Clause 22
General.-This deals with the topic of "voyage" and "time" policies. Time policies cover the subject-matter of the insurance for a period of time. Voyage policies insure the subject-matter from one place to another or others.
Time policies.-The section requires that a definite period of time should be mentioned.
Stamp Act-suggested omission of section 7(2).-Under section 7(2) of the Indian Stamp Act, 1899, and section 93(2) of the (English) Stamp Act, 1891, a policy of marine insurance cannot be made for any time exceeding twelve months. The object behind this stringent provision was to ensure a regular revenue from the marine insurance business. Section 25(2) of the (English) Marine Insurance Act also makes the same provision in substance, and says 'that a time policy for more than twelve months is invalid. Section 7(2) of the Stamp Act should be omitted on the passing of this Bill to prevent overlapping with the clause under discussion.
Continuation clause-suggestion regarding addition in Stamp Act.-In actual practice, in England, this restriction regarding time was found to cause difficulty, particularly in cases where the vessel had some casualty or encountered heavy weather. In such cases, it was difficult to arrive at the actual date of the loss, that is, whether the date fell within the time or outside it. To meet such difficulties, a "continuation clause" was usually attached to a policy as an honour agreement.
Section 11 of the (English) Finance Act, 1901 afforded statutory recognition to the practice of attaching the continuation clause. That section provides that a marine insurance policy for a time may contain a continuation clause and shall not be invalid merely on the ground that by the continuation clause it becomes available for a period of more than twelve months. The standard form taken by the continuation clause is as follows1:-
"Should the vessel at the expiration of this policy be at sea or in distress at a port of refuge or of call, the interest hereby insured shall, provided previous notice be given to the underwriters, be held covered at a pro rata monthly premium to her port of destination."
(There are minor provisions in this section regarding continuation clause, which need not be considered here).
The necessity of making a similar provision in our Stamp Law may be considered,2 if section 7(2) is retained.
Voyage policies.-"Voyage" policies expressly describe the voyage covered. One of several voyages may be covered in such policies. Questions of deviation from the voyage, change of voyage and different voyage arise in such policies; but they need not be considered here.3
Combined policies.-Very often, voyage policies also contain an element of time. Section 7(4) of the (Indian) Stamp Act, 1899, and section 94 of the (English) Stamp Act, 1891, contain provisions regarding the charging of stamp duties on combined policies. So long as the voyage policy merely provides that the insurance continues to attach until the expiry of 24 hours after the ship has arrived in good safety at the destination, it is still a voyage policy, since this is the usual form of the clause. Even if the period after arrival at the destination is extended up to 30 days, the stamp duty is single. Sometimes a combined voyage and time policy may cause difficulty.
For example in an English case4 a ship was insured "at and from the port of Pomaron to New Castle and for 15 days whilst there after arrival". The vessel arrived at the destination and discharged the cargo. But before the 15 days expired, a new cargo was being loaded for a new outward voyage. Then the ship was damaged. The contention of the insurers was, that the 15 days mentioned in the policy were intended only as a maximum period for the discharge of the cargo (meaning, in effect, that the policy was a voyage policy, and once the voyage was over, the policy ceased).
The Court, however, held that even after the expiry of the first voyage, the policy continued as a time policy for the 15 days in question, and the insurers were liable for any loss or damage occurring during those 15 days. In effect, therefore, the policy was held not to be a time policy with reference to a voyage, but a voyage policy initially with an independent time policy.
1. See Dover, p. 133.
2. See also notes to section 22, English Act-clause 19.
3. For deviations etc., see sections 43 to 45 of the English Act-clauses 44 to 46.
4. Gambles v. Ocean Marine Insurance Co. of Bombay, (1876) 1 KB 141.