V.S.T. Tillers Tractors Limited, Being a Company Incorporated Under the Companies Act, 1956 Represented by Its Company Secretary, Mr. B.L. Akshara Vs. the National Insurance Company Limited - Court Judgment

Excerpt:
- indian evidence act, 1872.section 3: [c.k. thakker & d.k. jain, jj] interested witnesses - court has to scrutinize such evidence with greater care and caution but such evidence cannot be discarded on the sole ground to the interest of such witnesses in the prosecution. the relationship per se does not affect the credibility of a witness. merely because a witness happens to be a relative of the victim of the crime, he/she cannot be characterised as an interested witness. the term interested postulates that the person concerned has some direct or indirect interest in seeing that the accused is somehow or the other convicted either because he had some animus with the accused or for some other oblique motive.section 3: interested witnesses - a close relative cannot be characterised as an interested witness - he is a natural witness. his evidence, however, must be scrutinised carefully. if on such scrutiny, his evidence is found to be intrinsically reliable, inherently probable and wholly trustworthy, conviction can be based on the sole testimony of such witness. close relationship of witness with the deceased or victim is no ground to reject the evidence. on the contrary, close relative of the deceased would normally be most reluctant to spare the real culprit and falsely implicate an innocent one.indian penal code, 1890.section 302: murder- dispute over possession of flat -assault on deceased by accused pw-1 and pw-2 are eye-witnesses to incident - pw-2, the sole independent witness did not support the prosecution version, in so much as he did not claim to have seen occurrence - he stated that he had come soon after the assault -moreover, many inconsistencies in evidence of pw-1 and pw-2 - no member of crowd which had gathered had been examined - presence of pw-1 doubted - held, case under section 302 ipc is not made out. conviction was set aside. indian penal code, 1890. section 456: house breaking by night fir lodged by pw1 and he had not mentioned that accused no.4 and 5 broke open their flat and occupied it - no reason assigned for such omission - moreover, pw4 father of pw1 did not even whisper about forcible occupation of their flat by accused nos. 4 and 5 held, omission to mention the fact regarding the occupation of flat by accused nos. 4 and 5 in fir held to be very important circumstances, fatal to prosecution case. conviction under section 456 not warranted. orderanand byrareddy, j.1. heard the counsel for the parties.2. the facts of the case are as follows:the petitioner is a manufacturer of farm equipment including tractors and tillers. the petitioner imported certain parts for the said purpose. the order was placed for the import of 100 sets of tractor 'e' mark items from m/s mercura trade and services, b.v. holland, netherlands. the said supplier had issued an invoice dated 12.5.1999 and the petitioner had remitted a sum of dfl 16980 (dutch gilders) to the supplier towards the cost of the same. the consignment was booked and shipped under a bill of lading issued by m/s cleve and zonen. the consignment was to be loaded on board a ship al rotterdam and the port of discharge was chennai, india. m/s freight system (india) were the agents for the earners. the consignment was covered under a marine insurance policy issued by the national insurance company limited, bangalore, the respondent herein, covering the risk from the ware-house at rotterdam to (he ware-house at bangalore, the value indicated was at rs. 4,20,000/- the policy was dated 18.8.1999. the consignment was to have been loaded on the vessel 'hanjin malta'. when the said vessel reached chennai, the goods were not on board. the agents of the carriers, on confirmation received from its principals, issued a certificate, to state that the cargo was lost al their ware-house in rotterdam and consequently, the goods were not loaded on the ship al all. the petitioner raised a claim against the respondent the petitioner was directed to contact the respondent's agent m/s w.k. websters and company al rotterdam, who were said to have been appointed to investigate the loss. the said concern by their report dated 25.9.2001, had advised the respondent not to honour the claim for the reason that the terms of contract between the petitioner and the supplier was fob rotterdam and therefore, the insurance coverage commenced only if the goods had been loaded on board the ship and not if the same were lost at the ware-house. the respondent, in turn, by a letter dated 4.1.2002, disallowed the claim of the petitioner. the petitioner thereupon approached the supplier, who in turn pointed out that with the issuance of a bill of lading, the responsibility of the supplier to answer for the goods was at an end. the petitioner thereafter, approached the insurance ombudsman at hyderabad on 30.10.2002. the petitioner was informed that the ombudsman had no jurisdiction to entertain complaints from limited companies and hence, did not address the petition. it is in this background that the petitioner is before this court.3. the counsel for the petitioner contends that the action of the respondent in dis-allowing the claim is patently illegal. the marine insurance policy provided a risk coverage from ware-house to ware-house. there was also reference to the bill of lading issued by the carrier in the policy of insurance. the policy is not conditional or contingent upon the terms of contract, as between the petitioner and its supplier. the stand of the respondent on the basis of the opinion expressed by m/s websters and company, is not in accordance with law. the bills of lading act, 1856, in terms of section 3 lays down that every bill of lading in the hands of a consignee for valuable consideration representing goods to have been shipped on board a vessel shall be conclusive evidence of such shipment as against the master or other person signing the same notwithstanding that such goods or some part thereof may not have been so shipped. having regard to this, the respondent is precluded from contending that the risk covered under the policy does not commence till the consignment is actually put on board the vessel. the presumption that arises on the issuance of a bill of lading is that such goods have actually been put on board the ship even it in fact, they were not so put on board. in the eye of law, the respondent therefore would be liable to cover the loss.the counsel would place reliance on several authorities, namely,(a) abl international limited v. export credit guarantee corporation of india limited : (2004) 3 scc 553,(h) s. chinnaswami v. the home insurance co., madras : air 1981 sc 1528,(c) bihar supply syndicate v. asiatic navigation and ors. : air 1993 sc 2054.