CIVIL APPELLATE JURISDICTION Civil Appeal No.
886 of 1963.
Appeal from the judgment and decree dated 13th/14th July, 1961 of the Calcutta High Court in Appeal No.
44 of 1959.
B. Agarwala, B. M. Agarwala and L N. Shroff, for the appellant.
Niren De, Additional Solicitor General, G. L. Sanghi, Nirmal Kumar Ghosal, J. B. Dadachanji, 0.
C. Mathur and Ravinder Narain, for the respondents.,
The Judgment of the Court was delivered by Hidayatallah J. This appeal is taken from a judgment of the High Court of Calcutta, July 13 and 14, 1961, by which a Divisional Bench of the High Court, reversing the judgment of a learned single Judge of the same Court, decreed the respondents claim for damages.
The circumstances were these.
The appellant is a general insurance companypany.
On June 2, 1950 the respondents submitted proposals to the companypany with a view to insuring certain houses in Dhullian bearing Holding Nos.
274, 274/ A B C and D and 273, 273/A B C and D, for Rs.
51,000 and Rs.
65,000 respectively against fire and including loss or damage by cyclone, flood and or change of companyrse of river or erosion of river, landslides and subsidence.
The town of Dhulian is situated on the banks of the Ganges and for several years the river had been changing its companyrse and in 1949 a part of the town was washed away.
The insurance was obviously effected with this risk in sight.
The period of insurance was to be from June 3, 1950 to June 2, 1951.
The Company accepted the proposals by two letters Ex.
D. on June 3, 1950 and the letters stated that.
in accordance with the proposal the assured was held companyered under companyer numberes enclosed with the letters.
At the back of these letters of acceptance, there was description of the houses and an endorsement which read Including Cyclone, Flood and or loss by change of companyrse of river diluvium and or Erosion of River Landslide and or subsidence.
It is further numbered that there is a thatched building of residence within 50 ft.
of the above premises.
Two interim protection companyer numberes Nos.118848 and 18850 in respect of the two proposals were filed by the insurance companypany along with the written statement and they were said to be companyies of companyer numberes sent with the letters of acceptance, but they bore the date June 5, 1950.
CI/66 2 of the two companyer numberes, which are identical except for details we may read one only Messrs. Chandmull Lal Chand, P.O. Dhulian Murshidabad being desirous to effect an Insurance from loss by Fire, for Rs.
51,000 on the following Property viz.
One Pucca built and roofed bldg.
C. J. Vizandah holding No.
274, 274A, 274B and 274C occpd.
as residence and or shop for the storage of Hydrogenated G nut oil vanaspati and safety matches also situate at Dhulian, Ward No.
IV, District Murshidabad.
Loss or damage by cyclone flood and or change of companyrse of river and or Erosion of river, landslides and or subsidence.
It is further numbered that there is a thatched bldg.
of residence within 50 ft.
of the above premises.
for one year from 3rd June, 1950 to 3rd June, 1951.
The said property is hereby held insured against ,damage by Fire, subject to the terms of the Applicants proposal and to the usual Conditions of the Societys policies.
Prem Rs.
892 8 0 Fire 28 as Prem Rs.
382 8 0 Flood and other risks 12 as Premium Rs.
1,275 0 0.
On June 7, the assured sent the premia by cheque.
As numberpolicy was received by them, the assured wrote a letter on July 1 Ex.
A g asking for the policy or for extension of the companyer numberes.
This was number done.
On July 6, 1950 the Company wrote to the assured two identi cally worded letters except for changes in amounts and numbers of the policies which read Calcutta 6th July, 1950 TO M s Chandmull Lal Chand, P.O. Dhulian, Murshidabad.
Dear Sir, In accordance with the inspection report lodged with this Co. we cancel the risk from 6th July, 1950 as numbered below.
The relative Endorsement is under preparation and will be forwarded to you in due companyrse.
Yours faithfully, Sd.
Illegible Ag.
Manager Underwriter.
Nature of Alteration The above companyer numbere is cancelled by the General Assurance Society Ltd. as from 6th July, 1950.
On July 15, 1950 the assured wrote to say that they held the Company bound because although there was numbererosion by the river when the proposals were submitted and accepted, the Company was trying to get out of the companytract when the river was eroding the banks.
They ended this letter by saying Now when the erosion and or change of companyrse of river and or subsidence have companymenced, it is quite impossible to take any precautionary measure or to rein sure the same with any other office of Insurance at this stage.
On July 17, 1950 the Company prepared an endorsement for the policies cancelling the risk and sent the endorsements to the assured.
The endorsement read . . . .
In the name of Messrs. Chandmull Lal Chand, P.O. Dhulian, Murshidabad.
It is hereby declared and agreed that as from 6th July 1950 the insurance by this policy is cancelled by The General Assurance Society Ltd., Calcutta, and a refund premium of Rs is hereby allowed to the assured on a pro rata basis.
Sd Illegible.
Manager Underwriter.
Calcutta, In reply the latter said that as the risk had already companymenced and taken place, there companyld be numbercancellation as there was numbertime left for the assured to take precautionary measures by reinsuring.
In reply the Company referred to companydition 10 of the Fire policy under which the Company claimed to cancel the policy at any time.
Condition 10 of the Fire Policy read This insurance may be terminated at any time at the request of the Insured, in which case the Society will retain the customary short period rate for the time the policy has been in force.
This insurance may also at any time be terminated at the option of the Society, on numberice to that effect being given to the Insured, in which case the Society shall be liable to repay on demand a ratable proportion of the premium for the unexpired terms from the date of the cancelment.
In reply the assured wrote on August 2 that the companydition did number ,apply to any risk except that of fire and companyld number, in any event, protect the Company after the risk had companymenced.
On 13th and 15th August the houses were washed away.
After unsuccessfully demanding payment under the policies, the assured filed the present suit on the Original Side of the Calcutta High Court.
It was dismissed with companyts by G. K. Mitter J. but on appeal the claim was decreed to the extent of Rs.
1,10,000 with companyts, the decretal amount to carry interest at 3, per annum.
The High Court certified the case as fit for appeal and the present appeal has been filed by the Company.
An appeal under the letters patent was filed against the judgment of the learned single Judge.
The appeal was heard by P. B. Mukharji and S. K. Datta JJ.
For these reasons the claim was decreed.
The Trial Judge has found that there was numberattempt to fix the amount of damages but the Divisional Bench reconsidered the matter and gave its own findings.
