ORDER - The question of general importance that arises in this Revisional Application by the original plaintiffs is "whether an insured, who declared the value of Gold Coins or bullion delivered by him for transmission by post in excess of its actual value is not entitled to recover compensation from the insurer - the Government of India - on the ground that the value declared was in excess of the actual value". In the Full Court Application No. 2 of 1959 arising out of Suit No. 176/794 of 1955, in the Court of Small Causes at Bombay the actual value of gold delivered by the plaintiffs for transmission by post was Rs. 2,496. The gold was lost in the course of transit. For the purposes of insurance the plaintiffs had declared the value of gold at Rs. 2,500. The plaintiffs suit was to recover the sum of Rs. 2,500 as compensation under the insurance effected by the Union of India through its Postal Department. The trial Court passed decree in favour of the plaintiffs for Rs. 2,496. The Full Court of the Court of Small Causes dismissed the plaintiffs suit. The Full Court observed;- ".. When the statutory rule enjoins that a declaration has got to be made by the person posting such parcels the actual provisions have got to be complied with very strictly and the question whether the non-compliance of the actual provisions was a result of dishonesty or mala fide on the part of the party cannot be considered by the Court. Even if such a declaration which does not comply with the provisions of the rule has been made honestly and without any intention to deceive, the declaration must be construed as being against and not in compliance with the provisions of the rules and if that is so even though the Court finds that the difference is a small one and was made bona fide and honestly, the Court, in our opinion, cannot find that the rules have been complied with properly," In the instant case, the plaintiffs filed Suit No. 1838/9706 of 1956 for recovering the sum of Rs. 2,474.15.6 in respect of a parcel containing ten gold coins weighing in the aggregate 26 tolas and delivered on June 16, 1955, by the plaintiffs for transmission by post and insured by the Union of India through its Postal Department. 2,474.15.6 in respect of a parcel containing ten gold coins weighing in the aggregate 26 tolas and delivered on June 16, 1955, by the plaintiffs for transmission by post and insured by the Union of India through its Postal Department. The gold coins were purchased by the plaintiffs on June 15, 1955, at Bombay for the aggregate price of Rs. 2,465-14-0 as commission agents for transmission and delivery to their constituents at Bikaner. The plaintiffs were entitled to charge brokerage and Adat to their constituents. The rate at which the gold coins were purchased was for a part Rs. 94-3-0 per tola and for the remaining part Rs. 94-4-0 per tola. The expenses for once, and postage, and the commission and brokerage charges amounted to Rs. 9.1.6. The plaintiffs added Rs. 25 as one per cent margin of profits. According to the plaintiffs, the value of the gold coins in the aggregate came to Rs. 2,499.15.6 For the purpose of insurance the plaintiffs had to declare on the parcel the value of gold coins. They declared the same at Rs.2,500 and paid registration and insurance charges (or fees) on that footing. On June 16, 1955, the parcel was insured and accepted by the Post Office of the Union of India at Ramwadi, Bombay, for transmission to the addressees who were the plaintiffs constituents at Bikaner. On that very day the parcel was found missing from the post office. The plaintiffs were informed about the fact of the parcel having been lost in the evening of June 16, 1955. After giving due notices, the plaintiffs filed the above suit for recovering only the actual cost of gold coins lost i.e. Rs. 2,465.14.0. Following the above observations in the Full Court Application No.2 of 1959, the single Judge of the Court of Small Causes dismissed the plaintiffs suit. The plaintiffs filed Full Court Application No. 153 of 1959. A Bench of two Judges quoted the relevant observations from the judgment in the prior Full Court Application No.2 of 1959 and following those observations dismissed the plaintiffs Full Court Application and confirmed the dismissal of the suit. 2. The plaintiffs filed Full Court Application No. 153 of 1959. A Bench of two Judges quoted the relevant observations from the judgment in the prior Full Court Application No.2 of 1959 and following those observations dismissed the plaintiffs Full Court Application and confirmed the dismissal of the suit. 2. The contention on behalf of the plaintiffs is that the opinion expressed and observations made by the Full Court of the Court of Small Causes in Full Court Application No. 2 of 1959 are altogether unwarranted and cannot be justified having regard to the general law of insurance and also the relevant sections of the Indian Post Office Act and the rules made thereunder. The question is of general public importance and it is necessary that