Law: Insurance Act, (IV of 1938)

Section: 3

(a) Insurance Act (IV of 1938)--S. 3-C(4) [as inserted by Insurance (Amendment) Act (XXVII of 1958)]---Collection of premium---Requirement for payment of premium is not restricted to payment of cash at the time of issuance of policy but S.3-C(4) of Insurance Act, 1938 provided for the conditions set forth in the section to be complied with, and one of the conditions therein was that guarantee for such payment constituted a valid condition of enforcement of contract---Guarantee or the manner of tendering of such guarantee had not been specified and had been left open to the parties to the transaction to be determined according to their own satisfaction---Insurer, in the present case, accepted to issue the guarantee in consideration of the premium being paid in three instalments out of which first was realized by cheque at the time of issue of cover note or immediately thereafter and the remaining two cheques provided sufficient guarantee for recovery of balance amount of premium---Cheques issued, had constituted sufficient undertaking to make the payment for the contract on the basis of which the insurance company was satisfied and the cover note was issued. Trans Ocean Asia v. Alpha Insurance Company Ltd. 1981 CLC 1028 distinguished. (b) Words and phrases----- --"Guarantee"---Meaning. Chambers 20th Century Dictionary Edition of 1983 quoted. JUDGMENT ZIA PERWAZ, J.---This appeal is directed against the judgment and decree dated 30-7-1991 and 18-8-1991 respectively passed by II-Additional District Judge, Karachi South in Suit No.3 of 1976. Brief facts of the case are that the respondent instituted the suit for recovery of balance amount of insurance premium against Cover Note No.AAG/437/76 dated 22-6-1976 providing insurance cover to Vessel M.V. Marei Ann purchased by the appellant under an L.C. through Habib Bank Limited. After arrival of the Vessel the aforesaid cover note was issued to cover the losses from Karachi to the Gadani Beach under the aforesaid cover note. The premium was worked out at 0.50% of the total cost of the vessel amounting to Rs.58 lacs. The amount of premium worked out to net total sum of Rs.29,000 as per details set forth in the cover…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492