service matter - whether a minimum continuous service in an academic year is a prerequisite for raising a claim for re-appointment under Rule 51A of Chapter XIV A of the Kerala Education Rules, 1959 (for short ‘ thePage 66 KER’) in view of sub-rule (3) of Rule 7A of the same chapter of the KER. - We are, therefore, inclined to allow these appeals and set aside the judgment of the Division Bench with the following directions: (i) A teacher, who was relieved from service under Rules 49 and 53 of Chapter XIVA of the KER, is entitled to get preference for appointment under Rule 51A only if the teacher has a minimum prescribed continuous service in an academic year as on the date of relief. (ii) The Manager of an aided school can, however, appoint teachers in vacancies occurred due to death, retirement, promotion, resignation, long-term leave etc. provided they are established vacancies and the approval can be granted subject to the conditions under Rule 49 of Chapter XIV A of the KER.Page 24 24 (iii) Approval can also be granted to appointments made to the approved vacancies arising and continuing beyond 31 st March due to sanctioning of additional divisions. (iv) The Manager can make appointments in school even if the duration of which is less than one academic year but on daily wages basis and if the duration of vacancy exceeds one academic year that can be filled up on scale of pay basis. (v) The Manager is free to appoint teachers on a regular basis from the re-opening date itself against regular established vacancies and need not wait for the appointments till completion of the staff fixation as per the KER. (vi) Teachers who have been appointed in the midst of the academic year and not completed the requisite minimum continuous service before vacation will not be entitled to get vacation salary.Page 25 25 27. Appeals are accordingly allowed and disposed of as above setting aside the judgment of the High Court but there will be no order as to costs.

