MUHAMMAD RAZA QURESHI, J. Through this Regular First Appeal under section 124 of the Insurance Ordinance, 2000 (the "Ordinance"), the Appellants being policy holders have called into question the legality and propriety of the Judgment and Decree dated 07.05.2019 passed by the learned Insurance Tribunal constituted under section 121 of the Ordinance. Pursuant to the Impugned Judgment and Decree, the Insurance Application of the Appellants seeking recovery of Rs.28,057,632/- was dismissed.
2. The proceedings culminating in Impugned Judgment and Decree emanate from two insurance policies bearing No. FR-FNP-0001053-01-2007 and FR-FNP-0001054-01-2007 for the period 31.12.2006 to 31.12.2007 (the "Insurance Policies") wherein for their stock and machinery the Appellants availed insurance cover from Premier Insurance Company of Pakistan Ltd. (the "Insurer"). Through Insurance Policies, the Appellants secured their assets duly enumerated therein against fire and burglary in the sum of Rs.60,000,000/-.
3. The Appellants claimed to have imported 78 Sulzer Looms from Turkey in September 2006. The Looms were initially insured by the Appellants for a period from 07.09.2006 to 31.12.2006. Closer to the expiry period the Appellants on 21.12.2006 sought an extension of policies for another period of 365 days from 31.12.2006 to 31.12.2007. The request for an extension was acceded to by the Insurer through the Insurance Policies.
4. As per the claim of the Appellants on 06.04.2007, during shifting, it transpired that sizeable equipment and spare parts of the subject matter imported Looms were stolen. The Appellants through a letter dated 06.04.2007 informed the Insurer and lodged an FIR bearing No.332 dated 10.04.2007 with Police Station Peoples Colony, Faisalabad.
5. The Insurer through letters dated 06.04.2007 and 10.04.2007 appointed surveyors, namely Hamid Mukhtar & Co. (Pvt.) Ltd. and Athar Alam & Co. (Pvt.) Ltd. On 22.08.2007, the Appellants submitted their Burglary Claim Forms with the Insurer. The joint surveyors submitted their Survey Reports on 02.06.2008, pursuant whereto the claim of the Appellants was refused and joint surveyors did not recommend indemnification on the pretext (i) the loss claimed by the Appellants cannot be considered as an event of a burglary, (ii) at the time of the event, the coverage under Insurance Policies had not commenced, and (iii) various policy terms, conditions, warranties etc. were breached by the Appellants. In pursuance of the Survey Reports, the Insurer through letters dated 16.10.2008 turned down the claim lodged by the Appellants.
6. With this factual matrix, the Appellants on 04.09.2009 instituted an Application before the Tribunal constituted under the provisions of the Ordinance and sought recovery of an amount of Rs.28,057,632/-. The Application of the Appellants was seriously contested by the Insurer.
Out of divergent pleadings of the parties the learned Tribunal framed as many as the following 8 issues:
1. Whether instant application has not been validly and properly instituted? OPR
2. Whether the application does not disclose any cause of action? OPR
3. Whether the application is bad for misjoinder of parties? OPR
4. Whether the applicants have not approached this Tribunal with clean hands? OPR
5. Whether the application has been filed with mala fide intention just to blackmail the Respondents and as such the applicants should be burdened with special costs under section 35- A, C.P.C.? OPR
6. Whether the application has not been properly verified? OPR
7. Whether the applicants are entitled to recover Rs.28,057,632/- along with interest at bank rate, from the Respondents? OPA
8. Relief?
7. After recording evidence and hearing arguments of both the learned counsel for the parties, the learned Tribunal dismissed the claim of the Appellants through Impugned Judgment and Decree.
Hence, the instant Appeal.
8. Learned counsel for the Appellants submits that the learned Tribunal erred in law by dismissing the Application/claim filed by the Appellants. According to him the Appellants comprehensively pleaded their case through oral as well as documentary evidence on record to substantiate the claim. Learned counsel submits that the authorized Director of the Appellants namely Farhan Shahid appeared as AW-1 and adduced in evidence documentary proof comprising of Exh-PA to Exh-PN and mark-A to mark-B. It has been contended that the learned Tribunal misread the evidence on record and the Impugned Judgment and Decree is a glaring example of non-reading of evidence on record.
9. Learned counsel by referring to Insurance Policies and terms and conditions attached therewith submits that the document is to be read as a whole and it contains glaring contradictions as the period of insurance has been mentioned as 365 days from 31.12.2006 to 31.12.2007 whereas in the gist of Policies the Insurer subsequently inserted an exclusion clause that the insurance cover will be 'subject to no loss till 04.01.2007'. Learned counsel submits that the learned Tribunal failed to advert that by inserting this clause the Insure took benefit of its unconscionable bargaining position. Further contends that while interpreting the documents the learned Tribunal erred in law by holding that the case of the Appellants was covered under the exclusion clause.
