- (1.) This judgment will dispose of two appeals, one preferred by Ghaki Mal Hukam Chand (hereinafter called the plaintiff), FAO. 161 of 1958, and the other by the Great American Insurance Company Limited, New Delhi (hereinafter called the defendant) FAO. 182 of 1958.
(2.) The plaintiff firm carried on the business of mill owners at Kasur in the District of Lahore before the partition of 1947. Under of policy of insurance with the defendant Company, the stock of cotton goods was insured by the plaintiff against risk by fire for a sum of rupees one lakh on 1st of June, 1947. The policy was to terminate on 1st of December, 1947. In consideration of an additional premium it was also stipulated between the parties that the policy "shall extend to include loss or damage by fire to the property insured directly caused by persons taking pat in riots or civil commotion's, also loss or damage by fire to the property insured directly caused by the action of any lawfully constituted authority....". This additional risk, however, did not cover any loss caused by fire on account of war, invasion, act of foreign enemy, civil war, mutiny, insurrection etc. Under clause 11 of the policy, the insured was to give notice to the defendant of any loss or damage caused by fire within 15 days after such loss or damage. Under clause 19, on which reliance has been placed by the defendant. "in no case whatever shall the Company be liable for any loss or damage after the expiration of twelve months from the happening of the loss or damage unless the claim is the subject of pending action or arbitration."
(3.) The premises of the plaintiff in Kasur were looted and set on fire on 17th or 18th of August, 1947. A representative of the plaintiff firm who stayed in Kasur till the 18th of August 1947 claims to have sent an intimation of this loss to the branch office of the defendant Company at Lahore and subsequently a registered letter was also sent at the New Delhi address of the defendant Company on 20th of November, 1947, followed by another such letter of 7th of September, 1948. There is acknowledgment from the defendant Company of the letters claimed to have been sent by the plaintiff regarding the loss. No steps were taken by the plaintiff to enforce their claim against the Insurance Company till the present application for recovery of rupees one lac was filed on 1st of August 1952 under the Displaced Persons (Debts Adjustment) Act, 1951, which came into force with effect from 8th November 1951. It is common ground that the plaintiff would have no cause of action at all but for the provisions of Section 18 of the Displaced Persons (Debts Adjustment) Act, 1951. The relevant provisions of Section 18 of the Act are as under: "18(1). Where any property in West Pakistan belonging to a displaced person was insured with any insurance Company before the 15th day of August, 1947, against any risk arising out of fire or theft or riot and civil commotion and there has been a loss in respect of such property arising out of any such risk at a time when the contract of insurance was in force, such Company shall not be entitled to refuse payment of the sum due under any claim in relation thereto on the ground that. (a) * * * (b) the claim was not made to the Company within the agreed time, or (c) * * * (d) * * * and any contract to the contrary, to the extend to which it is in contravention of the provisions of this sub-section, shall be deemed to have had no effect. * * * * (6) No application under this section shall be entertained in any case where no claim has been made to the insurance company within one year after the date of the loss. Explanation: A claim shall be deemed to have been made within the meaning of this sub-section if intimation thereof has been given to the insurance company within one year after the date of the loss notwithstanding that the intimation does not specify the amount of the claim or is not in the form, if any, required by the contract of insurance or in any other specified form." "(3a) At this stage, I may also advert to the provision of Section 36 of the Debts Adjustment Act: 36. Extension of period of limitation. Notwithstanding any thing contained in the Indian Limitation Act, 1908, or in any special or local law or in any agreement,- (a) * * * * (b) any suit or other legal proceeding for the enforcement of a claim against an insurance company......... may be instituted at any time within one year from the commencement of this Act.";