P L D 1970 Karachi 462 (PLP)

8. Mr. Rauf Khan was conscious of the poor impression made by P. W. Nooruddin, therefore, he submitted his evidence should be accepted because it was supported by that of P. W. Manan. The plaintiff's factory had been built by a sole proprietorship business known as Messrs Engineering Consultant, and P. W. Mannan had been an employee of this business at the relevant time. He said in his evidence that he had been deputed by his employer, Mr. Zahir Mirza, to check whether glass panes had been installed in the plaintiff's factory or not, and he had inspected the godown and found that the glass panes had been properly installed. According to Mr. Rauf Khan this proved that P. W. Nooruddin was an honest witness even though he might have been confused in his evidence. But P. W. Manan did not produce any measurement books in support of his oral statement that he had inspected the plaintiff's factory as claimed by him. He also admitted that, though it was normal business practice for contractors to submit their returning bills, no such running bills had been submitted by the person who had installed the glass panes. Apart from these minor discrepancies P. W. Nooruddin admitted that he had received payment only after his work had been checked. But as according to P. W. Manan he bad been requested to check the work only on 19th March 1966, he could not possibly have inspected the plaintiff's factory before 19th March 1966. Further as neither P. W. Nooruddin nor P. W. Manan claimed to have met each other in Kotri during P. W. Manan's inspections it follows that P. W. Nooruddin could only have been paid after 19th March 1966. Yet P. W. Nooruddin's receipt for this payment, which is the plaintiff's debt voucher Exh. 8/4 is dated 18th March 1966. It is obvious that this debt voucher is a false document and that the plaintiff has deliberately not produced its books of account in order to conceal the real date on which it had paid P. W. Nooruddin. This casts very great doubt on its claim to have installed the glass panes in the godown before the cyclone.

9. I now turn to the defendant's evidence under this issue, but before I do so I may point out that according to P. W. Dalal D. W. Allden, the first defendant's Manager, had inspected the entire factory in November 1965, therefore, the defendants were aware that the godown did not have doors, window panes etc. P. W. Allden has denied having visited the factory at any time after March 1965 and as it is a case of word against word, on this ground alone, P. W. Dalal's evidence cannot be accepted. But even if I assume for the sake of argument that P. W. Dalal's evidence is to be preferred to that of D. W. Allden, he has merely said that D. W. Allden had visited the factory in November 1965 and thereafter on several other occasions. But as according to the plaintiff, the glass panes in the godown were installed only in the second half of February 1966, the plaintiff had to prove that D. W. Allden had visited its factory after the glass panes had been installed. The only evidence in this respect is that of P. W. Dalal, and as he has not specified the dates on which, according to him, D. W. Allden had visited the plaintiff's factory after November 1965, even if I accept his evidence, it only establishes that D. W. Allden had visited the factory in November 1965. As the factory was then under construction, even if D. W. Allden saw the godown without glass panes and doors he could not possibly have drawn the conclusion that the plaintiff did not intend to instal glass panes and doors in the godown. If therefore the plaintiff was negotiating an insurance for the stocks to be stored in the godown, it was its duty to have warned D. W. Allden or any other person visiting the factory, on behalf of the defendants, that it did not intend to instal glass panes and doors in the godown, and its silence in the circumstances was not honest. In the result I hold that the plaintiff has failed to prove that the defendants were aware that the godown did not have doors and glass panes.

10. I now turn to the evidence produced by the defendants to show that the plaintiff could not have installed glass panes in the windows and ventilators of the godown and I shall only consider the evidence of D. Ws. Shafi and Stevenson, as they were the two persons who had visited the godown immediately after the cyclone. D. W. Shafi was living in Hyderabad at the relevant time and he said that on 24th June 1966 he was directed by D. W. Steven3on to visit the plaintiff's factory at Kotri and survey the damage caused by the cyclone. He said he reached the factory at about 6 p.m. on the same day and P. W. Dalal showed him broken glass panes in the extraction hall of the factory, then took him to the godown and merely showed him a part of the roof that had been blown off causing damage to the bags stored in the godown. He then said : "I did not see any glass panes in the frames of the windows and the ventilators. Mr. Dalai did not show me any glass panes from windows and ventilators which had been broken. My firm impression was that in the frame and shutters, ventilators . . . . no glasses had been fitted and therefore there were none to break." He further said that the next day he had gone and visited the factory with Mr. Stevenson, and D. W. Stevenson's evidence, which was recorded on commission, fully supports D. W. Shafi's evidence. It is true that P. W. Dalal's claims to have shown the splinters of the glass panes to D. W. Stevenson and Shafi. But they have denied this allegation and the question is whether the plaintiff's evidence is to be preferred.

