IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA RSA No.368 of 2001. Judgment Reserved on: 09.05.2011 Date of decision: 26.05.2011 Karma Padhan … …Appellant Versus New India Assurance Co. … …Respondent Coram The Hon’ble Mr.Justice Dev Darshan Sud,J. Whether approved for reporting ?1 No. For the Appellant: Mr.M.S. Thakur, Advocate. For the Respondent: Mr.K.D. Sood, Advocate. Dev Darshan Sud,J. This appeal has been preferred by the plaintiff against the judgment and decree of the learned District Judge, Kinnaur, dismissing the suit of the plaintiff for recovery of Rs.1,25,000/- being insurance claim for the factory of the plaintiff which is alleged to have been washed away in a flood. 2. The plaintiff instituted the suit out of which this appeal arises on the pleadings that he was running saw and flour mill in the name and style of `Relatives Saw and Flour Mill’ at village Gharat (Sarahan), in Tehsil Rampur, District Shimla. The plaintiff pleads that his industry was registered as a 1 Whether the reporters of Local Papers may be allowed to see the judgement? Yes. 2 Small Scale Industry with the Department of Industries and he is its sole proprietor. According to the plaintiff, an Insurance Policy covering all risks was taken out by the bank since he was a loanee. He had raised a loan of Rs.50,000/- from the State Bank of India Branch at Sarahan which covered the losses by fire, earthquake and floods also. In the intervening night of 12.8.1987 and 13.8.1987 there was a flash flood and the factory of the plaintiff completely washed away, carrying away with it all machinery, material including papers etc. The defendant has not paid for the insurance cover and therefore, it was claimed that according to the policy, the plaintiff was entitled to the amount of damages actually suffered by him. The respondent-Insurance Company without admitting its liability has calculated the loss at Rs.66,288/- and claimed that it is only for loss by fire and not by flood. 3. Six issues were settled by the learned trial Court in which the first two issues were crucial, viz: as to whether the plaintiff was entitled for loss caused by floods and secondly whether the plaintiff is entitled to the suit amount as claimed? Both these issues were taken up together for consideration by the learned trial Court. It is undisputed before the learned trial Court that the policy was in-fact taken out by bank on the essential requirement of the loan conditions. Learned trial Court basically proceeded on 3 the point that the defendant-Insurance Company has withheld the insurance policy and that the agent as also the bank had specifically stated that the premium paid was to cover the risk from floods also. It is in these circumstances that the claim of the plaintiff was decreed in his favour. The defendant appealed before the appellate Court. 4. Adverting to paragraph-8 of the judgment of the learned trial Court, learned appellate Court holds that DW-2 Tilkeshwar Singh, Branch Manager of the defendant-Company has stated that according to the tariff applicable in 1987, a premium of 1,000/- rupees was to be charged for covering fire only. In case of floods, an additional premium of Rs.250/- was required to be paid. Learned Court holds that the tariff has been placed on the record of the case and in these circumstances, the decree was set aside. 5. Before proceeding to other questions on the record, what I find is that this is one case where the defendant is taking advantage of the fact of loss of the record being washed away. I will advert to this issue at a later point of time. 6. This appeal was admitted on questions of law No.1 and 2; namely:- “1. Whether due to non-production/ placing on records the insurance policy by the respondent/defendant, an adverse inference is to be drawn against the respondent/defendant to the effect that they had covered all the risks to the industry of 4 the appellant/plaintiff including the risks of floods? 2. Whether due to the non-production of evidence in respect of three different categories of fire policy, i.e. `A’, `B’, `C’, as alleged by the respondent/ defendant, an adverse inference is to be drawn against the respondent/defendant?” Questions No.1 and 2: 7. Both these questions relate to the effect as to whether the presumption under Section 114 of the Evidence Act should have or ought to have been invoked against the defendant-Insurance Company. Learned counsel appearing for the appellant places reliance on the judgments in Oriental Insurance Co.Ltd. vs. Sony Cheriyan, (1999)6 SCC 451 (para-17), Polymat India (P) Ltd. and Another vs. National Insurance Co.Ltd. and Others, (2005)9 SCC 174, United India Insurance Co.Ltd. vs. Great Eastern Shipping Co.Ltd., (2007)7 SCC 101, General Assurance Society Ltd., vs. Chandmull Jain and Another, AIR 1966 SC 1644, A.Raghavamma and Another vs. A.Chenchamma and Another, AIR 1964 SC 136, State of Punjab vs. M/s.Modern Cultivators, AIR 1965 SC 17 and Ramdas Oil Mills vs. Union of India (Military Deptt.), AIR 1977 SC 638 in support of his contention that such inference should and ought to be drawn. 