KOTHARI, J. - (1.) MACHIAVELLI in his noted work, "the Prince" said, "it must be considered that there is nothing more difficult to carry out, not more doubtful of success, nor more dangerous to handle, than to initiate a new order of things. "
(2.) A case of Marine Insurance in desserts of Rajasthan evoked initial attraction of this Court but when the facts in a marshalled manner were shipped on the board of this Court, it revealed that respondent plaintiff M/s. Prakash Pulverising Mills Private Ltd. Company, imported 1600 bags of P. G. Red Oxide from M/s. Abdul Raza Jalaly of Bandar Abbas (Iran) for being transshipped from Iran to Mumbai and then were to be transported from Mumbai to Alwar in Rajasthan in the fateful ship "naran Pasa" under its captain Qadir Hussan. A little more dive into the sea of facts would be appropriate to decide this first appeal arising out of Civil Original Suit No. 89/77 decreed in favour of plaintiff by the court of Shri S. R. Singh Bajwa, ADJ No. 1, Jaipur City, Jaipur on 31. 3. 1981. The said goods under Bill of Lading dated 20. 5. 1976, Ex. 8 and Invoice dated 23. 5. 1976, Ex. 7 were consigned by Mr. Abdul Raza Jalaly who informed the plaintiff respondent vide his telegram Ex. 11 dated 29. 5. 1976 that the goods had been ashiped by the said craft and the consignee may insure the same. On 11. 6. 1976, apparently in ignorance of the total loss accident of the said fateful ship "naran Pass", the plaintiff respondent obtained a marine insurance policy called "lost or not lost", a contract of `uberrimae fidei', a contract of utmost good faith on 11. 6. 1976. It later on came in evidence before the learned trial court that the said unfortunate ship "naran Pasa' had run into rough weather on high seas near Karachi, Pakistan, broke into two and sank resulting in total loss on 10. 6. 1976 as per the statement of captain Qadir Hussan DW 3 and another crew member Amin Hussan DW. 4 who luckily survived, were arrested by Pakistani officials and were released only after about two years of their jail term in Pakistan and appeared in the witness box before the learned trial Court in the present case also. Since the goods in question imported by the plaintiff respondent also apparently were totally lost, the plaintiff lodged its claim before the appellant insurance company by informing the insurance company of the said total loss on 24. 7. 1976 in the first instance vide Ex. 31. It may be noted here that the insurance policy Ex. 10 was issued by the appellant insurance company on 23. 9. 1976 after intimation of the said total loss in pursuance of the cover note Ex. 9 dated 11. 6. 1976. The appellant insurance company contested the claim before the learned trial Court mainly on the ground that there was a breach of condition No. 9 of the insurance policy in the form that the goods in question had been shipped and sailed prior to the date of cover note i. e. 11. 6. 1976 and, therefore, on account of said breach of clause 9 of warranty the claim was repudiated. Before this Court, Mr. B. P. Agrawal, Senior Advocate, however, contested this on the ground of Section 20 of the Indian Contract Act, the point although urged before the learned trial Court but found to have not raised in the pleadings that in view of the goods in question themselves having been lost on 10. 6. 1976, the contract was void on the ground of mistake of fact in accordance with Section 20 of the Contract Act, and, therefore, the claim was rightly rejected by the insurance company. Mr. B. L. Mandhana, learned counsel appearing for the plaintiff respondent was at pains to support the impugned decretal judgment dated 31. 3. 1981 on the ground that the special enactment in the form of the Marina Insurance Act, 1963 would prevail over the general law contained in Indian Contract Act and Section 20 of the Contract Act was of no avail to the appellant insurance company. He emphasised that the said law envisaged coverage of liability with retrospective effect even if the goods were lost and unless there was an allegation of fraud and fraudulent withholding of information by the assured and the fact of loss of goods having already been within his knowledge, such contract under "lost or not lost" marine insurance policy saved the coverage in favour of assured and in the present case since there was nothing on record to establish that the plaintiff was even aware in any manner of the loss of goods in the total loss in an accident occurred on 10. 6. 1976, irrespective of the said fact, the plaintiff was entitled to recover the said claim from the insurance company. It would be appropriate to reproduce the relevant provisions of Section 8 & 24 of the Marine Insurance Act, 1963 here:- " 8. When interest must attach- (1) The assured must be interested in the subject-matter insured at the time of the loss, though he need not be interested when the insurance is effected: Provided that, where the subject-matter is insured "lost or not lost," the assured may recover although he may not have acquired his interest until after the loss, unless at the time of effecting the contract of insurance the assured was aware of the loss, and the insurer was not. (2) Where the assured has no interest at the time of the loss, he cannot acquire interest by any act or election after he is aware of the loss. " " 24. Contract must be embodied in policy.- A contract of marine insurance shall not be admitted in evidence unless it is embodied in a marine policy in accordance with this Act. The policy may be executed and issued either at the time when the contract is concluded, or afterwards. "