11. Here I have to observe that the plaintiff's case is that glass splinters had been completely removed from all the window frames of the godown, thereby implying that all the glass panes of the godown had been broken in the cyclone, and P. W. Dalal has said that he had sent for P. W. Nooruddin from Karachi, who had come and removed the glass splinters from all the window frames. He has further said that the windows had steel frames and that the glass panes had been fixed on them by a substance known as lampi. As there was no trace of lampi when D. Ws. Shafi and Stevenson inspected the damage, P. W. Dalal has said that P. W. Nooruddin had completely scraped off the lampi from the window frames. But P. W. Nooruddin has not said that he had scraped off the lampi from the window frames. He has also not claimed to have seen either D. Ws. Shafi or Stevenson when he was removing the glass splinters. This casts doubt on the plaintiff's evidence. Here I may point out that it is not disputed before me that D. W. Shafi had visited the godown on 24th and 25th June 1966 and that D. W. Stevenson had done so on 25th June 1966. But P. W. Dalal has said that P. W. Nooruddin had removed the glass splinters and scraped off the lampi on 24th and 25th June 1956. As both D. Ws. Shafi and Stevenson have denied having seen P. W. Nooruddin, and as P. W. Nooruddin was silent on this aspect of the case, I accept the evidence of D. Ws. Shaft and Stevenson that they had not seen any person on 24th and 25th June 1966 removing the glass splinters or scraping the lampi from the window frames of the godown. But, as the removal of the glass splinters and of the lampi from the window frames was a task which required considerable time, this casts very great doubt on the plaintiff's claim that P. W. Nooruddin had come all the way from Karachi and removed the glass splinters and the lampi on 24th and 25th June 1966. I have also to point out here that, contrary to P. W. Dalal's evidence P. W. Siddiqui, the plaintiff's General Manager, has said that the glass panes in the windows and ventilators had been fixed not by using lampi but by fixing them on wooden frames which has been fixed on the steel frames. This discrepancy is not as insignificant as it appears at first sight. P. W. Dalal had admitted in his evidence that the steel frames of the windows had been painted with red oxide point and that this paint was visible when the surveyors had come to inspect the damage. According to D. W. Stevenson, the presence of red oxide paint was inconsistent with the possibility that lampi had been applied or removed from the steel frames of the windows, therefore P, W. Dalal had been cross‑exmamined about this inconsistency, and he had admitted that he did not know whether the effect of removing the lampi from the steel frames would be to change the colours of the red oxide paint. In these circumstances, there is no reason to doubt P. W. Stevenson's statement that the presence of red oxide paint on the steel frames of the windows falsified P. W. Dalai's evidence that the glass panes had been secured on the steel frames by using lampi. Secondly as P. W. Siddiqui had been examined, after P. W. Dalai's cross‑examination it is obvious that his statement that the glass panes had been fixed on wooden frames and not by using lampi was an obliging statement made in order to overcome the difficulty caused by P. W. Dalai's admission that the red oxide paint was visible on the steel frames of the windows, despite the application and removal of lampi ; therefore far from supporting the plaintiff's evidence P. W. Siddiqui's evidence casts very great doubt on it.

