I. Inviemsure J.-Constitution Petitoris No, 1312/75 and No, 170/75 raise common questions of law relating to the interpretation of certain provisions of the War Risks Insurance Ordinance 1971, the War Risks Insurance Rules, 1971 and the War Risks ;Buildings) Insurance Scheme dated 5-12-1971.
They were heard together and will be decided by th1 Judgment. For convenience, the aforesaid statutory inateurne its will hereinafter be referred to respectively, as "the Ordinance", "the Rules" and "the Scheme".
2. In Constitutkn Petition No, 1312/75, the petitioner, Pakistan Warranted Warehouse Ltd. Is a Company. It owns certain godown-builuings which were constructed during the years 1953 and 1956 on Plots Nos. S/10, Sill and S/12, Mauripur Road, S. I. T. E., Karachi and, on the relevant date, were let out to tenants on rent. Under section 10 of the Ordinance read with the Rules, Scheme and the notifications issued thereunder, which came into force on 5-12-1971, it was compulsory on every company owning a , building or a building under construction of a value exceeding Rupees two lees, to to se out a policy of insurance against War Risks, in accordance with the Scheme, for a sum not less than the insurable value of such building. Accordingly, the petitioner took out a War Risks Insurance Policy in respect of the buildings with Habib Insurance Co., Ltd., the respondent No, 5, for the period 5-12-1971 to 31-12-71 for the sum of Rs 4,75,000, for which sum it used to insure the buildings against fire. However, in the petitioner's Balance Sheet for the year ending 31-12-71 the depreciated value of the landed property, that is the land, buildings, fittings and fixtures, was shown at Rs, 2,93,008. The petitioner did not renew the War Risks Insurance policy after 31-12-71, because, according to the petitioner, hostilities between India and Pakistan having been" officially declared to have ceased on and from 17-12-71", there were no war risks in existence against which the petitioner was obliged to insure the buildings. However, it may be a:mistimed here, that the Scheme was not officially rescinded until 1-8-72 by Notification No, S.R.O. 552(1)/72. The respondent No, 2, the Enquiry Officer, War Risks Insurance (Sind & Baluchistan), who was appointee under the Ordinance, issued es notice dated 8.1-1974 under section 18 of the Ordinance to the petitioner for the purpose of ascertaining whether or not property insurable under the Ordinance has been insured by the petitioner and its insurable value and called upon the petitioner to furnish certain information in the pro forma attached to the notice. In reply thereto, the petitioner submitted certain documentary evidence from which it appeared to the Enquiry Officer that the petitioner had failed to insure the buildings after 31-12-71 and that it had evaded payment of premium. Therefore, he issued a show-cause notice dated 12-3-74 and appointed a hearing on 22-3-74. The petitioner appeared at the hearing before the Enquiry Officer, through its attorney and legal adviser, Mr. S. M.
Asked, and also at the adjourned hearing on 22.4-74, when he produced further documentary information relating to the assessm ent of the annual rental value of the buildings by the Excise & Taxation Department, Karachi. The Enquiry Officer, after hearing the petitioner's representative, passed the impugned assessm ent order dated 30-4-74. He assessed the insurable value of each of the three buildings at 40 (forty) times the annual rental value assessed by the Excise and Taxation Authority, Karachi, in view of Explanation I (iv) of rule 7 of the Rules at an aggregate amount of Re. 75,84,000 and fixed the unpaid premium at Rs, 1,49,442.50 for the period ending 31-7- 72 after giving credit for the premium of Rs, 1034.36 paid for the month of December, 1971. He also levied a surcharge at 30% on the unpaid premium and interest at 1 % above bank rate, making a total demand of Rs, 2, 03, 502. He accordingly issued a Notice of Demand directing the petitioner to pay the amount. Being aggrieved by the assessment order and the demand notice, the petitioner filed en appeal under section 10(2) of the Rules to the respondent No, 1, the Government of Pakistan through the Secretary Ministry of Commerce, Islamabad. It was considered by the Joint Secretary in the said Ministry, the respondent No, 3, who after stating the facts and .Discussing the of grounds of appeal, rejected the appeal by his order dated 4.6-75 without granting a personal hearing to the petitioner. As recovery proceedings were instituted by the City Deputy Collector, the respondent No, 4, the petitioner has filed the present Constitutional Petition challenging the aforesaid orders and notices of demand as being without lawful authority and of no legal effect.
