P L D 1955 Sind 309 (PLP)

INAMULLAH, J.‑These are two applications under order XI, rule 12 Civil P. C. in two different suits Nos. 370 of 1952 and 688 of 1953. The questions involved in the two applications are the same and I would therefore dispose them of by a common order. These applications shortly put arise under the following circumstances. The plaintiffs in both the suits had agreed to purchase some cotton yarn from Hongkong. The goods were insured with the defendants, South British Insurance Co. Ltd. The common contention of the plaintiffs in both the suits is that they failed to receive the goods purchased and therefore the defendant‑Insurance Co. was liable to pay the amount in suit. The Insurance Policy in both the cases includes the follow?ing clause :?-- "This Insurance is understood and agreed to be subject to English Law and usage as to liability for and settlement of any and all claims.". Mr. Parmanand, the learned Advocate for the Insurance Co., has made the present application under O. XI, Rule 12 C. P. C. The prayer contained in the application however is wider than is contemplated by O. XI rule 12 C. P. C. Mr. Parmanand's contention has been threefold. In the first place he has contended that the law applicable is English Law. In the second place he has contended that the prayer which he has made in his application under order XI, rule 12 C. P. C. is a matter of substantive law and not of adjective law and by virtue of the contract between the parties he is entitled to have his application granted. In the third place his conten?tion was that even if the prayer embodied in his application is not a matter of substantive law, he is entitled to invoke inherent power of the Court under section 151, Civil P. C. So far as the first contention is concerned Mr. Parmanand has relied on the comments (P. 10) of Mulla's Contract Act for his contention that the parties would be governed by the same law to which they had agreed by contract. He has next relied on Halsbury's Volume 6, 2nd Edition p. 263 para. 321, and All England Reports 1939 Vol. 1, p. 513, in support of the contention that the parties would be governed by the law by which they had agreed or intended to be governed. He therefore maintains that the law applic?able between the parties in the present case would be English Law as they had contracted that the same should be applicable between them. Mr. Parmanand has next contended that the prayer contained in his application under O. XI, rule 12 C. P. C. is a matter of substantive law and not procedural law. In support of his contention he has relied on a passage para. 1271 at p. 1176 of Arnold on the law of Marine Insurance and Average, 13th Edition. It reads as under: " There is one important point of practice, which is peculiar to actions on policies of Marine Insurance ; this is the practice whereby the underwriter is entitled, as a matter of course, as soon as the writ is issued, to an order against the assured, requiring the latter to discover on oath, and to produce all the ships' papers. This practice appears to have been introduced more than a century ago, at a time when the Courts of Common Law were unable to grant discovery, in order to relieve the underwriter of the necessity of going to a Court of equity. Further reasons for the practice are that the underwriters have no means of knowing how a loss was caused ; it occurs abroad and when the ship is entirely under the control of the assured. In addition to this the contract of insurance is made, in peculiar terms, on behalf of the assured himself and all persons interested, and who these persons are, especially at the time of the loss, is entirely unknown to the under?writers. Nor was the practice of making the order on all parties interested, without an affidavit, altered by the judicature Acts, or by the New Procedure Rules." This order against the assured was very comprehensive in form and it ran in the same terms which are embodied in the two applications filed by Mr. Parmanand under O. XI rule 12 C. P. C. I do not consider it necessary to reproduce the form of that order. Mr. Parmanand has also relied on the commentary by Mulla on C. P. C. Volume 1 page 676 12th Edition. It runs as under :‑ "The affidavit of ship's papers which underwriters are entitled to require from the plaintiff in an action on a policy of marine insurance on cargo is not limited to documents in the possession of the plaintiff or other persons interested in the insurance, but extends to all material documents in whom so ever's possession they may be." This quotation obviously has been taken from a case reported in 1924 1 K. B.