12. There are also other circumstances which make the plaintiff's version of the damage to the glass panes highly improbable. The evidence of D. Ws. Shafi and Stevenson that they had seen some broken windows in the extraction hall is unrebutted. As the plaintiff has not produced the site plan of the godown nor any evidence about the wind force and direction of the cyclone, it is difficult to believe that unlike the extraction hall each and every glass pane in the godown was smashed as claimed by the plaintiff. But even more improbable is the plaintiff's story that it had removed the glass splinters and the lamp! or the wooden frames after the damage. First of all, whilst the removal of glass splinters from the floor of the godown might have been a reasonable step taken in an emergency, the alleged removal of the broken splinters of the glass panes and of the lamp! from the window frames was completely unnecessary, and it is difficult to believe that an assured would, in this manner, destroy evidence of its claim. P. W. Dalal has tried to overcome this difficulty by saying that D. W. Allden had instructed him on the telephone on 23rd June 1966 to salvage "whatever goods were undamaged". D. W. Allden has denied this. Further, although the plaintiff in its letter dated the 23rd June 1966 (Exh. 7/13) to the first defendant has referred to the alleged conversation between P.W. halal and D. W. Allden, the letter does not refer to the alleged oral instructions to remove any goods, therefore I am not able to accept P. W. Dalai's evidence. But assuming for the sake of argument that D. W. Allden had instructed P. W. Dalal to salvage undamaged goods this could not possibly mean that P. W. Dalal should have removed the glass splinters and even the lampi from the window frames of the godown. The plaintiff's claim that it had even had the lampi scraped off from the window frames is so absurd that it cannot be believed. As I am not able to believe the plaintiff's claim that it had removed the glass splinters and the lampi from the godown's window frames and, bearing in mind also the fact that the plaintiff's evidence of the installation of glass panes in the godown does not inspire confidence, I hold that it had never installed glass panes in the windows and ventilators of the godown.

13. The plaintiff's failure to instal the glass panes in the godown's windows and ventilators was a defect which would obviously permit the entry of water in the event of storm or rain. Similarly, the absence of doors in the godown in the existence of a running space between the walls and the roof of the godown, which have been admitted by the plaintiff, were similar defects which would permit the entry of water in the event of a storm or of rain. I shall refer to these defects as the said defects, and in view of the said defects I decide this issue against the plaintiff.

14. Issue No. 3.‑The submission of learned counsel for the defendant under this issue wag that the plaintiff's failure to inform the defendants of the said defects amounted to concealment of material facts which entitled them to repudiate all liability under their agreement with the defendants. On the other band, Mr. Rauf Khan submitted that the plaintiff was under no libility to inform the defendants of the said defects because they had accepted its proposal for a policy without any warranties whatsoever.

15. The principles governing the rights and obligations of the assured and the insurer are well known. Thus in Halsbury's Laws of England, 3rd Edition, Volume 22 in para. 355 the learned author states as follows :‑ Requirement of uberrima fides.‑In the case of marine insurance it is enacted by statute that the contract of insurance is a contract based on the utmost good faith, and, if the utmost good faith is not observed by either party, the contract may be avoided by the other party. This statutory provision has codified, in relation to marine insurance, a principle of universal application to all types of insurance contracts. The utmost good faith requires, not so much a strict interpre tation of the obligations undertaken, and strict preservation of the circumstances in which they are undertaken as the performance of positive duties. In its practical application the principle involves that either party has the right to avoid the contract altogether if he establishes against the other party, either that there has been a failure by the other party to disclose a material fact, or that there has been on the part of the other party a misrepresentation, however innocently and honestly made, of a material fact." The same view has been taken by MacGillivray in the 4th Edition of his Commentary "On Insurance Law", and in para. 827 the learned author has pointed out that the principles of Insurance Law governing the obligations of the assured to the insurer were laid down more than 200 years ago by Lord Mansfield in Carter v. Boehm (97 E R 1162). In that classic Judgment Lord Mansfield observed at page 1164 Insurance is a contract upon speculation. The special facts upon which the contingent chance is to be computed, lie most commonly in the knowledge of the assured only ; the underwriter trusts to his representation, and proceeds upon confidence that he does not keep back any circumstance, in his knowledge, to mislead the underwriter .The keeping back such circumstance is a fraud .Although the suppression should happen through a mistake, without any fraudulent intention, yet still the underwriter is deceived and the policy is void. Coming nearer to our time, in dismissing a claim against an insurer on account of concealment of material facts, Scrutton L. J. observed in Green Hill v. Federal Insurance ((1927) 1 K B 65) at page 76 as follows Insurance is a contract of the utmost good faith, and it is of the gravest importance to commerce that that position should be observed. The underwriter knows nothing of the particular circumstances of the voyage to be insured. The assured knows a great deal, and it is the duty of the assured to inform the underwriter of everything that he is not taken as knowing, so that the contract may be entered into on an equal footing. Although these observations had reference to a case under marine insurance the same principles are applicable to all forms of insurance. Finally, I may observe here that the same view has been taken by the High Courts of the sub‑continent. Thus in Imperial Pressing Company v. British Crown Assurance Corporation Ltd. (I L R = 41 Cal. 581) Chaudhuri, J. observed at page 588 as follows So far as insurance contracts are concerned they are based, as has always been said, upon the utmost good faith, `uberrima fides', and I do not think there is any doubt that every circum stance which would influence, or be likely to influence, the judgment of a prudent insurer in fixing the premium and in determining whether he would take the risk or not, should be disclosed. With these observations Chaudhury, J. dismissed the plaintiff's suit against the defendant insurer because of the plaintiff's failure to disclose material information to the defendant‑insurer. Thus the principle laid down in all the judgments is that the assured is under an obligation to inform the insurer of every circumstance relevant to the risk with regard to which he seeks insurance, and if he keeps back such information from the insurer, the insurer is entitled to repudiate all liability under the contract of insurance.