(d) general traders limited v. pierce leslie (india) limited : air 1987 kerala 62,(e) new india assurance co. limited v. hira lal ramesh chand and ors. 2008 air scw 4389,(f) home insurance co. limited, new york v. ramnath and co., madras air 1955 mad 602,in support of the contentions.4. the respondent - insurance company, which is represented by counsel has filed statement of objections and it is contended on behalf the respondent that the writ petition is misconceived and the remedy, if any, is by recourse to other proceedings and not to invoke the writ jurisdiction of this court. the respondent has repudiated the claim of the petitioner after examining the same with reference to the investigative reports, by a letter dated 7.2.2000. it is reiterated that one pallet containing tractor parts was lost at the ware-house of cleve and zonen in rotterdam and this was prior to the loading of the vessel which was to carry the goods to the port of destination. and as evident from the invoice of the supplier, their shipment was on a free-on-board or fob contract. as per the international rules for the interpretation of trade terms, popularly called 'incoterms', fob contract of sale would in here a transfer of risk only when the goods are placed on board a carrying vessel. subject to the terms of the contract, it would be the supplier's responsibility to arrange for coverage of risk till the goods are placed on board the carrying vessel. in the case on hand, the loss having occurred before the loading of the ship, no liability would arise under the policy of insurance. the claim, if any, of the petitioner would lie against the supplier or in the alternative, against the carrier and not against the respondent as the coverage of risk prior to the loading of the ship is not contemplated under the policy of insurance. it is on this basis that the claim of the petitioner has been repudiated. the present writ petition filed to challenge the same is therefore not maintainable. the present writ petition is misconceived and the disputed questions of fact cannot be addressed on the basis of affidavits of the parties it is also contended that inspite of the repudiation, the petitioner had sought for a review of the claim and the respondent went out of its way in seeking further clarification from m/s webster and company, who have endorsed the legal position and therefore, the respondent is absolved of any liability. it is further emphasized that the insurance coverage would commence from the moment the insured goods leave the ware-house or the place of storage in order that the transit commences and as it is evident even to the knowledge of the petitioner that the goods never left the ware-house, the risk is not covered under the policy of insurance. and it is in this vein that the petition is sought to be resisted.the counsel draws attention to a book-let entitled - 'a guide to marine cargo insurance in india' published by the respondent in order to enlighten its clientele as to the rules and legal principles governing marine insurance and would draw particular reference to the expression 'fob' as defined therein as well as the 'institute cargo clauses' which are referred to under the policy of insurance, more particularly, the duration of the coverage of risk and when the same commences, especially, with reference to a free-on-board contract. in this regard, attention is drawn to pages - 8, 19, and 39 of the booklet to support his contentions.5. in the above background, on the question of maintainability of the writ petition, on the ground that the transaction involves disputed questions of fact and therefore, the same would not be maintainable under article 226 of the constitution of india would require this court to consider the facts and circumstances before upholding such a contention. the petition has been filed in the year 2003. this court has entertained the same and at this point of time, to reject the petition only on the ground that the petitioner ought to pursue his remedies elsewhere would be acceptable if the transaction indeed involved disputed questions of fact, which could not resolved on the basis of admitted facts and circumstances and with reference to the material on record and the settled legal position.in abl international limited, supra, the supreme court has addressed this very question, namely, whether a writ petition under article 226 of the constitution of india is maintainable to enforce a contractual obligation of the state or its instrumentality by an aggrieved party and the supreme court has referred to several judicial pronouncements to emphasize that it is a settled position of law as to a writ petition being maintainable. the following are the authorities referred to by the supreme court:k.n. guruswamy v. state of mysore : air 1954 sc 592 wherein the supreme court had held that a writ would be ineffective if issued in that particular case, on account of sheer lapse of lime in the matter reaching the court. therefore, it was observed in abl international supra, that the above observation clearly indicating that on a given set of facts, if the state acts in an arbitrary manner, even in the matter of a contract, an aggrieved party could approach the court by way of a writ petition under article 226 of the constitution of india and has drawn attention to the case of d.f.o. v. ram sanehi singh (1973)3 scc 864, wherein it was held as follows:by that order he has deprived the respondent of a valuable right. we are unable to hold that merely became the source of the right which the respondent claims was initially in a contract, for obtaining relief against any arbitrary and unlawful action on the part of a public authority he must resort to a suit and not to a petition by way of a writ. in view of the judgment of this court in k.n. guruswamy case there can be no doubt that the petition was maintainable, even if the right to relief arose out of an alleged breach of contract, where the action challenged was of a public authority invested with statutory power.the supreme court has also drawn attention to the case in gujarat state financial corporation v. lotus hotels (p) limited : (1983) 3 scc 379, following an earlier judgment in ramana dayaram shetty v. international airport authority of india : (1979) 3 scc 489, wherein it was held that an instrumentality of slate cannot commit breach of a solemn undertaking to the prejudice of the other party which acted on that undertaking or promise and put itself in a disadvantageous position. and in the event, the instrumentality of the slate has broken such a promise, it could not be said that the only remedy for the aggrieved party would be to sue for damages and that the stale or its instrumentalities could not be compelled for specific performance of contract, under article 226 of constitution of india.and referring to the judgment in lic of india v. escorts limited : (1986)1 scc 264, wherein the supreme court has held that if an action related to contractual obligations or obligations arising out of tort, the court may not ordinarily examine actions of the state related to contractual obligations unless the action has some public law character attached to it. and further, in demarcating the frontier between the public law domain and the private law field, the question would have to be decided in each case with reference to particular action, the activity in which the stale or instrumentality of the slate is engaged when performing the action, the public law or private law character of the action and a host of other relevant circumstances. commenting on this view, the supreme court in abl international, supra has opined that the court has not in any manner departed from the view expressed in the earlier judgments. the case in lic of india, supra, proceeded on the facts of that case and it was only held that a relief by way of a writ petition may not ordinarily be an appropriate remedy. therefore, on the existence of the required factual matrix, a remedy under article 226 of the constitution of india would be available.while referring to state of bihar v. jain plastics and chemicals limited : (2002)1 scc 216, the supreme court has, with regard to the view expressed therein that seriously disputed questions or rival claims of the parties with regard to breach of contract are to be investigated and determined on the basis of evidence, which may be led by the parties in a properly instituted suit rather than by a court exercising prerogative of issuing writs, held that a writ petition involving serious disputed questions of fact, which requires consideration of evidence which is not on record, will not normally be entertained by a court in the exercise of its jurisdiction under article 226 of the constitution of india. and has pointed out that in jain plastics and chemicals limited case supra, it was not laid down as an absolute rule that in all cases involving disputed questions of fact, the parties shall be relegated to a civil suit. and the court has placed reliance on an earlier judgment in the case of gunwant kaur v. municipal committee, bhatinda : (1969)3 scc 769, wherein it was held as follows:14. the high court observed that they wilt not determine disputed question of fact in a writ petition. but what facts were in dispute and what were admitted could only be determined after an affidavit-in-reply was filed by the state. the high court, however, proceeded to dismiss the petition in limine, the high court is not deprived of its jurisdiction to entertain a petition under article 226 merely because in considering the petitioner's right to relief questions of fact may fall to be determined. in a petition under article 226 the high court has jurisdiction to try issues both of fact and law. exercise of the jurisdiction is, it is true, discretionary, but the discretion must be exercised on sound judicial principles. when the petition raises questions of fact of a complex nature, which may for their determination require oral evidence to be taken, and on that account the high court is of the view that the dispute may not appropriately be tried in a writ petition, the high court may decline to try a petition. rejection of a petition in limine will normally be justified, where the high court is of the view that the petition is frivolous or because of the nature of the claim made dispute sought to be agitated, or that the petition against the party against whom relief is claimed is not maintainable or that the dispute raised thereby is such that it would be inappropriate to try it in the writ jurisdiction, or for analogous reasons.15. from the averments made in the petition filed by the appellants it is clear that in proof of a large number of allegations the appellants relied upon documentary evidence and the only matter in respect of which conflict of facts may possibly arise related to the due publication of the notification under section 4 by the collector.16. in the present case, in our judgment, the high court was not justified in dismissing the petition on the ground that it will not determine a disputed question of fact. the high court has jurisdiction to determine questions of fact, even if they are in dispute and the present, in our judgment, is a case in which in the interests of both the parties the high court should have entertained the petition and called for an affidavit-in-reply from the respondents, and should have proceeded to try the petition instead of relegating the appellants to a separate suit.and