Page 1
1
REPORTBLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1643               OF 2013
(Arising out of SLP(C) No.22332 of 2009
State of Kerala and others          ……
Appellants
Versus
Sneha Cheriyan and another                …..Respondents
WITH
C. A. NO. 1644 OF 2013 @ SLP(C) No.22260 of 2009
C. A. NO. 1645 OF 2013 @ SLP(C) No.22326 of 2009
C. A. NO.1646  OF 2013 @ SLP(C) No.22558 of 2009
C. A. NO.1647  OF 2013 @ SLP(C) No.22674 of 2009
C. A. NO.1648  OF 2013 @ SLP(C) No.22742 of 2009
C. A. NO.1649  OF 2013 @ SLP(C) No.22843 of 2009
C. A. NO.165O  OF 2013 @ SLP(C) No.22404 of 2009
C. A. NO.1651  OF 2013 @ SLP(C) No.22416 of 2009
C. A. NO.1652  OF 2013 @ SLP(C) No.22422 of 2009
C. A. NO.1653  OF 2013 @ SLP(C) No.22423 of 2009
C. A. NO.1654  OF 2013 @ SLP(C) No.22393 of 2009
C. A. NO.1655  OF 2013 @ SLP(C) No.22352 of 2009
C. A. NO.1656  OF 2013 @ SLP(C) No.22493 of 2009
C. A. NO.1657  OF 2013 @ SLP(C) No.23037 of 2009
C. A. NO.1658  OF 2013 @ SLP(C) No.23689 of 2009
C. A. NO.1659  OF 2013 @ SLP(C) No.25745 of 2009
C. A. NO.1660  OF 2013 @ SLP(C) No.29317 of 2009
C. A. NO.1661  OF 2013  @ SLP(C) No.29310 of 2009
C. A. NO.1662  OF 2013 @ SLP(C) No.26998 of 2009
C. A. NO.1663  OF 2013 @ SLP(C) No.29318 of 2009
C. A. NO.1664  OF 2013 @ SLP(C) No.27014 of 2009
C. A. NO.1665  OF 2013 @ SLP(C) No.29320 of 2009Page 2
2
C. A. NO.1666  OF 2013 @ SLP(C) No.27016 of 2009
C. A. NO.1667  OF 2013 @ SLP(C) No.27022 of 2009
C. A. NO.1668  OF 2013 @ SLP(C) No.27086 of 2009
C. A. NO.1669  OF 2013 @ SLP(C) No.27156 of 2009
C. A. NO.1670  OF 2013 @ SLP(C) No.27165 of 2009
C. A. NO.1671  OF 2013 @ SLP(C) No.27359 of 2009
C. A. NO.1672  OF 2013 @ SLP(C) No.29308 of 2009
C. A. NO.1673  OF 2013 @ SLP(C) No.29321 of 2009
C. A. NO.1674  OF 2013 @ SLP(C) No.27659 of 2009
C. A. NO.1675  OF 2013 @ SLP(C) No.27761 of 2009
C. A. NO.1676  OF 2013 @ SLP(C) No.29311 of 2009
C. A. NO.1677  OF 2013 @ SLP(C) No.27857 of 2009
C. A. NO.1678  OF 2013 @ SLP(C) No.27959 of 2009
C. A. NO.1679  OF 2013 @ SLP(C) No.28106 of 2009
C. A. NO.1680  OF 2013 @ SLP(C) No.29322 of 2009
C. A. NO.1681  OF 2013 @ SLP(C) No.1099 of 2010
C. A. NO.1682  OF 2013 @ SLP(C) No.1100 of 2010
C. A. NO.1683  OF 2013 @ SLP(C) No.17087 of 2009
C. A. NO.1684  OF 2013 @ SLP(C) No.23817 of 2009
C. A. NO.1685  OF 2013 @ SLP(C) No.23820 of 2009
C. A. NO.1686  OF 2013 @ SLP(C) No.24136 of 2009
C. A. NO.1687  OF 2013 @ SLP(C) No.24862 of 2009
C. A. NO.1688  OF 2013 @ SLP(C) No.1662 of 2010
C. A. NO.1689  OF 2013 @ SLP(C) No.1014 of 2010
C. A. NO.1690  OF 2013 @ SLP(C) No.1020 of 2010
C. A. NO.1691  OF 2013 @ SLP(C) No.1017 of 2010
C. A. NO.1692  OF 2013 @ SLP(C) No.1021 of 2010
C. A. NO.1693  OF 2013 @ SLP(C) No.1022 of 2010
C. A. NO.1694  OF 2013 @ SLP(C) No.1015 of 2010
C. A. NO.1695  OF 2013 @ SLP(C) No.2502 of 2010
C. A. NO.1696  OF 2013 @ SLP(C) No.791 of 2010
C. A. NO.1697  OF 2013 @ SLP(C) No.2503 of 2010
C. A. NO.1698  OF 2013 @ SLP(C) No.2504 of 2010
C. A. NO.1699  OF 2013 @ SLP(C) No.2505 of 2010
C. A. NO.1700  OF 2013 @ SLP(C) No.2507 of 2010
C. A. NO.1701  OF 2013 @ SLP(C) No.2508 of 2010
C. A. NO.1702  OF 2013 @ SLP(C) No.2509 of 2010
C. A. NO.1703  OF 2013 @ SLP(C) No.2510 of 2010Page 3
3
C. A. NO.1704  OF 2013 @ SLP(C) No.2511 of 2010
C. A. NO.1705  OF 2013 @ SLP(C) No.2512 of 2010
C. A. NO.1706  OF 2013 @ SLP(C) No.2513 of 2010
C. A. NO.1707  OF 2013 @ SLP(C) No.2514 of 2010
C. A. NO.1708  OF 2013 @ SLP(C) No.2516 of 2010
C. A. NO.1709  OF 2013 @ SLP(C) No.2517 of 2010
C. A. NO.1710  OF 2013 @ SLP(C) No.2518 of 2010
C. A. NO.1711  OF 2013 @ SLP(C) No.2521 of 2010
C. A. NO.1712  OF 2013 @ SLP(C) No.5768 of 2010
C. A. NO.1713  OF 2013 @ SLP(C) No.7768 of 2010
C. A. NO.1714  OF 2013 @ SLP(C) No.5881 of 2010
C. A. NO.1715  OF 2013 @ SLP(C) No.7767 of 2010
C. A. NO.1716  OF 2013 @ SLP(C) No.11036 of 2010
C. A. NO.1717  OF 2013 @ SLP(C) No.10786 of 2010
C. A. NO.1718  OF 2013 @ SLP(C) No.11730 of 2010
C. A. NO.1719  OF 2013 @ SLP(C) No.10787 of 2010
C. A. NO.1720  OF 2013 @ SLP(C) No.29677 of 2009
C. A. NO.1721  OF 2013 @ SLP(C) No.32905 of 2009
C. A. NO.1722  OF 2013 @ SLP(C) No.32903 of 2009
C. A. NO.1723  OF 2013 @ SLP(C) No.29823 of 2009
C. A. NO.1724  OF 2013 @ SLP(C) No.32907 of 2009
C. A. NO.1725  OF 2013 @ SLP(C) No.32908 of 2009
C. A. NO.1726  OF 2013 @ SLP(C) No.12190 of 2010
C. A. NO.1727  OF 2013 @ SLP(C) No.4963 of 2010
C. A. NO.1728  OF 2013 @ SLP(C) No.19574 of 2010
C. A. NO.1729  OF 2013 @ SLP(C) No.19787 of 2010
C. A. NO.1730  OF 2013 @ SLP(C) No.32653 of 2009
C. A. NO.1731  OF 2013 @ SLP(C) No.19585 of 2010
C. A. NO.1732  OF 2013 @ SLP(C) No.19576 of 2010
C. A. NO.1733  OF 2013 @ SLP(C) No.26647 of 2010
C. A. NO.1734  OF 2013 @ SLP(C) No.13246 of 2010
C. A. NO.1735  OF 2013 @ SLP(C) No.25151 of 2010
C. A. NO.1736  OF 2013 @ SLP(C) No.21164 of 2009
C. A. NO.1737  OF 2013 @ SLP(C) No.30941 of 2009
AND
C.A. No.5620/2010,  C.A. No.5621/2010,  C.A. No.5622/2010,
C.A. No.5623/2010,  C.A. No.5624/2010,  C.A. No.5625/2010,
C.A. No.5626/2010   C.A. No.5627/2010,  C.A. No.5628/2010,  Page 4
4
C.A. No.5629/2010,  C.A. No.5630/2010,  C.A. No.5631/2010,
C.A. No.5632/2010,  C.A. No.5633/2010,  C.A. No.5634/2010,
C.A. No.5635/2010,  C.A. No.5636/2010,  C.A. No.5637/2010,  C.A.
No.5638/2010,  C.A. No.5639/2010,  C.A. No.5640/2010,  C.A.
No.1104/2011,  C.A. No.1106/2011,  C.A. No.1107/2011,  C.A.
No.1105/2011,  
C. A. NO.1738  OF 2013 @ SLP(C) No.18259 of 2010
C. A. NO.1739  OF 2013 @ SLP(C) No.18260 of 2010,
C.A. No.245 of 2011,  C.A. No.247 of 2011,  
C.A. No.248 of 2011,  C.A. No.2846 of 2011,
C. A. NO.1740  OF 2013 @ SLP(C) No.5624 of 2010
C. A. NO.1741  OF 2013 @ SLP(C) No.4465 of 2010
C. A. NO.1742  OF 2013 @ SLP(C) No.5625 of 2010
C. A. NO.1743  OF 2013 @ SLP(C) No.3760 of 2010
C. A. NO.1744  OF 2013 @ SLP(C) No.3786 of 2010
C. A. NO.1745  OF 2013 @ SLP(C) No.3788 of 2010
C. A. NO.1746  OF 2013 @ SLP(C) No.3787 of 2010
C. A. NO.1747  OF 2013 @ SLP(C) No.3789 of 2010
C. A. NO.1748  OF 2013 @ SLP(C) No.3790 of 2010
C. A. NO.1749  OF 2013 @ SLP(C) No.3792 of 2010
C. A. NO.1750  OF 2013 @ SLP(C) No.3793 of 2010
C. A. NO.1751  OF 2013 @ SLP(C) No.3794 of 2010
C. A. NO.1752  OF 2013 @ SLP(C) No.3796 of 2010
C. A. NO.1753  OF 2013 @ SLP(C) No.3797 of 2010
C. A. NO.1754  OF 2013 @ SLP(C) No.3798 of 2010
C. A. NO.1755  OF 2013 @ SLP(C) No.3801 of 2010
C. A. NO.1756  OF 2013 @ SLP(C) No.3802 of 2010
C. A. NO.1757  OF 2013 @ SLP(C) No.3803 of 2010
C. A. NO.1758  OF 2013 @ SLP(C) No.3804 of 2010
C. A. NO.1759  OF 2013 @ SLP(C) No.3805 of 2010
C. A. NO.1760  OF 2013 @ SLP(C) No.3807 of 2010
C. A. NO.1761  OF 2013 @ SLP(C) No.3808 of 2010
C. A. NO.1762  OF 2013 @ SLP(C) No.3812 of 2010
C. A. NO.1763  OF 2013 @ SLP(C) No.3761 of 2010
C. A. NO.1764  OF 2013 @ SLP(C) No.3762 of 2010
C. A. NO.1765  OF 2013 @ SLP(C) No.3763 of 2010
C. A. NO.1766  OF 2013 @ SLP(C) No.3764 of 2010
C. A. NO.1767  OF 2013 @ SLP(C) No.3765 of 2010
C. A. NO.1768  OF 2013 @ SLP(C) No.3766 of 2010Page 5
5
C. A. NO.1769  OF 2013 @ SLP(C) No.3767 of 2010
C. A. NO.1770  OF 2013 @ SLP(C) No.3768 of 2010
C. A. NO.1771  OF 2013 @ SLP(C) No.3769 of 2010
C. A. NO.1772  OF 2013 @ SLP(C) No.3770 of 2010
C. A. NO.1773  OF 2013 @ SLP(C) No.3771 of 2010
C. A. NO.1774  OF 2013 @ SLP(C) No.3772 of 2010
C. A. NO.1775  OF 2013 @ SLP(C) No.3773 of 2010
C. A. NO.1776  OF 2013 @ SLP(C) No.3774 of 2010
C. A. NO.1777  OF 2013 @ SLP(C) No.3775 of 2010
C. A. NO.1778  OF 2013 @ SLP(C) No.3776 of 2010
C. A. NO.1779  OF 2013 @ SLP(C) No.3777 of 2010
C. A. NO.1780  OF 2013 @ SLP(C) No.3780 of 2010
C. A. NO.1781  OF 2013 @ SLP(C) No.3783 of 2010
C. A. NO.1782  OF 2013 @ SLP(C) No.3781 of 2010
C. A. NO.1783  OF 2013 @ SLP(C) No.3782 of 2010
C. A. NO.1784  OF 2013 @ SLP(C) No.3779 of 2010
C. A. NO.1785  OF 2013 @ SLP(C) No.3785 of 2010
J U D G M E N T
K.S. Radhakrishnan, J
Delay condoned.
1. Leave granted.
2. We  are  in  these  cases  called  upon  to  decide
 whether  a
minimum  continuous  service  in  an  academic  year  is  a  prerequisite for raising a claim for re-appointment under Rule 51A of Chapter XIV A of the Kerala Education Rules, 1959 (for short ‘ thePage 66 KER’) in view of sub-rule (3) of Rule 7A of the same chapter of the KER.
3. In the State of Kerala, the power for appointment of teachers
in aided schools is conferred on Managers of such schools under
Section 11 of the Kerala Education Act, 1958 (for short ‘the Act’)
while the salary and other benefits are to be borne by the State
Government under Section 9 of the Act.  Qualified teachers who
are  so  appointed  when  relieved  as  per  Rule  49  or  52  or  on
account  of  termination  of  vacancies  shall  have  preference  for
appointment to future vacancies as per Rule 51A of Chapter XIV A
of  the  KER.   Therefore,  when  vacancy  arises,  the  Manager  is
bound to comply with the procedure under Rule 51A and cannot
deny that statutory claim.   When once a valid appointment is
given to the teachers and such appointments are approved ipso
facto they become entitled to the benefits under Rule 51A.
4. The Management and the teachers, it is generally known,
started  misusing  the  above  statutory  provisions  for  getting
preference for future appointments by effecting appointments byPage 7
7
creating vacancies during the academic year.  Such unethical and
unhealthy practices led to creation of anticipatory vacancies and
multiple  claimants  under  Rule  51A  causing  drain  on  State
exchequer since the State is paying the salary.  The Government
in  order  to  check  such  practices  issued  an  order  G.O.(P)
No.169/04.G.Edn. dated 15.06.2004 stating that the claim for reappointment under Rule 51A of the KER would be limited to those
who had been appointed against regular/ leave vacancies having
a duration of not less than one academic year.  Further, it was
also  stated  that  vacancies  having  duration  of  less  than  one
academic year would be filled up on daily wage basis and in order
to  give  effect  to  that  Government  order,  it  was  ordered  that
necessary amendments would be made to sub-rule (3) of Rule 7A,
Chapter XIV A of the KER.
5. The  Government  of  Kerala  in  exercise  of  the  powers
conferred under Section 36 of the Act amended the KER vide its
notification  dated  G.O.(P)  No.  121/2005/G.  Edn.  Dated
16.04.2005.  Page 8
8
Unamended sub-rule (3) of Rule 7A  reads as follows:
“Vacancies the duration of which is two months or less
shall not be filled up any appointment”
Amended sub-rule (3) of Rule 7A reads as follows:
“Vacancies  the  duration  of  which  is  less  than  one
academic year shall not be filled up.”
The explanatory note to the above-mentioned Rules reads as
follows:
“(This  does  not  form  part  of  the  notification  but  is
intended to indicate the general purpose).
Under the existing sub-rule (3) of Rule 7A Chapter XIV A,
General Education Rules vacancies the duration of which
is  two  months  or  less  shall  not  be  filled  up  by  any
appointment.   Managements  of  aided  schools  are
appointing  teachers  in  short  leave  vacancies  the
duration of which is more than two months and it results
in  huge  financial  commitment  to  Government.   After
detailed examination of the matter Government inter alia
issued  order  as  per  G.O.(P)  169/2004/G.  Edn  dated
15.06.2004  to  the  effect  that  claim  for  appointment
under rule 51A of the Kerala Education Rule be limited to
those who have been  appointed against regular/leave
vacancies  having  a  duration  of  not  less  than  one
academic year.  The Government has now decided to
give statutory validity to the above Government order.
The notification is intended to achieve the above object.”Page 9
9
6. The Government issued another clarificatory order G.O.(P)
No. 31/06GE dated 19.01.2006 dealing with the appointment of
teachers in short vacancies which is not of much relevance, but
for  completeness,  the  operative  portion  of  the  same  is  given
below:
“In the above circumstances, Government are pleased
to clarify that the condition in Para 6 of G.O. (P) No.
169/2004/GE dated 15.06.2004 shall not apply to the
appointments  on  promotions  to  the  post  of  Head
Master,  to  the  appointments  given  under  Rule  43,
Chapter XIV A KERs and to the reappointments of those
who had acquired the claim under Rule 51A, Chapter
XIV A KERs, if the reappointment is to a vacancy having
the duration of more than 2 months as existed prior to
the amendment.  Necessary amendment to the rules
shall be made to this effect and the Director of Public
Instruction shall furnish proposals for the same.”
7. The Government of Kerala later issued a clarificatory order
vide G.O. (P) No. 104/2008/G Edn. Dated 10.06.2008 regarding
the nature of appointment and admissibility of vacation salary as
per Rule 49 of Chapter XIV A of the KER to teachers appointed in
leave / regular vacancies making it applicable to appointments in
both  leave  vacancies  and  regular  vacancies.   The  operative
portion of clauses 5, 6 and 7 reads as follows:Page 10
10
“5.  As per rule 7A (3) of Chapter XIV A KER, if the
period of appointment is less than one academic year,
the appointment cannot be approved on regular basis.
This has caused many doubts among various quarters,
requiring  clarification  regarding  the  nature  of
appointment and admissibility of vacation salary as per
Rule 49 of Chapter XIVA KER to teacher appointed in -
leave / regular vacancies.  In view of the above, the
following  orders  are  issued  with  immediate  effect.
These  are  applicable  to  appointments  in  both  leave
vacancies and regular vacancies:-
(i) If the period of appointments does not cover
one academic year (i.e. from the re-opening
day of the school after summer vacation to
the  closing  day  for  summer  vacation),  the
appointment  shall  be  made  only  on  daily
wages.
(ii) If  the  period  of  appointments  commences
after the beginning of the re-opening day but
extends over the next academic year/years,
the period up to the first vacation shall be
approved  on  daily  wages  only.   Reappointment  can  be  approved  on  regular
basis, only if the duration of the period of reappointment completes one academic year.  If
the period of re-appointment is also less than
one academic year, that re-appointment will
also be considered only on daily wages basis.
In short, fractions of an academic year will not
be considered for approval on regular basis;Page 11
11
(iii) In  the  case  of  appointment  of  Rule  51A
claimants, promotion of Rule 43 claimants and
appointment  /  promotion  of  teachers  as
Headmasters,  temporary
Headmaster/teachers-in-charge, approval will
be granted on regular basis if the period of
appointment is more than 2 months;
(iv) The  appointments  made  against  training
vacancies  shall  also  be  filled  up  on  daily
wages only except in the case of (iii) above;
(v) If a leave substitute, appointed on daily wages
continues in service without any break for one
full academic year consequent to extension of
leave, the appointment shall be revised and
approved  as  on  regular  basis.   However,  if
