1994 PLP 1280 (CLC)

June 1985 MO 269/85 119‑400 Rs.2,711 September 1985 MO 321/82 104‑197 Rs.2,067 September 1985 MO 446/85 108‑568 Rs.1,550 January 1986 MO 042/86 109‑013 Rs.1,713 May 1986 MO 232/86 202‑478 Rs.3,051 July 1986 MO 269/85 119‑400 Rs.1,854 October 1986 MO 446/85 108‑569 Rs.1,935 October 1986 MO 521/86 104‑197 Rs.2.710 May 1987 MO 232/86 202‑478 Rs.3,672 May 1987 MO 269/85 119‑400 Rs.1,977 September 1987 MO 446/85 108‑569 Rs.1,393 January 1988 MO 232/86 202‑478 Rs.1,354 On such insurance policies the defendant firm was required to pay to the plaintiffs premium detailed in the statement marked "C" and amounting toRs.153,

804. On receiving statement of accounts under a letter dated 28‑6‑88, the defendant gave an undertaking in writing, to clear the entire debt payable by him to the plaintiffs. A partial amount of Rs.19,206 out of the amount due was paid by way of a cheque dated 30‑7‑1988. Balance of Rs.134,598 was agreed to be cleared by 30‑9‑

88. Plaint further shows that said cheque dated 30‑7‑88 was dishonoured. Dishonouring of said cheque aroused suspicion in mind of the plaintiff that the amount due would not be paid by 30‑9‑1988. Hence the suit. Plaintiff also claimed profit on the amount due, at the rate of 15% per annum for the period from institution of the suit till the recovery. The suit was contested by the defendant who in his written statement challenged the same to be time‑barred, bad for misjoinder of causes of action, and without any cause of action. On merits, obtaining of various insurance policies from the plaintiff was not denied but liability to pay the premium periodically from 1983 onwards was denied. It was denied if the plaintiff was entitled to the amount claimed or to the alleged profit. It was added that the letter dated 28‑6‑1988 about acknowledgment of liability and the cheque dated 30‑7‑1988, were without consideration and were obtained by mis representation and on being given assurance that there would be rendition of accounts. Following consent issues were filed and adopted: (1) Whether there was any mutual understanding between the parties whereby the defendants have agreed to pay the premium periodically and the policies were issued under the said understanding? (2) Did the defendant obtain various insurance policies from the plaintiffs from 1983 to January, 1988 on deferred payment basis as per Annexures A, B and C annexed to the plaint. If so, did not defendant enjoy the benefit of such insurance policies? (3) Did the defendant in their letter dated 28‑6‑88 made a promise in writing to pay outstanding premium amount of Rs.153,804 and in part performance thereof issue a cheque dated 30‑7‑1988 for Rs.19,206,00? If so, what is the effect? (4) Whether the suit is barred by limitation? (5) Whether the suit is bad for misjoinder of causes of action? (6) Whether the defendant is liable to, pay the plaintiffs amount of Rs.153,804 with loss of profit @ 15% p.m.? (7)What should be the decree? . Evidence of the parties was recorded through a Commissioner. I have heard Mr. Ghulam Muhammad Ebrahim counsel for the plaintiff and Mr. I.H. Zaidi counsel for the defendant. My findings to above issues follow with reasons. ISSUE No. 1: Plaintiffs mentioned in para. 2 of the plaint that there was a mutual understanding between the parties at request of the defendant and the plaintiffs had been issuing fire and accident insurance covers to the defendant from 1983 onwards. That the defendant under the mutual understanding had agreed to pay periodically to the plaintiffs the premium. The defendant in his written statement denied existence of mutual understanding between the parties about issuance to him of fire and accident insurance covers by the plaintiffs. Plaintiffs examined from their side P.W. Mir Muhammad Anwar who was their Marketing Manager till his retirement in February, 1990. P.W. Mir Muhammad Anwar Exh. 4 deposed that he was working till his retirement in February 1960 as Marketing Manager with plaintiff Norwich Union Fire Insurance Society Limited. He further stated that during the period of his working with the plaintiff the defendant company had transactions of taking fire and motor‑car insurance policies. P.W. Mir Muhammad Anwar produced statement of Fire outstanding premium Exh. 4/1, premium bills Exh. 4/2, Exh. 4/4, Exh.4/8, Exh.4/10, Exh.4/13, Exh.4/16, Exh.4/18, Exh.4/20, Exh.4/22, Exh.4/24, Exh.4/26, Exh.4/28, Exh.4/30, Exh.4/32, Exh.4/34, Exh.4/36, Exh.4/38, Exh.4/40, Exh.4/42, Exh.4/45 and Exh.4/47. P.W. Mir Muhammad Anwar also produced schedules of policies in name of the defendant as Exh.4/5, Exh.4/6, Exh.4/7, Exh.4/9, Exh.4/11, Exh.4/12, Exh.4/33, Exh.4/35, Exh.4/41 and Exh.4/12. He further produced copies of letters Exh.4/14 and Exh.4/15 from the plaintiff to the defendant and to defendant's bank, statement of Accident (Motor) outstanding premium Exh.4/17, bills Exh.4/19, Exh.4/25 about insurance of two Honda Civic Cars, . bills Exh.4/21, Exh.4/23, Exh.4/31, Exh.4/39, Exh.4/46 and Exh.4/48 about insurance of six Toyota Corolla Cars of the defendant, bills Exh.4/27, Exh.4/37 about insurance of two Mark 1 Cars, bills Exh.4/43 about insurance of a Charade Car, letter Exh.4/44 about cancellation of a policy. P.W. Mir Muhammad Anwar