 the emergency risks (goods) insurance bill, 1962(as introduced in lox sabha on stii december, 1962)  bill, 1962  (as introduced in lox: sabha)a bill to 9m1ce certain provisions fm the insurance of goods in india againat damage by enemy action during the period of emergency bz it enacted by parliament in the thirteenth year of the republic of india as follows:- chaprer i preliminary, , (1) this act may be called the emergency insurance act, 1962 risks (gooda) short iidm atedcaad dortlue  (!) it extends to the whole of india (3) it shall remain in force during the period of operation of the proclamation of emergency issued on the 26th october, 1962 and 10 for such further period as the central government may, by notification in the official gazette, declare to be the period of emergency for the purposes of this act, but its expiry shall not affect anything done or omitted to be done before such expiry and section 6 of the 10 of 197· general clauses act, 1897, shall apply upon the expiry of this act i~ as if it had been repealed by a central act 2 in this act, unless the context otherwise requires,-dehiti  (a) "enemy" means--(i) any person or country committing external aggreslion against india; (ii) any person belonging to a country committing such aggression; (iii) such other country as may be declared by the central government to be assisting the country committing such aggression; ! s (iv) any person belonging to such other country; (b) iigoods" means any materials, commodities or articles and includes materials, commodities or articles used in or for the construction of any ship up to the time at which the ship after construction is launched; 10 (c) "scheme" means the emergency risks (goods) insurance scheme made under this act; (d) "seller of goods" includes a seller of goods acting as an agent; , (e) iisupplier of goods" means a person carrying on a is business in ·the course of which he supplies goods for the purpose of, or in pursuance of, contracts made by him for work, labour and materials; i (i) "emergency risks" means such risks arising from"':::' (i) action taken by an enemy or action taken in com- 20 bating an enemy or in repelling an imagined attack by an enemy; (ii) any explosion or fire which involves explosives or munitions or other dangerous things required for the purposes of defence against any action of an enemy and which 2s happens or is caused by, through, or in connection with, the manufacture, storage or transportation of· any such explosives, munitions or other dangerous things;  (iii) measures taken under proper authority to avoi~ the spreading of, or otherwise to mitigate, the consequen- 30 ces of damage occurring (whether accidentally or not) ,as a direct result of any such action as is described jnsuhclause (i) or of any such explosion or fire as is described in sub-clause (ii); (iv) precautionary or preparatory measures taken 35 under proper authority with a view to preventing or hindering the carrying out of any attack by an enemy, being measures involving a substantial degree of risk to property; (v) precautionary or preparatory measures involving the doing of work on land and taken under proper authority in any way in anticipation of enemy action, being measures involving a substantial degree of risk to property; (vi) precautionary or preparatory measures taken under proper authority with a view to denying facilities to an enemy, being measures involving a substantial  degree of damage to or diminution of value of property  )0 chapter ii insurable goods and insurance scheme3 (1) subject to the provisions of this section, the following goods idaurgoods shall, in relation to any person carrying on business ~ie ;oder in india as a seller or supplier of goods of any description, e ct, j s be deemed to be goods insurable under this act, that is to say, all good$ situated in india or, consigned from one place in india to another place in india and in transit, being either-(i) goods of that description, or (ii) goods used as material from which goods of that des-20  cription are produced or as ingredients or component parts of goods of that description: provided that no goods shall be deemed to be insurable under this act-' - (a) fn relation to any person, being the owner of the goods, who carries on business as a seller of goods, unless they are owned by him with a view to being sold, or to being used as m~terial for the production of goods to be sold, or as ingredients or component parts of goods to be sold; (b) in relation to any person, being the owner of the goods, who oorries on business as a supplier of goods, unless they are owhed by him with a view to being supplied for the purpose of, -or in pursuance of, a contract made by him for work, labour and materials or to being used as material for the production -of goods to be supplied as aforesaid, or as ingredients or compo-nent parts of goods to be supplied  35 (2) the central government may, by notification in the omcial gazette, direct that goods of any description specified in the not~iica­tion shall, _ notwithstanding anything contained in this section h~ deemed not to be good~ ~nsura1?l~ under this act, (3) nothing in sub-section (1) shall apply in relation to goodl which are owned by government or in respect of which the goy-ernment is the seller or supplier 4 (1) save in so far as is otherwise expressly provided in tht act, any goods, shall, subject to the provisions