also relied upon a ease in century spinning and manufacturing co. limited v. ulhasnagar municipal council : (1970)1 scc 582, wherein it was again declared as follows :merely because a question of fact is raised, the high court will not be justified in requiring the party to seek relief by the somewhat lengthy, dilatory and expensive process by a civil suit against a public body. the questions of fact raised by the petition in this case are elementary.the above observation was made by the court while negating a contention advanced on behalf of the respondent -municipality, which contended that the petition filed by the appellant - company raised questions of fact, which argument of the municipality had been accepted by the high court holding such disputed questions of fact cannot be tried in exercise of extraordinary jurisdiction under article 226 of the constitution.the supreme court thus concluded, in abl international limited, that merely because one of the parties to the litigation raises a dispute in regard to the facts of the case, the court entertaining such petition under article 226 of the constitution of india is not always bound to relegate the parties to a suit. and in the case of gunwant kaur, the supreme court even went to the extent of holding that in a writ petition if the facts require even oral evidence can be taken. therefore, in an appropriate ease, the writ court would have jurisdiction to entertain a writ petition involving disputed questions of fact and there is no absolute bar for entertaining a writ petition even if the same arises out of a contractual obligation or involves some disputed questions of fact.in the present case, the respondent does not dispute that the respondent is an instrumentality of state and is governed by statutory provisions. and given the circumstances of the case, where the sequence of events are not in dispute, it is the legal contention as to whether or not the respondent is liable to meet the insurance claim. therefore, given the law as laid down by the supreme court in abl international limited, the present writ petition is maintainable, notwithstanding that the claim of the respondent to the contrary.it is seen from the facts of the present case, that a bill of lading in respect of the lost consignment was issued by the carriers, m/s cleve and zonen. it would therefore be pertinent to examine the effect of issuance of a bill of lading in the course of a transaction. section 3 of the bills of lading act, 1856, may be usefully referred to and therefore is reproduced hereunder for ready reference:3. bill of lading in hands of consignee, etc., conclusive evidence of the shipment as against master etc. - every bill of lading in the hands of a consignee or endorsee for valuable consideration representing goods to have been shipped on board a vessel, shall be conclusive evidence of such shipment as against the master or other person signing the same, notwithstanding that such goods or some part thereof may not have been so shipped, unless such holder of the bill of lading shall have had actual notice at the time of receiving the same that the goods had not in fact been laden on board.it is plain that a bill of lading is a document, on the strength of which it can be said that the goods referred to therein have been shipped on board a vessel and is conclusive evidence of such shipment. since the area of dispute that is sought to be raised by the respondent in the present case centres around whether the goods were lost even before the same were loaded on a vessel and before they left the warehouse of origin. from the legal position that would emerge, from a reading of the above provision, it is immaterial that such goods or a part thereof may not have been shipped and it would only be material if the holder of the bill of lading is placed on notice, at the time that he receives the same, that the goods had not in fact been laden on board. there is no indication that the petitioner, who was the holder of the bill of lading was placed on notice when the bill of lading was delivered that the goods had not in fact been laden on board. it is therefore to be deemed that the goods had been laden on board the vessel and that the same were lost in transit. hence, the contention of the respondent in denying its liability is irrelevant. the further contention that the transaction was on fob terms and since it is not in dispute that the goods have never been placed on board the vessel, the risk is not covered by the policy of insurance is a contention which is apparently incorrect and is an opinion expressed by a third-party which would not be conclusive. from a plain examination of the transaction, it cannot be said that the policy of insurance contemplated an fob transaction, admittedly it was a contract to cover the risk of the goods from ware-house to ware-house. and even though there was much argument on the scope of the phrase 'ware house to ware house' as also not rendering the respondent liable under the contract as again it could only bind the respondent if the goods are lost after the goods leave the ware house of origin and before the goods are delivered at the ware house at the port of discharge - that controversy need not be addressed - as the liability of the respondent stands fastened even otherwise as stated above.in the light of the above, it is not necessary to address the other case-law which has been relied upon by the petitioner though the said cases involve highly interesting fact situations and contain a rich source of information of the legal principles with regard to transactions such as the above. in any event, the same lend support to the case of the petitioner.therefore, there is no hesitation in allowing the present writ petition. consequently, the letter dated 4.1.2002 issued by the respondent repudiating the claim of the petitioner is hereby quashed. the respondent is directed to settle the claim of the petitioner bearing no. 604200/21/4300081/1999 as per the marine insurance policy dated 18.8.1999, with interest thereon on the amount from the dale of claim till the date of payment at 6% per annum.