next produced statement of year‑wise premium outstanding against the defendant as Exh.4/49, letter dated 28‑6‑1988 from the defendant to the plaintiff as Exh.4/50, letter dated 3‑8‑1988 from the defendant to the plaintiff as Exh.4/53, letter dated' 17‑8‑1988 from the defendant to the plaiAtiff Exh.4/54. All this oral as well as documentary evidence is unrebutted. It shows that there was mutual understanding between the parties about issue We of Insurance Policies by the plaintiff in favour of the defendant: Issue No. 1 therefore stands proved. IISSUE NO. 2: Annexure "A" to the plaint is copy of statement of Fire Outstanding Premium Exh.4/1. Annexure "B" to the plaint is copy of the Statement of (Accident) outstanding premium on 31‑7‑1988 Exh.4/17. Annexure "C" to the plaint is copy of the yearwise premium outstanding FIRE and ACCIDENT (Motor) as on 31‑7‑1988 Exh.4/49. Said documents viz. Exh.4/1, Exh.4/17 and Exh.4/49 were produced and supported by P.W. Mir Muhammad Anwar Exh.4 who deposed that an amount of Rs.1,16,904 is due and payable to the plaintiff as per the statement Exh.4/1. He conceded that Rs.25,000 received through a pay order dated 17‑8‑1988 be adjusted against the suit amount and the balance amount of Rs.109,804 was payable. In his cross‑examination P.W. Mir Muhammad Anwar Exh.4 produced letter of authority Exh.4/57. Statement Exh.4/1 contains details of the outstanding amount due from the defendants to the plaintiffs on account of the premium for fire policies for the period October 1983 to October 1987. Statement Exh.4/17 shows the details of motor accident insurance policies issued by the plaintiffs in respect. of the vehicles belonging to the defendants. Statement Exh.4/49 gives summary of the yearwise premium outstanding against the defendants on account of fire and accident (Motor). Issuance of these policies by the plaintiffs was not disputed. Defendants took plea that the general insurance policies are issued for one year and that such policies could not be renewed except at request of the defendants. In his cross‑examination P.W. Mir Muhammad Anwar Exh.4 was put such questions. He admitted that general insurance policy is issued for only one year but added that it was renewable. He disagreed with a suggestion that a fresh policy is issued after the earlier policy has lapsed. He admitted that renewal is done after a request is made and if there is no request then no renewal policy is issued and in that case the policy lapses unless a fresh policy is obtained. P.W. Mir Muhammad Anwar further stated that first policy was issued to the defendants in respect of fire and cars 1983 and then there was oral request for renewal of the policies. He admitted that in the plaint it was not mentioned that renewal of the policies was done at oral request of the defendants. He admitted that he had not produced any letter demanding outstanding premium for the years 1983 to 1987 but added that statements of accounts were being sent although they were not acknowledged. Defendants had taken a valid defence, and the same could be accepted if the same had been mentioned in the letter Exh.4/50 dated 28‑6‑1988. Under said letter the defendants acknowledged their liability to pay Rs.1,53,804 as insurance premium for the years 1983 to 1987. By issuing such letter the defendants admitted that renewal of the various policies by the plaintiffs was at their request. Letter Exh.4/50 also shows that various insurance policies were issued by the plaintiffs on deferred payment basis and that the defendants enjoyed the benefit of such insurance policies. This issue is therefore, found in the affirmative. ISSUE NO. 3: Mir Muhammad Anwar produced a letter Exh.4/50 from the defendant to the plaintiff dated 28‑6‑

88. In said letter the defendant expressed regrets for not being able to pay to the plaintiff insurance premium on various policies for the years 1983 to 1987 amounting to Rs.153,804 Said letter also shows that a cheque of Rs.19,206 was issued by the defendant in favour of the plaintiffs in respect of a fire insurance policy issued about property of the defendant for the year 1983. The evidence produced by the plaintiffs has not I been rebutted. This issue is, therefore, found in the affirmative. ISSUE NO. 4: Present suit was filed on 15‑8‑1988 and should cover premium in respect of those policies which were drawn on or after 15‑8‑1985.. In the present case the plaintiffs have claimed premium in respect of the policy drawn in 1983 and 1984 besides the premium for the policies drawn in 1985 and onwards. However, in view of the letter Exh.4/50, section 19 of the Limitation Act would come into operation. Under the letter Exh.4/50 the defendant . acknowledged his liability to pay the premium for the policies drawn during the C years 1983 to 1987. In these circumstances a fresh period of limitation would run from 28‑6‑88 which was date of issue of the letter Exh.4/50. Consequently present suit is not barred by limitation and issue No. 4 is found in the negative. ISSUE NO. 5: According to Order 2, Rule 2 every suit shall include the whole of the claim which the plaintiff is entitled to make, in respect of the cause of action. According to Order 2, Rule 3, a plaintiff may unite in the same suit