3. In the other Constitution Petition No, 170/1976, the relevant facts are that the petitioner, New Jubilee Insurance Co., Ltd., is a company which owns a building known as "Jubilee Insurance House" situated on Plots Nos. 2/2 and 2/3 R. Y. 5, Railway Quarters, Chundrigar Road, ie.Arachi comprising several storeys, which are being used as offices. Upon the coming into force of the Ordinance on 5- 12-71, the petitioner took out a War Risks Insurance Policy in respect of the said building with itself, being an insurance agent appointed by the Central Government for a sum of Rs, 45,00,000 for the period 5-12-71 to 31-12-71, for which sum it had earlier insured it against fire. Upon the expiry of the said period, the petitioner renewed the policy for the period until recession of the Scheme on 31-8-
72. In or about February, 1973, the Enquiry Officer, War Risks Insurance (Sind & Baluchistan), issued a notice to the petitioner under section 18 of the Ordinance calling for certain information. The required information was supplied and after scrtoieising the same, the Enquiry Officer issued a show-cause notice dated 20-10-73 to the petitioner to show cause why the insurable value of the building should not be determined at Rs, 4,07,09,480 which was 40 (forty) times the G. A. R. V. Of the building which was assessed at Rs, 10,17,737. For the year 1971 by the Excise & Taxation Authority, and why action, should not be taken against it under rule 10 and the Third Schedule to the Rules, for failing to insure for the said full amount instead of for Rs, 45,00,000 for which value the building was insured against fire, and thereby evading of premium. The petitioner was also required to appear personally or through a duly authorized representative on 3.11-73. The petitioner submitted a reply objecting to the determination of the insurable value of the building at 40 (forty) times the G. A. R.
V. Under Explanation I to rule 7 of the Rules as being illegal and ultra wires. Various hearings took place thereafter, the last of which was held on 14-2-76, on which date the Enquiry Officer reserved the case for final orders. But before final orders could be passed, petitioner filed the present petition stating therein that it is a foregone conclusion that the respondent would illegally assess the insurable value of the building at 40 (forty) times the annual rental value under Explanation I to rule 7 of the Rules, in the manner proposed in the show-cause notice, as they had recently done in the case of properties owned by Messrs Pakistan Warranted Warehouse Ltd , the petitioner in the co- pending Constitution Petition No, 1312/75, the facts of which have been mentioned above. The petitioner' attack is therefore directed against the issuance of the show-cause notice and the proceedings taken thereunder, as being without lawful authority or jurisdiction.
4. The first submission of Mr, Khalid I shaque, learned counsei for the petitioner, in the first- mentioned petition, is that the appellate authority,- respondent No, 3, rejected tne petitioner's appeal without appointing a personal hearing and, therefore, the appellate order Masted behind its back was null and void. Such a contention was raised before a Division Bench of this High Court on identical facts in Pakistan Chrome Mines Ltd., Karachi v. Enquiry Officer, War Risks Insurance and another (I) but it was rejected. The Division Bench held that under the statutory provisions relating to appeals contained in the Rules and the Third Schedule thereto, there is no statutory duty cast on the appellate authority to give the petitioner personal hearing before deciding the appeal, But Mr. Khalid Ishaque'e submission is that this view is wrong and he urged us not to follow it, as the rule laid down in certain decision of Supreme Court, presently to be considered, was not considered by the ivision Bench and therefore, the said Bench wrongly relied o the decisions in Mehrab Khan v. Taj Muhammad and others (2) which was followed in Dr. Mumtaz Husain v. University of Sind; Hyderabad (3). Wherein it was held that a personal hearing 13 not a necessary requirement of the principle of natural justice. We have considered this submission of the learned counsel and the Supreme Court decisions referred to by him, but we regret, we are unable to accede to it.