Judgment:
ORDER

Anand Byrareddy, J.

1. Heard the Counsel for the parties.

2. The facts of the case are as follows:

The petitioner is a manufacturer of farm equipment including Tractors and Tillers. The petitioner imported certain parts for the said purpose. The order was placed for the import of 100 sets of Tractor 'E' Mark items from M/s Mercura Trade and Services, B.V. Holland, Netherlands. The said supplier had issued an invoice dated 12.5.1999 and the petitioner had remitted a sum of Dfl 16980 (Dutch Gilders) to the supplier towards the cost of the same. The consignment was booked and shipped under a Bill of Lading issued by M/s Cleve and Zonen. The consignment was to be loaded on board a ship al Rotterdam and the Port of discharge was Chennai, India. M/s Freight System (India) were the agents for the earners. The consignment was covered under a Marine Insurance Policy issued by the National Insurance Company limited, Bangalore, the respondent herein, covering the risk from the ware-house at Rotterdam to (he ware-house at Bangalore, The value indicated was at Rs. 4,20,000/- The policy was dated 18.8.1999. The consignment was to have been loaded on the vessel 'Hanjin Malta'. When the said vessel reached Chennai, the goods were not on board. The agents of the carriers, on confirmation received from its principals, issued a Certificate, to state that the cargo was lost al their ware-house in Rotterdam and consequently, the goods were not loaded on the ship al all. The petitioner raised a claim against the respondent The petitioner was directed to contact the respondent's agent M/s W.K. Websters and Company al Rotterdam, who were said to have been appointed to investigate the loss. The said concern by their report dated 25.9.2001, had advised the respondent not to honour the claim for the reason that the terms of contract between the petitioner and the supplier was FOB Rotterdam and therefore, the insurance coverage commenced only if the goods had been loaded on board the ship and not if the same were lost at the ware-house. The respondent, in turn, by a letter dated 4.1.2002, disallowed the claim of the petitioner. The petitioner thereupon approached the supplier, who in turn pointed out that with the issuance of a Bill of Lading, the responsibility of the supplier to answer for the goods was at an end. The petitioner thereafter, approached the Insurance Ombudsman at Hyderabad on 30.10.2002. The petitioner was informed that the Ombudsman had no jurisdiction to entertain complaints from Limited Companies and hence, did not address the petition. It is in this background that the petitioner is before this court.

3. The Counsel for the petitioner contends that the action of the respondent in dis-allowing the claim is patently illegal. The Marine Insurance Policy provided a risk coverage from ware-house to ware-house. There was also reference to the Bill of Lading issued by the carrier in the policy of insurance. The policy is not conditional or contingent upon the terms of contract, as between the petitioner and its supplier. The stand of the respondent on the basis of the opinion expressed by M/s Websters and Company, is not in accordance with law. The Bills of Lading Act, 1856, in terms of Section 3 lays down that every Bill of Lading in the hands of a consignee for valuable consideration representing goods to have been shipped on board a vessel shall be conclusive evidence of such shipment as against the Master or other person signing the same notwithstanding that such goods or some part thereof may not have been so shipped. Having regard to this, the respondent is precluded from contending that the risk covered under the policy does not commence till the consignment is actually put on board the vessel. The presumption that arises on the issuance of a Bill of Lading is that such goods have actually been put on board the ship even it in fact, they were not so put on board. In the eye of law, the respondent therefore would be liable to cover the loss.

The Counsel would place reliance on several authorities, namely,

(a) ABL International Limited v. Export Credit Guarantee Corporation of India Limited : (2004) 3 SCC 553,

(h) S. Chinnaswami v. The Home Insurance Co., Madras : AIR 1981 SC 1528,

(c) Bihar Supply Syndicate v. Asiatic Navigation and Ors. : AIR 1993 SC 2054.

