2500/-. A learned single judge of the Small Causes dismissed the suit. The matter was taken before the Full Court of Small Causes by the respondent firm While conceding that the difference in the actual value and the value declared was small the Full Court held that the rules had not been complied with properly and upheld the dismissal of the suit. After examining all the relevant provisions of the Act and the rules the High Court was of the view that it was for the insurer to prove that it had been discharged from the liability because of fraud, misrepresentation, mistake or incorrect statements made by the insured and the burden had to be strictly discharged by the insurer. As it had not been proved by the Union of India that the value declared by the plaintiffs on June 16, 1955 was not the actual market value of the gold delivered by the plaintiffs for transmission by means of a postal parcel the plaintiffs were entitled to a decree for Rs. 2474-15-6 with interest at 6% per annum from the date of the suit.

(3.) Section 6 of the Act provides that the Government shall not incur any liability by reason of the loss, misdelivery etc. of any article in the course of transmission by post except in so far as such liability may in express terms be undertaken by the Government. Section 30 provides for insurance of postal articles. Section 33 is in the following terms :