79. The contention of Mr. Parmanand in quoting this comment from Mulla's C. P. C. was that this practice of the English Courts was recognised also by Indian Courts. His contention was that had it not been so, Mulla would not have quoted the English case while dealing with O. XI rule 12 C. P. C. Mr. Parmanand has lastly relied on Rule 136 at p. 579 Dicey's Conflict of Laws, 6th Edition. Rule 136 runs as under :‑ "Rule 136‑In this Digest the term `proper law of a contract' means the law, or laws, by which the parties intended, or may fairly be presumed to have intended, the contract to be governed; or (in other words) the law or laws to which the parties intended or may fairly be presumed to have intended, to submit themselves." Mr. Parmanand has very strenuously contended that the prayer contained in his application under O. XI, rule 12 C. P. C. is a matter of substantive law. I would later on deal with this question whether it is substantive law or procedural law after disposing of his contention that if it be held that it is not substantive law, section 151 of the C. P. C. would apply. He has relied upon the commentary by Mulla on C. P. C. under section 151 C. P. C. He has not cited any direct authority whether under the circumstances like the present the Court could proceed under section 151 in ordering a party to do more than what he is required under O. XI rule 12 C. P. C. In this connection he has also contended that it would work out a great hardship in the case of his client if the other side is not directed to comply with the prayer he has made in his application. Mr. Chundrigar, the learned Counsel has appeared in suit No. 688 of 1953 for the plaintiffs. He has con?tended in the first place that the prayer contained in the application filed by Mr. Parmanand is not a matter of sub?stantive law but a matter of procedural law or adjective law. He has also in the second place contended that section 151 C. P. C. would have no application. 'At any rate his conten?tion was that the defendant Insurance Co. has not made out a case under which the Court should exercise its inherent power. In the third place his contention was that the proper stage to file an application under O. XI rule 12 C. P. C. is not before the written statement has been filed by the defendants. In other words, his contention was that it was only when the parties have closed their pleadings that as a general rule `discovery' is ordered. In support of his first contention Mr. Chundrigar has maintained that the very term of contract which is embodied in the Insurance Policy goes to show that all the parties had agreed upon was that the substantive English Law would be made applicable and not adjective law or procedural law. I have already quoted the term embodied in the Insurance A Policy regarding the Law which was to be applicable between the parties. I am of the opinion that the contention of Mr. Chundrigar must prevail. It has also not been contended by Mr. Parmanand that the terms of contract between the parties also included the adjective law. In fact as I have already mentioned above the main contention of Mr. Parmanand was that the terms of the application would come within the substantive law applicable in England. The next contention of Mr. Chundrigar, the learned Counsel for the plaintiffs, was that the procedure is to be governed by lex loci fori. He has relied in support of his contention on Chitty on Contracts, 13th Edition page

166. The relevant portion of the comment runs as under :‑ " In seeking to endorse a foreign contract by action in this country all the provisions of our law which have relation to and which regulate the time and mode of proceeding and the practical conduct of the suit will be enforced with?out regard to the foreign law upon these subjects ; the rule being that, as to everything that is incident to the remedy at law for a breach of the contract, the lex loci fori in which the remedy is sought shall prevail. Thus it is held that a verbal agreement made abroad, although it may be enforceable in the country where it is made, cannot be enforced in the Courts of this country if it is be an agree?ment for which the Statute of Frauds requires a memorandum in writing. The time of limitation of the action falls within the same rule and is governed by the law of the country where the action is brought, except where the law governing the contract sued on does not merely extinguish the remedy, but makes the contract wholly void. Thus, where an action was brought in England on an instrument made in Scotland, which by Scots law had the operation and effect of a bond and a period of forty years' limitation, and the defendant pleaded the English Statute of Limitations, it was held that the remedy in this country was to be governed by the English Law of Limitation and that the action was barred. Set off is matter of procedure, and the right to set oft is therefore determined by the law of the country where the right is sought to be enforced." He also relied on 32 Law Times page

814. It was held by the Queen's Bench in that case that where parties had contracted that the law of a particular country should apply between them the parties were bound only so far as the sub?stantive law was concerned but the procedure was to be applied of the country in which the action was brought. Mr. Chundrigar has also relied on section 1 of the C. P. C. of 1908 in support of his contention that so far as the question of procedure is concerned no exception has been made in favour of the parties, unlike the Indian Contract Act of 1872 wherein the parties can by contract modify the provisions of the Contract Act. In other words his contention was that so far as the question of procedure is concerned the parties cannot by contract force the Court to apply the procedure of any foreign country. So far as the Contract Act was' concerned the legislature specifically provided that the parties can make a particular law applicable between themselves. Mr. Chundrigar, the learned Counsel for the plaintiff, has cited a very important case reported in 1940. All England Report, Volume 3, page