of this lecticm, be' deemed for the purposes of this act to be owned,-(a) if the property in the goods is for the time being ftlte4 in a person in relation to whom they are insurable under thii act, by that person; (b) if the property in the goods is not so vested, by any 10 person in relation to whom the goods are insurable under thia act and who is for the time being entitled, either unconditionally or conditionally, to have the property in the goods vested in him: provided that where-(i) any goods would, under the foregoing provisions of thtt section, be deemed to be owned by a person in whom the pr0-perty therein is vested otherwise than in the course of a business carried on by him in india, or who is entitled to have the property therein vested in him otherwise than in the course of 30 such a business, and (ii) any person carrying on business in india ii for the time being entitled to sell the goods as agent, the goods shall be deemed to be owned by the last mentioned per-8011 a, (2) where in the course of any business a ship is being, or hu been, constructed under contract, and the ship or any part thereof or any goods appropriated for the construction thereof-(a) would, apart from the provisions of this sub-section, have been deemed for the purposes of this act to be owned at ,0 any time by the person from time to time carrying on the business, or (b) have at any time been accepted, in pursuanee of a contract made with him, by the person from time to time earrying on the business, 3'  then, notwithstanding that they would not, apart from the said ~ visions, be deemed for the said purposes to be owned by the perlon from time to time carrying on the business, the ship and any part thereof and any goods so appropriated as aforesaid shall, subject to the provisions of sub-section (3), be deemed, in 6 case to which clause (a) of this sub-section applies, to continue to be owned by 5 the person from time to time carrying on the business until the acceptance of the ship, in pursuance of the contract in question, by the person for whom it is being or has been, constructed, and in a case to which clause (b) of this sub-section applies, to be owned by the person from time to time carrying on the business at all 10 times between the acceptance referred to in the said clause (b) and the acceptance of the ship as aforesaid by the person for whom it is being, or has been, constructed (3) the provisions of sub-section (2) shall apply in relation to the construction under contract in the course of a business of part is of a ship, not being part of a ship which is being, or has been, constructed by the person from time to time oarrying on the business, as they apply in relation to the construction of a ship-(a) with the substitution for references to a ship of references to part of a ship; 20 (b) where the contract for the part of the ship is with the person for whom the ship is being constructed, with the substitution for reference~ to the acceptance of the ship under the contract in question of references to the acceptance of the ship under the contract for the construction thereof; 25 (c) where the contract for the part of the ship is with any other person, with the substitution for references to the acceptance of the ship under the contract in question of references to the acceptance of the part of the ship under the contract for the construction of the part by the person for whom it is being, or 30 has been, constructed (4) where the person from time to time carrying on a business receives any money, under a policy issued in pursuance of the  scheme, in respect of the loss of or damage to a ship, part of a ship or' goods which are deemed to be owned by him by virtue of sub-35 section (2) or sub-section (3), the money shall be held by him on trust for the person who, apart from the provisions of those subsections, wo~ld be deemed for the purposes of this act to be the  owner of the ship, part or goods, subject, however, to any lien or charge which would otherwise be enforceable against the ship, part 40 or goods and subject also to the right to retain out of the money the amount· of any expenses reasonably ircurred by the first mentioned l,>erson in making good any part of the loss or damage which he is liable to make good ~rgenc:y 5 (1) the central government may, by notification in the official f,;:da) gazette, put into operation a scheme to be called the emergency scheme risks (goods) insurance scheme, whereby the central government s undertakes in relation to persons carrying on business in india as sellers or suppliers of goods, the liability of insurance of such persons against emergency risks, to the extent provided by or under this act, in respect of goods insurable under this act which are from time to time ownpd by such persons in the course of such business 10 (2) the scheme may also extend-(a) to the undertaking by the central government in relation to any person carrying on business in india as seller or supplier of goods, of the liability of insuring such a person against emergency risks in respect of goods insurable under this is act which are not owned by him but in which he has an interest arising in the course of that business; (b) without prejudice to the provisions of clause (a) of this sub-section, to the undertaking by the central government, in relation to a person carrying on any business in india, of the zo liability of insuring such