10. According to learned counsel since both the parties had not agreed to this clause, therefore, at maximum same can be construed as a counter offer to which the Appellants never gave their consent. By referring to Surveyors Reports learned counsel submits that pursuant to rule 22 contained in Insurance Rules, 2002 the surveyor was under an obligation to submit his report within a period of 30 days which was subsequently amended as 90 days through SRO No.224 (I/2009) dated 05.03.2009. As per the contention of the learned counsel when the law requires a thing to be done in a particular manner, it can only be done in the said manner and not otherwise.
Additionally, it has been argued before us that the Survey Reports rubber-stamped the wishful thinking of the Insurer and the claim of the Appellants was illegally declined.
11. By attacking the competence of the surveyor learned counsel submits that in his cross- examination the surveyor conceded that he lacked qualification under the Ordinance and rules framed thereunder. According to the learned counsel, the Survey Reports adduced in evidence were not credit-worthy and the learned Tribunal illegally relied upon the said Reports. According to the learned counsel, the Impugned Judgment and Decree is a nullity in the eyes of law and the same is liable to be set aside.
12. Learned counsel for the Respondents, seriously contested the Appeal and has argued that the Appellants failed to substantiate their case through cogent and trustworthy evidence. According to the learned counsel AW-1 himself was not sure when the burglary took place, however, he expressed a suspicion that it must have happened between 01.01.2007 to 03.01.2007 during Eid Holidays.
13. As per the contention of learned counsel, it is clearly stated in the Insurance Policies that the period from 01.01.2007 to 04.01.2007 was not covered by the subject matter Insurance Policies, therefore, the Application of the Appellants before the Tribunal failed to disclose a cause of action in their favour. According to the learned counsel, the plaint of the Appellants failed to satisfy even the bare minimum tests laid down by the law as it was an obligation of the Appellants to lay down their case initially through their pleadings and then to prove through oral as well as documentary evidence, which onus the Appellants failed to discharge.
14. So far as the objection of the Appellants with respect to Survey Reports is concerned, the learned counsel for the Respondents contends that the said Survey Reports were never challenged by the Appellants under the Securities and Exchange Commission of Pakistan (Insurance) Rules, 2002. According to learned counsel, had there been any objection relating to delay in submission of the Survey Reports or the competence of the surveyor the Appellants had a remedy to file an Application before the Securities and Exchange Commission of Pakistan under rule 24 of the Securities and Exchange Commission of Pakistan (Insurance) Rules, 2002 for appointment of an independent surveyor, this remedy was never availed by the Appellants and now at the belated stage, they cannot be allowed to turn round and throw a challenge to the Surveyors Reports.
15. Learned counsel has assisted this Court by referring to warranties contained in the subject matter Insurance Policies by asserting that the Appellants themselves failed to demonstrate due care and conceded in their evidence that on the fateful day there is a possibility that the guards deputed at the site were not present due to Eid Holidays. According to learned counsel, it is actually the claim of the Appellants, which is incompetent and fraudulent in its nature as the Appellants themselves could not identify that how burglary was committed, whereas, the subject matter machinery was lying at a conspicuous place in the premises of Appellants factory. According to learned counsel, it is a case of no evidence on behalf of the Appellants, therefore, the Impugned Judgment and Decree rightly and lawfully dismissed the claim filed by the Appellants.
16. Arguments of learned counsel for the parties have been heard and the record of instant Appeal as well as learned Tribunal has been perused with their able assistance.
17. Before dilating upon the merits of the case, it is imperative to identify the scheme of law under which the proceedings are conducted before the learned Tribunal. The Ordinance 2000 was promulgated to regulate the business of the insurance industry; ensure the protection of the interests of the insurance policy holders; and promote the sound development of the insurance industry and for matters connected therewith and incidental thereto.
18. Pursuant to the definition clause contained in section 2(xvi), a Court, inter alia, has been defined as the principal Civil Court of original jurisdiction in a District and includes a High Court in the exercise of its ordinary civil jurisdiction, whereas pursuant to section 2(lxv), the Tribunal is constituted under section 121 of the Ordinance.
19. So far as the powers and procedure of the Tribunal are concerned, they are governed by sections 122 and 123 of the Ordinance. A combined reading of these two provisions manifests that:
(i) in respect of a claim filed by the policy holder against an insurance company in respect of, or arising out of policy of insurance, the Tribunal shall exercise all powers vested in a Civil Court under the Code of Civil Procedure, 1908 ("C.P.C.");
(ii) Under the mandate of Ordinance, a Tribunal shall for the purpose of trial of an application follow such procedure as may be prescribed and have the same powers as are vested in Civil Court trying a Suit under the C.P.C., inter alia, with respect to summoning and enforcing the attendance of any person and examining him on oath; requiring and production of documents and material objects; receiving evidence on affidavit; and issuing commission for the examination of witnesses or documents.
