UNION OF INDIA NEW DELHI Vs. THAMMANA SITARAMANJANEYULU

JUDGEMENT

(1.) The two writ appeals and the writ petitions question the validity of the notices issued by the 2nd respondent under the Emergency Risks (Good) Insurance Act (LXII of 1962) and the Emergency Risks (Factories) Insurance Act (LXIII of 1962). hereinafter called the Goods Act". and "the Factories Act." The impugned notice charge the petitioners of having evaded premia in respect of goods and/or factories The allegation was that the petitioners contravened the provisions of the Acts inasmuch as they under ablated the goods or factories for the purpose of insuring them under the a Acts.

(2.) During the Second World War, War Risks Insurance Acts in force in the United Kingdom then were also n extended to India. The Emergency Risks (Goods and Factories) Insurance Acts. 1962 in substance are similar to the War Risks Insurance Acts. The object of the Acts is to ensure smooth flow of the commercial and industrial activity during the emergency proclaimed by the President after the Chiness aggression, by providing indemnity against damage or loss of goods or factories by enemy action. Immediately after the Chinese aggression in October, 1962, it was realised that it is necessary not only to continue the production of various goods, if possible, on war footing but also to make provisions for replenishing the damaged or ruined factories by enemy action and also by reimbursing the loss or damage of goods continue the commercial and economic activities with a view to successfully meet the sudden act of perfidy on the part of Chinees. The task was large and no private enterprise in the insurance filed could have undertaken insurance of losses or damages sustain by the insured properties due to enemy action. No one can deny that these Acts instilled confidence in the public mind in regard to the economic security. Apart from the other relief that the victims of any enemy action may get from the Government , they are under the insurance schemes put on their feet again by paying them admissible compensation under the Emergency Risks Insurances Scheme. BY creating an insurance fund, the Acts ensure the speedy payment of the insurance compensation.

(3.) The President of India after the Chinese aggression in October, 1962 proclaimed emergency under Art. 352 of the Constitution. The emergency began on 26-10-1962. The proclamation was revoked by the president on 10-1-1963. The Emergency Risks Insurance Acts came into force with effect from 1-1-1963. The Acts provide for compulsory insurance against emergency risks of every person carrying on business in India as a seller or supplier of goods in respect of the insurable goods, which are from time to time owned or deemed to be owned by him in the course of such business if the insurable value of such goods lying in one and the same city or district exceeds Rs. 30,000 (sic) all factories falling within the purview of the Factories Act. 1948 and other plants and machinery etc. The schemes framed under the two respective Acts were also published and came into force simultaneously with the Acts. These schemes set out in detail procedural matters relating to the mode of the valuation of the insurable goods and assets, payment of premium, receipt of applications for the issue of policies, the terms and condition attaching to such policies and other connected matters such as settlement of the claims etc.