different  leave  substitutes  are  appointed  to
the  same  post,  this  benefit  shall  not  be
extended to them;
(vi) Appointments  in  leave  vacancy  and  regular
vacancy shall be treated separately;
(vii) The  admissibility  of  vacation  salary  as
provided in rule 49 Chapter XIV A KER will not
be applicable to appointments on daily wage
basis. Necessary amendments to this effect in
the KER shall be made separately.Page 12
12
6. The claim under Rule 51A Chapter XIVA KER will
not be admissible to those teachers appointed on daily
wage basis.
7. This order will take effect from the date of the
order only.  The approval of appointments given prior to
this order shall not be reviewed.”
8. The main challenge is with regard to the validity of clause
5(i) and (ii) of the above mentioned that Government order which
according to the respondents go contrary to sub-rule (3) of Rule
7A,  Chapter  XIV  A  of  the  KER  and  hence  ultra  vires and
unenforceable.
9. Shri, C.S. Rajan, learned senior counsel appearing for some
of the respondents submitted that sub-rule (3) of Rule 7A speaks
of “vacancies” the duration of which is less than one “academic
year” which means if the vacancy is having a duration of one
academic year or more, appointment can be made to fill up the
same.   Learned  senior  counsel  pointed  out  that  the  term  of
appointment  need  not  be  co-terminus  with  the  term  of  the
vacancy.  Further, it was pointed out that if in fact, the vacancy isPage 13
13
having a duration of one academic year or more, even if, there is
some delay in making the appointment, such appointment will
have to be approved since Rule 7A speaks of duration of vacancy
and not duration of appointment.
10. Shri P.A. Noor Muhamed, learned counsel appearing for some
of the respondents while submitting written arguments pointed
out that as per the scheme of the KER and conjoint reading of the
provisions of Chapter XXIII and sub-rule (3) of Rule 7A and Rule 49
under  Chapter  XIV  A  of  the  KER  it  is  clear  that  “time  of
appointment” is immaterial and what is material is the “duration
of vacancies”.  Further, it was pointed out that as per the scheme
contemplated under the provisions in Chapter XXIII of the KER,
appointments in regular vacancies can be made only after the
receipt  of  orders  of  departmental  authorities  on  staff  fixation
which is in turn based on the students’ strength as well, which can
be ascertained only after the beginning of the academic year.  It
was pointed out that merely because appointment was not made
in  consonance  of  the  first  academic  year,  approval  of
appointments cannot be denied ignoring the fact that the vacancyPage 14
14
in which the appointment made runs to more than one academic
year.  The delay, if any, in making appointment is not due to the
fault of the teachers and hence they shall not be penalized.
11. Learned  counsel  appearing  for  the  respondents  therefore
submitted that the impugned G.O. dated 10.06.2008 is contrary
to sub-rule (3) of Rule 7A of the KER and has rightly been declared
so by the High Court which calls for no interference by this Court.
12. Shri V. Giri, learned senior counsel appearing for the State of
Kerala  submitted  that  the  Government  have  issued  the
notification dated 14.06.2005 amending Sub rule (3) of Rule 7A
followed by the Government order dated 10.06.2008, so as to
avoid the unhealthy practices followed by certain aided school
managers by appointing teachers in short spells thereby creating
more  51A  claimants  creating  multiple  claims.   Learned  senior
counsel  submitted  that  the  Government  Order  is  only  a
clarification to the statutory amendment made in sub-rule (3) of
Rule 7A of the Rules.  Learned senior counsel also submitted that
there is no restriction in the matter of appointment of teachers inPage 15
15
anticipated  vacancies  due  to  retirements,  promotions,
resignations  etc.  provided  it  is  an  established  vacancy  which
could be anticipated well in advance.  Learned senior counsel
submitted that the Managers of the aided schools are free to
appoint  teachers  on  regular  basis  from  the  starting  of  the
academic  year  against  regular/established  vacancies  and  they
need not wait for appointments till completion of staff fixation as
per  the  provisions  under  KER.   Learned  senior  counsel  also
submitted  that  the  Managers  can  make  appointments  in
anticipation of sanction of additional posts by the educational
authorities as per Rule 12B Chapter XXIII of the KER and such
posts shall be deemed to have been created from the date of
appointments.
13. Learned  senior  counsel  also  submitted  that
permanency/promotional vacancy which are in existence on the
beginning  of  the  academic  year  though  filled  up  during  the
academic year is also not covered by the impugned notification so
also the vacancies which arise due to death are also not hit by the
impugned notification.  Further, it is also pointed out that leavePage 16
16
vacancies  which  are  in  existence  on  the  beginning  of  the
academic year can also be filled up during the academic year
which also are not covered by the impugned notification.
14. We have heard learned counsel on either side at length.  WP
(C) No. 2563 of 2009 against which SLP (C) No. 22332 of 2009
arises was treated as the main case by the High Court, hence we
treat that case as the leading case for disposal of these batches
of appeals since questions of law arise for consideration are the
same.
15. Shri Shinoj T. Elias, High School Assistant (HSA) (English) who
was working in St. Mary’s Higher Secondary School, Morakkala, an
aided school, applied for leave from 08.07.2008 to 07.07.2013
and the leave was granted by the Manager of that school.  The
first respondent (herein) who was the writ petitioner before the
High Court was appointed in that vacancy on 06.10.2008 and the
period  of  her  appointment  would  normally  expire  only  on
07.07.2013.   The  Manager  of  the  school  forwarded  that
appointment order for approval to the District Educational OfficerPage 17
17
(DEO).  But the DEO approved the appointment from 06.10.2008
to 31.03.2009 only on daily wage basis based on the Government
order  dated  10.06.2008.   Based  on  the  impugned G.O.  dated
10.06.2008, it was pointed out by the first respondent before the
High  Court  that  the  vacancy  had  duration  of  five  years  and
therefore her appointment should have been approved without
any  time  limit  in  the  same  scale  of  pay  applicable  to  HSAs.
Reliance was placed on sub-rule (3) of Rule 7A of the Rules which
was found favour by the Division Bench of the High Court.
16. We may before examining the scope of sub-rule (3) of Rule
7A and the proviso to Section 51A read with the Government
Order dated 10.06.2008 examine the scheme of the Act and the
KER and the object and purpose of sub rule 3 of Rule 7A as well as
the  impugned  order  dated  10.06.2008.   We  have  already
indicated that as per the Kerala Education Act and the KER, the
Manager  of  the aided  School  is  free  to  make  appointment  of
teachers in their respective schools who are qualified according to
the Rules and the entire salary and other allowances have to be
borne by the State Government.Page 18
18
17. Rule 51A of the Chapter XIVA of the KER states qualified
teachers  in  aided  schools  who  are  relieved  on  account  of
termination of vacancies shall have preference for re-appointment
in future vacancies in the aided schools.  Rule 43, Chapter XIV A
of the KER states that the vacancies in any higher grade of pay
shall be filled up by promotion in the lower grade according to the
seniority.
18. We cannot read sub rule (3) of Rule 7A in isolation, it has to
be read in the light of the proviso to Section 51A, they have to be
read as parts of an integral whole and as being interdependent.
Legislature has recognized that interdependency since both sub
rule (3) of Rule 7A and the proviso to Section 51A were inserted
by the same amendment in the year 2005.
19. The expression “vacancies” used in sub-rule (3) to Rule 7
means ‘posts which remain unoccupied”.  Rule does not say that
the duration of vacancy is to be determined from the time whenPage 19
19
the vacancy occurs to the time when it expires.  Duration means
the time during which something continues, i.e the continuance of
the incumbent.  As stated in the Notification dated 15.06.2004 the
vacancies having a duration of less than one academic year can
be filled up on daily wage basis.  Sub-rule (3) to Rule 7A uses the
expression “academic year”.  Rule 2A of Chapter VII of the KER
refers to the academic year, which reads as follows:
“2A.  Academic year shall be deemed to commence on
the  re-opening  day  and  terminate  on  the  last  day
before the summer vacation.”
20. Rule 1 of Chapter VII says “all schools shall be closed for the
summer vacation every year on the first working day on March
and re-opened on the first working day of June unless otherwise
notified by the Director.”  The Notification dated 10.06.2008 only
says if the period of appointment does not cover one academic
year i.e. the re-opening of the school after summer vacation to
the closing day for summer vacation, the appointment shall be
made only on daily wage basis.  So also if the period commences
after the beginning of the re-opening day, but extends either nextPage 20
20
academic year/years the period upto the first vacation shall be
approved on daily wages only which does not take away the right
of  the  managers  of  the  aided  schools  to  appoint  teachers  in
vacancies that may arise by way of promotion, death, resignation
etc.  Restriction is only with respect to the minimum tenure/period
for a new appointee to become a 51A claimant, that is the object
and purpose of sub-rule (3) to Rule 7A read with proviso to Rule
51A of Chapter XIV-A of the KER.
21. The object and purpose of the Notification dated 16.04.2005
issued by the Government in exercise of the powers conferred
under  Section  36  of  the  Kerala  Education  Act  is  to  curb  the
unhealthy  practices  adopted  by  certain  managers  of  aided
schools by creating short-term vacancies or appointing several
persons in a relatively long leave vacancies itself thereby making
several 51A claimants against one and the same vacancy.  The
object and purpose of the above-mentioned notification is also to
end the practice of creation of multiple claimants in anticipatory
vacancies creating more 51A claimants imposing huge financial
commitment to the Government.Page 21
21
22. Sub-rule  (3)  to  Rule  7  does  not  restrict  the  right  of  the
managers of various schools in making the regular appointments
in  the  established  vacancies,  what  it  does  is  to  prevent  the
misuse  of  that  provision  and  to  prevent  the  aided  school
managers in creating short-term vacancies and appointing several
persons in those vacancies so as to make them claimants under
Rule 51A.  Looking to the mischief or evil sought to be remedied,
we have to adopt a purposive construction of  sub-rule (3) of Rule
7A read with proviso to Rule 51A of Chapter XIV-A of the KER.
23. We are inclined to adopt such a construction since the stand
of  the  respondents  is  that  Rule  7A  speaks  of  “duration  of
vacancies” and not “duration of appointment”.  The expression
“vacancy” used in sub-rule (3) to Rule 7A has to be read along
with the expression “academic year” so as to achieve the object
and purpose of the amended sub-rule (3) to Rule 7A so as to
remedy the mischief.  Evil, which was sought to be remedied was
the  one  resulting  from  vide  spread  unethical  and  unhealthy
practices followed by certain aided school managers in creatingPage 22
22
short term vacancies during the academic year.  We are adopting
such a course, not because there is an ambiguity in the statutory
provision but to reaffirm the object and purpose of sub-rule (3) to
Rule 7A read with proviso to Section 51A and the Government
Order dated 10.06.2008.
24. We notice later the Government passed yet another GO(P)
56/11/Gen.Edn dated 26.02.2011 clarifying the earlier GO dated
15.06.2004 and 10.06.2008.  The operative portion of the same
reads as under:
“1. Approval can be granted subject to the conditions
under  Rule  49  Chapter  XIV-A  of  the  K.E.R.  for  the
appointments  to  the  vacancies  arising  due  to  the
existing teachers’ retirement, resignation, death long
leave etc. and to the approved vacancies arising and
continuing  beyond  31
st
 March  due  to  sanctioning  of
additional divisions.
2. Appointments for a duration of less than 8 months
in an academic year can be  approved on daily wage
basis and appointments of a duration of more than that
are to be approved as regular (on pay scale).”
25. We  have  referred  to  the  above  GO,  for  the  sake  of
completeness,  which  has  of  course  no  bearing  on  thePage 23
23
interpretation which we have placed on sub-rule (3) to Rule 7A
read with the proviso to Rule 51A of Chapter XIV-A of the KER, but
may have application on facts in certain cases which have to be
decided independently.
26. We are, therefore, inclined to allow these appeals and set
aside  the  judgment  of  the  Division  Bench  with  the  following
directions:
(i) A teacher, who was relieved from service under Rules
49 and 53 of Chapter XIVA of the KER, is entitled to
get preference for appointment under Rule 51A only
if the teacher has a minimum prescribed continuous
service in an academic year as on the date of relief.
(ii) The  Manager  of  an  aided  school  can,  however,
appoint teachers in vacancies occurred due to death,
retirement, promotion, resignation, long-term leave
etc. provided they are established vacancies and the
approval can be granted subject to the conditions
under Rule 49 of Chapter XIV A of the KER.Page 24
24
(iii) Approval can also be granted to appointments made
to  the  approved  vacancies  arising  and  continuing
beyond 31
st
 March due to sanctioning of additional
divisions.
(iv) The Manager can make appointments in school even
if the duration of which is less than one academic
year but on daily wages basis and if the duration of
vacancy  exceeds  one  academic  year  that  can  be
filled up on scale of pay basis.
(v) The Manager is free to appoint teachers on a regular
basis from the re-opening date itself against regular
established  vacancies  and  need  not  wait  for  the
appointments till completion of the staff fixation as
per the KER.
(vi) Teachers who have been appointed in the midst of
the academic year and not completed the requisite
minimum continuous service before vacation will not
be entitled to get vacation salary.Page 25
25
27. Appeals  are  accordingly  allowed  and  disposed  of  as
above setting aside the judgment of the High Court but there
will be no order as to costs.
………………………….J.
(K.S. Radhakrishnan)
…………………………J.
               (Dipak Misra)
New Delhi,
February 22, 2013