(3.) SECTION 8 of the Act of 1963, particularly the proviso to sub-section (1) is very clear. The assured may recover although he may not have acquired his interest until after the loss, unless at the time of effecting the contract of insurance the assured was aware of the loss, and the insurer was not. The gap of knowledge attributed to insurer and the insured is significant in the said proviso. The insurer in order to avoid its liability under the said proviso has to specifically allege and prove that the fact of loss of goods insured was within the knowledge of the insured but withholding that, the insurance company was not made aware of the same and thus misleading the insurer, the insurance in question was obtained by the insured. Nothing of this sort appears to have been even alleged by the insurance company much less established by the appellant insurance Company in the present case. The insurance policy of "lost or not lost" issued in accordance with the terms of the contract specified in the Schedule to the said Act of 1963 clearly envisages coverage of insurance of loss even if such loss has occurred prior to issuance of the insurance policy. The contract of insurance admittedly being a contract of "uberriamae fidei", a contract of utmost goods faith, unless lack of such goods faith is clearly established as a fact, the liability of insurance company cannot be denied on mere assumptions, suspicions or surmises or weak arguments like actual loss in fact having occurred prior to the obtaining of the insurance. The dates and facts in the present case about obtaining insurance on 11. 6. 1976 followed by insurance of the marine insurance policy on 23. 9. 1976 are beyond dispute and admitted facts by the appellant insurance company. The issuance of insurance policy on 23. 9. 1976 even after having been informed about the total loss by the plaintiff himself vide Ex. 31 dated 24. 7. 1976 clearly clinches the issue in favour of the plaintiff and even if some weakness in the claim of the plaintiff could be assumed for argument sake though there was none the same should be deemed to have been waived and ractified by the appellant insurance company upon insurance of the insurance policy on 23. 9. 1976. The sheet anchor of the argument of appellant insurance company that there was violation of condition No. 9 of the policy which reads, "warranted that the craft has not sailed earlier than the date of issue of cover note and no loss or damage has taken place prior to issue of cover note or policy, is firstly washed and watered down by condition No. 2 of the same document which reads, "the risk attaches from the time the goods are loaded into the craft at the port named in policy and continues during the ordinary course of transit and terminates on discharges at the final port of destination or 4 days after the craft has anchored or moored at the final port of destination whichever is earlier". Moreover, the cover note as well as insurance policy itself gives the particulars of the risk cover in which the description of goods including the date of invoice No. 69/919 dated 23. 5. 1976 is noted by the insurance company. Therefore, the condition No. 9 that the goods having been shipped prior to 11. 6. 1976, is waived on that very day when the insurance policy notices that the bail of lading and invoice prior to the said date and still takes the risk coverage by accepting the premium. Moreover, the alleged warrantee in condition No. 9 given by the plaintiff could be proved only with the help of proposal form which the insured plaintiff gave to the appellant insurance company. The learned trial court even did not find that document on record produced by the appellant insurance company and, therefore, naturally an adverse inference was drawn against the appellant insurance company and the plaintiff could not be said to have given any such warrantee, therefore, the repudiation of the claim by the appellant insurance company on the ground of alleged breach of condition No. 9, was rightly not sustained by the learned trial Court and the said view is affirmed by this Court. Mr. B. P. Agrawal frankly and rightly conceded that in the written statement filed on behalf of the insurance company in additional pleas only the insurance company had stated in para 2 of additional pleas that the craft Naran Pasa had sailed on 20. 5. 1976 from Bandar Abbas, Iran while the insurance cover note was taken by the plaintiff and issued on 11. 6. 1976 and, therefore, the country craft has sailed earlier to date of issue of cover note and the loss or damage had taken place prior to issue of cover note or policy, however, nothing of the sort that the plaintiff had fraudulently withheld the knowledge or information from the insurance company of total loss of goods prior to said date, had even been alleged and, therefore, nothing specific about invoking Section 20 of the Contract Act was stated in the written statement. In the absence of any such contest, no issue was framed by the learned trial Court in this regard nor any evidence was led. It is too late in the day now at this stage after 25 years of the decretal judgment to allow the appellant insurance company to rake up such a contention which is without a foundation, as has been found by the learned trial Court and rightly so in the opinion of this Court. ;