(d) General Traders Limited v. Pierce Leslie (India) Limited : AIR 1987 Kerala 62,

(e) New India Assurance Co. Limited v. Hira Lal Ramesh Chand and Ors. 2008 AIR SCW 4389,

(f) Home Insurance Co. Limited, New York v. Ramnath and Co., Madras AIR 1955 Mad 602,

in support of the contentions.

4. The respondent - Insurance Company, which is represented by Counsel has filed statement of objections and it is contended on behalf the respondent that the writ petition is misconceived and the remedy, if any, is by recourse to other proceedings and not to invoke the writ jurisdiction of this court. The respondent has repudiated the claim of the petitioner after examining the same with reference to the investigative reports, by a letter dated 7.2.2000. It is reiterated that one pallet containing Tractor parts was lost at the ware-house of Cleve and Zonen in Rotterdam and this was prior to the loading of the vessel which was to carry the goods to the port of destination. And as evident from the invoice of the supplier, their shipment was on a Free-On-Board or FOB contract. As per the International Rules for the Interpretation of Trade Terms, popularly called 'INCOTERMS', FOB contract of sale would in here a transfer of risk only when the goods are placed on board a carrying vessel. Subject to the terms of the contract, it would be the supplier's responsibility to arrange for coverage of risk till the goods are placed on board the carrying vessel. In the case on hand, the loss having occurred before the loading of the ship, no liability would arise under the policy of insurance. The claim, if any, of the petitioner would lie against the supplier or in the alternative, against the carrier and not against the respondent as the coverage of risk prior to the loading of the ship is not contemplated under the policy of insurance. It is on this basis that the claim of the petitioner has been repudiated. The present writ petition filed to challenge the same is therefore not maintainable. The present writ petition is misconceived and the disputed questions of fact cannot be addressed on the basis of affidavits of the parties It is also contended that inspite of the repudiation, the petitioner had sought for a review of the claim and the respondent went out of its way in seeking further clarification from M/s Webster and Company, who have endorsed the legal position and therefore, the respondent is absolved of any liability. It is further emphasized that the insurance coverage would commence from the moment the insured goods leave the ware-house or the place of storage in order that the transit commences and as it is evident even to the knowledge of the petitioner that the goods never left the ware-house, the risk is not covered under the policy of insurance. And it is in this vein that the petition is sought to be resisted.

The Counsel draws attention to a Book-let entitled - 'A Guide to Marine Cargo Insurance in India' published by the respondent in order to enlighten its clientele as to the rules and legal principles governing Marine Insurance and would draw particular reference to the expression 'FOB' as defined therein as well as the 'Institute Cargo Clauses' which are referred to under the policy of insurance, more particularly, the duration of the coverage of risk and when the same commences, especially, with reference to a Free-on-Board contract. In this regard, attention is drawn to pages - 8, 19, and 39 of the Booklet to support his contentions.

5. In the above background, on the question of maintainability of the writ petition, on the ground that the transaction involves disputed questions of fact and therefore, the same would not be maintainable under Article 226 of the Constitution of India would require this court to consider the facts and circumstances before upholding such a contention. The petition has been filed in the year 2003. This court has entertained the same and at this point of time, to reject the petition only on the ground that the petitioner ought to pursue his remedies elsewhere would be acceptable if the transaction indeed involved disputed questions of fact, which could not resolved on the basis of admitted facts and circumstances and with reference to the material on record and the settled legal position.

In ABL International Limited, supra, the Supreme Court has addressed this very question, namely, whether a writ petition under Article 226 of the Constitution of India is maintainable to enforce a contractual obligation of the State or its instrumentality by an aggrieved party and the Supreme Court has referred to several judicial pronouncements to emphasize that it is a settled position of law as to a writ petition being maintainable. The following are the authorities referred to by the Supreme Court:

K.N. Guruswamy v. State of Mysore : AIR 1954 SC 592 wherein the Supreme Court had held that a writ would be ineffective if issued in that particular case, on account of sheer lapse of lime in the matter reaching the Court. Therefore, it was observed in ABL International supra, that the above observation clearly indicating that on a given set of facts, if the State acts in an arbitrary manner, even in the matter of a contract, an aggrieved party could approach the court by way of a writ petition under Article 226 of the Constitution of India and has drawn attention to the case of D.F.O. v. Ram Sanehi Singh (1973)3 SCC 864, wherein it was held as follows:

By that order he has deprived the respondent of a valuable right. We are unable to hold that merely became the source of the right which the respondent claims was initially in a contract, for obtaining relief against any arbitrary and unlawful action on the part of a public authority he must resort to a suit and not to a petition by way of a writ. In view of the judgment of this Court in K.N. Guruswamy case there can be no doubt that the petition was maintainable, even if the right to relief arose out of an alleged breach of contract, where the action challenged was of a public authority invested with statutory power.