5. The Supreme Court decisions referred to by Mr. Khalid Ishaque are Chief Commissioner, Karachi v. Mrs. Dina Sohret Katrak (4), Federation of Pakistan v. Sardar All (5), Faridsons Ltd. , Government of Pakistan (6, Abdur Rehman v. Collector and Deputy Commissioner, Bahawalnagar and others (7), COMMISSioner of Karachi v. Fazlur Rahman (8), University of Dacca and another v. Zakir Ahmad (9) and Abdus Saboor Khan v. Karachi University and another (10). In these decisions, the Supreme Court laid down that it is a principle of natural justice that a party has a right to be heard before the proposed action is taken against him by any authority, judicial or administrative, which might result in consequences affecting the person or poperty or other right of the parties concerned, and that this rule is to be impliedly read in every statute in the absence of a specific provision to the contrary. Further that this rule applies equally to proceedings before a tribunal of first instance as well as to proceedings before an appellate authority. This proposition of law is conceded by Mr. Shah Jamil Alam, learned Deputy AttomeeeGenera), appearing on behalf of the official respondents. However, his submission is that these cases do not lay down an invariable rule that the principle of natural justice, "audi alteram partem"' necessarily means that the bearing before the original tribunal, as well as before the appellate authority, must be a personal hearing.
6. In the Supreme Court cases cited by Mr. Khalid Ishaque, where the order passed on appeal was sought to be challenged, no hearing was granted to the party either at the stage of the original proceedings or before the appellate authority. Thus in the case of Chief Commissioner, Karachi v.
Mrs. Dina Sohrab Katrak, the respondent's appeal to the Chief
(1) PLD 1976 Kar. 673
(3) PLD 1966 Kar.
429.
(5) PLD 1959 SC (Pak.) 25
(7) PLD 1964 SC 461 9) PLD 1965 SC 90
(2) PLD 1961 Quetta 1
(4) PLD 1959 SC (Pak.) 45
(6) PLD 1961 SC 537
(8) PLD 1964 SC 410
(10) PLD 1966 SC 636 ' Commissioner, Karachi from an order of requisition passed by the Rent Controller under the Sind (Requisition of Land) Act, 1947, was dismissed without giving to the respondent an opportunity of being heard. It was held by their Lordships of the Supreme Court that the Chief Commissioner could not decide the appeal on the basis of the report of the Controller, which he had called for, without giving the respondent an opportunity of explaining or controverting the facts contained in the report prejudicial to the respondent. It was in this context that the Soprano Court observed that this principle of natural justice applies equally to an appeal as to an order passed by a tribunal of first instance and that when a statute gives a right of appeal, it should be understood as silently implying, when it does not expressly provide, that the appellant shall have a right of being heard.
But nowhere has it been hid down as an invariable rule that the hearing an appeal shall be an oral one. In fact, their Lordships observed at page 55 of the report that the point whether the hearing should have been an oral one or not was neither specifically raised in the writ petition before the High Court out of which the appeal had arisen, nor was the point raised before them.
7. The second decision relied on by Mr. Khalid Ishaque is Federation of Pakistan v. Saraar Ali. This was a case in which the appellate authority, the Central Board of Revenue, had decided the appeal without giving the appellant an opportunity of being heard. The appeal of the respondent, Sardar Ali, was decided against him on the basis of certain departmental reports and private enquiries without giving him an opportunity of explaining or controverting the evidential material contained in the .Departmental repents prejudicial to him in the same manner as adopted by tl-e Collector of Customs. It was in these circumstances that their Lordships .Observed that the word 'appeal' in itself implies a right of audience ; but -whether the hearing before the appellate authority had to be a personal ,hearing or not was not a question directly in issue.