this Court should in this Revisional Application consider the true effect of the relevant sections and rules. On behalf of the Union of India, the learned Assistant Government Pleader, Mr. Abhyankar, has submitted that the true effect of the provisions in the Indian Post Office Act and the rules made thereunder is that slightest difference in the declared value of gold delivered for transmission by post under insurance and its actual value renders the insurance void and in the result the Union of India as insurer becomes discharged from liability to pay compensation for loss of such gold. 3. The following requires to be stated at the outset. Contract of insurance being a contract of indemnity an insured can never recover from an insured compensation in excess of the real value of loss or damage suffered. The contract of insurance involves uberrima fides, utmost good faith - on the part of the proposed insured; but in India the law from which this position results is in the Contract Act and particularly the sections dealing with fraud, misrepresentation and mistake. It needs to be stated that thus the law is the general law involved In the matter of all contracts and not particularly different. It is the duty of the proposed insured to disclose all material facts. Those are facts which affect the risk involved the amount to be charged as premia or fees and cannot be ordinarily ascertained by an insurer. Information given or facts stated which are mere misstatements and do not involve fraud cannot and do not avoid or affect the liability of an insurer. Those are facts which affect the risk involved the amount to be charged as premia or fees and cannot be ordinarily ascertained by an insurer. Information given or facts stated which are mere misstatements and do not involve fraud cannot and do not avoid or affect the liability of an insurer. This, however, is not true in respect of statements which are agreed to be and made the very basis of the ultimate and for resulting contract of insurance. The burden of proof that he is discharged from liability because of fraud misrepresentation and mistake or incorrect statements made in respect agreed to be and for made the very basis of the contract of insurance is always on and liable to be strictly discharged by the insurer. 4. In connection with the questions in this case the relevant provisions in the Indian Post Office Act and the rules made thereunder are to be found in sections 6, 30 to 33 and 64 and rules 44, 72 to 74, 78, 81 (g), 83 and 83.A. It is not necessary to quote all these sections and rules here. Under section 6, the Government is exempted from liability for loss of any postal article in course of transmission by post except in so far as such liability may in express terms be undertaken by the Government as provided by the Act and the rules. Under sections 30 to 33, the Government is authorised by notification to give directions regarding insurance of postal articles (against the risk of loss or damage in course of transmission by post) and direct charging of additional fees for registration and insurance of postal articles. The Government is authorised to compel insurance of certain articles delivered for transmission by post and to make rules in that connection. 5. Section 33 provides: "Subject to such conditions and restrictions as the Central Government. may, by rule, prescribe, the Central Government shall be liable to pay compensation, not. The Government is authorised to compel insurance of certain articles delivered for transmission by post and to make rules in that connection. 5. Section 33 provides: "Subject to such conditions and restrictions as the Central Government. may, by rule, prescribe, the Central Government shall be liable to pay compensation, not. exceeding the amount for which a postal article has been insured, to the sender thereof for the loss of the postal article or its contents, or for any damage caused to it in course of transmission by post: Provided that the compensation so payable shall in no case exceed the value of the article lost or the amount of the damage caused." Section 64 makes false declarations in respect of postal articles punishable with fine. Under rule 44, gold coin or bullion exceeding the value of Rs. 2,500 cannot be transmitted by post. Rule 72, inter alia, provides for insurance of registered parcels upto the value of Rs. 5,000. There are two provisos to this rule which run as follows: "Provided that in no case shall such value exceed the real value of the contents of the article insured: Provided also that articles containing gold coin or bullion or both shall be insured for the actual value of the contents." Rule 73 runs as follows: "Insurance shall cover all risks in course of transmission by post." Rule 74 provides for additional fees to be charged for insurance at 6 annas where the value insured exceeds Rs. 100 and at 3 annas for every additional Rs. 100 or fraction thereof over Rs. 100. Under rule 78, the insurer is directed to write in words and figures the amount