1999 PLP 1190 (CLC)

4. The suit was resisted by all the defendants i.e. appellant and respondents Nos.2 to

4. Several issues were framed on the basis of pleadings and though some evidence was led by the deceased respondent and the respondent No.2, the remaining parties preferred to rest their defence on legal grounds only. Eventually, the learned Single Judge dismissed the suit as against respondent No.4 (carrier) on the ground of being barred by limitation. With respect to respondent No.2 it was held that the original policy only covered Marine Risk and admittedly the loss was not attributed to perils of the sea. The endorsement covering War Risk was made on 11‑12‑1971 i.e. after enforcement of War Risk Insurance Ordinance, 1971 (hereinafter mentioned ' as the Ordinance), which came into force on 5‑12‑1971 and section 19 thereof prohibited an insurer from issuing policy covering War Risks, as such the endorsement was made in contravention of law and could not, therefore, be enforced. Accordingly, the suit against respondent No.2 was also dismissed. However, the suit against the appellant (Pakistan Insurance Corporation) and respondent No.3 (Federal Government) was decreed to the extent of Rs.1,30,000 on account of liability that the latter had undertaken under the Ordinance and requirements of law to the effect that claim arising out of destruction of goods on account of War had to be settled by the appellant on behalf of the respondent No.3. Aggrieved by the same the appellant preferred this appeal.

5. The claim of the deceased respondent in Suit No.47 of 1974 was almost identical except to the extent that the consignment shipped comprised 266 Chests of Tea and the respondent No.4 (carrier) was a different party. This suit also, for the same reasons was dismissed as against respondents Nos. l and 4 but decreed in the sum of Rs.1,80,000 as against the appellant and respondent No. 2.

6. Mr. Mahmood Iqbal, learned counsel for the appellant pressed the appeal only on one ground i.e. that the goods belonging to the respondents had been destroyed prior to the issuance of War Risk Insurance Policy and the aforesaid respondents had no insurable interest in the property for the loss whereof compensation was being claimed. Learned counsel argued that a contract of insurance was void if the assured did not possess any insurable interest in the property covered by the policy and according to him there could be no question of "insurance of ashes against risk of fire". He pointed out that according to the deceased respondent the goods had been destroyed in December, 1971, whereas the War Risk Policy was obtained on 31‑12‑1971. Indeed there can be no cavil with the aforesaid proposition as far as voluntary contracts of insurance are concerned. Nevertheless in the instant case we are dealing with scheme of compulsory insurance, required to be taken by the mandate of law in an unusual situation and the obligations that the Government had undertaken .under the provisions of a specific statute. The matter would, therefore, be required to be considered from the stand point of the requirements of the Ordinance, and the Schemes made there under and not by reference to the ordinary law of general insurance. Under section 4 the Federal was required to prepare schemes undertaking to insure properties any goods, means goods which are for the time being insured against fire with an insurer registered in Pakistan and includes‑‑ (a) any spares and stores and other consumable material kept in the premises of a factory for the upkeep, maintenance and funning of the factory provided such material are insured against fire with an insurer registered in Pakistan; (b) any materials, commodities or articles lying within the precincts of a port or on barges or on ships and are intended either for export or for movement outside the port area in Pakistan for final disposal and are insured against fire with an insurer registered in Pakistan; (ii) in relation to any goods in transit, means all goods which are imported into Pakistan or shipped or otherwise despatched from one Province to another or are in transit in the same Province by railways, inland steamer, or a goods vehicle, but does not include goods which are in transit by a ship that sailed from a port of shipment before the coming into force of this Ordinance:

8. The scheme relating to goods in transit was published on 5‑12‑1971 and para. 3 thereof reads as under:‑‑ "

3. Obligation of an owner of goods in transit.‑‑‑ (1) Every owner of goods in transit required to take out a policy under subsection (1) of section 8 in so far as it relates to goods in transit shall take out a policy issued under this scheme and pay the premiums provided therefore. (2) An owner of goods in transit who has fulfilled such of his obligations under sub‑clause (1) as have fallen due shall be entitled to the payment of compensation admissible to him under the Ordinance, Rules and the Policy by the Central Government; Provided that where an owner of goods in transit could not fulfil his obligations under sub‑clause (1) for reasons which, to the satisfaction of the Central Government, were beyond his control, he shall also be entitled to the same benefits as aforesaid, but a sum equal to the amount of the premium plus surcharge and interest, if any, remaining unpaid on the date of compensation, shall be deducted therefrom."

9. A careful reading of the above would show that the obligation of the Government to insure the owner of goods in transit against War Risk did not emerge as a result of a voluntary contract between the parties, but from the requirements of law itself and evidently even a person who had not obtained the A compulsory War Risk Policy could also be compensated upon certain conditions. We are, therefore, of the view that the target date for determining when the liability came into effect would not be the date of obtaining the policy but the date when the scheme came into operation i.e. 5‑12‑1971.

10. We have carefully gone through the entire evidence and material on record but it appears that there is nothing to identify the specific date on which the loss in question took place. Mr. Mahmood Iqbal, however, laid great emphasis on the following statement of the deceased respondent during cross examination:‑‑ "so far as I had heard in these days the ship suffered the damage soon after leaving the harbour of Dhaka. "

11. We regret to say that the aforesaid statement is of no significance as it appears to be hearsay and in any case the date of destruction of the goods has not been identified. Moreover, the deceased respondent himself has deposed in his examination‑in‑chief that the vessel left Chitagong for Karachi on 30‑11‑1971. The learned Single Judge has held at page 18 of the judgment that there is no evidence to show that the goods were destroyed before 31‑12‑1971. We entirely agree with him, at least to the extent that there is nothing to indicate that such destruction took place before 5‑12‑1971 i.e. the date when the scheme 8 in question came into operation.

12. We are also in agreement with the learned Single Judge that the Ordinance classifies "goods" and "goods in transit" in two different categories and it may not be necessary to repeat the profound reason contained in the impugned judgment for holding so nevertheless with great respect we deem it necessary to point out that an important aspect of the matter which escaped the attention of the learned Single Judge appears to be that goods kept in barges or at ships prior to the actual sailing of a ship were required to be treated as "goods" and not "goods in transit". In this context it may be seen that section 2(h)(i)(b) which relates to definition of goods includes "commodities or articles lying within the precinct of a port or on barges or on ships and are intended either for export or for movement outside the port area in Pakistan ... " This evidently shows that commodities on board of vessel are to be treated as goods and not as goods in transit. Therefore, we are of the humble opinion that in case the vessel had not actually sailed from the Port of Chitagong, the consignments in question had to be treated as being situated in East Pakistan and were fully covered by the provisions of section 16‑A which provides that damage suffered by such goods will not be covered by a policy under the Ordinance.

13. On the other hand if it be assumed that the vessel had in fact left the Port of Chitagong on 30‑11‑1971 or on any date prior to the commencement of the Ordinance, the matter would be governed by sub‑clause (ii) of section 2(h) defining "goods in transit" wherein it is stated that goods which are in transit by a ship that sailed from the port of shipment before coming into force of they Ordinance would not be covered by this definition. In either case, therefore, insurance cover provided by the scheme framed under the Ordinance would not be applicable to the goods belonging to the deceased respondent. aforesaid reasons, we are constrained to allow both these 14: For the appeals and recall the judgment of the learned Single Judge. Since the grounds of appeal were not specifically urged by the counsel for the appellant, we are not inclined to make any order as to costs. Q.M.H./M.A.K./P‑64/K . Appeals allowed.