TaxTMI Login
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →Just a moment...
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether the commission agents were liable to make good the loss arising from their failure to insure the goods, notwithstanding the fire insurance clause excluding explosion damage and the subsequent Bombay Explosion (Compensation) Ordinance, 1944. (ii) Whether the respondents' counterclaim for the balance of the loss was barred by section 18(2) of the Ordinance.
Issue (i): Whether the commission agents were liable to make good the loss arising from their failure to insure the goods, notwithstanding the fire insurance clause excluding explosion damage and the subsequent Bombay Explosion (Compensation) Ordinance, 1944.
Analysis: The agreement to insure was proved. The majority held that, once the agents undertook to insure and represented that they had done so, their failure to effect insurance made them liable for the direct consequences of that neglect under the law of agency and contract. The court treated the Ordinance as only providing the measure and machinery of compensation in place of ordinary claims, without creating a new liability or breaking the chain of causation. The loss of the balance of the value of the goods was therefore regarded as a direct consequence of the failure to insure, not as a remote or indirect loss.
Conclusion: The agents were liable, and the claim for damages succeeded in favour of the respondents.
Issue (ii): Whether the respondents' counterclaim for the balance of the loss was barred by section 18(2) of the Ordinance.
Analysis: The majority held that the respondents were not suing for compensation arising out of the explosion as such, but for damages resulting from the agents' breach of duty in failing to insure. The counterclaim was therefore founded on the agency default, while the Ordinance merely supplied the basis on which the amount of loss would be quantified. On that view, section 18(2) did not bar the claim.
Conclusion: The counterclaim was not barred.
Final Conclusion: The appeal failed because the agents' default in not insuring the goods made them liable for the respondents' loss, and the statutory bar did not defeat the counterclaim. The dissent would have limited recovery to nominal damages and treated the counterclaim as barred.
Concurring Opinion: DAS J. agreed with the Chief Justice.
Dissenting Opinion: PATANJALI SASTRI J. held that the ordinary policy would not have covered explosion damage, so only nominal damages were recoverable, and further considered the counterclaim barred by section 18(2) of the Ordinance.
Ratio Decidendi: Where an agent undertakes to insure property and negligently fails to do so, the agent is liable for the direct loss that the principal would have recovered under the contemplated insurance regime, and a later statutory compensation scheme does not of itself break causation or bar a claim founded on the agent's breach of duty.
TaxTMI 
TaxTMI 
