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Judgment
The present appeal is against an award made and published by the Jammu & Kashmir Consumer Protection Commission, Srinagar (hereinafter
referred to as 'the Commission'). The award having been made and published against the appellants, appellants are before us in this statutory
appeal.
We have heard learned counsel for the appellants, claimant before the Commission as well as the respondentInsurance Company.
The appellants had covered merchandise of the claimant before the Commission against, amongst others, the peril of fire by issuing a policy of
insurance. The fire took place on February 7,1990 at 4:30 p. m. The incident of fire and destruction of his merchandise as a consequence of such
fire, was brought to the notice of the appellants by the claimant before the Commission. The appellants sent a surveyor for assessing whether the
claimant before the Commission suffered any loss by reason of any of the perils covered by the policy of insurance issued by the appellants and, if
so, the quantum thereof. Before the surveyor so deputed by the appellants the claimant before the Commission disclosed that he had taken out a
policy of insurance on the date of the incident, i.e., on February 7, 1990 at 12:30 a.m. covering the selfsame goods for, amongst others, peril of
fire from the respondentInsurance Company. The surveyor perused the Interim Protection Note issued by the respondentInsurance Company and,
having regard to the quantum of coverage granted by the appellants and the respondentInsurance Company, determined that of the assessed loss
of Rs. 10,24,222.00, the appellants are liable to pay a sum of Rs. 4,56,406 and the respondentInsurance Company a sum of Rs. 5,67,817. There
is no dispute that if the claimant before the Commission had not taken out the policy of insurance from the respondentInsurance Company, liability
of the appellants on account of loss suffered by the claimant before the Commission would have been the whole, i. e., Rs. 10,24,222.
The report of the surveyor was accepted by the appellants and, accordingly, the appellants paid, in full and final settlement of the claim, a sum of
Rs. 4,56,405 to the claimant before the Commission on August 23,1993.
The claimant before the Commission approached respondentInsurance Company for recovery of the remaining compensation of Rs.
5,67,817.00, but in vain. The respondentInsurance Company refused to accede to the contention of the claimant before the Commission that it had
issued a policy of insurance covering the subject goods at or before the incident. This information was brought to the notice of the appellants by the
claimant before the Commission from time to time, including on September 6, 1997. The appellants also requested the respondentInsurance
Company to pay its share of compensation, as assessed by the surveyor, to the claimant before the Commission. Inasmuch as the
respondentInsurance Company did not pay any part of the assessed compensation, that forced the claimant before the Commission to approach
the Commission on July 18,2001.
Before the Commission, evidence was led for establishing that the respondentInsurance Company had covered the peril of fire and the
merchandise belonging to the claimant before the Commission prior to the incident of fire taking place destroying the merchandise in question. In
order to do so, the Interim Protection Note issued by the respondentInsurance Company was brought on record as a piece of evidence. The same
suggested that Canara Bank, the Banker of the claimant before the Commission, has paid a sum of Rs. 3,895 on account of premium for taking out
the said Interim Protection Note. At the same time, the Interim Protection Note suggested that the same will not be valid unless the actual premium
adequate to cover the risk has been received by the Company, i.e., the respondentInsurance Company. Therefore, a question cropped up,
whether actually premium was or was not received by the respondentInsurance Company at or before the incident. In order to substantiate that
premium was paid, reliance was placed on a debit advice of Canara Bank, i. e., the Banker of the claimant before the Commission, dated
February 8, 1990, which suggested that a sum of Rs. 6,744 was paid to the respondentInsurance Company on that date. There is no dispute that
the sum of Rs. 6,744 covered the amount of Rs. 3,894, being the sum required to be paid for obtaining the said Interim Protection Note. That
being the situation, the Commission held that at the time of the incident there was no valid policy of insurance issued by the respondentInsurance
Company covering either the peril of fire or the merchandise of the claimant before the Commission which was gutted by fire. The Commission
noticing that in the absence of an Insurance Policy issued by the respondentInsurance Company, the appellant had full liability to pay the assessed
loss of Rs. 10,24,222 directed the appellant to pay the same less the amount already paid, together with interest at the rate of 9% per annum from
September 6,1997 upto the date of complaint, i. e., July 18,2007.