346. Mr. Chundrigar contends that this case in the first place demolishes the contention of Mr. Parmanand that the prayer contained in his application is the invariable practice in English Courts, and in the second place he contends that it goes to show that the practice relied on by Mr. Parmanand is only a matter of procedure. This case goes to show that what has been relied on by Mr. Parmanand and which I have already quoted above is no longer good law. According to the practice relied on by Mr. Parmanand the Court was bound to order on the applica?tion of the underwriters the other party to produce the ship's papers. L. J Goddard in this particular case upheld the order of the Court below refusing the request of the underwriters to order the ship's papers to be produced. The relevant observa?tion of Goddard, L. J., is as under :‑ " Before 1936, no doubt, the defendant would have been entitled to an order for ship's papers, and this action would have been stayed under the practice which had grown upsince the end of the eighteenth century which often involved very great hardship to the insured. That hard?ship would be particularly felt in the present because the order for ship's papers is an order of a most comprehensive description. Very often great difficulty was experienced in making proper compliance with the order which used to lead to many applications and to constant` delay in reaching the hearing of a case. In 1936, the rules relating to this matter were altered. By Supreme Court Rules O. XXXI, rule 12A, a discretion was given to the judge as to whether or not he would order an affidavit of ship's papers. Rule 12A provides as follows :‑ "Where in any action arising upon a marine insurance policy an application for discovery of documents is made by the insurer, the following provisions shall apply :--?(A) On the hearing of the application, the Court or judge may, subject as is provided in the next paragraph, make an order in accordance with rule 12 or rule 14 of this order." Then further on the learned Judge has observed: "Obviously, the effect of the rule is to put into the complete discretion of the judge whether or not he should make an order for an affidavit of ship's papers. It gives him power to do exactly as the judge has done in this case, namely, postpone the application, or to say that, if at a later stage it can be shown that it is fair and right that the underwriters should have access to the ship's papers, which are not ordinarily in the possession or power of the consignee of the goods, or shipper of the goods, as the case may be, an application can be made, and no doubt in a proper case it would be granted. However, this is a matter upon which, if the judge has exercised his discretion, this Court would be very slow to interfere with it." It would appear from the above observation of his Lord?ship that the Courts of law in England thought it just and proper to change the customary practice which has existed for over one hundred years. It cannot therefore be said that what is contended by Mr. Parmanand is still an invariable practice of the English Courts. The important question in this case to determine is whether the prayer contained in the application by Mr. G Parmanand is a matter of substantive law or procedural law. In order to determine that question Mr. Chundrigar has relied on certain well known writers. This question was also argued out by Mr. Sharifuddin. Salmonds has given some definition of what can be said to be adjective law in his, book on Jurisprudence 7th Edition

495. It reads as under :‑ " It is no easy task to state with precision the exact nature of the distinction between substantive law and the law of procedure, and it will conduce to clearness if we first consider a plausible but erroneous explanation. In view of the fact that the administration of justice in its typical form consists in the application of remedies to the violations of rights, it may be suggested that substantive law is that which defines the rights, while procedural law determines the remedies." Mr. Sharifuddin, the learned advocate for the plaintiff has relied on the conflict of Laws by Graveson, 1948 Edition, to elucidate what is meant by procedure. The following passage at page 270 of the book clearly elucidates what is meant by procedure: "What, then, is procedure ? According to the view‑`of Lush, L. J. it is 'the mode of proceeding by which a legal right is enforced, as distinguished from the law which gives or defines the right, and which by means of the proceeding the Court is to administer, the machinery as distinguished from the product'. But the conventional English distinction between matters of substance and those of procedure, on the basis of substantive right and procedural remedy which English Courts have generally followed, is inadequate and un?satisfactory when taken beyond the broadest generalisation. Historically procedure is much more than the skeleton and framework of English law, which grew up around the principle ubi remedium ibi jus. No right which did not presuppose a form of action for its enforcement was considered a legal right, and this procedural paralysis of common law later infected equity as it became the traditional outlook of English judges and lawyers. Historically, therefore, Dicey was justified in throwing wide the net of procedure. " English lawyers ", he wrote "give the widest possible extension to the meaning of the term " Procedure." The expression, as interpreted by our judges, includes all legal remedies, and everything connected with the enforcement of a right." But this general view has taken too little account of certain important aspects of remedies which are considered below". It is doubtful