a person agaj~st emergency risks' in respect of-(i) any goods situated in india which are in his possession, otherwise than under a hire purchase agreement, for the purposes of that business, 25 (ii) any goods situated in india which are subject to a mortgage, pledge or charge in his favour held by him in the course of that business, being in either case goods which are not owned by him but which are insurable under this act in relation to the person  by 30 whom they are owned; (c) to the undertaking by the central government, in relation to a person carrying on any business in india, of the liability of insuring such person against emergency risks in respect of any goods situated in india, which· having been sold in 35 india, for export from india, are in his possession for the purpose of such export and are goods which were prior to such sale insurable under this act in relation to the person by whom they were then owned;  s (d) to the undertaking by the central government, in ~ lation to any person carrying on any business in india as a sellet or supplier of goods, of the liability of insuring such a person ag&inat emergency risks in respect of goods imported into india through any port of india, while such goods are situated at such port or are in transit to a place in india   (3) the scheme shall be such as to secure-(a) that the liability of the central government as insurer shall not extend to more than eighty per cent of the insurable value of the property ins\h'able; 10 (b) that any liability of the central government as insurer under the scheme is determined by a policy of insurance 1ssued, in the form and in respect of a period not exceeding the period specified in the scheme, by a person acting on behalf of the central government: is provided that the form of policy may be such as to limit the extent and nature of the indemnity provided by the central government and to impose conditions subject to which the indemnity is provided; 20 (c) that any premium under a policy so issued is payable at such rate as may, for the time being, be specified in the scheme; and (d) that the amount of anyone premium payable under a policy so issued is not less than such sum as may be specified in 2s the scheme (4) different forms of policies may be specified under sub-section (3) in relation to different descriptions of goods (5) the central government may, by notification in the official 'gazette, add to, amend or vary any scheme made under this act 30 6 the central government may, by notification in the official &1plopdejlt  gazette, employ or authorise the employment of any person to act ~!f:~o~ as its agent for any of the purposes of this act and may pay to the crnmcnt person so employed such remuneration as it may think fit  chapter iii h compulsory insurance7 (1) while the scheme is in operation, no person shall, after !'!~!rto u  lnaur-~ nch· date as may be specified in this behalf by the central govern- ante comment by notification in the official gazette, carry on any business in puiaory india as a seller or supplier of goods, unless, in respect of any gooda insurable under this act which are for the time being owned by him in the course of that business, there is in force a policy of insurance against emergency risks issued in accordance with the scheme, whereby he is insured in respect of such goods for a sum not less than , the value thereof for the time being: provided that the scheme shall not restrict the carrying on of business as aforesaid by any person, if and so long as the value of all goods insurable under this act which are for the time being owned by him within one and the same presidency town or district in the 10 course of that business does not exceed fifty thousand rupees (2) whoever contravenes the provisions of this section shall be punishable with fine which may extend to one thousand rupees and with further fine which may extend to five hundred rupees for every day after the first on which the contravention continues i' oml  ion to 8 (1) without prejudice to the provisions of sub-section (2) of ::~~: ~~ t~o section 7, where any person has failed to insure as, or to the full the fuu amount, required by this act, and has thereby evaded the payment amount by way of premium of any i money which he would have had to pay but for such failure, an officer authorised in this behalf by the 20 central government may determine the amount payment of which has been so evaded and the amount so determined shall be payable by such person and shall be recoverable from him as an arrear of land revenue and shall be a first charge on the goods in respect of which the' default was made 25 (2) a person against whom ~ determination is made under subsection (1) may, within the period specified in tha scheme, appeal against such determination to the central government whose decision thereon shall be final  resbicti'?d' 9 (1) after the date on which the scheme is put into operation, 30 : :rrz:!fn no person shall, except as a person authorised by the central govinsurance ernment as its agent to issue policies in pursuance of the scheme, buaineaa carry on any business of insuring persons carrying on business in india as sellers or suppliers of goods against emergency risks in respect of goods insurable under this act which are from time to time 3' owned by such persons in the course of such business as is last mentioned (2) whoever contravenes the provisions