1. Having heard learned Counsel for the parties, I have come to the conclusion that the decision of the Court below is not quite correct. The plaintiff respondent is the proprietor of a building which has been described as a godown, situated in the city of Cawnpore and the defendant applicant is his tenant paying Rs. 200 per mensem as rent. The defendant applicant has installed certain plant and machinery in that building and runs some sort of a factory there. The suit was for the recovery of Bs. 400 as rent for two months, 5th July 1942 to 4th September 1942, according to the pleadings, and 4th July 1942, to 3rd September 1942 according to the statement of Ram Swarup one of the partners in the defendant firm. The learned Judge below has taken the latter dates. The point is, how-ever, not material. The defence was that the defendant was entitled to a set-off to the extent of Rs. 300 as he had paid that amount on account of premium on the insurance of policy which he had to take out under Section 5 of Ordinance 12 of 1942. Alleging that he was thus liable to pay only Rs. 100 to the plaintiff, the defendant deposited a sum of Bs. 100 in Court during the pendency of this suit. The learned Judge did not accept the defendant's contention and held that the defendant was liable to pay not only Rs. 100 but the full amount claimed by the plaintiff. He decreed the suit accordingly.
2. It has been contended before me on behalf of the defendant applicant that the decision of the Court below is wrong. It appears to me that the reasons given by the learned Judge for his decision are unsound and that his decree cannot be sustained. The defendant applicant relied upon the proviso to Sub-section (1) of Section 5 of the Ordinance. After quoting that proviso the learned Judge observed : 'The Ordinances are special laws and cannot presume anything.' I have not been able to understand the latter part of this sentence and the learned Counsel for the parties have also not been able to explain it. The learned Judge then proceeded as follows:
In the present case it will be seen that the occupier of the factory is himself the owner and as such he had to take a policy. There is no reference in the Ordinance about the owner of the building. The plaintiff has nothing to do with the factory and the defendant must be himself liable for all costs he has to incur to maintain the factory. The plaintiff cannot be made liable for any disobedience of any factory law. For that the defendant will be liable. The plaintiff therefore cannot be made liable under this Ordinance when nothing has been said in it about the position of the owner of the building. The defendant paid the premium to maintain his factory at the spot and must bear the burden.
3. These observations of the learned Judge are, in my opinion, unsound. In order to decide the question that arose in this case it was necessary to read carefully certain definitions which are given in Clauses (b), (f), (g) and (i) of Section 2 of the Ordinance. The material portions of those definitions are as follows:
(b) 'factory' means a factory as defined in Clause (j) of Section 2, Factories Act, 1934, and includes any premises including the precincts thereof....
(f) 'occupier' of a factory has the meaning assigned to the word in Clause (1) of Section 2, Factories Act, 1934;
(g) 'owner of a factory' includes when parts of the property insurable under this Ordinance in relation to the factory are owned by different persons each such person in respect of the part owned by him.
(i) 'property insurable under this Ordinance' means, in relation to any factory, the factory buildings, all plant and machinery in the factory....
It is common ground that the factory with which the present case is concerned is a factory within the meaning of Section 2(j), Factories Act, 1934. The words of Section 5(1) of the Ordinance which are material for our present purpose are as follows:
Every owner of a factory shall...take out a policy of insurance...whereby he is insured in respect of all property insurable under this Ordinance.
Thus, as long as this factory is carried on, the building of which the plaintiff is the proprietor - is also included within the meaning of the expression 'factory' as defined in the Ordinance. The plaintiff was the 'owner' in respect of the part owned by him and the defendant firm was the 'owner' in respect of the part owned by it. The defendant firm alone, however, was the 'occupier' of the factory as it alone had control over the affairs of the factory (Section 2(f) of the Ordinance read with Section 2(1), Factories Act, 25 of 1934). It is important to bear this position in mind when reading the proviso to Section 5(1) of the Ordinance. It runs as follows:
Provided that, where the owner of the factory is not himself the occupier of the factory, the occupier of the factory shall, unless the owner has already taken out a policy of insurance as required by this sub-section, himself take out the policy, and in such, a case the occupier shall be deemed to act as the agent of the owner and shall be entitled to receive from the owner all sums paid as premiums on the policy.
Thus, although the defendant firm was also an 'owner' in respect of the part owned by it, the defendant firm, as the 'occupier' had to take out a policy of insurance in respect, not only of the plant and machinery, but also of the building. In these circumstances the defendant firm must be held to be entitled to a set-off, not of the entire amount of the premium paid, but of that proportion of that amount which was in respect of the building. It is necessary therefore to apportion the sum of Bs. 300 between the building and the plant and machinery. It was common ground that the defendant firm had paid a total sum of Rs. 300 on account of insurance premium. The case must, therefore, go back to the Court below for such apportionment and decision in accordance with it. I allow this application for revision, set aside the decree of the Court below and send the case back to that Court for apportionment of the sum of Rs. 300 as indicated above and for ultimate decision in accordance with that apportionment. The parties will be at liberty to produce, if necessary, further evidence relevant to the question of apportionment. The costs in this Court shall be costs in the case which each party will be ordered by the Court below to receive and pay in proportion to success and failure.