The Supreme Court has also drawn attention to the case in Gujarat State Financial Corporation v. Lotus Hotels (P) Limited : (1983) 3 SCC 379, following an earlier judgment in Ramana Dayaram Shetty v. International Airport Authority of India : (1979) 3 SCC 489, wherein it was held that an instrumentality of Slate cannot commit breach of a solemn undertaking to the prejudice of the other party which acted on that undertaking or promise and put itself in a disadvantageous position. And in the event, the instrumentality of the Slate has broken such a promise, it could not be said that the only remedy for the aggrieved party would be to sue for damages and that the Stale or its instrumentalities could not be compelled for specific performance of contract, under Article 226 of Constitution of India.

And referring to the judgment in LIC of India v. Escorts Limited : (1986)1 SCC 264, wherein the Supreme Court has held that if an action related to contractual obligations or obligations arising out of tort, the court may not ordinarily examine actions of the State related to contractual obligations unless the action has some public law character attached to it. And further, in demarcating the frontier between the public law domain and the private law field, the question would have to be decided in each case with reference to particular action, the activity in which the Stale or Instrumentality of the Slate is engaged when performing the action, the public law or private law character of the action and a host of other relevant circumstances. Commenting on this view, the Supreme Court in ABL International, supra has opined that the court has not in any manner departed from the view expressed in the earlier judgments. The case in LIC of India, supra, proceeded on the facts of that case and it was only held that a relief by way of a writ petition may not ordinarily be an appropriate remedy. Therefore, on the existence of the required factual matrix, a remedy under Article 226 of the Constitution of India would be available.

While referring to State of Bihar v. Jain Plastics and Chemicals Limited : (2002)1 SCC 216, the Supreme Court has, with regard to the view expressed therein that seriously disputed questions or rival claims of the parties with regard to breach of contract are to be investigated and determined on the basis of evidence, which may be led by the parties in a properly instituted suit rather than by a court exercising prerogative of issuing writs, held that a writ petition involving serious disputed questions of fact, which requires consideration of evidence which is not on record, will not normally be entertained by a Court in the exercise of its jurisdiction under Article 226 of the Constitution of India. And has pointed out that in Jain Plastics and Chemicals Limited case supra, it was not laid down as an absolute rule that in all cases involving disputed questions of fact, the parties shall be relegated to a civil suit. And the Court has placed reliance on an earlier judgment in the case of Gunwant Kaur v. Municipal Committee, Bhatinda : (1969)3 SCC 769, wherein it was held as follows:

14. The High Court observed that they wilt not determine disputed question of fact in a writ petition. But what facts were in dispute and what were admitted could only be determined after an affidavit-in-reply was filed by the State. The High Court, however, proceeded to dismiss the petition in limine, The High Court is not deprived of its jurisdiction to entertain a petition under Article 226 merely because in considering the petitioner's right to relief questions of fact may fall to be determined. In a petition under Article 226 the High Court has jurisdiction to try issues both of fact and law. Exercise of the jurisdiction is, it is true, discretionary, but the discretion must be exercised on sound judicial principles. When the petition raises questions of fact of a complex nature, which may for their determination require oral evidence to be taken, and on that account the High Court is of the view that the dispute may not appropriately be tried in a writ petition, the High Court may decline to try a petition. Rejection of a petition in limine will normally be justified, where the High Court is of the view that the petition is frivolous or because of the nature of the claim made dispute sought to be agitated, or that the petition against the party against whom relief is claimed is not maintainable or that the dispute raised thereby is such that it would be inappropriate to try it in the writ jurisdiction, or for analogous reasons.

15. From the averments made in the petition filed by the appellants it is clear that in proof of a large number of allegations the appellants relied upon documentary evidence and the only matter in respect of which conflict of facts may possibly arise related to the due publication of the notification under Section 4 by the Collector.

16. In the present case, in our judgment, the High Court was not justified in dismissing the petition on the ground that it will not determine a disputed question of fact. The High Court has jurisdiction to determine questions of fact, even if they are in dispute and the present, in our judgment, is a case in which in the interests of both the parties the High Court should have entertained the petition and called for an affidavit-in-reply from the respondents, and should have proceeded to try the petition instead of relegating the appellants to a separate suit.

