Section 7 in The Emergency Risks (Undertakings) Insurance Scheme
7. Mode of Valuation of insurable properties.
- For the purpose of insurance under The Act, the insurable value of property shall be ascertained in accordance with the following principles:-(a)The insurable value shall be the actual value in the case of completed works, and the estimated value of the works which are in the course of construction, or additions to property which are anticipated or expected to be completed, in both cases at the prices prevailing on the relevant dates after making due allowance for any depreciation.Provided that in respect of the standing tea crop the insurable value shall be ascertained in the following manner, namely:(i)The average annual sale proceeds of cured and processed tea sold from a garden during the three accounting years immediately preceding the date on which the growing tea crop in that garden first becomes insurable under the scheme shall be ascertained and from the said average annual sale proceeds deductions shall be made, firstly, on account of profit on sales, at an amount equivalent to five per cent of the ascertained average annual sale proceeds, and secondly on account of the average annual expenditure attributable to curing, processing, transport, handling and sales, at an amount equivalent to the average annual recurring expenditure of the garden during the said three years as ascertained from the income and expenditure account or, if no such account is maintained, from the profit and loss account (after excluding from such average annual recurring expenditure any expenditure on account of fertilisers, labour establishment or any other expenditure connected with or arising out of agriculture's operations),(ii)the balance of the sale proceeds as arrived at in accordance with the provisions of clause (i) shall be treated as the annual value of the standing tea crop in the garden and the said annual value shall be insurable under the scheme,(iii)the annual value of the standing tea crop in a garden as arrived at in accordance with the provisions of Clause (ii) shall be deemed, without any reference to the stage or degree of growth of the crop at any time, but subject to the provisions of Clause (iv) to be the insurable value thereof at all periods from the date of commencement of agricultural operations in the garden in any season to the date on which the plucking of tea in that garden is completed in that season, the dates aforesaid being certified in every season for the purposes of this scheme by the person who is liable to insure the crop,(iv)the owner of any tea garden shall, when he first becomes liable to insure the standing crop in that garden and at the commencement of any quarter during which any insurance policy issued under this scheme is in force thereafter, ascertain as nearly as may be in accordance with the principles set out in Cls.(i) and (ii), the value of the crop, which having been plucked is liable to or can be insured under the Emergency Risks (Goods) Insurance Scheme, and thereupon, the insurable value of the growing tea crop in that garden shall be reduced accordingly.(b)All plant and machinery and the hull, machinery and fittings of inland vessels, which is part of the property to be insured under the scheme shall be valued as part of a going concern or a serviceable vessel as the case may be and not as scrap.(c)The relevant dates referred to in Cl.(a) shall be-(i)in relation to completed works, the date from which the policy is to take effect, and(ii)in relation to works which are in the course of construction or additions to property which are anticipated or expected to be made, the last day of the quarter in which the application for insurance is made.(d)If any doubt arises whether the insurable value of the standing tea crop in any garden has been correctly computed in accordance with the principles set out in the proviso to sub-paragraph (a), the matter shall be referred to the Chairman, Tea Board, whose decision thereon shall be final.