8. The learned counsel also reliel on Commissioner of Income-tax v. Faziur Rahman. In this case, the respondent's revision application to the Commissioner of Income-tax under section 33-A(2) of the Income-tax Act, 1922, for revising the order passed against him by the Income-tax Officer was summarily rejected without hearing him. Their Lordships observed that as the proceedings were judicial proceedings, a party is entitled to a right of appearance in the absence of speeific provision to the contrary. This case h therefore distinguishable on its own facts and also as it related to a judicial proceeding.
9. Therefore, as rightly submitted by Mr. Shah ilama Alam, the rule laid down by the Supreme Court in the decisions mentioned above, means nothing more than that a party ehould have an adequate opportunity to make a representation against the action proposed to be taken against him and to explain and controvert any evidential material prejudicial to his case. This is the gist of the rule of natural justice. We are inclined to agree with the learned Deputy Attorney-Geaeral that the rule of natural justice requiring a party to be heard, "audi alterarn partem", does not necessaril demind a personal hearing and that this principle is not violated if the statute provides for a decision upon the basis of a written representation, containing the material statements and arguments relied upon by the appellant, as in this case. Counsel also referred to Halsbury's Laws of England, 4th Edn., Vol. f, Article 76 "Natural justice does not invariably require that the parties be entitled to an oral hearing. It will sometimes be fair to determhe an issue on the basis of written representations; but the parties concerned must still be apprised of and given a proper opportunity of repaying to any allegations against them or other relevant evidential material unless they have waived their right to be informed of such material."
' The learned Deputy Attorney-General, therefore, rightly relied on the decisions in the cases of Mehrab Khan and Dr. Mamtaz Husain referred to earlier, which were relied on by the Division Bench in the Pakistan Chrome Mines' case, which held that a personal hearing before deciding a matter is not necessary requirement of the principle of natural justice and all that is necessary is a full and fair opportunity of making representation or showing cause.
10. When an appeal is provided by statute from a decision of an administrative tribunal, the question whether the appellant has a right of appearance before the appellate tribunal depends on the intention of the Legislature to be gathered from the words used in the relevant statutory provision. It is, therefore, necessary to examine the relevant procedures prescribed in the Third Schedule relating to hearings before the Enquiry Officer as well as hearings before the appellate authority. Under para. Of the Third Schedule, the Enquiry Officer is first required to serve a show- cause notice to the owner of the building who has failed to insure it as required by the Ordinance to produce any document or other evidence in support of his case. Under para. 2, the Enquiry Obi per shall give the defaulter an opportunity of being heard in support of his cause before recording his opinion on the insurable value of he property and determining amount of premium evaded by the defaulter. If the Enquiry Officer is basing his opinion on information received from another source under section 18 cf the Ordinance, he is also required to give the defaulter an opportunity to explain the same. The relevant procedure to be followed by the appellate authority in disposing of an appeal is contained in paras. 7 and 8, which read as follows :- "(7) An appeal under paragraph 5 shall contain all material statements and arguments relied on by the appellant and shall be accompanied by a copy of the notice of demand served upon the appellant. It shall be preferred through the authority against whose order the appeal is preferred.
8. The appellate authority shall consider
(a) Whether the facts on which the notice of demand was based have been established, and
(b) Whether the sum determined as payable is excessive, adequate or inadequate, and after such consideration shall pass such order as it thinks proper. But no order enhancing the amount determined as payable by the appellant shall be passed without first recommunieeting to him the grounds on which such order is proposed to be passed and giving him an opportunity to show cause against the same."