whether procedure can usefully be defined. Generally it comprises the steps which any person must take in order to bring an action or other proceeding before a Court. But the nature of procedure can only be fully under?stood from a consideration of its contents in its broadest sense, the sense in which it is used in the conflict of laws. Procedure includes the following major matters: (1) Determination of the proper Court ; that is, questions of internal competence. (2) The question of actionability, including limitation of actions or other judicial proceedings. (3) Determination of the proper parties. (4) Methods of starting proceedings and ensuring obedience to orders of the Court. (5) Methods of pleading and proceedings in Court, includ?ing the mode of trial. (6) Evidence, including its nature, admissibility, pre?sumptions, competence of witnesses and proof of foreign law. (7) Priorities and, subject to what is said below, set‑off and counter claim. (8) The nature and enforcement of remedies, (9) Costs. (10) Execution of judgments. (11) Rights of appeal and method of appeal to higher Courts." In this connection the following passage from Maxwell on the "Interpretation of Statutes ", 10th Edition 157 is also important: "For the nature and extent of legal remedies are governed by the lex fori, and it is no breach of international law, or any interference with the rights of foreigners, to determine what redress is to be given to suitors who resort to our Courts. Where a remedy is sought to be obtained, the party seeking it must take it according to the law of that country in which it is to be enforced." Another important comment in this connection is by Carver on the Carriage of Goods by Sea, 9th Edition at page 403 which reads as under :‑ "Next as to the effect of foreign law in determining the validity of a contract, with regard to the capacity of the parties to contract, and the sufficiency of the contract in point of form. The general rule is that these are to be determined by the law of the place where it was made, though the manner in which the contract must be proved, and the admissibility of evidence of its existence, are determined by the law of the Tribunal in which it is sought to be enforced. Thus, a document may be admitted to prove a contract, although not stamped in accordance with the law of the country in which the contract was made, or in which the document was executed. But ' if for want of a stamp a contract made in a foreign country is void, it cannot be enforced here'. " In 5 Moore's Indian Appeals page 233 at page 265 the same principal of lex loci fori has been accepted. It is clear from the various authorities cited by the parties that no definition can be attempted as to what is meant by procedure, but speaking broadly it‑means what a person is required to do in a Court of law in order to prosecute his action. So far as the present case is concerned I have no doubt in my mind that the prayer contained in the application by the Insurance Co. relates to one of procedure. The very fact that the application has been made under O. XI rule 12 C. P. C. establishes the contention of Mr. Chundrigar that the question is one of procedure and not of substantive law. Moreover as was contended by Mr. Chundrigar that had it been a matter of substantive law the Supreme Court in England would not have introduced rule 12 (a) to O. XXXI of the Rules of the Supreme Court. This was introduced as already noted above in the case reported in 1940 of All England Report. In 1936 the Courts have been given power to frame rules regarding the procedure to be followed in their Courts. The Courts have no power to legislate. If the custom relied upon by Mr. Parmanand was one of substantive law it would not have been subject of rule 12 (a) to O. XXXI of the Supreme Court Rules. Mr. Parmanand has also contended in reply that the prayer contained in his application has taken the place of this usage and therefore it has the effect of substantive law. I do not think that there is any force in this contention. The very fact that the so‑called usage relied on by Mr. Parmanand does not now exist in England and that it has been modified in 1936 goes to show that it is not usage "in the sense which can be regarded to have taken the force of law." Moreover Mr. Chundrigar, the learned counsel, has contended that the very process of discovery is such that it cannot be anything but a matter of procedure. He has relied on a passage in Halsbury's Statutes of England 2nd Edition Volume 6 at page 125 to elucidate as to what is meant by discovery: " Discovery is the process by which in a civil action parties may obtain in writing and on oath information with regard to documents in the possession of other parties and as to questions of fact relating to the matters in dispute." It was also contended, as I have already mentioned above, by Mr. Chundrigar that section 151 of the C. P. C. would have no application. His contention was that the legislature has made ample provision under O. XI rule 12 C. P. C. as regards discovery, and that this Court has no power to enlarge its power and scope so far as the question of dis?covery is concerned. It was for the legislature which for some reason or other did not think it proper under O. XI rule 12 C. P. C. to give power to the Court to order dis?covery regarding documents in possession of other parties besides the party before the Court. His contention is that the inherent power of the Court can be invoked only where the legislature has made no provision and not so as to enlarge its power where already a provision has been made limiting the scope of its power. He has relied on a passage in the commentary on C. P. C. by Mulla under section 151 C. P. C. at page 477: " Inherent jurisdiction must be exercised subject to the rule that if the code does contain specific provisions which would meet the necessities of the case in question, such