several causes of action against the same defendant, or the same defendant jointly. In the present case the plaintiffs have claimed premium payable by the defendant on various insurance policies pertaining to the years 1983 to 1987. The object of Order 2, Rule 3 of C.P.C. is to avoid needless multiplicity of suits. In the present case filing of a separate suit for every insurance policy would have created confusion for the defendant besides creating botheration for the plaintiffs. In terms of Order 2, Rule 3 of C.P.C. the plaintiffs were within their right to join a several claims for premium in respect of the insurance policies issued by them in favour of the defendant. Issue No. 5, is therefore, found in the negative. During the arguments Mr: I.H. Zaidi, learned counsel for the defendants contended that the suit filed on 15‑8‑1988 was time‑barred in view of Article 86 of the Limitation Act. This point has already been considered while discussing issue No. 4 and the best answer to the objection is section 19 of Limitation Act and letter of the defendant Exh.4/50 dated 28‑6‑1988. In this respect learned counsel for the plaintiffs cited the case of United Bank Limited, Karachi v. K.S. Kamal (PLD 1977 Kar. 521) where son of deceased debtor while acknowledging debt of his father, made promise to pay the same. and it was held that although the suit Was factually barred by time yet within time on the basis of promise. Learned counsel for the plaintiffs also cited the case of M/s. United Bank Limited v. Bazme Salat and another (PLD 1986 Kar. 464) where view taken was, that an agreement to pay the time‑barred debt is not void and cannot be avoided. Learned counsel for the defendants further argued that every insurance policy was for one year in the sense that a policy drawn in 1983 lapsed in 1984 and hence one suit should not have been filed in respect of different policies. This point is already discussed under issue No. 5 and is answered by Order 2, Rule 3 of C.P.C. Learned counsel for the defendants further argued that letter Exh.4/50 is not a legal contract as it is without consideration. He referred to section 23 of the Contract Act, which says that any consideration or object of an agreement, which is forbidden by law or is of a nature that if permitted it would defeat the provisions of any law or is fraudulent or involves injury to the person or property of another or the Court regards it as immoral, or opposed to public policy, is unlawful. Section 23 of the Contract Act applies to agreements and not to acknowledgements. Assuming the letter Exh.4/50 to be an agreement, there is nothing to show if it contains consideration which is forbidden by law or is fraudulent, or is immoral etc. coming within the mischief of section 23 of the Contract Act. Even if the letter Exh.4/50 is a contract without consideration it is covered by clause (3) of' section 25 of the Contract Act. Contention that the letter Exh.4/50 is a contract without consideration runs counter to the contention that it is an ,agreement with. a consideration that is forbidden by law or is meant to defeat provisions of any law or .is fraudulent etc. inviting application of section 23 of the Contract Act. Both the submissions therefore appear forceless. It was also argued on behalf of the defendant that the letter Exh.4/50 was obtained by misrepresentation and it was against the law of limitation because the claim of the plaintiffs had already become time‑barred before 28‑6‑1988 viz. the date of said letter. Defendant has not been able to adduce any evidence to establish that said letter Exh.4/50 was obtained from him by the plaintiffs under misrepresentation. Obviously the defendant was not under any pressure to issue the letter Exh.4/50. Moreover a promise can be made to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits and an agreement with such promise but without consideration is not void as per section 25(3) of the Contract Act. An agreement with such a promise can be entered into even after expiry of the period fixed by law of limitation for recovery of the debt in question. In the case of Eastern Federal Union Insurance Company Ltd. v. Bawany Industries Ltd. (1979 CLC 321) cited on behalf of the plaintiffs, there was a suit for recovery of premium. The insured party admitted the liability through a letter but procrastinated in making the payment and subsequently raised contention about mistaken admission. Yet suit of the plaintiff was held to be maintainable and was decreed with interest and costs. Lastly learned counsel for the plaintiffs cited the case of KA.H. Ghori v. Khan Zafar Masood and another (PLD 1988 Kar. 460) where it was held that the written statement is not a substantive evidence in a suit and if the defendant does not appear to support the pleas raised in the written statement and offer himself for cross‑examination on the facts stated in the written statement, the pleas and/or contentions raised in the written statement cannot be relied upon. There cannot be cavil with such view. For the foregoing reasons, the suit is decreed with costs for recovery of Rs.153,804 with interest on the said amount from 15‑8‑1988 till the date of recovery, at the rate of 10% per annum. A.A/N‑517/K Suit decreed.