of sub-section (1) shall be punishable with fine which may extend to five thousand rupees and with further fine which may extend to one thousand rupees for 40 every day after the first on which the contravention continues 10 (1) the central government may, after due appropriation bme~lency made ity parliament by law in this behalf, transfer in each finadeial = ,ear to a fudd to be called the emergency risks (goods) insurance pund fund (hereinafter referred to as the "fund") such sums, as lljay be j of 11,1 ~ codsidered necessary, not exceeding the sums received b)' the, central government by way of insurance premiums under the scheme, or by way of payments made on composition of offences under section 15 or by way of expenses or compensation awarded by a court, under section 545 of the code of criminal procedure, 1898, out 01 10 any fine imposed in any prosecution under this act (2) there shall be paid from out of the fund all sums required for the discharge by the central government of any of its liabilities   udder the scheme or for the payment by the central government of the remuderation and expenses of agents employed for the purposes i s of the scheme  " (3) if at any time when a payment is to be made out of the fund, the sum standing to the credit of the fund is less than the sum ~­quired for the making of that payment, an amount equal to the deftciency shall, after due appropriation made by parliament by law, be 20 paid into the fund as an advance out of the consolidated flmd of india (4) if at any time the amount standing to the credit of the fund exceeds the sum which, in the opinion of the central government, is likely to be required for the making of payments out of the fund, 2s the excess shall be disposed of in such manner as the central gov- emment may think fit (5) the central government shall prepare, in such fonn and manner 8$ may be specified in the scheme and shall publish either annually or at such shorter intervals as may be specified therein; :n 30 account of all sums received into and paid (jut of the fund  chapter iv miscellaneous11 (1) aijy person authorised in this behalf by the central gov~ powe· of ernment may, for the purposes of ascertaining whether or not the =tc:v-35 requirements of this act have been complied with,-ob~in information (4) require any person carrying on in india the business of fire insurance or of a seller or supplier of goods to submit t5 him iuch accounts, books or other documents or to' furnish to him such information as he may reasonably think necessary,' or 2276 (b) ls-2 (b) at any reasonable time enter any premises oecupied by any penon carrying on in india the business of a seller or sup plies' of goods tor the purposes of that business rnd may inspect the premises and require any person found therein ~bo il for the time being in charge thereof, or in control of the business , carried on therein to produce to him and allow him to examlde weh a~unts, books or other documents as may relate to the business carried on in the premises and to furnish to him such other information as he may reasonably require for the purpose of ascertaining whether or not, and, if so to what extent, the 10 person carrying on the business is insured under the scheme in respect of goods owned by him in the course of that busineu, and of ascertaining the value of any goods insurable under the scheme which are or were at any relevant time owned by him in the course of that business and the maximum amount which j' would be recoverable in respect of any such goods under a polley issued under this act  (2) whoever wilfully obstructs any person in the exercise of hi powers under this section or fails without any reasonable excuse to l'omply with a demand made thereunder, shall in respect of each 20 occasi~n on which any such obstruction or failure take5 place, be p\1l1ishable with fine which may extend to five hundred rupees (3) whoever, in purporting to comply with his obligations under this section, knowingly or recklessly makes a statement· false in a material particular, shall be punishable with fine which may extend 2' to one thousand :rupees (4) where in any proceedings in respect of a contravention ot  etion 7 in relation to any business, it is proved, in relation to that i)usinen-(cz) that a demand for the production of a policy of huuranee ~o i •• ued in accordance with the scheme insuring the person earrying on the business was duly made under this section and was not complied with, and (b) that the person making the demand was not satisfied that there was such a policy in existence, it shall be presumed, exeept in so far as the contrary is proved, that tb\? said aection 7 was being contravened in relation to that businetl at the time when the demand was made and continued to be contravebed in relation to that business at all times thereafter 12 if any person, for the purpose of obtaining for himalf or any punil!