Order 41 Rule 27 CPC contemplates that wherever additional evidence is allowed to be produced by the appellate Court, the court should record reasons for its admission. We find that the first appellate Court did not reject the application under Order 41 Rule 27 CPC, nor did it assign any reasons while recording that only production of the documents was allowed. We are of the view that the procedure adopted was incorrect. The first appellate Court ought to have passed an order in respect of the application under Order 41 Rule 27 CPC, either allowing or rejecting the application. The first appellate Court has considered the application as if it was one under Order 13 Rule 1 CPC and not under Order 41 Rule 27 CPC. The High Court ought to have therefore interfered in the matter by raising an appropriate question of law. It failed to do so. The judgments, therefore, call for interference. 5. We, therefore, allow this appeal and set aside the judgment and decree of the High Court and first appellate Court and remand the matter to the first appellate Court with a direction to consider and dispose of the application under Order 41 Rule 27 CPC in accordance with law and then decide the first appeal.

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 5185 OF 2008
[Arising out of SLP(C) No.14423/2007]
NAMDEO S/O BAPURAO BANSOD .......APPELLANT(S)
Versus
TUKARAM S/O MAROTRAO JADHAV .....RESPONDENT(S)
O R D E R
Leave granted. Heard learned counsel for the parties. The appellant and
respondent are respectively the plaintiff and defendant in a suit for permanent
injunction.
2. The appellant's prayer in the suit was to restrain the respondent from
interfering with his possession of agricultural field S.No.131/2 of Ridhora village
measuring 4 acres. The suit was dismissed by judgment and decree dated 31.7.2000.
The appellant filed an appeal before the District Judge, Akola. During the pendency of
the said first appeal before the District Judge, the appellant filed two applications. One
application was for amendment of plaint, under Order 6 Rule 17 of CPC. The second
application was under Order 41 Rule 27 of CPC to accept the certified copies of
revenue extracts relating to the suit land as additional evidence.
........2.- 2 -
3. The first appellate Court allowed the application for amendment by order
dated 20.4.2002. By another order dated 20.4.2002, the first appellate Court permitted
production of documents. Ultimately, the first appellate Court dismissed the appeal by
order dated 19.6.2006. While doing so, it did not refer to or consider the documents,
production of which was permitted. The second appeal filed by the appellant was also
dismissed by the High Court. Dealing with the contention of the appellant that the first
appellate court ought to have considered and taken into account the additional
evidence, the High Court held that it was not sufficient for the appellant to merely file
an application under Order 41 Rule 27 CPC; that he ought to have specifically
requested the first appellate court to remit the matter to the trial Court for further
evidence;  and that in the absence of such prayer, the first appellate Court was justified
in ignoring the said documents.
4. It is true that the first appellate Court only allowed “production of
documents” and did not make any order receiving them as additional evidence. The
documents produced by the appellant were all certified copies of crops statement,
record of rights, index of lands and revenue proceedings. The appellant was
apparently under the impression that his application for additional  evidence  had been
allowed and the
.....3.- 3 -
documents had been accepted as evidence. Order 41 Rule 27 CPC contemplates that
wherever additional evidence is allowed to be produced by the appellate Court, the
court should record reasons for its admission. We find that the first appellate Court
did not reject the application under Order 41 Rule 27 CPC, nor did it assign any
reasons while recording that only production of the documents was allowed. We are of
the view that the procedure adopted was incorrect. The first appellate Court ought to
have passed an order in respect of the application under Order 41 Rule 27 CPC, either
allowing or rejecting the application. The first appellate Court has considered the
application as if it was one under Order 13 Rule 1 CPC and not under Order 41 Rule
27 CPC. The High Court ought to have therefore interfered in the matter by raising an
appropriate question of law. It failed to do so. The judgments, therefore, call for
interference.
5. We, therefore, allow this appeal and set aside the judgment and decree of the
High Court and first appellate Court and remand the matter to the first appellate
Court with a direction to consider and dispose of the application under Order 41 Rule
27 CPC in accordance with law and then decide the first appeal.
...........................J.
( R.V. RAVEENDRAN )
New Delhi; ...........................J.
August 18, 2008. ( P. SATHASIVAM )

