THE GENERAL ASSURANCE SOCIETY LTD Vs. MOHD. SALIM

JUDGEMENT

(1.) This is a defendants appeal arising out of a suit filed by the plaintiff respondent against the defendant appellant (Suit No. 10 of 1951) in the Court of the Civil Judge, Moradabad for recovery of Rs.20,900.00 on a policy of fire insurance on general merchandise goods belonging to the plaintiff.

(2.) The case of the plaintiff, according to the plaint allegations, was that the plaintiff had been carrying on business of general merchandise on a large scale for a long time and had acquired good reputation as a first class local stockist covering every variety of goods and commodities to meet the requirements of the public. The plaintiff was in occupation of a rented shop in Bazarganj, Moradabad. This shop contained the plaintiffs stocks of general merchandise insured or held by him on trust or commission. The plaintiff wanted to get the building of the shop which contained his stocks insured against loss or damage by fire or lightning. An agent of the General Assurance Society (hereinafter called the society), which did fire insurance business approached the plaintiff and requested him to enter into a contract with the society. On 3/9/1949 the plaintiff made a proposal to the society and gave full information on the prescribed proposal form. The society accepted the plaintiffs proposal and issued a policy No. 27108 to the plaintiff on 22/10/1949. All the terms of the contract between the parties were embodied in the policy. The plaintiff paid the annual premium of Rs.188.0011 to the society. This premium included a risk of loss or damage to the property insured directly caused by persons taking part in riots or civil commotion and a reference to the annexed printed "Riot and Civil Commotions clause B " was specifically made in the policy. The policy was to be effective from 6/10/1949 to 6/10/1950 both days inclusive. It was agreed between the parties that if the plaintiffs goods or any part thereof shall be destroyed or damaged by fire during the stipulated period, the society will make good all that loss or damage and would pay the amount of Rs.20,000.00 to the plaintiff. The entire stock in trade and goods with the plaintiff were worth more than Rs.70.000 but in order to pay a lesser premium the plaintiff obtained insurance only for Rs.20,000..00 The plaintiff paid huge amounts as sales tax in the year 1948-49 and income-tax on the income assessed in the year 1948-49 which showed the flourishing condition of the plaintiffs business. It is stated in paragraph 9 of the plaint that on 5/3/1950 at about 8-30 p.m. when curfew order was in force in Moradabad, on account of communal riots and disturbances, some miscreants put the plaintiffs shop to fire and the entire stock of merchandise with all the furniture in the shop were burnt and reduced to ashes on account of which the plaintiff suffered irreparable loss. The plaintiff lodged a report at police station Kotwali, Moradabad. The fire continued to burn for a few days as it was not possible to extinguish it earlier. The plaintiff informed the society about the fire promptly after the accident and later on filed a regular claim. The plaintiffs claim was enquired into by the society through its surveyors for a long time but the society avoided to reply to the claim or come to a decision on the pretext that it had not received a report about the fire from the Superintendent of Police Moradabad. The plaintiff went on pressing the defendant for a final decision of the claim preferred by him and ultimately the defendant, on a very flimsy excuse, repudiated its liability under the policy and rejected the plaintiffs claim. The plaintiff contended that it was wrong to suggest that the fire originated in a double-storeyed building adjoining the insured shop on the back. side. According to the plaintiff there was no door in the shop communicating with any double-storeyed building and there was no mis-description or omission on his part as regards the extent or construction of the shop. The plaintiff further contended that the defendant, without any justification, pleaded breach of clause No. 1 of the conditions contained in the policy. Clause No. 1 of the conditions of the policy was fully complied with by the plaintiff in the proposal form which was issued to him by the society and which was verified and approved by the societys agent and inspector. Later on, the society tried to shift its case by alleging that the plaintiff insured his stocks in a portion of the shop and the policy did not cover general merchandise goods in the entire shop. According to the plaintiff this contention was not correct in view of the detailed entries of the proposal and its acceptance by the society. The society did not pay Rs.20,000.00 to the plaintiff which was payable under the terms and conditions of the policy issued by the societys branch at Lalbagh Road, Lucknow on 22/10/1949. The plaintiff demanded the payment from the society by a notice dtd. 4/11/1950 but the defendant did not pay any amount to him. The plaintiff had, therefore, to file the suit claiming; Rs.20,900.00 together with interest by way of damages at 6 per cent per annum on the sum insured. The interest worked out to Rs.900.00. According to the plaintiff the cause of action arose on 5/3/1950 when the actual damage and loss to the goods by fire took place and subsequently on 4/11/1950 when the society rejected the plaintiffs claim and sent an intimation to that effect to hint at Moradabad.

(3.) In defence the society admitted that the plaintiff carried on business of general merchandise at Moradabad and that he occupied a shop on rent in Bazarganj. It also admitted that the plaintiff made a proposal for insurance against loss or damage by fire or lightning to the building mentioned by him in his proposal and that the proposal was accepted by the "society at Lucknow and a policy No. 27108 was issued to him by the society. It also-admitted that the annual premium was Rs.188.0011-0- and that the period of insurance was from 6/10/1949 to 6/10/1950. The terms of the contract, as embodied in the policy, were also accepted. The society also accepted that the insurance was for Rs.20,000.00. The society however, contested the plaintiffs claim and, inter alia, pleaded that the plaintiff had no cause of action against the defendant. The plaintiffs suit was barred under Cl. 18 of the conditions of the policy of insurance. It was incumbent upon the plaintiff to comply with the provisions of that clause and the suit in its present form was not maintainable. It was also pleaded that the proposal for insurance made by the plaintiff was accepted by the society at Lucknow and hence the court of the Civil Judge, Moradabad had no jurisdiction to entertain the suit. In paragraph 4 of the written statement it was stated that the plaintiff carried on business in the shop which consisted of two different adjacent buildings. The front portion abutted on the main Gunj Bazar road and was one storeyed and the back portion of the shop was located on the ground floor of a two storeyed building facing east in a narrow lane. The roof of the rear portion was built partly with mortar and partly with corrugated iron sheets and there was a communicating passage between the two portions which was made by the plaintiff by removing the wall in between. According to the defendant the room adjacent to the front portion of the shop, which alone was insured, was a vegetable ghee shop and to the east was a stationery shop. The plaintiff did not insure the entire building in which his shop was located. In his proposal the plaintiff clearly mentioned the entire stocks as "stock whilst contained in the insured shop forming part of a building situate at Bazar Gunj, Moradabad". The description of the insured building given by the plaintiff was as follows : -