Case: Amadalavalasa Cooperative Agricultural &amp;Industrial Society Vs. U.O.I

of the factory or goods insured was incurred Acts and the schemes were in operation. The liability to pay premia on the basis of the full insurable value of the factory or goods is one thing; the quantification of the amount is another.16. But it was argued that if a policy was taken not for the full insurable value, the authorized officer should have ascertained the correct insurab le value within the quarter and a supplementary policy should have been issued on the basis of the full insurable value, also within the quarter, so that the liability to pay premia on the basis of the full insurable value might arise. In other words, the argument was that the liability to pay premia on the basis of the full insurable value in case of under insurance was conditioned by the capacity on the part of the insurer to issue a supplementary policy within the quarter undertaking to indemnify the insured on the basis of the correct value against emergency risks, and, as the insurer ceased to have the capacity after the expiry of the quarter, and a fortiort after the expiry of the Acts, to issue a supplementary policy undertaking the liability to indemnify against loss arising out of emergency risk, on the basis of the full insured value, the obligation to pay premia on the full insurance value ceased, as, after the expiry of the Acts, there could no longer be any emergency risk.17. We do not think that the argument is correct. As we said, the obligation to insure for full insurable value of the factory or goods was an obligation which was not dependent upon the corresponding liability of the insurer to indemnify. If the owner of factory or goods failed to take insurance policy at the time he ought to have taken it and pay the premia, the liability of the insured to pay the premia could be enforced under clause 13 or 14 respectively of the Schemes under the Goods Act or the Factories Act. In such a case there would be no obligation on the part of the President to indemnify the insured in case of loss or damage on account of emergency risk the insured did not take out the policy of insurance. The obligation to issue the policy or supplementary policy, as the case may be, would arise only after payment or recovery of the evaded premia, and even then, the liability of the insurer under the policy or supplementary policy would be from the date of payment or recovery of the evaded premia. The fact, therefore, that no supplementary policy was issued before the expiry of the Acts is no answer for not fulfilling the obligation of the insured to pay the premia in accordance with the correct insurable value of the factory or goods as determined under the Third Schedule to the Schemes. Therefore, if under 6. S of the Factories Act or under s. 7 of the Goods Act, the liability to pay the premia on the full insurable value was incurred before he expiry of the Act, s. 6 of the General Clauses Act would enable the ascertainment of the extent of liability for the evaded premia by an officer who was authorized when the Act was in force or by an officer authorised after the expiry of the Act. The principle behind s. 6 of the General Clauses Act is that all the provisions of the Acts would continue in force for purposes of enforcing the liability incurred when the Acts were in force and any investigation, legal proceeding, remedy, may be instituted, continued or enforced as if the Acts had not expired.The Third Schedule to the Schemes provides for the method of ascertaining the liability in case of under insurance. The provisions of the Third Schedule show that the officer has to give an opportunity to the insured to show cause why he should not be made to pay the premia on the basis of correct value of the factory or goods under valued.18. It was contended for the petitioner in Writ Petition No. 461 of 971 that the provisions of the Acts contravened Articles 14, 19 and Article 19 is not available to the petitioner for challenging the validity of the provisions of the Acts a s these Acts were passed during the currency of the proclamation of emergency under Article 352. No doubt, when the proclamation of emergency was revoked in 1968, the provisions of the Acts became liable to be challenged on the ground that they violated Article 19(1); but the liability incured for acts or omissions during the currency of the proclamation of emergency cannot be nullified even if it be assumed that the provisions of the Acts were violative of Article 19. In other words, liability crated by an act or omission when the Acts were in operation during the currency of the proclamation of emergency cannot be challenged even after the revocation of the proclamation on the ground that the provisions of the Acts violated Article 19. This, we think, is the principle laid down by this Court after reading Article 358 of the constitution in Makhan Singh v. State of Punjab([1964] 4 S.C.R. 797 at 812).19. We also think that the procedure for ascertaining the correct insurable value of the factory or goods is reasonable, having regard to the provisions of the Third Schedule in that behalf and cannot, therefore, violate Article 19(1)(f) or (g).20. The writ petitioner has not shown how the provisions of the Acts violated Article 14.And, as regards the contention of the petitioner that the provisions of the Acts violated Article 31(1), we do not think that the petitioner was deprived of any property without the authority of law. he petitioner has not succeeded in showing law the law which deprived him of his property could be challenged on the ground that it was violative of any of the provisions in Part III of the Constitution;21.