8. For the order which I propose to pass, I am not going into this aspect in the present appeal. Considering the evidence on record, if the learned 5 trial Court, according to the learned appellate Court, has been speculative and has based its judgment on conjectures and surmises, the appellate Court has gone a step further. Let me now consider the evidence on the record. The plaintiff appeared as PW-1 and stated that he had taken loan from the bank and the Insurance Policy was taken out by Shri Prem Kumar Sharma. He emphatically states that a sum of Rs.1,00,000/- was taken as a cover for damage since Rs.50,000/- has been taken as a loan. He then says that the policy cover was from 8.4.1987 to 8.4.1988. On 12th, 13th August, 1987, there was a flash flood in which his entire factory premises etc. were washed away. This loss was surveyed by the Insurance Company. PW-2 N.C. Tandon was employee of the State Bank of India, who states that loan has been taken by the plaintiff and insurance policy was required by the bank. It also covers flood damages etc. Ex.P-1 which is cover note is issued to the State Bank of India, Rampur, against `Relative Saw and Flour Mill’, Village Gharat, Post Office Sarahan, Tehsil Rampur, District Shimla, covering shed, plant, machinery and logs etc. It is this note which has been used as crucial to determine the entire liability of the parties and on the basis of which the learned appellate Court states that it is covered by fire (including fire resulting from explosion, lighting etc.). When considered in conjunction with the evidence of PW-1, he admits that it was standard fire policy 6 which was issued directly to the Bank. DW-2 Tilkeshwar Singh submits that 10% were required to be paid over and above the premium for fire insurance. This is the state of affairs on the record of the case. 9. I find from the record that a lot of documents have been filed which have not been proved in accordance with law, but which have weighed with the two Courts below for arriving at the decision. Surely the learned appellate Court or trial Court should have realized before adverting to give decision on the merits of the case on the basis of these documents, which should or ought to have been excluded and if relied upon, should have been proved in accordance with law. The Insurance Company cannot escape its liability. It is this party in possession of the all the documents, policy, tariff etc. 10. In this view of the matter, irrespective of the onus and proof, these documents should have come from their custody also. (See: Gopal Krishnaji Kekkar vs. Mohamed Haji Latif and others, AIR 1968 SC 1413). But I refrain from expressing any opinion on this aspect. Ritualistic interpretation of standard form contracts cannot be invoked, more especially, considering the fact that it was the bank which was looking after the insurance cover of the appellant as is evident from Ex.P-1, cover note, issued directly to the bank. When the Insurance Agent and the bank are unanimous on the point that floods are also covered in 7 the category of fire policy issued by the respondent, surely an adverse inference should have been drawn. I find from the record that the other facts having been admitted, the only thing which is required to be proved is whether policy covers floods also or not. 11. In these circumstances, I deem it fit to remand this case to the Court of learned District Judge, Rampur for decision afresh in accordance with law with this direction that the photocopies placed on the record of the case be allowed to be proved by the respective parties in accordance with law and an opportunity be given to the plaintiff as also the respondent-defendant to further place such documents in the nature of tariff policy etc. in support of its contention. This appeal is accordingly allowed. Judgment of the learned District Judge is set aside. The case is remanded to the Court of learned District Judge, Rampur Bushehar for decision afresh in accordance with law. Parties are directed to appear before the learned District Judge, Rampur Bushehar on 27th June, 2011. Records be sent back forthwith. May 26, 2011 (Dev Darshan Sud) (aks) Judge.