1989 PLP 839 (CLC)

The learned counsel for the defendant No.l has relied or. Kishan Lal and others v. Chandiya Bala and others 75 I.C. 917 where it was observed that 'under section 45 of the Contract Act in regard to a promise made to two or more persons jointly proceedings to enforce the claim must be taken by all promisees and that a suit brought by one of several creditors or partners is liable to be dismissed'. In the present case the defendant No.l had issued the policies in the joint names of the plaintiff No.l and Standard Bank Limited.lA The policy was subject to Bank mortgage clause. By virtue of 'Bank' mortgage endorsement any amount payable under the policy was to be paid to the Standard Bank Limited. The plaintiffs have not alleged in the plaint nor any evidence has been produced to prove that the mortgage debt has been satisfied or that the Bank has assigned the right to claim benefits under the policy to them. No explanation has been offered by the plaintiffs for not joining the Bank as a party. D. W. Muhammad Ilyas has produced two letters Exhs.6/1 and 6/2 by which the Bank had claimed the amount payable under both the policies. These documents have been exhibited without any objection. In these facts and circumstances the plaintiffs are not entitled to file the suit in their name alone. My finding is in the affirmative. Issue No.2. Not pressed Issue No.3. Not pressed Issue No.4. Not pressed Issue No.5 The plaintiffs had obtained insurance policies from defendant No.l condition number 19 of which reads as follows:‑ "In no case whatever shall the company be liable for any loss or damage after expiration of 12 months from the happening of the loss or damage unless the claim is the subject of pending action or arbitration." Mr. Lari, the learned counsel has contended that as the plaintiffs have filed the suit after expiry of 12 months from the happening of the loss or damage and there being no pending action or arbitration, the defendant No.l is not liable for the plaintiffs' claim. On the other hand Mr. Anis Ahmad, the learned counsel for the plaintiffs has contended that there was a pending action and, therefore, the liability of the defendant No.l subsists. In this regard the learned counsel for the plaintiffs has referred to correspondence exhibit 5/11 (exhibit 5/32) and subsequent letters which were exchanged between the parties whereby the defendant No.l had appointed surveyor and the plaintiffs had been making and pressing their claim against the defendant No.

1. It is after promulgation of Civil Commotion Compensation Fund Ordinance, 1971 that defendant No.l by letter dated 18‑1‑1973 (Ex.5/33) repudiated its liability. It has been contended that although the defendant No. 1 was liable for the claim under the policy but due to operation of this Ordinance the compensation was payable by the Pakistan Insurance Corporation and the Government of Pakistan also. In these circumstances according to the plaintiffs there was a pending action. It is an admitted position that the parties did not refer the matter to the arbitration. Admittedly suit was filed on 27‑2‑1974 whereas the loss due to the occurrence was suffered on 1‑3‑1971, 2‑3‑1971 and 3‑3‑1971. Therefore, the suit has been filed beyond the period of 12 months from the date of the loss. If the plaintiffs succeed in establishing that there was a pending action between the parties, the bar of clause 19 referred above will E not apply. According to Mr. Lari pending action means any action, suit or proceeding which has been filed in any Court of law or before an arbitrator and has not been disposed of. On the other hand Mr. Anis has contended that pending action refers to action which may be taken by a party even by making a claim against the defendant No.l without referring to arbitration or approaching the Court and so long it is not accepted or rejected it remains a pending action Mr. Lari has referred to Sargodha Corporation Company v. New Insurance Company PLD 1982 Kar.