16. Applying these principles to the instant case, as the insurance sought by the plaintiff included insurance against storm risks for stocks stored in the godown, it was under a duty to inform the defendants about the said defects because it was obvious that, in the event of a storm or perhaps even a passing shower, water was likely to enter the godown on account of the said defects, The plaintiff's failure to inform the defendants facts said defects therefore amounted to concealment of materia of the more so as a godown may mean a building with some windows and doors, but it cannot mean a building without any glass panes or doors in the open spaces for doors and windows. Prima facie therefore, on the basis of the judgments cited in para. 15, the defendants are entitled to repudiate their contract with the plaintiff. Mr. Rauf Khan therefore argued that the plaintiff was not under any obligation to inform the defendants about the said defects because they had agreed to its proposal for the issue of a policy "without any warranties whatsoever". Assum ing for the sake of argument that the defendants had agreed to issue such a policy, the question is whether this relieved the plaintiff of its obligations of disclosure under insurance law.

17. As a policy without any warranties whatsoever might amount to an agreement caused by fraud, I repeatedly asked learned counsel to clarify what he meant by such a Policy. Learned counsel did not appear to have examined this aspect of the case and merely stated that such a policy relieved the plaintiff of its obligations under the law of insurance to inform the defendants of the said defects, and he thought that this submission was supported by a judgment of the Madras High Court in National Indian Life Assurance Company v. Mahalevan and others (A I R 1933 Mad. 680) and by a judgment of the Lahore High Court in Co‑operative Assurance Company Ltd., Lahore v. Sachdev and another (A I R 1936 Lah. 685). In both the judgments cited suits had been filed against insurers and the Courts had to construe ambiguities in the insurance policies issued by them. Both the Courts held that an ambiguity in a document has to be construed against the maker of the document, therefore in both cases the Courts adopted a construction of the policy which was against the defendants. I am in respectful agreement with the view that an ambiguity in a document has to be construed against the maker of that document. But this principle is completely irrelevant to the issue under consideration, which relates to the liability of the assured to disclose all relevant information with in his knowledge to the insurer. The judgments cited are of no relevance to Mr. Rauf Khan's argument which has to be decided on general principles.