provisions should be followed and the inherent jurisdiction should not be involved. Thus, inherent power would not include a power similar to the power of, revision under section 115 C. P. C., even as to cases to which that section is not applicable." Mr. Chundrigar contends that O. XI rule 12 has con?ferred a certain power upon the Court regarding the discovery of documents in possession of the other party, and the same should be taken to be specific provision to meet the present case. It is, however, not necessary for me to give any definite finding whether section 151 of the C., P. C. would apply to the present case or not in view of my opinion that no case has been made out by Mr. Parmanand where I should exercise my inherent power. It was contended by Mr. Parmanand that it is a fit case where the Court should exercise its inherent power to meet the ends of justice. On the other hand it was contended by Mr. Chundrigar that it would work out a great hardship if his client was asked to make a discovery about the documents in possession of another party. There is a great force in the contention of Mr. Chundrigar. Moreover Mr. Chundrigar has also contended that if the application of Mr. Parmanand is granted it would only lead to unnecessary delay. It was only to meet such hardships that rule 12 (a) was introduced to O. XXXI of the Supreme Court Rules of England. It was also urged by Mr. Chundrigar that the object of the present application was to fish out some sort of defence. Without going into the merits of this contention, I am of the opinion that if the Insurance Co. wants any particulars to be supplied by the plaintiffs they have their remedy open under O. VI rule 5 C. P. C. which reads as under : ‑ " A further and better statement of the nature of the claim or defence, or further and better particulars of any matter stated in any pleading, may in all cases be ordered, upon such terms, as to costs and otherwise, as may be just." In view of this provision of law in the C. P. C. the Insurance Co. cannot be allowed to have recourse to what the procedure of this Court does not allow. Mr. Chundrigar also contended that as a rule the practice of this Court and that of English Courts is that an application of the nature which is now under consideration is made after the close of the pleadings. This, Mr. Chundrigar has candidly conceded is a general rule but not an invariable rule. He has in the first place contended that O. XI follows O. VIII which deals with the filing of the written statement and set‑off. It shows the intention of the legislature that the discovery and inspection which is dealt with under O. XI should follow the filing of the written statement. He has in the second place relied on rule 186 of the Sind Chief Court Rules which reads as under :‑ "(1) When the pleadings have been closed, the suit shall be set down before the Registrar (O. S.) for directions: provided that any party may apply to the Registrar (O. S.), before the closing of the pleadings for direction, and the Registrar (O. S.) may grant or refuse such application as he thinks fit. (2) On the suit coming before him for directions, the Registrar (O. S.) shall, so far as practicable, make such orders as may be proper with respect to the following matters :‑ Pleadings, particulars, admissions, discovery, interrogataries, inspection of documents or of movable or immovable pro?perty and the mode by which particular facts may be proved." This rule, he contends goes to show the usual practice of Courts that the question of discovery would come only after the pleadings have been closed. Mr. Chundrigar has contended that rule 186 quoted above only confirms the English practice that as a rule the plaintiff is not ordered to file an affidavit of discovery before the defence. He has relied on a passage at page 522 of the Annual Practice 1945. The relevant comments are: " The Court will not, save in very exceptional circum?stances, order a defendant to produce documents in his possession before the plaintiff has delivered his statement of claim Gale v. Denman Picture House Ltd. (1901 K B 588 C A), and nor is it the practice to allow a plaintiff discovery before defence." The Courts of Law would not allow discoveries for the purpose of fishing out a defence. A defendant is, as a rule, not allowed general discovery before putting in his defence. In the present case, I am of the opinion that no exceptional circumstance have been made by the Insurance Co. for an order of discovery as prayed for before filing of the written statement. As I have already mentioned above O. VI rule 5 of the C. P. C. is there. If the Insurance Co. wants any further and better particulars of the claim they are entitled to make an application for the same. More than that I do not think that the Insurance Co. is entitled at this stage. I am of the opinion, after having considered the authorities and the law cited by the parties, that the prayer contained in the application under O. XI rule 12 C. P. C. is not one of substantive law but only of adjective law, and thus the principle of lex loci fori would apply. I am further of the opinion that even if section 151 C. P. C. were applicable in a matter of discovery no case by the Insurance Co. has been made out under which I should exercise my discretion in their favour ordering the plaintiffs to file an affidavit of discovery in the terms of the prayer made by the Company. I am also of the opinion that under the circumstances of the present case the application is premature and is accordingly dismissed. The Insurance Co. however would be entitled to make an application within the provision of O. XI 11 rule 12 C. P. C. after filing the written statement. Mr, Parmanand prays for 6 weeks' time to file the written statement which is granted. Call up before Registrar. A.H.???????????????????????????????????????????????????????????????????????????????????????? Application dismissed.