627. In this case similar clause in the insurance policy came up for consideration before the Bench which after exhaustively discussing several judgments of various High Courts observed that such a clause was not hit by sections 23 and 28 of the Contract Act. Mr. Anis has attempted to distinguish it on the plea that in this case question of pending arbitration or pending action was not under consideration. Identical clause came up for consideration in Baharat Bank Limited v. General Insurance Company Limited where it was observed that the word 'action' as used in clause 19 in the policies may be taken to have meaning wide enough to cover an application to a Court under section 20 of the Arbitration Act. The words 'pending action' refer to such cases or matters which have not been decided or disposed of. The pendency should be before any forum, agency, authority, arbitrator or Court to which a party may be entitled to apply for adjudication, settlement or decision C of its claim. The word 'action' means any proceeding by which a claim, complaint or proceeding for obtaining relief is filed before any Court, arbitrator, agency or authority competent to decide, adjudicate or settle the dispute between the parties. Mr. Anis Ahmad the learned counsel for the plaintiffs has referred to Bharat Bank Ltd. and another v. Ruby General Insurance Co. Ltd. AIR 1951 Pb. 97 in which the meaning of the word 'action' has been explained as follows:‑ ' The word 'suit' certainly has the more restricted meaning of the two words and therefore the inevitable conclusion is that the word 'action' is intended to have a wider meaning than the word 'suit'. As a matter of fact, when he was asked what the meaning of the word 'action' in the terms of the policy was, the learned counsel for the respondent, although he tried to maintain that for the purpose of clause 19 the word was synomymous to 'suit', at another time said that the word 'action' must be taken to have its meaning in English Law. This meaning is obviously very wide indeed if we are to rely on the authority of Halsbury, than which it does not seem there can be any better authority. Indeed, the definitions of the word 'action' contained in other Law Dictionaries & Lexicons appear to be based on Halsbury. In the circumstances I am of the opinion that the word 'action' as used in C1.19 in the Policy must be taken to have meaning wide enough to cover an application to a Court under section 20, Arbitration Act, for the filing of an agreement to refer to arbitration.' In this regard reference has also been made to Messrs Rah‑e‑Manzil Transport and others v. Muhammad Ameen PLD 1963 Kar. 182 where the meaning of action as defined in Halsbury's Laws of England III Edition Volum 1 at page 2 was quoted as follows:‑ ' An 'action', according to the legal meaning of the term, is a proceeding by which one party seeks in a Court of Justice to enforce some right against, or to restrain the commission of some wrong by another party. More concisely it may be said to be 'the legal demand of a right', or 'the mode of pursuing a right to judgment'." Applying the above meaning to the present case it is to be considered whether any action was pending within a period of 12 months from the date of occurrence disentitling the defendant No.l from claiming the benefit of condition No.19. The incident occurred on Ist, 2nd and 3rd March, 1971 . The plaintiffs were in correspondence with the defendant No.l which had taken necessary steps to ascertain their claim when on 10‑8‑1971 Civil Commotion Compensation Fund Ordinance, 1971 was promulgated. Under this Ordinance a surcharge was levied and claim was to be assessed, ascertained and paid by the Government of Pakistan. Consequently the defendant No.l asked the plaintiffs to seek their remedy from the Pakistan Insurance Corporation to which the authority to decide,, such claims and make payment had been delegated by the Government of Pakistan. Correspondence between the parties ensued and although the plaintiffs had supplied all the necessary documents to prove their claim no decision was taker on Pakistan Insurance Corporation. The ordinance was repealed on 13‑9‑1972 and till then the claim of the plaintiffs had not been rejected or accepted. It was kept pending. After repeal in view of the provision made in the repealing Ordinance that no claim shall be paid out of the fund created tinder the Ordinance the defendant No.2 rejected he claim. It is to be considered whether pursuing the claim before Pakistan Insurance Corporation which was .exercising authority under he Ordinance as delegated by the Government cf Pakistan, could be treated as a pending action. The Government through the Pakistani Insurance Corporation was settling and paying the claims under all procedure laid down by the Ordinance. The Ordinance further provided for an appeal if a claim was not properly decided or rejected. Therefore, by this Ordinance a forum had been created for deciding the claims for ,compensation under the policy and an aggrieved party could even file an appeal. Keeping all these facts in view the filing of claim with the Pakistan Insurance Corporation the defendant No.2 would amount to an action as contemplated by clause

19. This clause provides that if no action is pending at the time when 12 months period from the happening of the loss or damage expires, the defendant No.l shall not be liable for the loss or damage. The plaintiffs had filed their claim before the defendant No.l which was transferred by it to defendants Nos.2 g 3 after 10‑8‑1971 and the same was pending till 13‑9‑1972 then the Ordinance was repealed. In these circumstances the bar imposed under clause 19 will not apply and the limitation will be governed by Article 83, providing limitation of three years. My finding is in the negative. Issue No.6 The plaintiffs have filed report of the surveyor to prove the loss. The police report confirms the incident and loss which happened on 1st. 2nd and 3rd March. 1971, The surveyor appointed by defendant No.l did survey the shop of the plaintiffs and ascertained the amount of loss. The plaintiffs' witness Ex.5 has stated facts with regard to occurrence of the incident and quantum of loss which have not been challenged specifically. The plaintiffs have thus suffered a loss of Rs.1,62,083.94 as stated by the surveyor which had recommended payment in settlement of plaintiffs' claim subject to the conditions of the policies issued by the defendant No.