The marine policy is pitted against a Fire Policy, = “Whether the ‘Doctrine of Contribution’ is applicable in this case?. The marine policy is pitted against a Fire Policy, obtained from United India Insurance Co. Ltd., OP2, in this case. Clause 4 of the Fire Insurance Policy states : “This insurance does not cover any loss or damage to property, which at the time of the happening of such loss or damage, is insured by or would, but for the existence of this policy, be insured by any marine policy or policies except in respect of any excess beyond the amount which would have been payable under the Marine Policy or policies had this insurance not been effected”. The other question is “Whether other clauses of Insurance Policy will pale into insignificance?. The said Clause is to be read as vacua or as a part of whole composite policy?. The another knotty question is “Whether the complainant has insurable interest?. - In view of the facts and circumstances of this case, no liability can be fastened upon OP2. However, instead of helping the complainant, it supported the OP1. Why did OP2 work in cahoots with OP1? On the other hand, the OPs compelled the complainant to give the undertaking that they would not claim any amount from the Marine Policy as they would compensate it completely, on the other hand, OPs want to shirk from paying 50% of the loss. - We, therefore, direct the OP1 to pay 50% of the total loss of Rs.2,06,86,406.24ps with interest @ 9% p.a. from the date of filing of this complaint, i.e. 07.06.2000, till realisation of the decreetal amount, to the complainant. Compensation for mental agony and harassment, in the sum of Rs.50,000/- is also granted, payable by OP1, to the complainant, within 45 days, failing which it will carry interest at the rate of 9%, p.a., till realisation.

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
ORIGINAL PETITION NO. 165 OF 2000
Andagro United  Services Ltd. Now Known as Noble Resources & Trading India Pvt. Ltd. Registered office at 1A, Vandana Building, 11,Tolstoy Marg                                          New Delhi – 110 001 Carrying on business at : 45-47, Atlanta, Nariman Point                                                       Mumbai – 400 021                                                   …. Complainant
Vs.
1. United India Insurance Co. Ltd. Registered office at 24, Whites Road, Chennai & Divisional Office No.5, 68/1 Janpath, New Delhi 2. Central Warehousing Corporation Through its CMD, having its registered office At 4/J, Siri Fort, Institutional Area, Khel Gaon Marg New Delhi – 110 016 At Opp.Fire Station, Near West Gate, Kandla Port      … Opp.parties
BEFORE: HON’BLE MR.JUSTICE J. M. MALIK , PRESIDING MEMBER HON’BLE MR. VINAY KUMAR, MEMBER
For the Complainant :  Ms. Ramni Taneja, Advocate For OP1                    : Mr. S.M. Tripathi, Advocate For OP2                    : Mr. Manoj K. Srivastav, Advocate PPRONOUNCED ON_19.02.2013
ORDER

JUSTICE J.M. MALIK

1.      In this case, filed in this Commission on 07.06.2000, the main controversy swirls around the question 

“Whether the ‘Doctrine of Contribution’ is applicable in this case?.  

The marine policy is pitted against a Fire Policy, obtained from United India Insurance Co. Ltd., OP2, in this case.  

Clause 4 of the Fire Insurance Policy  states :

“This insurance does not cover any loss or damage to property, which at the time of the happening of such loss or damage, is insured by or would, but for the existence of this policy, be insured by any marine policy or policies except  in respect of any excess beyond the amount which would have been payable under the Marine Policy or policies had this insurance not been effected”.

The other question is 

“Whether other clauses of Insurance Policy will pale into insignificance?.  The said Clause is to be read as vacua  or as a part of whole composite policy?.  

The another knotty question is “Whether the complainant has insurable interest?.

2.      Let us now proceed to mention the facts of the case. The complainant is an Importer and Dealer in commodities.  

In April, 1998, the complainant imported 5000MTs  sugar to Kandla.  The sugar was purchased CIF (Cost, Insurance, Freight) and the complainant’s Seller  insured the cargo with Gerling-Konzern, who are the marine insurers and assigned the insurance to the complainant.  

The insurance with marine insurers was on a declaration basis and it was declared for a proportion CIF value of USD 662112.  

The cargo arrived at Kandla on 04.05.1998 by ship.  It was cleared by the customs.  A total relevant quantity of 181 MTs  remained with the port premises and were stored in Central Warehousing Corporation (CWC), OP2.  

OP 2 charged the complainant for warehousing services and as a separate charge, charged for obtaining insurance. Insurance covered risk of “storm, cyclone, typhoon, tempest, hurricane, tornado, flood and inundation”.  

The consideration was paid by the complainant in the first instance to OP2 and OP2 subsequently passed on the same to the United India Insurance Co. Ltd.,OP1. 

OP2 is required to make periodical declarations to OP1. 

 OP2 is bound to obtain a proper and adequate insurance cover and to ensure that any insurance claim is paid to the complainant.

3.      On or about 09.06.1998, a total quantity of 181MTs remained in the godown of OP2.  

The port of Kandla was hit by a storm/cyclone, became inundated and flooded and was otherwise struck by an occurrence covered by the insurance policy.  The warehouse and the port was flooded and all the goods were rendered unfit for human consumption.  The goods were tested by the Port Health Organisation  and were found not to conform to the standards and provisions of the Prevention of Food Adulteration Rules.  Certificate in this context, dated 26.06.1998 has been placed before the Commission. OP2 was the Bailee of the goods and in actual custody of the goods.  It was required to take due care of the goods as well as to take all  necessary steps to protect the goods. 

On 17.11.1998, the complainant filed its claim with OP2. OP2 refused to disclose the terms of the insurance. 

Sh.H.Srinivasan, Sr.Divisional Manager of OP1 refused to disclose the full terms and conditions of the policy.  He read over selective  reading which was designed to mislead the complainant which is itself a deficiency in service.