11. It would thus be seen that there is a marked contrast between the procedure prescribed for hearing before the Enquiry Officer and that prescribed for disposing of an appeal by the appellate authority. Whereas in para. 2, hearing has to be provided to the defaulter, which includes the right to a personal bearing, no such right to a hearing before the appellate authority has been provided and the appellate authority has to consider, on the basis of the material statements and arguments relied on by the appellant, whether the facts, on which the notice of demand was based have been established and whether the sum determined as payable is excessive, adequate or inadequate. It is only if the appellate authority proposes to enhance the amount determined as payable by the appellant, that it is required to communicate to the appellant the grounds on which the order is proposed to be passed and giving him an opportunity to show-cause against the same. Mr. Shah Jamil Alam, learned Deputy Attorney-General, relyirg on the principle of "expressio unius est exclueo altering", submitted that by the express mention of notice to show cause when the appellate authority is proposing to enhance the amount determined against appellant, there is to be Implied an exclusion of such requirement of notice of hearing where the appellate authority is not enhancing the amount. In the petitioner's case, the appellate authority, respondent No, 3, relied on no new material or evidence against the petitioner and has accepted the fact as established before the Enquiry Officer relating to annual rental value the buildings as proved by the P. T. I. Forms produced by the petitioned itself, on the basis of which the Enquiry Officer assessed their insurable value. No prejudice is shown to have been caused to the petitioner. We are, therefore, unable to accept the submission of Mr. Khalid Ishaque that the petitioner is entitled to a second hearing to controvert the established facts.
12. Mr. Khalid Tshaque submitted that the corresponding para. 8(b) of the Third Schedule to the War Risks Insurance Rules, 1965, which expressly provided that the appellant shall have no right to appear in person or by pleader before the appellate authority, was excluded from the present para. 8(b) of the Third Schedule to the 1971 Rules which were pari materia. Therefore, his contention is that by the exclusion, it must be interred that the Legislature intended to grant a right of personal bearing to the appellant before the appellate authority. The submission of Mr. Shah Jamil Alam on the other hand is that the words excluding the right of personal appearance were redundant. Since under para. 7 of the Third Schedule to the 1965 Rules, the appellate authority was to determine the appeal on the material statements and arguments of the petitioner contained in the appeal. We are inclined to agree with the submission of Mv. Shah Jamih Alam. We think that if a right of personal appearance was intended to be given, the Legislature would have expressly said so and not left it to be inferred.
13. Por the foregoing reasons, we find no force in the first submission of Mr. Khalid 'sheave that the petitioner was entitled to a right of personal hearing. With respect, we agree with the view expressed by the Division Bench in Pakistan Chrome Mins Ltd.. Karachi v. Enquiry Officer, War Risks Insurance mentioned above and see no reason to differ from it.
14. The next submission of Mr. Khalid /shaque is that both the Enquiry Officer, respondent No, 2, and the appellate authority, respondent No, 3, failed to give due allowance for depreciation while assessing the Insurable- value of the buildings and have wrongly interpreted rule 7(a) and Explanas tion I (iv). Therefore, he submitted that their orders are illegal and are liable to be set aside. Rule 7(a) and Explanation I (Is) read as under t- "(7) For the purposes of insurance under the Ordinance, the insurable value of goods or property shall be ascertained in accordance with the following principles :-
(a) The insurable value shall be the actual value or, in the case of works in course of constructioa, the estimated value of the property on the relevant date after giving due allowance for depreciation 1 . .
Explanation I.-For the purposes of this rule the 'actual value' shall be-
(fv) in case of a bailling, the amount equal to 40 times the annual rental value of the building as assessed by the appropriate assessing authority."
' The Appellate Authority, the respondent No, 3 rejected the petitioner's claim for depreciation allowance on the ground that Explanation I(iv) does not mention depreciation as it has clarified that the 'actual value' of the building was to be calculated on the basis of a formula of 40 ((arty) tines the annual rental value as assessed by the appropriate assesssing authority and, therefore, no depreciation allowance was to be allowed.