20. The Ordinance clearly envisages that for all intents and purposes, the Tribunal has the powers of a Civil Court under the C.P.C., and trial before it shall be conducted in the same manner in which, a suit before the Civil Court proceeds. Since the Tribunal has powers to enforce the attendance of any person, examine him on oath, receive evidence on affidavits and issue permission for examination of witnesses or documents, therefore, all procedural as well as substantive provisions contained in the C.P.C. and Qanun-e-Shahadat Order, 1984 will be applicable for trials before the Tribunal.
21. In a claim filed by policy holder against an insurance-company in respect of, or arising out of policy of insurance the Tribunal has the power to grant loss, insurance cover as well as liquidated damages under section 118 of the Ordinance, therefore, it is imperative for an Applicant to plead all such claims through tabulation of the financial details and prove the same in accordance with the parameters laid down by the provisions of Qanun-e-Shahadat Order, 1984. This criterion is mandatory in its scope and effect to curb evasive, bald, or vague claims to be presented before the Tribunal. It is also important for the purposes of administration of justice that all such contents shall be pleaded with specifics and categorically, otherwise, the claim or Application will be flawed and vague in its form and substance.
22. Pleading of essential facts are also mandatory as if the contents of an Application or plaint are not comprehensive the party will be debarred from leading testimony in respect thereof. This requirement of law emanates from the cardinal principle that pleadings could not be equated with evidence and neither party to lis can be allowed to lead evidence beyond pleadings nor could it be read in evidence. Under the law the parties are required to lead evidence in consonance with their pleadings and no evidence can be laid or looked into in support of a plea, which has not been taken in pleadings. A party, therefore, is required to plead facts necessary to seek relief claimed and to prove it through evidence of an unimpeachable character. Reliance in this regard is placed upon 2021 SCMR 642 titled "Saddaruddin (since deceased) through LRs. v. Sultan Khan (since deceased) through LRs. and others", 2021 SCMR 1068 titled "Muhammad Rafique and another v.
Syed Warand Ali Shah and others" and 2022 CLC 433 titled "Mst. Khanai and 4 others v. Ghulam Rasool and 9 others".
23. Now applying this test on the Application filed by the Appellants, it is noteworthy with dismay that the Application or plaint failed to pass tests laid down by law. For example, from paragraphs-1 to 7, the Appellants though vaguely pleaded the incomplete chain of events but throughout, the Application remained bereft of any mandatory or necessary challenge to the contradictory clause contained in the Insurance Policies or Surveyors Reports. In paragraphs 8 to 10, the Appellants laid down the contents relating to the cause of action, territorial jurisdiction, and suit valuation and sought recovery of an amount of Rs.28,057,632/- without even pleading the accrual or substantiation of the amount so claimed.
24. Admittedly, the Application or plaint fails to challenge the claimed exclusion clause contained in the Insurance Policies by specifically pleading that the Appellants never consented to exclude the days of insurance cover from 01.01.2007 to 04.01.2007 or for that purpose the Application is completely silent that the said exclusion clause is in contradiction to clause containing insurance cover for 365 days from 31.12.2006 to 31.12.2007. Especially when under section 77 of the Ordinance the Appellants had a remedy to seek declaration with respect to ambiguity or contradiction contained in the Insurance Policies as pursuant to provision ibid any ambiguity in the contract of insurance shall not be capable of being construed in a manner which is contrary to the interest of the policy holder. At the time of institution of Application, the Appellants were aware of all challenges to be put before the Tribunal. The plaint never challenged the subject matter insurance policy on the touchstone of any ambiguity or contradiction. Therefore, at this stage, in Appeal, the Appellant cannot be allowed to achieve which they throughout failed even to plead. Likewise, the Appellants neither challenged the Surveyors' Reports before the Commission nor sought appointment of independent surveyors on any ground whatsoever under the Securities and Exchange Commission (Insurance) Rules, 2002 nor in their Application they pleaded a challenge with respect to the legality, validity or impropriety of Surveyors' Report as now being agitated before us in Appeal.
25. We have also carefully examined the contents of the Application and list of reliance annexed therewith, which clearly demonstrate that the Appellants pleaded their case vaguely and callously and even the list of subject matter machinery claimed to have been stolen was neither pleaded in the Application nor mentioned in the list of reliance annexed with the Application. The list of reliance refers to 11 documents comprising of resolutions, corporate approvals, Form 29, cover notes of insurance policies, FIR No.332/2007, letter dated 16.10.2008 and agreement with Security Services Company. The failure to plead all these constituents necessary for an Application or placing complete documents on record entail penal consequences under the provisions of C.P.C. as well as Qanun-e-Shahadat Order, 1984. In our opinion, the Application filed by the Appellants was flawed in its form and substance.
