Calcutta High Court
Hindustan Motors Ltd. And Anr. vs National Insurance Co. Ltd. And Anr. on 7 September, 2001
Equivalent citations: AIR2003CAL41, AIR 2003 CALCUTTA 41, (2001) 4 ICC 891
Author: Amitava Lala
Bench: Amitava Lala
ORDER Amitava Lala, J.
1. This writ petition relates to various reliefs. Out of which withdrawal, revocation, recalling and/or cancellation of the impugned notice on 3-3-1992 being Annexure 'N' to the writ petition, issued by the Senior Divisional Manager, National Insurance Company Limited, respondent No. 2 is also particularly available.
2. Since the other reliefs are virtually relating to grant of claim of the petitioners arising out of fire took place in the petitioners premises along with interest, this Court is not inclined to adhere anything in respect thereto sitting in the writ jurisdiction but behaving like fact finding Court. Such type of claim cannot be entertained under the writ jurisdiction. It has to be adjudicated by a regular Civil Court or forum to come to a definite conclusion in this regard.
3. On that score, Mr. P.K. Mallick, learned senior Counsel for the petitioner addressing before the Court fairly submitted that such relief cannot be granted under the writ jurisdiction as rightly pointed out by the Court, and a suit is already existing in between the parties. But the relief as primarily made hereunder, is not for the same but for cancellation, revocation, withdrawal, or recalling of the impugned notice on 3-3-1992, as aforesaid, to which there cannot be any embargo in proceeding with the same under the writ jurisdiction.
4. It has contended before this Court that under Annexure 'N' to the writ petition, the Senior Divisional Manager by a letter under reference 100200/OPA/PGS dated 3rd March. 1992 intimated as follows :
"We refer to the correspondence resting with our letter dated 25-8-1986 along with which our cheque Nos. 982702 and 982703 both dated 14-8-1986 for Rs. 46,026/- and Rs. 39,46,275/- respectively were returned.
The matter of your claim arising out of the fire dated 29-6-1986 has since been considered at length and in view of what is stated above, there being no valid insurance we regret to inform you that we have no liability towards any loss that may have arisen out of the fire dated 28-6-1986."
5. Mr. Mallick pin pointed before this Court about the words under the letter ".......... no valid insurance ........", According to him validity of the insurance is to be governed by Section 64VB of the Insurance Act, 1938 read with Rule 58 of the Insurance Rules, 1939 framed under the Act. Section 64VB of the Insurance Act, 1938 provides no risk to be assumed unless premium received in advance. The Section is as follows :
"64 VB. No risk to be assumed unless premium is received in advance.--(1) No insurance business on which premium is not ordinarily payable outside India unless and until the premium payable is received by him or is guaranteed to be paid by such person in such manner and within such time as may be prescribed or unless and until deposit of such amount as may be prescribed, is made in advance in the prescribed manner.
(2) For the purposes of this section, in the case of risks for which premium can be ascertained in advance, the risk may be assumed not earlier than the date on which the premium, has been paid in cash or by cheque to the insurer.
(3) Any refund of premium which may become due to an insured on account of the cancellation of a policy or alteration in its terms and conditions or otherwise shall be paid by the insurer directly to the insured by a crossed or order cheque or by postal money order and a proper receipt shall be obtained by the insurer from the insured, and such refund shall in no case, be credited to the account of the agent.
(4) Where an insurance agent collects a premium on a policy of insurance on behalf of an insurer, he shall deposit with, or despatch by post to, the insurer, the premium so collected in full without deduction of his commission within twenty four hours of the collection excluding bank and postal holidays.
(5) The Central Government may by rules, relax the requirements of Sub-section (1) in respect of particular categories of insurance policies."
6. Rule 58 of the Insurance Rules, 1939 is giving provision about advance payment of premium. The detail of the rule is as follows :
"58. Advance payment of premiums.--For the purposes of Sub-section (1) of Section 64VB of the Act, a risk in respect of a policy may be assumed before the premium payable in respect thereof is received :
(i) If the entire amount of the premium is guaranteed to paid by a Banking Company before the end of the calendar month next succeeding to the month in which the risk is assumed, if the premium due is not paid by the insured before that date :
(ii) If an advance deposit is made with the Insurer to the credit of the insured sufficient to cover the payment of the entire amount of the premium together with the premium, if any, due from the insured in respect of any other risk already assumed against such deposit, such deposit being agreed to be adjusted towards the premium before the end of the month next succeeding to the month in which the risk is assumed, if the premium due is not paid by the insured before that date."