15. The submission of Mr. Khalid Ishaque is that depreciation allowance is to be given both in the case of completed works as well as in the case of "works in course of construction", because it is a notiorious fact that completed works and, in particular, comphtea buildings, also surfer from depreciation by weather, time and we and there appears to be no good reason why they should have been excluded. If the words "after giving due allowance for depreciation" appearing at the end of the sentence in rule 7(a) are said to apply only to works in course of construction becaue of the punctuation of the sentence, in which a second comma appears after the word 'construction his submission is that punctuation is not an essential part of a statute and may be ignored in order to avoid inconsistency. In support of the proposition, he referred to several decisions including Gusomukh Singh v. Commissioner of Income-tax (1), Nawab Haji Khair Muhammad Khan v. The State (2) and P. D. H. Laboratories and Workers' Unions v. Registrar of Trade Unions, Lahore (3). He also referred to Craies on Statute Law. 7th Edn., pages 197-198 and Maxwell on the Interpretation of Statutes, 1969 Edne (page 13).
16. We have considered this submission but it has not impressed us. Even if it be conceded that punctuation is not an essential part of statute and that the second comma appearing in the sentence in rule 7(a) may be ignored, we do not find any such inconsistency as is alleged. We are of the view that the Explanation I (iv) is clear and unambiguous, which explains that actual value in the case of a building is to be the amount equal to 40 (forty) times the annual rental value of the building as assessed by the appropriate assessing authority. Whereas in the case of a factory or shies, the 'actual value' is to be the sum equal to approximate cat price of a similar new factory or similar new nip less depreciation on such cost price, calculated at rates prescribed under the Income-tax Act, the actual value in the case of a building (as also of goods or goods in transi
(1) AIR 1944 Lab. 353 (2) PLD 1963 Kan 757
(3) P L 1973 Lab. 256 ' mentioned in Berms. (i) and (ft) is not to be the cost price to the owner of a similar new building less depreciation, but is to be calculated on altogether another basis; namely, on a hypothetical formula of 40 (forty) times the annual rental value as assessed by the appropriate assessing authority. As observed in Colony Sarhad Textile Mills Ltd. v. Collector, Central Excise and Land Customs and another (1) the object of adding an Explanation to a statutory provision is to facilitate its proper interpretation and to remove any possibility of confusion or misunciersiaading. Rule 7 mentions the general term 'propriety' (as well as goods), the insurable value of which has to be ascertained in accordance with the principles laid down therein, as enjoined by the definition 2(j) of the Ordinance and, therefore, it became necessary to add the Explanation I to explain separately the meaning of "actual value" in the case of each type of goods and property, viz., goods, in transit, factory, buildings and ships. By making no reference to depreciation allowance in the case of a building and making such reference in the case of a factory and ships, it cannot be said that Explanation I (iv) is inconsistent with rule 7. On the contrary, the Erplanation makes clear the distinction between these various types of property insurable under the Ordinance in the matter of ascertaining their insurable value.
17. For the foregoing reasons, we hold that in ascertaining the insurable value of a building on the basis of the formula of Explaeati -n I (iv), the petitioner is not entitled to any allowance on acount of depreciation.