1. Issue No.7. The surveyor Alliance Enterprises was appointed by defendant No.l which had submitted its report Ex.5/8. According to this survey report the defendant No.l is liable to pay Rs.1,62,083.94 under two policies subject to admission of liability. As the defendant No.l had appointed the surveyor its report is binding on it. My finding is in the affirmative. Issue No.8. This is one of the hotly contested issues between the parties. In this regard Mr. A. Rauf, the learned counsel for the defendant ho.2 has devoted sufficient time to show that the incidents due to which loss was caused to the plaintiffs are not covered by riot and strike endorsement. The policies contained a riot and strike endorsement condition No.6 which runs as follows:‑ 'This insurance does not cover any loss or damage occasioned by or through or in consequence, directly or indirectly, of any of the following occurrences, namely:‑ (a) War, invasion, act of foreign enemy, hostilities or warlike operations (whether war be declared or not), civil war. (b) Mutiny, civil commotion assuming the proportions of or amounting to a popular rising, military rising, insurrection, rebellion, revolution, military or usurped power ,or any act of any person acting on behalf of or in connection with any organisation with activities directed towards the overthrow by force of the Government de jure or defacto or to the influencing of it b) terrorism or violence. According to this condition any loss inter alia caused due to war, invasion, mutiny, civil commotion assuming the proportions of or amounting to popular rising, or revolution, will not be covered under the policies. Mr. Rauf the learned counsel has contended that on Ist, 2nd and 3rd of March, 1971 in the then East Pakistan conditions like mutiny, civil commotion assuming proportions or amounting to popular rising were operating and, therefore, the defendant No.l is not liable to compensate the plaintiffs. In this regard Mr. Rauf, the learned counsel has referred to the following books:‑ (1) Keesing's Research Report 9 Pakistan from 1947 to Creation of Bangladesh (2) Pakistan's Crises in Leadership by Fazal Muqeem Khan (3) Witness to Surrender by Siddiq Salik (4) White Paper issued on the crises of East Pakistan on 5 August 194L1 by the Government of Pakistan and (5) Pakistan: Failure in National Integration by Rounaq Jahan Reference can also be made to The East Pakistan Tragedy by L. Rushbrook Williams. In Keesing's Research Report 9 recounting the events during March 1971 it has been stated that the National Assembly was due to meet in Dacca for its first session on March, 1971. President General Yahya Khan announced his decision to postpone indefinitely the opening of the National Assembly, in order to allow the leaders time to settle the question of framing a Constitution. This led to general strike in Dacca and angry demonstrations. On March 6 President General Yahya Khan announced that the inaugural session of the Assembly would take place on 25‑3‑1971, Sheikh Mujibur Rehman put forward conditions for Awami League's participation in the Assembly session. The book at page 109 states:‑ 'While calling for a continued hartal (general strike) in Government offices and the law Courts until these conditions were accepted, and urging the people of East Pakistan to stop payment of taxes and revenues to the Government until power was transferred to the people's representatives, Sheikh Mujibur Rehman said there was still time for us to live as brothers if things are settled peacefully. President General Yahya Khan arrived in Dacca, on March 15 for talks with Sheikh Mujibur Rahman. By then the strike had entered the third week. As no settlement could be reached President Yahya Khan postponed the session of the National Assembly to unspecified date and returned back to West Pakistan on March 25. 