V.P. Gopalan Nambiyar, J.
1. Messrs. Gwalior Rayon Silk . (Pulp Division), Mavoor, the petitioner in this writ petition, seeks to quash certain proceedings taken by the respondent under the provisions of the Central Emergency Risks (Factories/Goods) Insurance Acts. 1962 (Acts 62 and 63 of 1962); to declare Exts. P-1 and P-2 communications of the 2nd respondent addressed to the petitioner invalid; and to prohibit the respondents from proceeding with further investigations in pursuance of the Central Acts.
2. As is seen noticed in the judicial decisions which have considered the position, the two Acts referred to earlier, were intended to ensure the smooth flow and even course of commercial and industrial activities during Proclamation of Emergency, made by the President of India on 26-10-1962 consequent on the Chinese invasion of this country in October. 1962. The Acts were modelled on the lines of the War Risks Insurance Act which was in force in Great Britain during the time of the Second World War, and the provisions of which were extended to India during that period. It was realised after the Chinese aggression that due provision should be made for replenishment of raw material needed for the factories and other industrial concerns and for recoupment of loss and damage to goods by enemy action. This was necessary to keep up the even tempo of commercial and economic activities. The magnitude of the task and the large amount involved in providing the necessary indemnity against loss, required that the Union Government itself should come forward as the insurer for the loss and damage sustained. The Acts brought into being certain compulsory insurance schemes under which compensation was payable in respect of the loss. The schemes were statutory schemes which had to be laid before Parliament. They provided for the mode of valuation of the goods and assets, the payments of premium, application for insurance policy, terms and conditions of such policy, settlement of claim or, the policy, and the like. The Union Government was to undertake 80% of the liability for the sum insured, and the remaining 20% was to be borne by the owner, presumably to inspire a feeling in him that he still remained the owner of the goods. Except for certain differences in regard to the numbering, sequence and arrangement of some of the Sections, the provisions in the two Acts are practically identical. It would therefore be enough to notice the provisions of one of the Acts. Section 1 (3) of the Emergency Risk's Goods Insurance Act reads as follows:
'1 (3) It shall remain in force during the period of operation of the Proclamation of Emergency issued on the 26th October. 1962 and for such further period as the Central Government may, by notification in the Official Gazette, declare to be the period of emergency for the purposes of this Act, but its expiry shall not affect anything done or omitted to be done before such expiry and Section 6 of the General Clauses Act, 1897, shall apply upon the expiry of this Act as if it had been repealed by a Central Act.' Identical is the language of Section 1 (3) the Emergency Risks (Factories) Insurance Act also hereinafter referred to as the Factories Insurance Act, for short. Section 2 is the definition section. It is unnecessary to notice any of the definitions for the purpose of this writ petition. Section 3 occurs in Chapter II which provides for insurable Hoods and insurance scheme. The provision regarding insurance scheme is contained in Section 3 (1) of both the Acts. The Scheme itself is denned under Section 2 (k). Clause 7 of Section 3 of the Factories Insurance Act contained a provision for laving the scheme before the Houses of Parliament. Section 5 (4) of the said Act reads as follows:
'5 (4). Whoever, contravenes the provisions of Sub-section (1) or the proviso thereto, or, haying taken out a policy of insurance as required by that sub-section, fails to pay any instalment of premium thereon which is subsequently due shall be punishable with fine which may extend to two thousand rupees and with a further fine which may extend to one thousand rupees for every day after the first on which the contravention or failure continues, and such punishment shall be without prejudice to any other penalty or liability incurred in consequence of such contravention or failure.' Section 8 of the Act empowers any Person authorised by the Central Government to ascertain whether or not the owner of occupier of any property required to be insured under the Act has taken out 3 policy of insurance as required by the Act, in respect of such property, and also to investigate the insurable value of any such property or to estimate damages suffered by any property insured under the Act. For carrying out these duties, the person authorised is empowered to require the owner or the occupier of the property to submit account books or other documents or furnish such information as he may reasonably think necessary. He is also empowered at any reasonable time to enter any premises comprising the property, inspect the premises and call upon the person found on such premises to produce before him and allow him to examine, such account books or other documents thought to be necessary or to furnish other relevant information. By Section 11 of the Act, where a person has evaded payment by way of premium or any money payable by him under the Act the Central Government is given power without prejudice to the provisions of Sub-section (4) of Section 5 to determine the amount which has been so evaded and the amount so determined shall be payable by such person and shall be recoverable as provided in Sub-section (2). Sub-section (2) provides for the amount being recovered as an arrear of land revenue.
3. Turning now to the provisions of the Statutory Scheme, paragraph 13 of the same provides for determination of the amount of the evaded premium in accordance with the third schedule. Sub-clause (2) of the said paragraph provides for an appeal to the Central Government against the decision. It is unnecessary to notice in detail the other provisions of the Act or of the Scheme.