18. The next submission of Mr. Khalid Ishaque is that Explanation I(iv) to rule 7 is ultra vires on the ground that it suffers from excessive or impermissible delegation of legislative power in that the Legislature has left it entirely to the Central Government by rules, to lay down and formulate the guidelines and principles for assessing the insurable value of goods and property and thereby the Legislature has totally effaced itself of its essential legislative authority. In this connection, counsel referred to the case of Province of East Pakistan v. Sirajal Haq Patwari (2) and Zaibtun Textile Mills Ltd., Karachi v. Central Beard of Resenue (3). We have considered this submission, but we do not think tuat rule 7, which lays down the principles for ascertaining the insurable value of goods or property, a suffers from the rule of excessive or impermissible delegation laid down in the aforesaid decisions. As we see it, the purpose of the Ordinance was to provide for the insurance of goods or property against war risks. Section 25 of the Ordinance gives power to the Central Government to make rules for carrying out the purposes of the Ordinance. For purposes of insurance under the Ordinance, it is necessary to ascertain the insurable value of goods and property. The ascertainment of insurable value of various types of goods and property is no doubt a matter of some complexity and technicality, and it is only appropriate that the Legislature should entrust this function to the appropriate department of the Central Government in order to carry out adequately the purposes of the Ordinance. In such circumstances, as observed by Hamoodur Rahman, J. (as he then was) in the case of Province of East Pakistan v. Slrajul Haq Potwari a greater degree f of latitude has to be conferred upon the Legislature of delegating legislative power to a Department of Government for adequately and effectively carrying out the purposes of legislation.
It is, therefore, not a case of delegation of power to make the law as the delegated authority in its discretion may think fit but a delegation of authority as to its execution.
(1) PLD 1969 Lah. 228 (2) PLD 1966 SC 854
(3) PLD 1971 Ku. 333
19. Mr. Khalid Ishaque further submitted that the formula praised In Explanation I (iv), viz. 40 (forty) times the annual rental value, unreasonable, unjust and harsh. We are not satisfied that the forniu prescribed in Explanation I (iv) for ascertaining the insurable valise of th property on the basis of the annual rental value, is so unreasonable. Thi formula is not unknown to the law. It finds recognition in section 2(9) and the Settlement Scheme No, 1 of the Displaced Persons (Compensation and Rehabilitation) Act, 1958, in determining the price of a house or shop on "evaluation basis" as an amount equal to either 25 times or 40 times the gross annual rent of the house or shop as the case may be. The concept is also not unknown that capitalised value of property may be computed as a multiple of gross annual rental value.
20. Mr. Khalid Ishaque lastly submitted that if rule 7 is interpreted so as to deny depreciation allowance in respect of completed works while giving it in respect of works in course of construction, it would be a case of an invalid discrimination and the rule would contravene the equal protection article in the Interim Constitution, which was then applicable. But, the Ordinance treats a building as a class apart from a building under construction, vide, inter alit sections 5(a) and 10 of the Ordinance and Para. 5 o' the Scheme, which prescribes separate forms of policies. We have no doubt g that the classification is just and reasonable having regard to the object of the Ordinance. We are, therefore, not inclined to accept this submission of Mr. Khalid Ishaque.
21. Mr. Liaqat Merchant, learned counset for the petitioner in Petition No, 170/76, adopted the arguments of Mr. Khalid Ishaque, but submitted additionally that Explanation 1 (vi) to rule 7 goes beyond the scope of the Ordinance and is altra rites. His submission is that the object of the Ordinance is to provide indemnity against loss or damage to property by war risks. In the event of such loss or damage, section 5(b) (iii) of the I Ordinance provides that the Central Government may pay compensation for the loss in value suffered by the damage, which shall be ascertained on the basis of values and prices ruling at the time at which the policy of insurance was taken out or at which the loss occurred, whichever is less. Therefore, according to counsel, sinec the principle of insurance is that it is an indemnity against actual loss in value which is to be compensated, the value for purposes of insurance must also be the actuel value calculated on the basis of values and prices ruling at the time at which the policy of insurance was taken out, and not a hypothetical value of 40 (forty) times the annual rental value as enumerated in Explanation I (iv). We have considered this submission, but we are not satisfied that the Ordinance provides any correlation between insurable value for purposes of insurance and the loss in value of the damaged property which is payable as compensation. We see nothing unreasonable in ascertaining the insurable value of a building differently from ascertaining the value of the loss.
22. For the foregoing reasons, we do not find any force in the two petitions and accordingly we would dismiss them with costs. Petition No, 170/76 is also dismissed on the additional ground that it is __ premature, in the absence of any impugned order passed against the petitioner.