18. As pointed out in Halsbury's Laws of England, Vol. XXII (para. 410 at page 218) "In insurance law however the expression warranty is used to describe a term by which the assured undertakes that some particular thing shall or shall not be done or that a particular fact does or does not exist, in such circum stances that the undertaking constitutes a fundamental term of the contract so as to confer, in the event of a breach, a right on the part of the insurers to repudiate the contract in toto." The law is so strict that if a warranty is not fulfilled, no matter how trivial or unimportant it be, it discharge3 the insurer from all liability. In Thomson v. Weems ((1884) 9 A C 671), Lord Watson said at page 689: "When the truth of a particular statement has been made the subject of warranty no question can arise as to its materiality or immateriality to the risk, it being the very purpose of the warranty to exclude all controversy upon that point." Again in Farr v. Motor Traders Mutual Insurance ((1920) 3 K 8 669) at page 673 Bankes, L. J. said "If, as a matter of construction it can properly be held that the question and answer amount to a warranty then, however absurd it may appear, the parties have made a bargain to that effect, and if the warranty is broken, the policy comes to an end." Such being the effect of a warranty, the meaning of a policy without warranties, provided and to the extent to which such a policy is not hit by fraud, appears to be that an insurer would not be entitled to repudiate liability under such a policy on account of an erroneous statement by the assured. I do not see how this can relieve the assured of his obligation, in the words of Lord Mansfied, "not to keep from back" from the insurer any circumstance relevant to the risk against which insurance is sought. After all, it is not the plaintiff's case that a policy without any warranties is in the nature of a gambling transac tion, and if such a policy is a contract of insurance it is a contract uberrima fides with all the incidents of such contracts, which imposes on the assured the obligations laid down in the judgments cited in para.

13. Secondly, the only effect of the peculiar policy sought by the plaintiff was to impose a heavier burden on the defendants. But merely because their burden was heavier I am not able to understand how it relieved the plaintiff of its obligations to inform them about the said defects. On the contrary, because it invited them to issue an unusual policy, it was under a stricter obligation to inform them about the said defects, the more so as the godown had been newly constructed. I therefore see no merit in learned counsel's argument and I hold that the plaintiff's failure to inform the defendants about the said defects amount to concealment of material facts. 19: Issue No. I.‑The burden of proving this issue is on the plaintiff, and in support of its case the plaintiff has relied on the oral evidence of P. W. Dalai and an exchange of letters with the first defendant. P. W. Dalai said in his evidence that D. W. Allden had visited the factory in connection with the insurance of the stocks in the godown, and he further said: "During the discussions Mr. Allden and Mr. Jawed both agreed that the risk covered by them would be without any warranties. They agreed to do so because they had visited the factory several times and had satisfied themselves in respect of the risk they intended to cover. It was on account of this that I put the note in a postscript of letter Exh. 8/2 that the policy for the above insurance must be free of any warranty whatsoever. "D. W. Allden has completely denied P. W. Dalai's allegations about this alleged oral agreement and further said: "We had not issued any storm policy without warranties." As P. W. Dalai's word was obviously not sufficient to prove the plaintiff's case, Mr. Rauf Khan submitted that as Mr. Jawed, referred to in P.

1. W. Dalai's evi dence, was the defendant's agent, the first defendant should have examined him and, as he did not do so, an adverse inference should be drawn against the defendants. But through his cross‑examination of D. W. Irshaduddin, Mr. Rauf Khan had proved not only that there was litigation between this Mr. Jawed and the first defendant, but that at the instance of the said Mr. Jawed D. W. Allden had been arrested. In these circumstances, Mr. Hassan submitted that it was under no obligation to examine the said Mr. Jawed. There is force in his argument, and I further find that when D. W. Allden's examination was completed on 16th May 1968 Mr. Rauf Khan had undertaken to summon M. B. Javat. In these circumstances no adverse inference can be drawn against the defendants for not examining Mr. Jawed even though he was their agent. Additionally, despite P. W. Dalai's state ment that letter Exh. 8/2 was written in pursuance of his oral agreement with D. W. Allden this letter does not contain any reference to the allegation that D. W. Allden had agreed at his meetings with P. W. Dalai to grant a policy without any warranties whatsoever. In these circumstances I am not able to believe P. W. Dalai's evidence, and the plaintiff's case, if any, turns on the correspondence with the defendants.