4. By Ext. P-1 notice dated 26-7-1971, the 2nd respondent viz. the Enforcement Officer gave notice to the petitioner that it was necessary to check up the premium paid, in respect of certain periods for the years 1963. 1965, 1966 etc. and demanding production of certain specified records. By another communication Ext. P-2 dated 28-2-1972 fin between there was correspondence between the petitioner and the Officer) the petitioner was again called upon to furnish copies of certain calculation statements for failure to pay in respect of certain quarters, and to furnish other information and details called for in the communication. The petitioner replied by Ext. P-3 dated 11th March 1972 in which he stated that as the Central Acts 62 and 63 of 1962 had terminated by the lifting of the emergency and had ceased to have force on and from 10-1-1968 when the notification of emergency was revoked by the President, no step or action under these Acts could be initiated against the petitioner, and the 2nd respondent has no statutory authority or jurisdiction to do so. It was thereafter that the petitioner approached this Court and filed this writ petition for the reliefs already detailed.
5. It appears to me that this writ petition is premature: and that the petitioner has approached this Court when the matter is in an exploratory stage and the Officer was merely gathering the materials for the purpose of satisfying himself as to whether the petitioner had complied with the provisions of the Act or not. But the petitioner's Counsel contended that he apprehended drastic and Penal action; and unless he approached this Court at the earliest stage, he might well find that he had 'missed the bus.' Rather than preclude the petitioner on the ground that the writ petition is premature. I would discuss and deal with the contention on the merits.
6. The contention strongly pressed was that the Acts in question were, by reason of Section 1 (3), to remain in force only during the operation of the Proclamation of Emergency issued on 26th October, 1962; that the Proclamation having been revoked and the emergency having been lifted on 10-1-1968, the Acts lapsed; and that being temporary enactments, with the death of these Acts, no action could be taken under their provisions. Section 1 (3) of both the Acts provides that the expiry of the Acts shall not affect anything done or omitted to be done before such expiry and that Section 6 of the General Clauses Act was to apply on the expiry of the Acts as if they had been repealed by a Central Act. The scope of the expression 'anything done or omitted to be done' had come up for the judicial consideration by the Courts in England and India. The relevant decisions are noticed in detail in the Indian decisions to which reference will be made presently. I do not propose to cover the ground all over again. In R. v. Wicks, (1946-2 All ER 529) 'things previously done or omitted to be done' were held wide enough to make the provisions of the statute operate in respect of any act done before its expiration, and therefore expiration did not affect the liability to punishment under the Statute or prosecution of legal proceedings for inflicting that punishment. In Wicks v. Director of Public Prosecutions. (1947-1 All ER 205), the House of Lords, affirming the decision of the Court of criminal appeal (1946-2 All ER 529), and speaking through Viscount Simon, Lord Chancellor, observed (in relation to Section 11 (3) of the Emergency Powers Act. Similarly worded, as Section 1 (3) of the Act here involved), that 'Parliament did not intend Sub-section (3) to expire with the rest of the Act and that its presence in the Statute preserves the right to prosecute after the date of expiry.' The Federal Court of our country considered the meaning of this expression 'acts done or omitted to be done.' in J. K. Gas Plant . v. Emperor, (AIR 1947 FC 38 at pp. 46 and 47) and accepted the principle of the above decision of the House of Lords. The Supreme Court had occasion to consider and to interpret these expressions in Gopichand v. Delhi Administration. (AIR 1959 SC 609 at p. 615); and again in the state of Orissa v. Bhupendra Kumar, (AIR 1962 SC 945 at P. 953). The matter was again considered in Rayala Corporation v. Director of Enforcement, New Delhi, (AIR 1970 SC 494). In the last of these cases it was observed by the Supreme Court that the thing done or omitted to be done can comprise only action already taken while the statutory provision was in force, but cannot justify the initiation of fresh proceeding which will not be covered by the said expression.