4.      Prior to that, on 03.03.1999, the OPs forced and induced the complainant to give an undertaking that they would not claim under the marine policy, but refused to disclose the policy.  

The complainant by its letter dated 08.03.1999, gave the undertaking. In response to the complainant’s  Advocate’s letter, the OP2, purported to have forwarded a copy of the policy by its letter dated 25.08.1999. 

The said policy contained only one printed page which purported to exclude the liability of OPs.  The non-supply of the full copy was another deficiency in service. The above said copy was incomplete and incorrect. However, vide their letter, dated 09.11.1999, OP1 dishonestly stated that the policy was complete.   The complainant vide its letter dated 23.12.1999 asked the OP to send copy of each page of the policy, but in response to the said letter, the complaint policy was not sent, instead, a  blank form containing printed terms and conditions was sent. 

5.      In the meantime, the complainant’s marine insurer, on  21.10.1999, in absence of any accurate information on the policy of OP1, considered the claim as a ‘Double Insurance’ and settled the claim by paying 50% of the policy  and   balance was to be claimed from the OP’s policy.  

The claim of the complainant results from a total loss of 1881MTs of white refined sugar valued at USD 352.00 per MT @ Rs.44.05 equivalent to Rs.15,505.60 per MT and having a total value of USD 662,112.00 @ Rs.44.05 equivalent to Rs.2,91,66,033.60. 

The complainant claims  the  sum of USD 4,65,910.00 @ Rs.44.40 equivalent to Rs.2,06,86,406.24 being the total of the actual relevant cost of the goods i.e. USD 331,056.00 @ Rs.44.40 equivalent to Rs.1,45,79,706.24 plus interest @ 21% p.a. from the date of loss, i.e. 09.06.1998 till 06.06.2000.  

The complainant has also claimed other proportionate relevant expenses in the sum of Rs.6,78,787/- along with interest @ 21%.p.a., compensation and damages in the sum of Rs.1,20,00,000/- against the OPs, jointly  and severally. 

6.      It is contended that the above said deficiency,  on the part of OPs is apparent.  The policy and full terms, and complete policy was never disclosed.  The complainant was misled by giving false excerpted terms of the policy.  The failure of the OP to consider and honour the complainant’s claim or to perform the acts and deeds and things necessary for the expeditious consideration and the honouring of the complainant’s claim by the marine insurers.  In the alternative, if the policy does not cover the complainant’s claim, the said OP has provided deficient service in  charging premium  and failing to obtain a proper and complete insurance policy with the complainant, the acts and omissions of OP has resulted in the complainant’s claim being settled at 50% on their claim by the marine insurers and, therefore, OPs  are liable to pay for the same.  Again contract of insurance is a contract of  ‘uberrimae fides’.  OP1 owed a duty of utmost  good faith to the complainant and was in breach of their duty.  It avoided to perform all the obligations.  2^nd OP was an agent and/or bailee  and/or  warehouseman and  owed diverse duties of care and faith to the complainant.  OP2 while working with OP1 in cahoots, sought to avoid making payment under the insurance and to assist the OP1 in breaching its obligations.

7.      In its written statement, OP1 has listed the following defences.  The complainant is not a “consumer”.  The complainant has not hired or availed of  any services from OP1 for a consideration.  It is also not the beneficiary of such services.  The complainant is not a ‘consumer’ in terms of Section 2(b)(i) of CP Act, 1986 as he  has not hired or availed of the services of OP1.  Before a  dispute can be termed as a ’consumer dispute’, it is necessary that the petition should be in terms of the Act. This complaint does not constitute a complaint in terms of Section 2(c)(iii) as there is no consumer dispute and the complaint is not maintainable.  The complainant  does not disclose any provisions of law under which the services by the OP1 was required to be maintained.    OP1 did not undertake any services to be performed to complainant in pursuance of a contract or otherwise as there is no question of any deficiency in discharge of its service.

8.      As a matter of fact, OP1 had issued a Fire Insurance Policy to OP2.  The said contract is purely between the OPs.  No third-party or a stranger to a contract has any right to lay his claim against OP1 on the basis of the said insurance policy.  The above mentioned insurance policy issued in favour of OP2 is itself dependant for its revival upon the compliance by OP2 with the terms and conditions and obligations specified in the policy.   OP2, in whose favour the insurance policy has been issued, can also not  transfer its rights under the policy to a third-party without the consent of OP1 as the insurance policy is a personal contract between the contracting parties. The complainant cannot acquire a right to sue under the policy and cannot maintain the petition against the OP1.  The complainant had no right to ask declaration of the contents of the insurance policy existing between OP1 and OP2 and to which insurance policy the complainant itself is not a party.  The complaint was not filed in accordance with Section 12 of Consumer Protection Act, 1986. 

9.      OP1 admits that the sugar was imported.  The Seller had insured the sugar and the insurance policy was assigned to buyer/complainant.  The contribution in marine insurance applies only when the insurable interest is covered in more than one insurance policies, which ought to have become clear to the complainant and its marine insurer that if at all there was a fire insurance existing in the name of OP2, it would necessarily cover the insurable interest only of OP2 in the goods, which insurable interest would be very different  than the one possessed by the complainant in respect of the subject matter.  Merely because the goods are the same, the contribution does not apply at all.  It was wrong for the marine insurer to have assumed that contribution applied. In case the complainant and its marine insurers proceeded under a misunderstood provisions of insurance law, it is a matter between themselves and the OPs  are not liable for the result flowing from such misunderstanding. Again, the subject matter of two contracts are not identical.  The law of contribution does not apply.  All the other allegations have been denied.

10.    Now, we advert to the written statement of OP2.  OP 2 admitted that the stock of the complainant  was stored in the Kandla Warehouse.  The insurance of the stock was arranged with OP1 on behalf of the complainant.  The storage charges as well as the insurance charges were collected from the complainant at the time of delivery of the stock.  It is admitted that stocks of the complainant were damaged in a cyclone on 09.06.1998, due to natural calamity. Consequently,  it cannot be said that there was deficiency in service on part of OP2.  The marine insurance policy was assigned to buyer/complainant.  The credit note towards insurance charges was, for the first time, raised only on 31.08.1998 onwards. Whereas, the credit note towards the storage charges was raised on 03.06.1998 onwards.  The insurance charges were recovered from the complainant only subsequent to the cyclone on 09.06.1998.  Even though the same had been paid by OP2 to the insurance company in advance.  OP2 has taken fire declaration from OP1 on behalf of  all depositors whose goods arrive in the warehouse and covers all warehouses, OP2, situated all over India.  A sum of Rs.3.90 crores were paid by OP2 to OP1 as a premium towards the said policy for the year 1998-99.  It is averred that the policy obtained by OP2 is a normal fire declaration with standard terms and conditions and, therefore, there was nothing confidential about the same.  But on the other hand, the complainant failed to make available to OP2, the copy of marine insurance policy obtained by it, in spite of several reminders.  The complainant has already got compensation to the extent of 50%  of the claim.  As per the conditions of the Fire Policy, the complainant had to first pursue the claim with the marine insurer.  The marine insurer should have discharged its liability in full under the marine policy.  The complainant should have pursued its right to recover the full amount of claim under the marine policy because it extended to cover the entire amount of loss. OP2 is not liable to the loss as it had happened force majure and secondly the fire insurance of a bailee covers interest from that of an owner of property and thirdly the fire insurance policies the world over contain the ‘Marine clause’ whereby the fire insurance can be called in  to consider the claim, if any, only in excess of the liability under marine policy.

11.    The claim made by Complainant  is an  exaggerated one. It cannot set up a claim for an amount in excess of that calculated strictly on the basis of principle of indemnity.  However, in any case, OP2 is prepared to pay the compensation to the depositors if OP1 agrees to pay the same and the same is received from OP1.

12.       We have heard the counsel for the parties and perused their written synopses. Both the OPs  have placed much reliance on Clause 4 of the Insurance Policy. Before proceeding further, it would be worthwhile to reproduce the relevant salient features of the Fire Policy :

          Clause 4 of the said policy, already stated above.

          Clause 6 of the said policy states : It is hereby declared and agreed that the property insured under this policy is either the insured’s own or held by him/them in trust, in deposit or in commission or on joint account with others for which he/they is/are liable in the event of loss or damage by fire.

          Clause 11 of the policy states : If at the time of any loss or damage happening to any property hereby insured,  there be any other subsisting insurance or insurances, whether effected by the insured or by any other person or persons covering the same property, this Company shall not be liable to pay or contribute more than its rateable proportion of such loss or damage.

          Clause 3 of the Special Conditions appended with the policy, runs as follows:- “If at the time of any loss or damage happening to any property hereby insured there be any other subsisting insurance or insurances, on other than a declaration basis, whether effected by the insured or by any other person or persons covering the stocks hereby insured, this policy shall apply only to the excess of the value of such stocks at the time of the loss over the sum insured by such other insurance or insurances, this Company shall not be liable to pay or contribute more than that proportion of such loss which such excess [or if there be other declaration insurances covering the same stocks, a rateable proportion of such excess], but not exceeding the Sum Insured hereby, bears to the total value of the stocks”.