In the present appeal, it is the contention of the appellants that it was the claimant before the Commission which represented to have taken out a
policy of insurance from the respondentInsurance Company. It was submitted that by reason of such representation, the loss was apportioned. It
was also submitted that such apportioned loss was accepted by the appellants as well as by the claimant before the Commission. It was contended
that upon such acceptance, claimant before the Commission recorded full and final satisfaction on August 23, 1993 as regards its claim to receive
compensation under the policy of insurance issued by the appellants. It was submitted that, in the circumstances, there could not be any deficiency
in service and, at the same time, the claimant having approached the Commission on July 17,2001, the claim of the claimant, if any, against the
appellants was wholly belated and could not be entertained. It was next submitted that the respondentInsurance Company in the Interim Protection
Note has recorded, without any uncertainty, that it has received from Canara Bank the premium of Rs. 3,894 and, accordingly, no other piece of
evidence could be looked at on the face of what had been stated in the Interim Protection Note. It was contended that in view of Section 64VB of
the Insurance Act, 1938, the moment premium was received, as depicted in the Interim Protection Note, respondentInsurance Company assumed
the risk covered by the Interim Protection Note. It was, therefore, contended that the finding of the Commission that there was no policy issued by
the respondentInsurance Company to cover the risk of the merchandise at about the time the incident of fire incurred which gutted the merchandise
of the claimant before the Commission, is not sustainable in law.
It is true that no evidence can be tendered or looked at to alter statements made in a written document. Either the statements so made are to be
believed or to be disbelieved altogether. Such statements altered by some other evidence cannot be accepted. As a result, neither oral evidence
nor documentary evidence can be relied to alter a statement already made in a written document. However, at the same time, it is permissible in
law to explain, either by oral evidence or by documentary evidence, any matter stated in a written document. In the Interim Protection Note, while
it was stated in one breath that the sum of Rs. 3,894.00, on account of premium, has been received, at the same time, it was denoted that the note
will not be valid unless the actual premium has been received by the Company, i. e., the respondentInsurance Company. There being two such
statements which are opposite to each other, no doubt could be explained either by giving oral evidence or by producing further documentary
evidence. In the instant case, the further documentary evidence which could be produced denoted that the payment was made by the Canara Bank
not on February 7,1990 but on February 8,1990.
A look at Section 64VB of the Insurance Act, 1938 makes it abundantly clear that the insurer assumes risk only on receipt of premium in
advance and not when it issues a cover note or the policy itself. It is payment of premium which is sine quo non in commencing the liability of the
insurer as undertaken by it. Having regard to the fact that the premium was not received by the respondentInsurance Company at or before the
occurrence of fire incident, we are afraid, we are not in a position to interfere with the views taken by the Commission to the effect that in relation
to the incident which resulted in loss the respondentInsurance Company had no liability.
It is true that it was the claimant before the Commission who brought it to the notice of the appellants that it had taken out a policy of insurance
prior to occurring of the incident and such insurance covered the risk of fire as well as the merchandise which were destroyed by fire. There is also
no dispute that undertaking of liability by the respondentInsurance Company was assumed not only by the claimant before the Commission but also
by the appellants as would be reflected by their conduct as indicated above. Thus, the claimant before the Commission as well as the appellants
were in bona fide belief that the risk of fire as well as the merchandise of the claimant before the Commission were covered by a policy of
insurance issued by the respondentInsurance Company. This belief was pursued by both until the matter was determined by the Commission. The
mistake, thus, committed by the claimant before the Commission as well as by the appellants, was a mutual mistake, which became known to not
only to the claimant before the Commission but also to the appellants no sooner a pronouncement was made by the Commission that the
respondentInsurance Company did not issue a policy of Insurance in favour of the claimant before the Commission either covering the risk of fire
or his merchandise which were destroyed by fire. This knowledge made the appellants liable to compensate the claimant before the Commission
for the whole sum which became payable by reason of loss of the merchandise of the claimant before the Commission by the incident of fire as was
determined by the surveyor appointed by the appellants. The appellants having not paid the same, it cannot be said that there had been no
deficiency in service. Recording of full and final satisfaction by the claimant, in the circumstances as above, should and can only be said to be on
mutual mistake committed by the claimant and the appellants which stood resolved only on the Commission holding in the manner it held pertaining
to the policy said to have been issued by the respondentInsurance Company.
However, inasmuch as the mistake became known only when the Commission pronounced its decision and, accordingly, passed an award, it
was not proper on the part of the Commission to award interest from any date prior to the date of pronouncement.
Accordingly, we modify the award of the Commission by making the appellants liable to pay interest on the sum adjudged on and from
September 21,2004 until payment. It is made clear that if any part of the principal amount has been deposited by the appellants, interest on such
part of the amount will stop accruing from the date of deposit.
The appeal is, thus, disposed of with the modification as above.