7. After noticing the above decisions (or some of them) a Division Bench of the Madras High Court in Stoneware Pipes (Madras) Ltd. v. Union of India, (AIR 1971 Mad 442) took the view that the liability to pay premium evaded, arises only on its determination, and a demand being made on the defaulter. Where therefore, proceedings for determination of premium and its recovery were taken under Section 11 of the Act after its expiry, it was held that the said proceedings cannot be saved under Section 1 (3), as the proceedings are not in respect of a liability incurred or a right accrued prior to the repeal contemplated by Section 6 of the General Clauses Act, It was also held that the phraseology that 'nothing shall affect anything done or omitted to be done' would not save the proceeding as the same would be apposite only to things completed either by an act or by an omission before the expiry of the Act. This ruling of the Madras High Court is in the petitioner's favour. But the same was dissented from by a Division Bench ruling of this Court in Marikar Motors Ltd. v. Chief Enforcement Officer, Emergency Risks Insurance Scheme, Madras, (AIR 1973 Ker 2). This Court expressed disagreement with the Madras view. This Court noticed the decision of a Division Bench of the Patna High Court in Eastern Bihar Divisional , Chamber of Commerce's case (AIR 1972 Pat 314). of the Andhra High Court in Union of India v. Thammana Sitaramanjaneyulu, (AIR 1971 Andh Pra 145), and of the Allahabad High Court in Writ Petns. Nos. 2262, 2296, 2297, 2298 and 3075 of 1970 (said to be not yet reported) all of which had taken a view contrary to the one expressed in the Madras case. This Court observed at page 7:
'We are in respectful disagreement with the learned Chief Justice. The reasons stated by him do not persuade us to accept his line of thinking. The opposite view reflected in the judgments of the High Courts of Patna. Allahabad and Andhra Pradesh, referred to above, according to us reflects the correct view and we hold that the liability under the temporary Act would continue to subsist upon its expiry and proceedings could be commenced to give effect to that liability. The action taken against the petitioner is valid also from the standpoint of Art, 358 of the Constitution, which provides that:--
'While a proclamation of Emergency is in operation, nothing in Article 19 shall restrict the power of the State as defined in Part III to make any law or to take, any executive action which the State would but for the provisions contained in that part be competent to make or to take, but any law so made, shall, to the extent of the incompetency cease to have effect as soon as the Proclamation ceases to operate, except as respects things done or omitted to be done before the law so ceases to have effect.' Therefore, the Enforcement Officer is justified in starting proceedings for realisation of the evaded premium and the compounding fee, which the petitioner is bound to pay. The complaint of the petitioner that the action initiated is violative of Article 19(1)(f) of the Constitution has also no force in the above circumstances.'
I am bound, by the above Division Bench Ruling. In the light of the same. I hold that there is no merit in the petitioner's contention.
8. The view accepted by the Division Bench of the Kerala High Court, which is the same that was taken by the Andhra. Allahabad and Patna Courts is briefly this. If Section 6 of the General Clauses Act is made applicable to the temporary Act action taken before the expiry of the Act, can not only be continued, but even fresh action can be initiated under the Act in respect of contraventions made while it was in force. This was based, in particular, on a passage in the Supreme Court decision in AIR 1970 SC 494, distinguishing AIR 1947 FC 38 The passage reads as follows:
'............in that case the prosecution had been started before the Defence of India Act ceased to be in force, and, secondly the language introduced in the amended Sub-section (4) of Section 1 of the Act had the effect of making applicable the principles laid down in Section 6 of the General Clauses Act, so that a legal proceeding could be instituted even after the repeal of the Act in respect of an offence committed during the time when the Act was in force.'
Section 1 (3) of the Acts 62 and 63 of 1962 expressly attracts Section 6 of the General Clauses Act. There is also Article 358 of the Constitution, which provides that on revocation of the proclamation of emergency, any law made during the time it was in operation, shall cease to have effect, except as regards things done or omitted to be done before the law ceases to have effect.
9. The petitioner's Counsel contended that one important aspect has been completely lost sight of by the Division Bench ruling of our Court in M/s. Marikar Motors Ltd's case, (AIR 1973 Ker 2). The ascertainment of the premium payable or the premium evaded, it was said, can only be for the purpose of enforcing payment of the same and effecting an insurance of the goods or factories as contemplated by the Acts. While in a contract of insurance, payment of premium is the consideration which must precede the contract, ascertainment of premium subsequently, in respect of an 'antecedent period expired, cannot, it was said, fructify in a contract of insurance: for, to do so would be to reverse the order of things in a contract of insurance, as known to law. If a contract of insurance cannot be constituted, ascertainment of premium, besides being purposeless and futile, would also become impossible in law. So ran the argument. I find it difficult to appreciate this argument. Assuming, without deciding that in the light of the investigation into the premium evaded or payable a contract of insurance cannot come into being, this Court would not be justified in staving the hands of the 2nd respondent from investigating into what the Acts permit him to investigate under the provisions of Section 8 (1) referred to earlier as a sample, Whether, after such investigation, he is entitled to bring into being a contract of insurance or not, is a point that does not strictly arise at this stage,
10. That apart, I may point out that a similar argument -- practically the same argument -- was dealt with and considered by the Andhra High Court in the ruling noticed earlier (See paragraphs 58 to 66). In substance the decision of the Andhra High Court held that insurance may be either contractual or statutory, and nothing prevented a statutory insurance resulting in respect of an antecedent period on determination of premium payable or evaded, ascertained subsequently. It was also observed that such a contract of insurance would not fall outside the legislative Entry 47 of List I of the Seventh Schedule of the Constitution. The argument as to legislative competence was not advanced before me; and as to the argument that a contract of insurance cannot fructify and therefore ascertainment of premium is futile and illegal, the same does not appeal to me. Even assuming that premium is consideration for the insurance, I do not see why the same cannot be subsequently ascertained where the premium was only promised but not paid. The reasoning of the Andhra Pradesh High Court about statutory insurance also appears attractive.
11. Counsel for the petitioner and for the respondents have drawn my attention of the new Acts of 1971 (Acts 50 and 51 of 1971 which have replaced the 1962 Acts). I am not referring to these Acts as they have no application to the facts here.
12. I see no reason to interfere. I dismiss this writ petition, but in the circumstances, without costs.