20. Mr. Rauf Khan admitted that the plaintiff's proposals were contained in its letter of 8th June 1966 to the first defendant (Exh. 8/2). In this letter the plaintiff sought insurance for its stocks in its factory against fire, flood, typhoon, hurricane and explosion cover. It also sought insurance of its stocks in Karachi and then in a postscript at the foot of the letter it stated that the policy should be free of any warranties. This letter was acknowledged by the defendant's reply dated the 21st June 1966 (Exh. 6/19), and, according to Mr. Rauf Khan, this reply (Exh. 6/19) amounted to an acceptance of the plaintiff's proposal for "a policy without any warranties whatsoever" because of the following para. at page 2 of this letter (Exh. 6/19). In this para. the first defendant's Manager has stated as follows Kindly note that cover for flood, hurricane and typhoon will be excluded in respect of stocks contained in the roofless godown which we shall be pleased to cover also in this particular risk once its construction on the roof, doors and windows is complete. This paragraph has reference to negotiations between the parties to insure the plaintiff's stocks in another godown, which did not then have a roof, and because this paragraph states that no insurance cover would be given for that godown unless it was, so to say, wind proof, Mr. Rauf Khan stated that this implied that the defendants had accepted the plaintiff's proposal with regard to the godown. I am not able to agree with this argument. On the contrary, the very fact that the defendant refused even to consider any insurance for the other godown unless it was properly built, clearly implied it would extend insurance cover only to godowns which were properly built. Mr. Rauf Khan then stated that his case was supported by another letter of the defendant dated the 1st July 1966 to the plaintiff (Exh. 6/7). This letter is rather ambiguous but, as it clearly states that it has reference to Exh. 6/19 it is to be construed with reference to Exh. 6/ 19 and therefore it does not support learned counsel's argument.

21. Mr. Rauf Khan also submitted that his case was supported by the fact that Exh. 6/19 was a cover note. It is therefore necessary to consider the meaning of a cover note. In Industrial Insurance the insurer does not generally accept the proposals of the assured without investigation. But investigations take time and the assured wants immediate cover, therefore the practice is to accept payment from the assured under a document known as an interim receipt or a cover note, which contains the terms and conditions on which the insurer extends protection to the assured pending investigation by it of the proposals of the assured. Since Mr. Rauf h ban relied on MacGillivray's on Insurance I may quote here from para. 653 of the 4th Edition. The para. states "In fire, burglary, accident and motor car insurance, the usual practice is to issue upon application and payment of the whole or part of the first year's premium an 'interim receipt' or 'cover note " Then in the next para. the learned author states "Such a receipt if given by an authorised officer or agent of the company creates a binding insurance for the specified period, but subject to determination by notice at any time within that period." The object of the interim receipt is thus to give immediate protection to the assured, pending the issue of a policy, and until such a policy is issued, or if it is not issued at all, as long as this interim receipt or cover note is not cancelled, the rights and liabilities of the parties are governed by this interim receipt or note cover.

22. Turning now to Mr. Rauf Khan's argument, he sub mitted that an interim receipt or cover note need not be in any prescribed form and that it could be in the form of a letter. Even if an interim receipt or cover note is in the form of a letter, it is relevant to remember, in interpreting it, that it is issued because the proposal of the assured has not been accepted. Further, in the instant case, the question is whether the first defendant's letter dated the 21st July 1966 (Exh. 6/19) to the plaintiff in such an interim receipt or cover note. The first para. of this letter states : "We thank you for your letter . . . . . of the 8th June (Exh. 8/2) with enclosure and now take pleasure in forwarding you our receipt No. 3307 for your records". This letter itself makes it clear beyond any doubt that it is not the interim receipt or cover note under which insurance cover was being given to the plaintiff and, as the plaintiff did not produce that receipt its failure so to do leads to an adverse inference against its claim, the more so as insurance cover under such an interim receipt or cover note is generally given on the basis of the standard policies of the insurer. Further in this connection D. W. Allden said in his evidence as follows "'A a do not give cover in receipt of stock unless the building is complete with doors and windows. I see Exh. 6/19 and say that it is for this reason that we refuse to give cover of any stock in roofless godowns." As I have explained, there is nothing to the contrary in the first defendant's letter (Exh. 6/19). Additionally it is relevant to bear in mind that this letter was in reply to the plaintiff's proposal for insurance of goods in a godown, and while a godown may mean a building with some broken windows or doors it cannot means a building without any windows or doors in the spaces for windows and doors. I therefore, accept D. W. Allden's evidence that the insurance cover extended by the first defendant to the plaintiff under its letter Exh. 6/19 and its cover note was a for godown "complete with doors and windows." This means that the defendant had never accepted the plaintiff's proposal for a policy without any warranties whatsoever, and I decide this issue against the plaintiff:

