1. ' MAMOON KAZI, J.--This appeal calls in question the judgment passed by a learned Single Judge of this Court dated 27-5-1982 decreeing the respondent's suit for recovery of Rs,65,000 from the appellant.
2. ' The respondent had filed a suit against the appellant for recovery of the aforesaid amount in respect of a claim of insurance sent to the appellant in connection with a stolen car, No,KAQ-4580.
3. The said car had been mortgaged with the respondent for Rs,70,000. One of the conditions of the mortgage was that if the mortgager failed to redeem the car within one year, the same would become the property of the mortgagee. The importer has executed a receipt for consideration as well as a letter of transfer in favour of the respondent. The respondent, claiming to have insurable interest in the said car, got the same insured with the appellant in the sum of Rs,50,000 and the Insurance Policy covering the risks effective from 22nd June, 1974 for one year was issued by the appellant. The policy was obtained covering risks for accident, fire, theft besides third party risks.
4. ' In was the case of the respondent that on 13-3-1975, the said car vested in the respondent who became its absolute owner. The car was however, stolen on 10-6-1975. The theft was reported to the police and an intimation was sent to the Excise and Taxation Office and also to the appellants.
5. The appellants however, rejected the claim of the respondent resulting in the filing of the said suit.
6. ' In the written statement filed on behalf of the appellants, although it was admitted that the respondents had insured the said car with them but it was denied that the respondent had any insurable interest in the car as the mortgagee or the owner thereof, after the expiry of the period of redemption. It was further contended that the respondent has failed to disclose her insurable interest in the car or all the material facts to the appellants.
7. ' On the basis of the aforesaid pleadings of the parties, the learned Single Judge framed issues as follows:
(1) Whether the plaintiff had insurable interest in Car No,KAQ-4580 at the time it was stolen?
(2) Whether the claim is barred by time?
(3) Whether the plaintiff has secured insurance of the car by fraud and misrepresentation, if, so what is its effect?
(4) What should the decree be?
8. ' The learned Single Judge decided all the issues in favour of the respondent and, therefore, he decreed the suit in her favour, as pointed out earlier.
9. ' Mr. Abdul Razzak Puri, learned counsel for the appellants has mainly argued that the respondent was not the owner of the motor car in question at the time the same was stolen, consequently she had no insurable interest in the said property. Similar contention was raised on behalf of the appellants before the learned Single Judge which was repelled by him. It was observed by the learned Single Judge that:- "Insurable interest has not been defined in the Insurance Act but on the basis of the leading authorities it is now well-settled that it is a right in a proper or a right arising out of the contract in relation to the property insured which if lost or damaged will affect the possession/ enjoyment of the claimant. It is sufficient if the claimant is able to establish some relation or concern in the subject-matter of insurance which by happening of the perils insured against may be so affected as to produce some pecuniary loss to the claimant. Stich interest may be at the time of commencement of the policy or it may even accrue after the commencement and before the expiry of the policy. A policy can be taken out in anticipation of an interest (William v. Baltic Insurance Association of London) (1924) 2 KB 282, but at the time of loss the claimant must have an interest, legal or equitable. The insurable interest is thus an interest of the claimant in insured property which may on happening .Of the peril covered by the policy be affected in such manner that the insured may suffer a pecuniary loss. That classical definition of insurable interest was given by Lawrence, J. i ' Lucena v. Craufurd (1806) 2 BOS & P.N.R. 269, (H.L) at page 302. This was a case under the Marine Insurance Act but the definition given by Lawrence, J. Has been so far accepted by all decisions and authors which is reproduced as follows;- "A man is interested in a thing to whop advantage may arise or prejudice happen from the circumstances which may attend it... And whom it imported that its condition as to safety or other quality should continue: interest does not necessarily imply a right to the whole or a part of a thing, necessarily and exclusively that which may be the subject of privation, but the having some relation to, or concern in the subject of the insurance, which relation or concern by the happening of the perils insured against may be so affected as to produce a damage, determine, or prejudice to the person insuring, and where a man is so circumstanced with respect of matters exposed to certain risks or damages, or to have a moral certainty of advantage or benefit, but for those risks or dangers he may be said to be interested in the safety of the thing. To be interested in the preservation of a thing, is to be so circumstanced with respect to it as to have benefit from its existence, prejudice from its destruction. The property of a thing and the interest derivable from it may be very different of the first the price is generally the measure, but by interest in a thing every benefit or advantage arising out of or depending on such thing may be considered_ as being comprehended."
10. It is well-settled that ownership is not the only criteria for determining the insurable interest.
11. Insurable interest may be founded on contract and IVAMY in General Principles of Insurance Law, 19M, Edition at page 19 has stated:- "Thus a bailee who has contracted, expressly or impliedly, to be responsible for the safety of goods belonging to another, or who has contracted to insure them has an insurable interest in them.
12. Apart from any question of contract, the mere fact of possession, if lawful, is sufficient to give an insurable interest.
13. ' An interest to be insurable must have a pecuniary value. Its nature however, is broadly speaking immaterial."
14. ' It is now to be seen whether in the facts of the present case the plaintiff had an insurable interest.
15. Mr. S. Hamid Ali the learned counsel for the plaintiff has contended that the plaintiff had obtained a mortgage of the car which was to be transferred to him after the expiry of one year and a letter of transfer had also been issued in his favour and therefore he had in insurable interest in the car. Mr. Pure the learned counsel for the defendants on the other hand has contended that transfer of car for a period of one year from the date of import had been prohibited under law and, therefore, the plaintiff could not have obtained a valid transfer or possession of the car and thus cannot claim to have an insurable interest in the property. It is true that under the Import and Export Control Act, 1950 the cars were allowed to be imported under Personal Baggage Scheme and it was one of the conditions of the import permit that the car shall not be transferred for a period of one year. Any agreement in breach of these provisions will be against public policy.
16. ' From the evidence it is established that the plaintiff had taken possession of the car in pursuance of the agreement.
17. After hearing Mr. Abdul Razzak Puri, we are of the considered view that findings arrived at by the learned Single Judge are not open to exception. The question whether the respondent had insurable interest is not dependent upon the ownership of the property as has been held by the learned Single Judge in the impugned judgment and we whole-heartedly agree with the observations made by him in this regard just reproduced by us in this judgment. Since no other point has been raised by Mr. Abdul Razzak Puri, and we find ourselves in complete agreement with the judgment passed by the learned Single Judge and his findings on the point. We therefore find no force in this appeal.
18. ' In the result, this appeal is dismissed. However, the parties are left to bear their own costs.