for which he wishes hill parcel to be insured. The relevant parts of rule 81 run as follows: "There shall be payable to the sender of an insured postal article compensation not exceeding the amount for which the article has been insured, for the loss of the postal article or any of its contents or for any damage caused to it in course of transmission by post: Provided that the compensation shall in no case exceed the value of the article or any of its contents lost or the amount of the damage caused, Provided also, that no compensation shall be payable (a) to (f) ... (g) where the insured article contains gold coin or bullion or both and had not been insured for the actual value of the contents: (h) to (i) … " Rule 83, inter alia provides that articles of gold or silver may be sent by post only in insured letters or insured parcels. Rule 83.A provides: "In the case of articles containing gold coin or bullion, the sender should declare on the article the value of the contents at the time of despatch." Under the last part of rule 44, it is provided: "The value for the purposes of this sub-rule, the second proviso to rule 72, clause (g) of the second proviso to rule 81 and rule 83.A shall be the market value on the date and at the place of posting." 6. On a reading of the above sections and rules, it is clear that for gold to be carried by post insurance is compulsory. The insurer referred to in these rules is the Union of India through its Postal Department. Gold of the value exceeding Rs. 2,500 cannot be transmitted by post. Whilst delivering for transmission by post, the value for which the gold is Intended to be insured and the value thereof are liable to be written on the packet and for parcel containing the gold. The compensation payable by the Union of India as insurer does not and can never exceed the amount for which gold is in fact insured. It can never exceed the true value of the gold lost. 7. The question is whether there is any provision in the sections and the rules quoted above which disentitles the insured from recovering compensation for gold lost in postal transmission in the event of his mentioning the value of the gold delivered by him in excess of its market value at the date and the place of posting. In this connection, strong reliance has been placed on behalf of the Union of India on the above quoted two provisos in rule 72 and also clause (g) in the second proviso to rule 81. In this connection, strong reliance has been placed on behalf of the Union of India on the above quoted two provisos in rule 72 and also clause (g) in the second proviso to rule 81. It is convenient to once again quote here the relevant part of rule 81: "81 ••••• Provided, also, that no compensation shall be payable_ •••• (g) where the insured article contains gold coin or bullion or both and has not been insured for the actual value of the contents; .••.•• Now, reading the above clause (g) by itself, it is abundantly clear that the clause does not provide that compensation shall not be payable if the article is insured for value (amount) in excess of the actual value of the gold coin or bullion or both contained in the article. Apparently, the true effect of this clause is that in the event of the article containing gold coin or bullion or both having been insured for value below that of the contents of the article, compensation shall not be payable. That is the only reasonable construction of the contents of clause (g). The true meaning of this clause is not that if the contents of the article containing gold coin or bullion or both are insured for any value larger than actual value compensation shall not be payable. The intent and purpose of the clause appears to be that the premia and for insurance fees charged must correspond with and must not be lesser than the actual value of the gold contained in the article delivered for transmission by post. The second proviso to rule 72 and rule 83-A has the effect of affirmative direction that articles containing gold coin or bullion or both must be insured for the actual value of the contents thereof. The true effect of this second proviso and rule 83•A is that the article containing these things must not be insured for an amount lesser than the actual value of the contents. In connection with the above affirmative direction it is necessary to remember that what are known as bullion markets as such exist only in large towns and do not exist in all places fixed for receiving articles containing gold and bullion for transmission by post. In connection with the above affirmative direction it is necessary to remember that what are known as bullion markets as such exist only in large towns and do not exist in all places fixed for receiving articles containing gold and bullion for transmission by post. It is also necessary to remember that in markets for sale and purchase of bullion rates of these articles do not remain constant even during the course of business hours. In these markets, not only there are occasional wide fluctuations