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]It is clear from the provisions of the Acts t hat the duty to take out insurance policy for the full insurable value of the factory of goods was mandatory and that the failure to do so was an offence. Besides, in the case of failure to insure for the full insurable value, provisions were made for recovery of the relative premia. To effectuate this purpose, the procedure for determination of the insurable value of the factory or goods and of the premia evaded was alsois no compulsion in a voluntary insur ance that the cover should be made for the entire insurable value of the property. The premium collected in a voluntary insurance is related to the quantum of the risk undertaken in the light of the insurable value suggested by the insured. Generally, in a voluntary insurance, the premium is paid in consideration of the cover provided. In other words, premium is paid in order to enable the insurer to indemnify the insured against loss or damage on account of the risk specified. The scheme of insurance envisaged by the Acts was different. There was no element of consensus on the fundamental terms of insurance in the scheme. The liability to take insurance policy for the full insurable value of the factory or goods was compulsory. The terms and conditions of the policy to be taken were governed solely by the provisions of the Acts and the Schemes. It is a mistake to assume that the rights and liabilities of the parties in this statutory scheme were similar t o those of a voluntary contract of insurance. If the liability to take the insurance policy for the full insurable value was absolute and if the terms and conditions of insurance were settled by the terms of the statutes and the Schemes read with the Schedules, there is no merit in the contention of counsel for the appellants that the obligation of the President as insurer was same as that of an insurer in a contract of voluntary insurance. The liability to pay premia ill case of under-valuation was not dependent upon the subsequent determination of the full insurable value of the factory or goods insured. If the factory or goods was under-valued, when the insurance policy was taken, the liability to pay premia on the basis of the full insurable value arose at the time when the policy was taken. That liability was not dependent upon the ascertainment of the full insurable value by the authorized officer in accordance with the Thirddo not think that the argument is correct. As we said, the obligation to insure for full insurable value of the factory or goods was an obligation which was not dependent upon the corresponding liability of the insurer to indemnify. If the owner of factory or goods failed to take insurance policy at the time he ought to have taken it and pay the premia, the liability of the insured to pay the premia could be enforced under clause 13 or 14 respectively of the Schemes under the Goods Act or the Factories Act. In such a case there would be no obligation on the part of the President to indemnify the insured in case of loss or damage on account of emergency risk the insured did not take out the policy of insurance. The obligation to issue the policy or supplementary policy, as the case may be, would arise only after payment or recovery of the evaded premia, and even then, the liability of the insurer under the policy or supplementary policy would be from the date of payment or recovery of the evaded premia. The fact, therefore, that no supplementary policy was issued before the expiry of the Acts is no answer for not fulfilling the obligation of the insured to pay the premia in accordance with the correct insurable value of the factory or goods as determined under the Third Schedule to the Schemes. Therefore, if under 6. S of the Factories Act or under s. 7 of the Goods Act, the liability to pay the premia on the full insurable value was incurred before he expiry of the Act, s. 6 of the General Clauses Act would enable the ascertainment of the extent of liability for the evaded premia by an officer who was authorized when the Act was in force or by an officer authorised after the expiry of the Act. The principle behind s. 6 of the General Clauses Act is that all the provisions of the Acts would continue in force for purposes of enforcing the liability incurred when the Acts were in force and any investigation, legal proceeding, remedy, may be instituted, continued or enforced as if the Acts had not expired.The Third Schedule to the Schemes provides for the method of ascertaining the liability in case of under insurance. The provisions of the Third Schedule show that the officer has to give an opportunity to the insured to show cause why he should not be made to pay the premia on the basis of correct value of the factory or goods underdoubt, when the proclamation of emergency was revoked in 1968, the provisions of the Acts became liable to be challenged on the ground that they violated Article 19(1); but the liability incured for acts or omissions during the currency of the proclamation of emergency cannot be nullified even if it be assumed that the provisions of the Acts were violative of Article 19. In other words, liability crated by an act or omission when the Acts were in operation during the currency of the proclamation of emergency cannot be challenged even after the revocation of the proclamation on the ground that the provisions of the Acts violated Article 19. This, we think, is the principle laid down by this Court after reading Article 358 of the constitution in Makhan Singh v. State of Punjab([1964] 4 S.C.R. 797 atalso think that the procedure for ascertaining the correct insurable value of the factory or goods is reasonable, having regard to the provisions of the Third Schedule in that behalf and cannot, therefore, violate Article 19(1)(f) orwrit petitioner has not shown how the provisions of the Acts violated Article 14.And, as regards the contention of the petitioner that the provisions of the Acts violated Article 31(1), we do not think that the petitioner was deprived of any property without the authority of law. he petitioner has not succeeded in showing law the law which deprived him of his property could be challenged on the ground that it was violative of any of the provisions in Part III of the Constitution;