And also relied upon a ease in Century Spinning and Manufacturing Co. Limited v. Ulhasnagar Municipal Council : (1970)1 SCC 582, wherein it was again declared as follows :

Merely because a question of fact is raised, the High Court will not be justified in requiring the party to seek relief by the somewhat lengthy, dilatory and expensive process by a civil suit against a public body. The questions of fact raised by the petition in this case are elementary.

The above observation was made by the Court while negating a contention advanced on behalf of the respondent -Municipality, which contended that the petition filed by the appellant - company raised questions of fact, which argument of the Municipality had been accepted by the High Court holding such disputed questions of fact cannot be tried in exercise of extraordinary jurisdiction under Article 226 of the Constitution.

The Supreme Court thus concluded, in ABL International Limited, that merely because one of the parties to the litigation raises a dispute in regard to the facts of the case, the Court entertaining such petition under Article 226 of the Constitution of India is not always bound to relegate the parties to a suit. And in the case of Gunwant Kaur, the Supreme Court even went to the extent of holding that in a writ petition if the facts require even oral evidence can be taken. Therefore, in an appropriate ease, the writ court would have jurisdiction to entertain a writ petition involving disputed questions of fact and there is no absolute bar for entertaining a writ petition even if the same arises out of a contractual obligation or involves some disputed questions of fact.

In the present case, the respondent does not dispute that the respondent is an instrumentality of State and is governed by statutory provisions. And given the circumstances of the case, where the sequence of events are not in dispute, it is the legal contention as to whether or not the respondent is liable to meet the insurance claim. Therefore, given the law as laid down by the Supreme Court in ABL International Limited, the present writ petition is maintainable, notwithstanding that the claim of the respondent to the contrary.

It is seen from the facts of the present case, that a Bill of Lading in respect of the lost consignment was issued by the carriers, M/s Cleve and Zonen. It would therefore be pertinent to examine the effect of issuance of a Bill of Lading in the course of a transaction. Section 3 of the Bills of Lading Act, 1856, may be usefully referred to and therefore is reproduced hereunder for ready reference:

3. Bill of lading in hands of consignee, etc., conclusive evidence of the shipment as against master etc. - Every bill of lading in the hands of a consignee or endorsee for valuable consideration representing goods to have been shipped on board a vessel, shall be conclusive evidence of such shipment as against the master or other person signing the same, notwithstanding that such goods or some part thereof may not have been so shipped, unless such holder of the bill of lading shall have had actual notice at the time of receiving the same that the goods had not in fact been laden on board.

It is plain that a bill of lading is a document, on the strength of which it can be said that the goods referred to therein have been shipped on board a vessel and is conclusive evidence of such shipment. Since the area of dispute that is sought to be raised by the respondent in the present case centres around whether the goods were lost even before the same were loaded on a vessel and before they left the warehouse of origin. From the legal position that would emerge, from a reading of the above provision, it is immaterial that such goods or a part thereof may not have been shipped and it would only be material if the holder of the Bill of Lading is placed on notice, at the time that he receives the same, that the goods had not in fact been laden on board. There is no indication that the petitioner, who was the holder of the Bill of Lading was placed on notice when the Bill of Lading was delivered that the goods had not in fact been laden on board. It is therefore to be deemed that the goods had been laden on board the vessel and that the same were lost in transit. Hence, the contention of the respondent in denying its liability is irrelevant. The further contention that the transaction was on FOB terms and since it is not in dispute that the goods have never been placed on board the vessel, the risk is not covered by the policy of insurance is a contention which is apparently incorrect and is an opinion expressed by a third-party which would not be conclusive. From a plain examination of the transaction, it cannot be said that the policy of insurance contemplated an FOB transaction, admittedly it was a contract to cover the risk of the goods from ware-house to ware-house. And even though there was much argument on the scope of the phrase 'ware house to ware house' as also not rendering the respondent liable under the contract as again it could only bind the respondent if the goods are lost after the goods leave the ware house of origin and before the goods are delivered at the ware house at the port of discharge - that controversy need not be addressed - as the liability of the respondent stands fastened even otherwise as stated above.

In the light of the above, it is not necessary to address the other case-law which has been relied upon by the petitioner though the said cases involve highly interesting fact situations and contain a rich source of information of the legal principles with regard to transactions such as the above. In any event, the same lend support to the case of the petitioner.

Therefore, there is no hesitation in allowing the present writ petition. Consequently, the letter dated 4.1.2002 issued by the respondent repudiating the claim of the petitioner is hereby quashed. The respondent is directed to settle the claim of the petitioner bearing No. 604200/21/4300081/1999 as per the Marine Insurance Policy dated 18.8.1999, with interest thereon on the amount from the dale of claim till the date of payment at 6% per annum.