from day to day, but even from hour to hour. Apparently, therefore, it is necessary to construe the rules relating to insurance of these articles when delivered for transmission by post reasonably so that the object and purpose of these statutory provisions can be carried out. The true purpose of these provisions appears to be that the value of the contents must always be declared. The value declared must not be lesser than the actual value because that results into fraudulent deprivation of the additional fees chargeable in connection with insurance of the articles. Having regard to the general law of insurance, the value declared should not be excessive. That is because fraud may be possible in the event of loss of articles by claiming larger value than the actual value thereof. This, however, has not been directly provided by the language of any of the provisions referred to above. To repeat, it is not the intent and purpose of the second proviso to rule 72 or clause (g) in the second proviso to rule 81 to make insurance void in the event of the article containing gold coin or bullion or both having been insured for any amount in excess of the actual value of the contents. By section 33 and other rules, it is provided that in no event the Union of India as insurer is to be liable to pay by way of compensation any amount in excess of the value of the article lost. 8. It is clear that provisions in the first and for the second proviso in rule 72 and clause (g) in the second proviso to rule 81 do not have the effect of creating an agreement that the truth of the value declared is the basis of the contract of insurance of postal articles. 8. It is clear that provisions in the first and for the second proviso in rule 72 and clause (g) in the second proviso to rule 81 do not have the effect of creating an agreement that the truth of the value declared is the basis of the contract of insurance of postal articles. The consequence is that unintentional misstatements as regards the declared value of insured articles containing gold coin or bullion or both have not been made by any rules or sections to affect liability under the contract of insurance in any manner. Misstatements in this connection must, having regard to the purpose and object of insurance of postal articles and the purpose for which these statutory provisions are made, be held to be not sufficient to discharge the Union of India as insurer from liability to pay compensation for loss of articles during postal transit. 9. It is difficult to agree with the above quoted observations of the Full Court of the Court of Small Causes in the Full Court Application No.2 of 1959 that a declaration of value not in strict compliance with rules made honestly and without any intention to deceive, must be construed as being against and not in compliance with the provisions of the rules. It is sufficient to state that there is no statutory rule making unintentional misstatements as regards the value of the gold coin or bullion or both sufficient to avoid liability of the Union of India as insurer. 10. It appears on a reading of the cross-examination of the plaintiffs partner that in this case the attempt of the Union of India, was to prove the market rate of gold coins and gold on the date of delivery of the postal article by the plaintiffs for despatch by post, i.e. on June 16, 1955. Apparently, the case of the Union of India was that the market rate of gold coins delivered by the plaintiffs for transmission by post was not Rs. 2,500. In cross-examination the plaintiffs partner wall unable to give any market rates for gold on June 16, 1955. The defendants witness Shivram Damle in this connection stated: "I enquired with the Bullion Exchange. I asked one of the clerks there. Q: What was the result of your enquiries? P. C.: Disallowed-as being hearsay. I submitted my report dt. 4-10-1955 to the Superintendent of Post offices, (Mr. The defendants witness Shivram Damle in this connection stated: "I enquired with the Bullion Exchange. I asked one of the clerks there. Q: What was the result of your enquiries? P. C.: Disallowed-as being hearsay. I submitted my report dt. 4-10-1955 to the Superintendent of Post offices, (Mr. Anandilal objects.) (Mr. Narayaniah replies.) P. C.: Objection upheld." It is sufficient to state that in the whole of the evidence recorded by the trial Court, there is nothing which goes to prove market rates of gold at the date and place of posting thereof (i.e. on June 16, 1955 at Bombay). It is, therefore, clear that it has not been proved that the value of the contents of the postal article delivered by the plaintiffs on June 16, 1955, was not Rs. 2,500. It is necessary to observe that as regards the defence that the declared value of Rs. 2,500 did not correspond with the actual value of the gold delivered the burden of proof was entirely on the Union of India. That burden has not been discharged. It is difficult to see why under those circumstances it was permissible for the trial Court or the full Court to proceed on the footing that the Union of India had proved its case that the declared value of Rs. 2,500 was not the actual value of the gold delivered by the plaintiffs for despatch by transmission by post. The findingl3 made by the Courts below appear to be based on unwarranted surmises and on the false footing that the Union of India had in fact proved that the value declared by the plaintiffs did not correspond with the market rates prevailing on June 16, 1955. Under these cir. cumstances, it is permissible to hold that the Courts below made their findings without any basis in evidence and, therefore, acted with material irregularity. 