23. Issue No. 2.‑Contrary to the request contained in the plaintiff's letter to the first defendant dated the 8th June 1966 (Exh. 8/2) the policy issued by the defendant (Exh. 6/1) neither gave the plaintiff insurance cover against storm risks nor was it a policy without any warranties ‑as proposed by the plaintiff: The plaintiff's case under this issue is that the policy was in breach of the agreement of the defendants with it because the defendants had accepted the proposal contained in its letter of 8th June 1966 (Exh. 8/2). As I have held that the defendants did not accept the proposals contained in the plaintiff's letter (Exh. 8/2) I decide this issue against the plaintiff.

24. Issue No. 4.‑P. W. Dalal has said in evidence that the plaintiff did not accept the policy (Exh. 6/1) issued by the defendants and this proposition has not been contested by learned counsel for the defendants. Mr. Rauf Khan therefore submitted that the policy was contrary to the terms of the cover note, that the cyclone occurred during the pendency of the cover note and before the policy was issued, therefore the plaintiff's rights were governed by the cover note and not by the insurance policy. Learned counsel's argument that the defendant's liabilities are governed by the cover note or interim receipt is correct. But this does not improve the plaintiff's case because it has wilfully failed to produce that receipt. As it has not produced that receipt I have accepted the evidence of the defendants that even the insurance cover extended by them under the cover note was for a godown "complete with doors and windows." The godown was not such a~ godown in view of the said defects and further, even for the purposes of the cover note, the plaintiff was bound to inform the defendants of the said defects. As it did not inform the defendants of the said defects they are entitled to and have rightly repudiated liability for the damage to the plaintiff's stocks.

25. Issue No S.‑I have considered this issue in my discussion of the 6th issue and, for the reasons given in para. 8, I hold that the defendants had not inspected the plaintiff's factory before giving it temporary insurance cover.

26. Issue No. 7.‑As the plaintiff has not accepted the policy issued by the defendants, it is not necessary to consider this issue.

27. Issue No. 8.‑This issue overlaps with the 6th issue and for the reasons given in my discussion of that issue I hold that the plaintiff's stocks were not stored in a godown constructed so as to prevent access to rain water.

28. Issue No. 9.‑Learned counsel have argued the question of damages under this issue. As I have decided the third issue against the plaintiff and held that it had concealed the said defect from the defendants are not liable for the damages claimed or for any damages. In this view of the matter it is not necessary to examine this issue, but as I have heard arguments on the question of damages, I shall briefly examine them.

29. In support of its claim for Rs. 2,92,451‑5‑0 P. W. Dalal has produced a document (Exh. 8/22) which was an annexure to the plaint, and according to this document 46,192 bags were damaged in the manner stated in Exh. 8/22. The plaintiff has also filed a certificate of its auditors (Exh. 8/9) according to which on 22nd July 1968, the night of the cyclone, 46,195 bags had been stored in the godown. However, this certificate itself states that it was prepared from the plaintiff's stock records. On the other hand, D. W. Stevenson has said in his evidence and in his first interim report dated the 13th July 1966 (Exh. i3/1) that he had examined the stock books of the plaintiff but "as they were only written up to 30th April 1966, we did not consider them adequate and suggested that the Company's auditors should certify the stock position." The plaintiff did not produce its stock books, but as they were prepared long after the cyclone damage, they would not have been of much value even if they had been produced, and the question for determination is whether P. W. Dalal's evidence should be accepted as sufficient proof of the plaintiff's claim.

