' Z. A. CHANNA , J.-This constitutional petition assails the orders passed under the War Risks Insurance Ordinance, 1971, and the rules thereunder by the Enquiry Officer and the Appellate Authority, in respect of the insurance premium, interest and surcharge payable on the factory owned by the petitioners.
2. The facts which have given rise to this petition, briefly stated, are that on 26-3-1974, a show- cause notice was issued by the Enquiry 0 cer to the petitioners in regard to the evasion of premium under the War Risks Insurance Ordinance, 1971, payable by the petitioners on their factory. The petitioners produced a number of documents before the Enquiry Officer, in an attempt to show the actual value of the factory on the respective due dates, but the Enquiry Officer preferred to base his valuation of the petitioner's factory on the Fire Risk insurance Policy, which the petitioners had taken out. On this basis, he valued the factory at Rs, 1,15,70,000 to which amount he added a further sum of Rs, 2,00,000 being the estimated value of plinth, pavement and foundation of the factory.
This valuation was for the period December, 1971 to April, 1972. For the period from May, 1972 to July, 1972 he added a further sum of Rs, 42,85,000 on account of increase in the estimated value of the machinery due to devaluation of Pak-rupee. Dissatisfied with this valuation the petitioners preferred an appeal to the Government of Pakistan but the appeal was unsuccessful, except for slight modifications.
3. The only point which has been canvassed before us by Mr. Samiuddin Sami, the learned counsel for the petitioners, is that in assessing the insurable value of the factory on the basis of the Fire Risk Insurance taken out by the appellants. The Enquiry Officer as well as the Appellate Authority had misdirected themselves. He contended that it is only in respect of goods that the valuation can be made on the basis of Fire Risk Insurance, but in respect of factory, it is clause (iii) of Explanation I to rule 7 of the War Risks Insurance Rules, 971, which prescribes the mode of valuation. According to this clause, in the case of a factory, the valuation has to be the sum equal to the approximate cost price to the owner, on the date of application, of similar new plant, machinery, buildings and other components of the factory, less depreciation on such cost price calculated according to the rates prescribed under the Income-tax Act, 1922, for the period the asset has been in use. He accordingly submitted that the case be remanded to the Enquiry Officer for assessing the valuation of the factory in terms of the said clause. Mr Shah Jamil Alam, the learned Deputy Attorney-General, conceded that the valuation adopted by both the Enquiry Officer and the Appellate Authority was not in accordance with the aforesaid clause, for depreciation has not been taken into account, as required by the said clause.
4. In view of the above agreed position, we remand the case to the Enquiry Officer, to assess the factory strictly in accordance with the provisions of clause (iii) of Explanation-I to rule 7 of the War Risks Insurance Rules.
1971. In the circumstances of the case, there would be no order as to costs.