-eat other person any payment in respect of any damage due to utei:he fnr!:! aetion of the enemy or under a p'jlicy issued in purs~dce of the ~iion; scheme,-, (a) furnishes any information which he know:i to be falh in a material particular, or recklessly furnishes any information which is false in a material particular; or (b) with intent to deceive, produces, furnishes, tendl or otherwise makes use of any book, account or other document 10 which it false in a material particular, or (c) with intent to deceive, withholds any mate1'"ial information, he shall be punishable with fine which may extend to ave thouand rupees, or with imprisonment for a term not exceeding three months is or with both 13 (1) where goods of any description have been insured by a retl'~ of seller or supplier of goods for any period, and before that period has =i'~ elapsed the goods of that description have ceased, by virtue of a notification under sub-section (2) of section 3 to be goods insurable 20 under this act, the person who has insured such goods shall be entitled to a proportionate refund of the premium (2) no suit shall be maintainable in any civil court againrt the central government or any person acting as the agent of the central government under section 6 for the refund of momy paid or pur-25 porting to have been paid as premium in respect of any policy issued or purporting to have been issued under this act 14 no prosecution for any offence punishable nnder this act umiwtioft shall be instituted against any person except by or with the consent ::i"oiecti-of, the central government or an authority authorised in this behalf )0 by the central government 15 any offence punishable under sub-section (2) of section 7, eaaoition or aub-seclion (2) of section 9 may either before or after the institu- of off_ tion of the prosecution, be compounded by the central government or by any authority authorised in this behalf by the central go", 35 ernment, on payment for credit to the fund of such sum as the central government or such authority, as the case may be, thinks ftt ii no suit, prosecution, or other legal proeee<iings lhall 1m liar of ill" against the central government or against any person for anythmc proeeecli  which is in ,oad faith done or intended to be done under thil act -   ' powerjur,ri-17 if any dtfticulty arises in giving effect to the provilionl of :uyti: this act, and in particular, if any doubt arises as to whether a person is insurable in re'spect of any goods under this act, the central government may, by order, make such provision or give such direction, not inconsistent with the provisions of this act, as appear to it to be s necessary or expedient for the removal of the doubt or difficulty; and the order of the central government, in such cases, shall be final  statement of objects and reasonsin view of the present emergency, it is considered desirable that provision should be made for the insurance of goods against the risk of loss or damage as a result of enemy action as the degree of risk which may be involved is necessarily uncertain, it will not ,be p0ssible for the established insurers to cover it in the normal course, and the scheme will have to be formulated, brought into foree and operated on behalf of the central government 2 the bill seeks to provide for a scheme of insurance baaed on premium rates which can be varied within certain limits with reference to the actual nature or extent of the risk as it may exist from time to time the various provisions are explained in detail in the notes on clauses which are attached to the bill morarji desai new dzlhi; the 29th november, 1962 clatue 1, in effect provides that the bill, when it is passed into law, shall come into force immediately in all the states or territories of india including jammu and kashmir the provisions of the act will continue to be in force throughout the period of the present emer~ency and for a reasonable period thereafter clause 2 defines the words and expressions used in the bill, the definition of "enemy" in sub-clause (a) is based i)n the corresponding definition in the defence of india bill, 1962 thp deftnition of "emergency risks" is based mainly on the provisions of the previous law as it was in force during the second world waf, and inc:1uc:les clam ages caused by explosions or by the adoption of "searched earth" or "denial" policies clause 3 makes it clear that the property insurable under the provisions of the bill will be goods held in india for purposes of sale in the course of business, but provides that good!; which are in transit from any place in india to any other place in india will, throughout the period of such transit be insurable in accordance with the provisions of the bill goods belonging to or sold or supplied by government will not be illlurable sub-elause (2) also provides that goods which are not normally insurable or which were not insured for similar rlsb during the last war may be excluded from the list of goods insurable under the scheme clause 4 provides for the ownership of goods, and consequently for the liability or obligations in regard to them to be determined in the event of doubt the intention is that if there is anv duileulty about determining the question whether goods have ve~ted in any penon at the time of insurance, the real owner, or his agent if such an agent is entitled to sell the goods, should be the person entitled to the rights or liable for the obligations, as the case may be under the various provisions of the sill clmue s provides for a scheme of insurance of good • within the iedpe of the provisions of the bill, to be prepared and brought into fore by notification at an appropriate stage by the central governwnent it is clarifted for the avoidance of any doubt that persons interested in, or entitled to the possession of, any insurable loads in the course of their buainess, or persons to whom nny insurable oocia have been