Report No. 21
Marine Insurance
1. No Indian Statute on marine insurance.-
There is no enactment of the Indian Legislature on the law relating to marine insurance.1 The Indian Stamp Act, 1899, prescribes the duties payable on insurance policies. The Transfer of Property Act, 1882, contains provisions relating to the formalities to be observed in the assignment of marine policies. The Insurance Act, 1938, regulates generally the carrying on of the business of insurance (including marine insurance) by associations incorporated and unincorporated and by individuals, and does not deal with the contract of insurance between the insurer and the assured.
The Merchant Shipping Act, 1958 (Central Act 44 of 1958), deals with the law relating to shipping such as registration of vessels, qualifications of Masters, the rights and obligations of the crew, the construction of ships and their equipments and the like, but not with marine insurance. The last mentioned Act does, however, contain provisions on such topics as sea-worthiness, collision and salvage, which arise for consideration in the law of marine insurance.
Thus there is no statute which deals directly with the subject of marine insurance contracts and the rights of the parties thereto. In the absence of such a statute, the courts were guided on the few occasions on which questions relating to marine insurance arose for decision, by the corresponding provisions of the (English) Marine Insurance Act, 1906, and by the principles laid down in the decisions of English Courts in dealing with such contracts.
That a comprehensive enactment on the law of marine insurance is a desideratum was expressed in 1944, when the Bill for amending the provisions of the Transfer of Property Act relating to the assignment of policy of Marine Insurance was introduced. In the statement of Objects and Reasons appended to that Bill2 occur the following observations:-
"It is recognised that while legislation on the above lines would clarify the Law of Assignment, and subrogation of marine insurance policies, the whole law of marine insurance will not be put on a satisfactory basis, unless comprehensive legislation on the lines of the Marine Insurance Act, 1906, is enacted for British India. Such a project, however, must necessarily await the termination of the war."
As a first step in the codification of the entire law relating to shipping, our Parliament has enacted the Indian Merchant Shipping Act, 1958. In 1959, a Bill on marine insurance3 was introduced in the Rajya Sabha by a Private Member.4 In due course, the Bill was circulated for the opinion of the State Governments, High Courts, and other bodies and persons interested. After the receipt of their comments, the Government of India referred to the Law Commission the questions as to whether there was need for legislation on this subject, and if there was, the lines on which it should be undertaken. That is how this matter has come before this Commission.
1. For details of statistics touching on the subject, see Appendix II, (Notes on clauses), topic discussed at the beginning under 'Existing Law in India'.
2. For details see Appendix II, Notes on clauses under clauses 52-53.
3. The Indian Marine Insurance Bill, 1959 (Bill No. 1 of 1959)-Rajya Sabha.
4. Shri M.P. Bhargava.
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