          Another special condition is also reproduced hereunder :-

          “It is understood and agreed that the entire property in one complex/location is extended to cover risk of Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation and the sum insured for this extension is identical to the sum insured against the risk covered under Fire Policy ‘C’”.

13.    It was argued that contribution in marine insurance applies only when the same insurable interest is covered under more than 1 insurance policies.  It was submitted that it ought to have become clear to both the complainant and his marine insurer that if at all, there was any fire insurance existing in the name of OP2, it would necessarily cover the insurable interest only of OP2 in the insured property which insurable interest would be very different than the one possessed by the complainant in respect of the subject matter.  It was emphasised that merely because the goods are the same, the contribution does not apply at all.  The marine insurer wrongly assumed that the ‘Doctrine of Contribution’ is applicable.  Moreover, there were two contracts of insurance, i.e. (1) the marine policy existing between the complainant and his marine insurer and (2) fire policy existing between OP1 & OP2. Since it does not contain the same insurable interest, the law of contribution  does not apply and the OP1 had no duty to disclose to overseas marine insurer, the nature or extent of contract of fire insurance existing between the OPs.

14.       It was also argued that the complainant had not hired or availed of any service of OP2 for consideration.  The complainant is also not a beneficiary of such service.  The complaint does not constitute  a complainant as there is no consumer dispute vis-à-vis, this OP.  Since OP1 has not undertaken any service to be performed by complainant in pursuance of a contract or otherwise, therefore, there can be no allegation of deficiency  in this case.  OP1 had issued a fire insurance policy in favour of OP2.  There is no privity of contract between the complainant and OP1.  OP2 also cannot transfer its rights under the policy to a third-party without the consent of OP1. Again, insurance policy is a transfer contract between the contracting parties.  The complainant cannot acquire a right to sue under the policy and cannot maintain the complaint.  The complainant has no right to ask disclosure of the contents of the insurance policy existing between the OP1 & OP2 to which insurance policy, the complainant is a stranger.

15.    In their written submissions, OP2 admits that the above said cyclone did not give any time to OP2, to save the stocks as there was no prior warning.  The cyclone caused damage worth Rs.600.00 crores at Kandla port.  The official death toll went up to 100 persons.  The complainant did not plead that there was negligence on the part of OP2 in keeping all the goods in warehouse and ipso facto, the deficiency of service does not arise on the part of OP2.  This is loss of goods and act of God, which is not covered under the fire policy.  This is universal practice across the globe.  As per clause 4, 11 and clause 3 of the Special Conditions, the complainant had to exhaust the remedy first of all against the marine policy to the  full extent.  In the instant case, the complainant submitted its undertaking/bond dated 08.03.1999 that the complainant would not take the subject claim from the Marine Insurance of M/s. Gerline but per contra, despite submitting undertaking, the complainant obtained claim from marine insurance and settled the claim at 50%.  Since the complainant  had already settled the claim with marine policy, he is not entitled to get any claim from OP2.  Moreover, Central Warehouse Corporation is not liable by virtue of clause 4.  The Doctrine of Double Insurance is not applicable.  Both the parties did not incorporate contribution clause. Moreover, OP2 kept good under statutory provision not because of any contract with complainant.  OP2 is appointed by the Customs under Section 57 of the Customs Act, 1962, as  Public Warehouse for keeping the goods which are subject to customs clearance.  The complainant imported total 5000 MTs of Pakistan sugar  and the said record was getting cleared by customs step by step in lots and the last lots of said goods 1881 MT sugar were not cleared by them.

16.    OP2 admits that it had realised the charges not at the time of deposit of goods but at the time of delivery and in the instant case too,  by virtue of receipt dated 03.06.1999, the OP2 only raised bills in pursuance of condition printed at the right hand top of the said receipt and the said charges were realised on 31.08.1998, subsequent to 09.06.1998, and therefore, at the time of advent of cyclone, there was no consideration passed by the complainant to OP2 to make a concluded contract.  OP2 has to pay the damages on pro rata basis and OP2 does not obtain insurance cover on behalf of any of its clients, including the complainant as the OP2 got insured its interest  of warehouse, not its clients and whenever a loss is caused to the goods at any point of time, the said loss is paid on pro-rata basis to all whose goods were kept and damaged. It was also argued that in case of insurance claim, the CWC simply transfers the claim of the insurance company and it is the insurance company which is to appoint a Surveyor and assess the loss of the complainant and whatever amount the insurance company decides to approve, the OP2 receives  the same from the insurance company and again re-transfers to individual claimant/complainant or the charges on pro rata basis.  Thus, the OP2 is merely a conduit between the insurer and the complainant and it cannot be made liable for  the claim of the insurance. There is no privity of contract between the complainant and OP2.  OP2 is merely the Bailee of the Customs and does not represent the Bailor.  It was submitted that mere receipt of a premium does not give rise to a concluded contract of insurance as per ratio propounded in (1) M/s. Marthi Crystal Vs. Oriental Insurance Co. Ltd. , AIR 2001 Mad, 288 and (2) Saleh Md. Vs. Ramrattan Tiwari, AIR 1924 Nag 156.  Moreover, there is negligence on the part of the complainant itself.  There was no water proof packaging and it did not invoke Section 23 of the Customs Act, 1962  for remission of Custom Duty.  Again, Customs is not a party.

17.    We find it extremely difficult to countenance these contentions.  First of all, we will decide the question whether the complainant is a stranger to the contract of insurance.  The OP2 obtained insurance services from OP1 for the benefit of complainant and other parties, whose goods were being kept there. Secondly, premium was paid by the complainant in advance to OP2.  OP2 in its written statement clearly mentions about it.  Consequently, the complainant is a “consumer”.  The privity of contract stands established between the complainant and OP1 due to agreement entered into between OP1 & OP2. OP1 is jointly and severally liable with OP2, qua the complainant.  This was never denied  that the complainant had paid portion of total insurance policy, the suppression of relevant provisions of insurance policy, the missing representation and the admitted non-payment itself, constitute a deficiency in service on the part of OP1.  InShri Laxmi Cotton Traders Vs. CWC & Ors., III 1996 CPJ 22 (NC) same view was taken.  

18.    We  are of the considered view  that ‘Doctrine of Contribution’ is applicable in this case.  The entire policy must be read holistically.  We cannot rely upon one part  and ignore the others, in favour of the insurance company and to the detriment of the complainant. Clause 11 of the insurance policy provides for Contribution as well as rateable proportion of such loss or damage.  Clause 3 of the Special Conditions  further provides that  it will cover the risk of cyclone as well.  In view of these clauses, Clause 4 of the insurance policy pales into insignificance.  Other Clauses will prevail over Clause 4. Moreover, relevant clauses of the Fire Policy were never disclosed.

19.    OP1 wants to have the benefit of both the worlds.  It has accepted premium in the sum of Rs.3.90 crores paid by the OP2 for all the persons whose goods were kept there, and on the other hand, it does not want to compensate the complainant on frivolous grounds.   Moreover, the privity of contract stands established with the following facts which cannot be skimmed over. (1) The cash receipt dated 03.06.1998, issued by OP2 to M/s. V.Arjoon, Forwarding and Clearing Agents, for the complainant indicating, inter alia, the insured charges paid by the complainant to OP2 and also the Warehouse charges paid by the complainant to OP2 and the acknowledgement of stocks of sugar issued by OP2 to M/s.V.Arjoon, Forwarding & Clearing Agents for the complainant and delivery of these stocks (2) letter dated 09.06.1998 addressed by OP to M/s.V.Arjoon, Forwarding & Clearing Agents, wherein it is confirmed “Cargo stored in our warehouse at Kandla is insured with the United India Insurance Co. Ltd., under  ‘All India Floater Policy’,  taken by our office, CWC, New Delhi.  The insurance is for flood, fire, theft, cyclone, burglary, etc. (3) The claim submitted by the complainant through its Consultants, addressed  to OP2, dated 07.09.1998.  (4) The revised bill dated 10.09.1998, given by OP2 to M/s.V.Arjoon, to the account of the complainant, in the sum of Rs.3,87,178/- being the dumping and destruction expenses. (5) Corresponding evidence which forms part of Annexure C-1, are (a) Letter dated 25.11.1998,  wherein OP2 admits that “consignment is also insured under marine policy”,  (b) letter dated 21.12.1999, addressed by OP2, admits that “your claim is being processed at our Regional Office/Corporate Office. There are other letters, dated 27.01.199, 28.01.1999, 03.03.1999, 09.04.1999, 01.05.1999, 12.05.1999, 02.06.1999, 11.06.1999, 25.08.1999, 09.09.1999,  06.10.1999,  15.12.1999,  27.01.2000, which show that OP2 took up the matter with OP1.  There is a letter dated 08.03.1999 written by the complainant to OP2. The relevant para of which runs as follows:-

                 “We refer to your letter under captioned and hereby undertake that we will not take the subject claim from our Marine Insurance Company and that at the time of payment of claim to us we shall furnish an indemnity bond to this effect to the Central Warehousing Corporation.