'Full scale civil war erupted in East Pakistan on March 26, 1971 when a clandestine radio broadcast announced the proclamation by Sheikh Mujibur Rehman and the Awami League of the 'Sovereign Independent People's Republic of Bangladesh'. Reference has been made to Blood and Tears by Qutubuddin Aziz in which the terrorist activities have been accounted. In the introduction it has been stated that in the first week of March 1971 the Awami League had fired, the first salvo of revolt in East Pakistan and it triggered off a forest fire of lawlessness, arson, loot and wanton murder all over the province. At page 16 it has been stated that on March 3 the general strike ordered by the Awami League all over the province, paralysed life in Dacca. Rampaging mobs, led by militants, carried fire, terror and death into the homes of thousands of non‑Bengalis under the order of Awami League High Command, the Radio and Television Stations in Dacca gave up playing Pakistan's National Anthem and replaced it by the 'Bangladesh Anthem'. From March 4 to 10 violent mobs led by Awami League jingoes, looted and burnt many non‑Bengali houses and shops and kidnapped rich West Pakistani businessmen for ransom. On six March there was a jail break of Central Prison in Dacca and 341 prisoners escaped. 'On March 7 Sheikh Majibur Rehman announced his long range action programme against the Federal Government at a mass meeting on the Ramna Race Course Ground. Unfurled on the platform was the new flag of Bangladesh.' Pakistan's Crises in Leadership by Fazal Muqeem Khan, at page 56 it ‑has‑been stated that ' c lowers of the Awami League and the people under the influence revolted on March

1. They were joined by the extremists of other parties and communists of all hues and colours who were already preparing and biding their time for just this kind of opportunity to start with. It was not a revolt against Pakistan or its ideology. It was a revolt against dictatorship. Sheikh Mujibur Rahman, even if prudence had dictated him, could not keep in a low key the forces of anger. The. Remaining books referred by Mr. A. Rauf corroborate these facts. Reference can also be made to The East Pakistan Tragedy by L. Rushbrook Williams. In Appendix 5 of the book the instances of lawlessness and violence committed by Awami, League prior to March 25, 1971 have been .stated. According to the author on 'March 1 Shaikh Mujibur Rahman called a strike in Dacca to protest against the temporary postponement of the meeting of the National Assembly. Awami Leagurs looted Naryan Gaj Rifle Club for arms which were collected by the student militants in the Iqbal and Jagannath Halls of Dacca University. During the night there was wide spread looting. On March 2 fire‑arm shops were looted. Mobs with fire‑arms raided business premises in Jinnah Avenue and Baitul Makarram'. On March 3 violence spread to other areas also. Loot and arson was rampant. 'Shaikh Mujibur Rahman announced a Civil disobedience movement to 'secure the rights of the people of Bangladesh Radio and Television were compelled to play the new Bangladesh National Anthem.' On March 5 telephone and telegraph employees stopped work on Awami League's orders. On March 6 Jail break was reported. On March 7 Shaikh Mujibur Rahman proclaimed plans for running a parallel Government and issued directions for non‑payment of taxes, closure of all Government offices, Courts and educational institutions. From all these books which narrate incidents, facts and happenings during March 1971 and onwards it seems established that the agitation in East Pakistan was started by making political demands but the situation turned to worst and from the date when the session of National Assembly was postponed the agitation which had started from earlier than March 1971 assumed the proportion of mutiny and revolution which included boycott of the Government offices, non‑payment of taxes, control of information media, formation of parallel Government and loot, arson and massacre of non‑Bangalis. This process continued culminating in declaration of independence and creation of Bangladesh to which stamp of success was given by military intervention of India. In this regard Mr. Rauf has referred to Rauf & Co. Ltd. v. Alpha