pledged, mortgaged, hypothecated or otherwise eharged, may insure the goods, on ,their initiative, in lieu of the persons who as the pre6umed owners for the purpolf:s of the scheme may be bound or compelled to insure the goods in the normal coutle goods which are in the process of being exported from, or imported into, india will be insurable at the stages at which and for the periods for which they are, or become, situated in india the central government's liability as the insurer under the scheme will be limited in each case to eighty per cent of the idlurable value of the goods the policies of insurance will be iuuecl for comparatively short peri0d6, the duration of which will be determined by the central government, but the periods of validity will be extended from time to time the premiums will be charged at a variable rate, which will be determined from time to time by the central government aft~~· taking into account the actual degree of risk which may be involved goods will normally be insurable under the scheme only if tbe risk of joss or damage is considerable vide the note under clause 7 clause 6 provides for the appointment of an agent to administer the scheme on behalf of the central government c1aubes 7 and 8-clause 7 provides that when a iicheme of insurance is notified and brought into force, every person who in the course of his business is a seller of goods will be compelled to insure such goods to the extent that they are insurable under the scheme clause 8 provides for the determination and recovery of any pay ment due to be paid to the central government on this account if it has been evaded or is in arrears goods, which being located in any district are of the value ot rs 50,000 or less, ar~ not compulsorily insurable in accordance with the provisions of the scheme clause 9 prohibits private insurers from competing with the central government in regard to the coverage of the abnormal emergency risks for which provision is made in the bill clause 10 provides for the establishment of an emergency riala (goods) insurance fund the fund is intended to be seltsuftleient, but provision is being made for the central government to advance to the fund, it it is temporarily in deficit any amount which may be needed for meeting the expenditure which may be chargeable to the fund if there is ultimately a surplus in the fund, after ~ vision has been made for all the obligations to the poucyholders, appropriate arrangements in regard to the utilisation of the ilul'plua will be made by the central government : clauses 11 and 12-clause 11 provides for the grant of power to the central government to obtain information or to carry out such inspections as may be necessary, and clause 12 provides for penalties for furnishing any false information clause 13 provides for the refund of premiums in the case of goods  which are insurable under the provisions of the bill at the time that a policy of insurance is issued but which are subsequently excluded during the currency of the insurance policy from the scope of the insurance scheme clauses 14 to 17 contain the usual provisions in regard to the limitation of prosecutions, the composition of offences, bar of legal proceedings in respect of action taken in good faith, and power to ~ove difficulties, if any clause 10 of the bill provides that an emergency risks (goods) insurance fund will be established and that an amount not exceeding the amount of the premiums collected under the scheme of insurance will be paid into that fund after due appropriation by law the degree of risk as a result of enemy action is necessarily uncertain and a reasonably accurate estimate of the value of the property insurable in accordance with the provisions of the bill is not also available it is not possible, therefore, to anticipate exactly at this stage the rate at which premiums may have to be fixed or the amounts receivable on account of the emergency ~rsk8 (goods) insurance fund it is envisaged, however, that the rate of premium may not exceed three fourths of one per cent of the insurable value per quarter, to begin with it is also expected that the scheme may not involve any net burden on the consolidated fund of india over and above the obligation to transfer to the emergency risks (goods) insurance fund from out of the consolidated fund the premiums received under the scheme the coat of administering the scheme is expected to amount to about rs 1· 5 lakhs on account of the special ofbcer's organisation sub-clause (3) of clause (1) provides that the central government may by notification in the official gazette declare that the ppriod of the emergency for the purposes of the emergency risks (goods) insurance scheme will be extended until some suitable date after the expiry of the emergency which has been proclaimed by the president under article 352 of the constitution the delegation of power to the central government for this purpose is unavoidable 2 there is no other provision in the bill which involves any delegation of powers which is not of a routine or donna! charaeter  - a bill to make certain provisions for the insurance of goods in india against damage by enemy action during the period of emergency the president has, in pursuance of clauses (i) and (3) of article ii, of the constitution of india, reqlidmended to lok sabha the introduction and consideration of the bill mn kaul, secretary (s"" murarji desai, min's, u/ finance) 