                 We trust you will find the above in order and expedite settlement of our claim at the earliest, especially when the same has been pending with you since September, 1998 and similar claims of other parties, to our knowledge have already been settled, needless to reiterate/highlight  the financial hardship being experienced by us due to delay in settlement of our claim”.

20.    The learned  counsel  for  the OP submitted that it has breached the undertaking given by the complainant. It has recovered compensation to the extent of 50%.  It was contended that the complainant is not entitled to any further compensation in view of the above said undertaking.

21.    We do not locate substance in these arguments.  This case is pending before this Commission for the last thirteen years.  Despite giving this undertaking, there lies no rub in pursuing the matter with the marine company.  The complainant has not got reimbursement of a single paisa from the OPs.  The undertaking was given on 08.03.1999.  We find considerable force  in the submission made by the counsel for the complainant that the complainant  acted in the best interest of the OPs by  claiming both from the marine insurer and from the OPs, in order to reduce the burden of OP1.  Moreover, according to insurance law, the assured has the right to persuade both the insurers on the basis of equity because it has paid the premium to two insurers and the two insurers must share the burden equally.  The complainants are bound to claim in law, the rateable interest from both the policies. 

22.    So far as Marine Insurance is concerned, Section 34 of the Marine Insurance Act, 1963, provides as follows:-

“(1) Where two or more policies are  effected by or on behalf of the assured on the same adventure and interest or any part thereof, and the sums insured exceed the indemnity allowed by this Act, the assured is said to be over-insured by double insurance.

(2) Where the assured is over-insured by double-insurance:-

(a) the assured, unless the policy otherwise provides, may claim payment from the insurers in such order as he may think fit, provided that he is not entitled to receive any sum in excess of the indemnity allowed by this Act;

(b) where the policy under which the assured claims is a valued policy, the assured must give credit  as against the valuation, for any sum received by him under any other policy, without regard to the actual value of the subject-matter insured;

(c) where the policy under which the assured claims is an unvalued policy he must give credit, as against the full insurable value, for any sum received by him under any other policy;

(d)  where the assured receives any sum in excess of the indemnity allowed by this Act, he is deemed to hold such sum in trust for the insurers, according to their right of contribution among themselves”.

23.    In an English case, reported in National Employees Mutual General Insurance Association Ltd. Vs. Haydon 1980 2 Lloyds Law Reports 149. The facts of this case  were :

            The Policy stated :

“This policy does not indemnify the insured in respect of any claim made against him (i) for which the Insured is or would but for the existence of this Policy be entitled to indemnify under any other Policy except in respect of any excess beyond the amount payable by such Policy …….”.

It was held, :

“4. Each policy was to be looked at independently and if each would be liable but for the existence of the other, then the exclusion clauses were to be treated as cancelling each other out and the plaintiffs and defendants were liable on the policies and the plaintiff was entitled to a contribution”.

It was also held :

“In my judgment, this case turns on the construction of the two policies as a whole and in particular of general  exception (i) in the NEM policy and general exclusion 5 (b) (iii) in the master policy.  If those two clauses are indistinguishable in their effect, as the Judge thought, I would agree with him that, like Mr.Justice Rowlatt in Weddell’s case, the Court should invoke the equitable principle of contribution between co-insurers to avoid the absurdity and injustice of holding that a person who has paid premiums for cover by two insurers should be left without insurance cover because each insurer has excluded liability for the risk against which the other has indemnified him.  But I accept Mr.Irvine’s submission that the two clauses we have to consider are clearly distinguishable from each other, and that on their true construction the solicitors are covered by the NEM policy and not by the master policy against the Glover claim.  Whether these clauses are rightly labelled exceptions or exclusions does not, in my opinion, matter. The question is, what in each case is covered by these policies read as a whole, including these clauses”.

It was further held :

“…. In the case of double insurance an exemption clause will not be allowed to deprive the insured of the benefit of both policies.  The insured was only entitled to recover 50% under one policy because there was a rateable proportion clause which reduced the liability under that policy in the event of another insurance policy existing at the date of the accident, as it did”.

24.    Again, in another English case, in reference, the Court of Appeal in case, Commercial Union Assurance Co.Ltd. Vs. Hayden, [1977] Vol.I] 13, held :

“Where a man has made a double insurance, he may recover his loss against which of the underwriters he please, but he can recover for no more than the amount of his loss…… It being thus settled, that the insured shall recover but one satisfaction, and that in the case of double insurance, he may fix upon which of the underwriters he will for the payment of his loss, it is a principle of natural justice that the several insurers should all of them contribute in their several proportions, to satisfy that loss against which they have all insured”.

25.    Similar view was taken in (1) Legal and General Assurance Society Ltd. Vs. Drake Insurance Co.Ltd., [1984 L. No.1495], I.Q.B. 887, (2) British Telecommunications PLC & Ors. Vs. Caledonia North Sea Limited & Ors., UKHL/0029/2002 and (3) Drake Insurance PLC Vs. Provident Insurance PLC, UKCM/0001/2003.

26.    Generally, the rule applicable is that a Tribunal is endowed with such ancillary and incidental powers to discharge its functions.  The Hon’ble Supreme Court in Grindlays Bank and Central Government Industrial Tribunal, AIR 1981 SC 606, went on to hold that by rule of statutory contribution, a Tribunal is endowed with such ancillary and incidental powers as necessary to discharge its functions effectively for the purpose of doing complete justice between the parties.

27.    In General Assurance Society Ltd. Vs. Sitarama Rice Mill Co. & Ors., 1971 Comp Case 162 (Mad),  it was held :

“The contribution clause in exhibit A-1 has been introduced only in order to secure to the first defendant the right of contribution wherever it arises. The general principle is that the assured who insures his property cannot recover more than a full indemnity.  But for such contribution clause, it would be open to the assured to select the policy upon which to claim his indemnity –if that alone is sufficient for the purpose – and the insurers upon that policy cannot resist liability upon the ground that there are other policies in existence which the assured might have enforced.  (See page 415 of Ivamy’s General Principles of Insurance Law).  At page 416 of the same book, it is stated in order to give rise to a right to contribution the following conditions must be fulfilled: 

1. All the policies concerned must comprise the same subject matter.  

2. All the policies must be effected against the same peril. 3. All the policies must be effected by or on behalf of the same assured. 

4. All the policies must in force at the time of the loss. 

5. All the policies must be legal contracts of insurance. 

6. No policy must contain any stipulation by which it is excluded from contribution. 

In dealing with the conditions giving rise to right of contribution, it is stated in paragraph 528 at page 267 of Halsbury’s Laws of England, third edition, volume 22, that each policy must cover the same interest in the property and the principle is explained in the following passage:

“Each policy must cover the same interest in the same property, that is to say, each policy must be intended to protect the same assured against the same loss.  The policies must, therefore, cover a common interest; it is not sufficient that they cover the same property.  Where separate insurances are effected upon the same property by different persons interested in it for the purpose of protecting their separate interests only, there is no contribution. Thus, there is no contribution when separate policies are effected by bailor and bailee, by mortgagor and mortgagee or by landlord and tenant for their individual  protection. Where, however, one of the policies is intended to ensure for the benefit of both persons interested, as, for instance, where the bailee, mortgagor or tenant intends to cover the interest of his bailor, mortgagee or landlord as well as his own, a case of contribution arises between such policy and any policy effected by the bailor, mortgagee, or landlord for his separate protection, since both policies, in fact, cover a common interest, namely, the interest of the bailor, mortgagee or landlord”.

28.    The learned counsel for the Complainant  has invited our attention to (1) Contship Container Lines Limited Vs. DK Lall & Ors., (2010) 4 SCC 256,(2) New India Assurance Co. Ltd. Vs. Priya Blue Industries Pvt. Ltd., (2011) 4 SCC 231, (3) Oriental Insurance Co. Ltd. Vs. Ozma Shipping Co. & Anr., (2009) 9 SCC 159.

29.    In view of the facts and circumstances of this case, no liability can be fastened upon OP2.  

However, instead of helping the complainant, it supported the OP1. 

 Why did OP2 work in cahoots with OP1?  

On the other hand, the OPs compelled the complainant to give the undertaking that they would not claim any amount from the Marine Policy as they would compensate it completely, on the other hand, OPs  want  to shirk from paying 50% of the loss.   

30.    The whole gamut of above said facts and circumstances leans on the side of the complainant. 

 We, therefore, direct the OP1 to pay 50% of the total loss of Rs.2,06,86,406.24ps  with interest @ 9% p.a. from the date of filing of this complaint, i.e. 07.06.2000, till realisation of the decreetal amount, to the complainant. Compensation for mental agony and  harassment, in the sum of Rs.50,000/- is also granted, payable by OP1, to the complainant, within 45 days, failing which it will carry interest at the rate of 9%, p.a., till realisation.

…………………………...

(J.M. MALIK, J.)

PRESIDING MEMBER

…………………………...

(VINAY KUMAR)

 MEMBER

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