Insurance Co. Ltd. PLD 1981 Kar. 457, while referring to the aforestated books it was observed that the facts and conditions prevailing in the then East Pakistan were not akin to riot or civil commotion. In this judgment the meaning of the term civil commotion as given in the Strouds Judicial Dictionary, IV edition has been quoted as follows:‑ 'A civil commotion' within an exception to a fire policy means 'an insurrection of the people for general purposes, though it may not amount to a rebellion,, where there is an usurped power.' (2) An organised conspiracy to commit criminal acts without more does not amount to civil commotion. (4) Fire Policy.‑ The following definition of this phrase in Wellford and Otter‑barry's Fire Insurance, 3rd Edn., p.64, was approved:‑ This phrase is used to indicate a stage between a riot and a civil war. It has been defined to mean an insurrection of the people for general purposes, though not amounting to rebellion; but it is probably not capable to any very precise definition. The element of turbulence or tumult is essential; an organized. conspiracy to commit criminal acts, where there is no tumult or disturbance until after the acts,. does not amount to civil commotion. It is not, however, necessary to show the existence of any outside organisation at whose instigation the acts were done. Any agitation, demonstration or movement though started peacefully in organised manner leading to violent or terrorist activities for a common purpose to overthrow the existing Government amounts to Civil Commotion. In degrees and stages Civil Commotion is at a higher and intensive level than riot and is short of civil war. In the present case the incidents which has' been recounted lead to the conclusion that the incidents on lst, 2nd and 3rd March indicate that they were a chain and link with the previous incidents growing into a civil commotion assuming the proportion of mutiny. Mr. Anis has contended that the incident in the referred case occurred in April and not in early March as in the present case. There the loss was suffered during March/April 1971. In any event the incidents on Ist, 2nd and 3rd March, 1971 were part of civil commotion which assumed the proportion of a popular rising, rebellion and revolt. My finding is in the negative. Issue No.9 As discussed above the Civil Commotion Compensation Fund Ordinance 1971 hereinafter referred as the Ordinance provided that the loss suffered during war and‑violence in East Pakistan was to be paid by the Fund. However, this Ordinance was repealed by Civil Commotion Compensation Fund (Repeal) Ordinance, 1972 (Ordinance XXXII of 1972) which provided that no compensation shall be paid out of the fund. Both the learned counsel agree that after repeal of the Ordinance the liability of defendant No.l under the policy did ` not cease to exist. After the repeal the liability of defendant No.l under the policy continued subject to its conditions and exception. Issue No.10. In view of discussion in issue No.9 the incidents on Ist, 2nd, and 3rd March, 1971 were a part of civil commotion which assumed the proportion of mutiny. The loss suffered by the plaintiffs on these dates is, therefore covered by the provisions of Civil Commotion Compensation Fund Ordinance 1971. This Ordinance was repealed by F Ordinance XXXII of 1972 which specifically provided that no payment shall be made out of the fund after the repeal. Therefore, no claim could be made against the defendants Nos.2 and 3 by invoking the provisions of this Ordinance. In this regard reference can be mad to Rauf and Co. Limited v. Alpha Insurance Co. Limited PLD 1981 Kar. 457 and Messrs Haji Razak Haji Habib Janoo v. The Islamic Republic of Pakistan and 2 others 1986 CLC

740. The liability was created under the Ordinance and as the repealing Ordinance prohibits any payment after repeal the liability so created does not exist. Finding accordingly. . Issues Nos.ll and 12: Not pressed. Issue No.13: Suit dismissed with no order as to costs. A . A. /B‑104/ K Suit dismissed