7. Mr. Mallick banged upon these two provisions, mainly for the purpose of covering the payment of premium by way of bank guaranteed which was received and accepted by the insurance company. According to him, in spite of realisation of premium by way of bank guarantee in accordance with Act and Rules, the authority cannot turn around any say that there is no valid existence of the insurance coverage as against the claim of the petitioner in respect of any cause of happening or happenings. From the factual aspect, it appears that in addition to such coverage by bank guarantee, a further amount was also given in favour of the respondent company. Therefore, under no stretch of imagination, it can be construed that there was no risk coverage of the petitioner as alleged or at all.
8. The Court has not been favoured with any argumentative value on behalf of the insurance company, the contesting respondent hereunder, since nobody is present in the Court. This is how the Government or Governmental instrument is dealing with the case before the Court of Law. Therefore, it becomes much more onerous to the Court to verify the affidavit available in the record. The respondent authority has taken four points in their Affidavit-in-Opposition on 25-8-1992 which is as follows :
"(a) The writ application suffers from non joinder of necessary party e.g. Oriental Insurance Co. Ltd.
(b) Material facts have been suppressed and disputed claim has been brought before the writ Court by making a misconceived claim which cannot be gone into in a writ petition.
(c) The entire case of the writ petitioner revolve upon appreciation of evidence and the writ Court is not the proper Forum for adjudication of such disputes and as such writ petition should be dismissed in limine with cost.
(d) The writ petitioner having failed to comply with the provisions of Section 64VB of Insurance Act. 1938 and read with Rule 58(1) of the Insurance Rules, 1939 cannot invoke the writ jurisdiction of this Hon'ble Court and clearly the claim of the writ petitioner is not maintainable in law."
Out of the four points, one of the points is very specific in respect of adjudication of the dispute by the writ Court not being proper Forum for appreciation of evidence. An attention is drawn by the learned Counsel for the petitioner about paragraph 10 of the said Affidavit-in-Opposition. The same is as follows :
"I say that bank guarantee cannot be a substitute for actual payment of premium as contemplated under Section 64VB of the Insurance Act read with Rule 58(1) of the Insurance Rules."
9. According to him, such statement is contrary to the provisions of law as aforesaid.
10. It is true that there is a flavour of acceptance of the petitioner's contention principally. But the real intention of the writ petitioner cannot be avoided by holding the same in this writ petition because the same will have a long lasting impact over and in respect of the suit or proceeding already initiated or to be initiated. A Civil Court or forum may be influenced by the order quashing such notice under Annexure 'N' to the writ petition. If I hold today that the notice is not an appropriate notice in view of the circumstances as above, then it will be construed as declaration of right in favour of the petitioner without verifying the evidence for the purpose of coming to an ultimate conclusion of payment. Morerover, there should not be any piecemeal declaration of right of the petitioner otherwise there is every possibility of conflict of judicial pronouncements. Multiplicity of proceeding should be avoided. Moreover, when such multiplicity is between fact finding Court and not fact finding Court, the earlier Court should be allowed to proceed being much more comprehensive in nature of finding.
11. The learned Counsel appearing for the petitioner cited a judgment reported in (2001) 1 JT (SC) 10 : (AIR 2001 SC 549) (Life Insurance Corporation of India v. Smt. Asha Goel). Principally, it has held therein that the High Court should not entertain a writ petition filed under Article 226 of the Constitution for mere enforcement of a claim under a contract of insurance. In a case where the claim by the insurer or nominee is repudiated raising a serious dispute and the Court finds the dispute to be bona fide one which requires oral and documentary evidence for its determination then the appropriate remedy is a civil suit and not a writ petition under Article 226 of the Constitution. However, a question arises in the way of making arguments relying upon such decision. According to the petitioner, in spite of the question of fraud, the Supreme Court was pleased to direct to pay if not already paid, the claim amount by the Life Insurance Corporation expeditiously to the claimant as directed by the learned Single Judge. But I have taken note of paragraph 9 of the such judgment wherefrom it appears that the learned Senior Counsel appearing on behalf of the Corporation fairly accepted the position and stated that the Corporation will pay the sum awarded by the learned single Judge in favour of the respondent No. 1. According to me, judgment on admission cannot be the judgment on principle. The position of law regarding the jurisdiction of the writ Court under Article 226 of the Constitution remained unaltered. Therefore, the writ jurisdiction cannot be invoked for the purpose of realisation of any amount principally or in the process of the declaration, if any, by the writ Court superseding the domain of Civil Court.
12. This being the position, the writ petition ought to be dismissed and hereby dismissed. However, no order is passed as to costs.
13. Let an urgent xeroxed certified copy of this judgment, if applied for, be given to the Learned Advocate for the parties within a period of two weeks from the date of putting requisites.