11. In this connection, it is relevant to state that the burden of proving the defences raised by them in this case was always on the Union of India. In Article 429 at page 227 in Halsburys Laws of England, 3rd edn. (Vol. 22), the relevant passage regarding burden of proof runs as follows: "As a general principle, the onus is on the insurers to prove that a condition has been broken, not on the assured to prove compliance on his part with each and every stipulation. In Article 429 at page 227 in Halsburys Laws of England, 3rd edn. (Vol. 22), the relevant passage regarding burden of proof runs as follows: "As a general principle, the onus is on the insurers to prove that a condition has been broken, not on the assured to prove compliance on his part with each and every stipulation. It may well be that, if there is a question as to whether a contract of insurance has ever come into existence or begun to be operative, the assured has to prove the happening of any events necessary to its existence or operation, but where the question is as to the insurers liability under an admittedly effective policy, the rule as to the burden of proof is axiomatic in insurance law. It is open to the parties to alter this result by making an express stipulation that the onus of proof shall be on the assured, but very clear words are necessary to achieve such a result" Similarly, in the Law of Insurance in British India by N. Barwell at page 296, as regards onus of proof, it is stated: "…; while upon the insurer is cast the burden (if he so pleads) of showing either that the policy is void; is no longer subsisting; or is to be forfeited by reason of some state of facts on which the insurer relies; or that the events on which the assured relies are outside the perils accepted by the policy. Thus, if the insurer sets up such defences al fraud, breach of warranty, breach of a condition precedent, or one of the exceptions as relieving him from liability, the onus (unless the policy otherwise provides) is entirely on him… To discharge the burden of proof, a plaintiff has but, in the first instance, to establish a prima facie case; when, if the defendant fails to destory the case so made against him, the plaintiff must succeed in the action…” Now, it has appeared to me that in this case, the plaintiffs have proved the fact that they had by insured parcel delivered for transmission by post the gold of the value of Rs. 2,474-15.6. In fact, the value of these goods to the consignee was Ra. 2.4S9.15.6 as deposed to by the plaintiffs partner. 2,474-15.6. In fact, the value of these goods to the consignee was Ra. 2.4S9.15.6 as deposed to by the plaintiffs partner. The plaintiff having proved these facts, the Union of India as defendants were bound to prove the defence set up by them that the value of Rs. 2,500 declared by the plaintiffs on June 16, 1955, was on June 16, 1955, not the actual value of the gold delivered by the plaintiffs. The Union of India entirely failed to discharge the burden of proving that defence. There is no evidence of any kind regarding the market rate of gold prevailing on June 16, 1955, on the record of the suit. It was, therefore, in my view. impossible for the Courts below to proceed on the footing that the value of Rs. 2,500 declared by the plaintiffs on June 16, 1955, was not the actual value of the gold delivered by the plaintiffs for trans. mission by post. The Courts below have acted with material irregularity in arriving at their above findings. 12. It is necessary to state that in the trial Court the question of the notice given by the plaintiffs under section 80 of the Code of Civil Procedure being invalid had been raised and answered against the plaintiffs. It was also held that the Court of Small Causes was not the Court of jurisdiction, but the plaint was not directed to be returned. It appears that these points were not pressed before the Full Court. Under the circumstances, this Revisional Application is disposed of on the footing that the Union of India did not insist on the suit being decided on these two last defences. 13. In the result, the decisions of the trial Court and the Full Court mentioned above are set aside. There will be a decree in favour of the plaintiffs for the sum of Rs. 2,474.15.6 with costs throughout and interest on judgment at 6 per cent per annum from the date of the suit. Rule absolute. Application allowed.