30. Mr. Hassan submitted that the plaintiff's case was false, and his first objection was that the plaintiff's claim was exaggerated because the godown was not big enough to store 46,192 bags. In support of this objection he referred me to D. W. Stevenson's second interim survey report dated the 16th July 1966 (Exh. 13/2). According to this report, the capacity of the godown was limited, and only 28,94 bags could have been stored in it. D. W. Stevenson was cross‑examined at length on this survey report and he stated that it had been prepared by him after taking measurements of the godown. Not only has D. W. Stevenson stood his cross‑examination very well, but he has candidly stated that P. W. Dalal had extended him the utmost co‑operation. Mr. Rauf Khan has made much of this statement, which shows that D. W. Stevenson was a reliable witness. Additionally I have to observe here that P. W. Dalal was cross‑examined about the capacity of the godown on the basis of D. W. Stevenson's report, but as he was admittedly not an expert, he should have produced the construction plans of the godown to prove its cubic capacity and led evidence to show that 40 to 45,000 bags could have been stored in it, as claimed by him. As the plaintiff has withheld this evidence, I accept the evidence of D. W. Stevenson that 46,195 bags could not possibly have been stored in the godown.

31. Mr. Hassan's second objection to the quantum of the plaintiff's claim was that the plaintiff had dishonestly filed a false claim for damage to about 9,000 bags which had been stored in the open before the cyclone. Here it is relevant to observe that the cyclone took place on the night of the 22nd June 1966 and when D. W. Shafi inspected the factory on 24th June 1966 he had found about 9,000 bags lying in the open near the godown. The‑ plaintiff's explanation of these bags was that, after the cyclone, they had been shifted from the godown into the open, but that when D. W. Shafi inspected the factory on 24th June 1966 only about 6,000 to 7,000 bags had been thus shifted from the godown into the open. However, P. W. Dalal admitted that each of these bags weighed between 130 to 160 pounds, and both D. Ws. Shafi and Stevenson were very definite in their opinion that, bearing in mind the weight of these bags, such a large number of bags could not have been shifted within two days of the cyclone. It is true that P. W. Dalal's claim that these bags had been shifted is supported by the evidence of, his General Manager P. W. Siddiqui. But I am not able to under stand the plaintiff's reasons for shifting these bags immediately after the cyclone. P. W. Dalai's explanation was that he had done it on account of the telephonic instructions of D. W. Allden. But as I have already explained, I am not able to believe P. W. Dalai's evidence. In any case, as the burden of proof was on the plaintiff, in view of the evidence of D. Ws. Shafi and Stevenson, the evidence of P. Ws. Dalal and Siddiqui is not sufficient to establish the plaintiff's claim, the more so as its action in shifting the bags from the godown into the open immediately after the cyclone is difficult to believe. Further, the plaintiff should have produced proper evidence of his claim by examining the contractors or the persons employed in this alleged shifting of 9,063 bags from the godown into the open. As it withheld this evidence, I am not able to believe this item of its claim, and as this item involves more than 9,000 bags it casts very great doubt on the plaintiff's case. In all the circum stances discussed P. W. Dalai's evidence is not sufficient even to prove the quantum of loss suffered by the plaintiff.

32. Additionally; I have to observe that in order to obtain a decree for compensation, the plaintiff had not only to prove the quantum of loss suffered by it but also the market price of the goods which, according to it, had been damaged in the cyclone. Unfortunately, it has not made even an attempt to give evidence about the market price of the goods for which it claims compensation. I therefore pointed out to Mr. Rauf Khan that the plaintiff's case under this issue would fail on this ground alone. Learned counsel first submitted that the plaintiff was not required to give evidence of its claim at all because it had agreed to the appointment of D. W. Stevenson as surveyor for its claim. The question of proof has to be decided by the pleadings and as the defendants have expressly repudiated liability in their written statement for the amount claimed by the plaintiff, the plaintiff had to prove its loss and the fact that the defendants had held a survey of the damaged goods did not relieve the plaintiff of its obligation to prove its claim. Learned counsel's argument is devoid of merit. Learned counsel then submitted that even if the plaintiff had not proved its claim it was entitled to rely on the evidence of the defendants' survey reports (Exhs. 13/1 to 13/4). This argument is correct, but unfortunately for the plaintiff although D. W. Stevenson has specified the number of damaged bags in his survey reports, he has not mentioned their market price. The result is that the plaintiff is not able to prove its claim even through D. W. Stevenson's survey reports, and even if it were entitled to recover compensation from the defendants, which it is not entitled to, its claim would have to be dismissed because it has not been proved. In the result, the plaintiff is not entitled to recover any damages from the defendants and the suit is dismissed with costs. A. E. Suit dismissed.