LexUNION OF INDIA versus M/S. SOHANLAL SAMPATLAL
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706 UNION OF INDIA v. M/S. SOHANLAL SAMPATLAL October 27, 1970 [1. C. SHAH, K. S. HEGDE AND A. N. GROVER, J],] Indian Post Office Act, 1890, s. 6-Ru/e 81 (g)-Go/d coins sent by parcel post-Value declared Rs. 2500-Parcel lost in transit-Suit /01 ·Compensation-Burden is on insurer to prove that value declared was not the market value at date and place of posting--S/lght difference does 1101 .absolve iluurer from liability. The respondent firm sent a parcel containing gold coins which had been purchased for Rs. 2465-l4-0 by post from Bombay to Bikaner. After adding Rs. 9-1·6 for insurance and profit at 1 % the value came, according lo the respondent, to R•. 2499-11·6. The parcel was insured for the iround figure of Rs. 2500. When it was lost in transit the respondent filed .a suit for Rs. 2474-15-6 to be paid by the Union of India represented by ots posal depitrtment. The Union of India resisted the claim on the ground ·that under s. 6 of the Indian Post Office Act, 1898 read with r. 81 (g) :made thereunder the liability to pay compensation could arise only if the plaintiff had declared the actual value of the contents on the date of the :.insurance. It was pointed out that in the present case neither the admitted purchase price of the coins not- the claim in the plaint amounted to Rs . .2500 and thus there was a discrepancy between the value declared and the , actual or market value of the goods. The contract was therefore not enfor- .ceable. The Single Judge as well as the Full Bench of the Court of Small •Causes accepted the argument on behalf of the Union of India. However; ithe High Court took the view that the burden of proving that the market ·value of the gold on the day of posting was different from the value declar· cd was on the insurer which in the present case the insurer had failed to uischarge. The Union of India, by special leave, appealed to this Court. HELD : The statutory provisions of the Act and the rules have to be -construed and read in a reasonable manne.r. The rules seem to en.sure ;!hat the insured should not make a declaration in excess of the market ·valu~ so as to avoid. frauduent dealings. Nor can the insured get more .compensation than the market value. But this does not and cannot mean ·that any innocent and in~ignificant mistatement by the insured of the actual value which has \o' be the market value on a particular date and at ·the plaee of posting can lead to the startling result that he becomes wholly disentitled to receive any compensation. The market in artides like gold and bullion exists only in large towns and the value fluctuates from day to day and from hour to hour. It may be sometimes impossible for any person sending gold or bullion by post after getting it insured to ascertain ·the exact value on a particular date. This does not mean that he is com· pletely absolved from the responsibility of ascertaining it but if h~ gives a valu• which is applroximately the same as the market value the msurer cannot take up ihe position that owing to an insignificant difference the insured cannot recover the compensation. [709 F-710 BJ In the present case the High Court fo~~d that no evidence df a_ny kinJ regarding the market rate of gold preva1hng on the date of posting was on record. On general principles which were rightly relied on by the High A B c D E F G H UNION v. SOHANLAL (Grover, J.) 707 A Court, it was for the insurer to load evidence on that point and show that according to the market rate prevailing on that date the value could not be Rs. 2500. The mere fact that the respondent was under the impression or had stated in the plaint that value of the gold was less than Rs. 2500 was not sufficient to absolve the insurer from proving that the value which was declared i.e. Rs. 2500 was not the market value on the date and at the place ol posting, 'The appeal must accordingly be dismissed. [710 C-El B CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2223 of c E F G H 1966. Appeal by special leave from the judgment and order dated August 31, 1965 of the Bombay High Court in Civil Revision Application No. 1263 of 1961. L. M. Singhvi, Ram Panjwani and S. P. Nayar, for the appellant. G. L. Sanghi and Janendra Lal, for the respondent. The Judgment of the Court was delivered by <Jrover, J, This is an appeal by special leave from a judge· ment of the Bombay High Court made in exercise of its revisional
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