26. So far as the testimony of Farhan Shahid AW-1, is concerned, it is noteworthy that in his examination-in-chief he stated the facts which were not even pleaded in the Application. As per law as held in paragraph 22 above, the deposition which travels beyond the pleadings cannot be read into evidence, and consequently, the testimony of AW-1 loses its evidentiary value.
27. We have analysed the examination-in-chief of AW-1, which reflects that he produced in Court FIR No.332 dated 10.04.2007 under section 380, P.P.C. as Mark-A and the list of burgled machinery comprising of 6 pages was produced as Mark-B. Nowhere in pleadings or evidence, the Appellants quantified the amount incurred in purchasing the stolen machinery or quantified the claimed loss caused due to burglary. This Court declares that the evidence produced by the Appellants before the learned Tribunal may have satisfied their wishful thinking but is not worth inspiring. The list of machinery placed as a marked document is worthless and inadmissible in evidence as the same cannot be even read in evidence. Reliance in this regard is placed upon 2011 SCMR 1013 titled "State Life Insurance Corporation v. Javaid Iqbal", PLD 2010 SC 604 titled "Federation of Pakistan through Secretary Ministry of Defence and another v. Jaffar Khan and others", and 2021 CLC 1351 titled "Azhar Abbas and others, v. Haji Tahir Abbas and another".
28. There appears to be yet another flaw in the pleadings and evidence of the Appellants as they neither pleaded nor proved in evidence the import documents and invoices and other details in respect of the stolen machinery. In his cross-examination, the Appellant deposed that "the insurance claim is regarding machinery and machinery parts. It was imported from Turkey. The machinery and machinery parts first reached in Karachi and then ultimately in Faisalabad. In my opinion, the 40 looms belong to J.K Fabrics Mills (Private) Limited. The machinery was stored in the warehouse belonging to the companies or their directors. We do not know when this machinery was stolen, but we came to know about it on 05.04.2007. I do not know whether the stolen machinery was stolen through the window. I do not remember the value of the machinery but it was on record...... The insurance claim is regarding the machinery parts. I do not remember from which Country those parts were imported, supposedly from Turkey. The amount of stolen parts is not known to me". With such a weak and shaky testimony, we cannot hold in law that this evidence is even creditworthy having evidentiary value.
29. The terms and conditions of the subject matter Insurance Policies were produced by the Insurer through their witness namely Nadeem Ashraf Khan as RW-1. The said Insurance Policies are admitted documents and contained warranties. One of the warranties contained in the insurance policies was: "warranted that the premises be guarded by armed guard throughout the day and nights"
When AW-2 was cross-examined by the Insurer he admitted that "I do not remember the number of security guards on duty at the place of occurrence...... I know the contents of letter dated 18.01.2008 written by the Appellants company. The date of loss according to letter dated 18.01.2008 were Eid Holidays. As per this letter all the security guards were not on duty." In such a situation, it is self-explanatory that the Appellants themselves breached the warranties contained in the Insurance Policy and now cannot seek indemnification from the Insurer.
30. Now adverting to a most crucial aspect of the case i.e claim of contradictory clauses contained in the Insurance Policies produced in evidence as Exh.R-2 and Exh.R-3 in which the period of insurance has been described from 31.12.2006 to 31.12.2007 (both dates inclusive) number of days
365. The same document contained a clause clarifying that the cover is 'subject to no loss till 04.01.2007'. It is an admitted fact that the Appellants nowhere pleaded or challenged this clause in their Application yet have argued before us that this clause was inserted subsequently and since there is a contradiction in two clauses contained in the document, therefore, this clause will become unenforceable and ineffective. It has also been argued before us that the concluded contract between the parties was only with respect to the period of insurance from 31.12.2006 to 31.12.2007 for a period of 365 days, therefore, the exclusion clause for no loss till 04.01.2007 is at maximum a counter proposal which is ineffective in its nature as the same was never accepted by the Appellants.
31. The matter relates to the interpretation of an admitted document that was produced in evidence by the Insurer. Therefore, it is for this Court to determine that how this document will be construed or interpreted. It is an admitted legal position that the question of construction of an instrument or document is a question of law and it is the duty of the Court to interpret a document in its proper legal perspective. Reliance in this regard is placed upon 2002 CLD 77 "Concentrate Manufacturing Company of Ireland and 3 others v. Seven-up Bottling Company (Private)
Limited and 3 others". While interpreting the document the intention of the parties must essentially be gathered from the language adopted in the document and viewed in the law through surrounding circumstances. As for proper comprehension and insight into an instrument that was to be read as a whole and where its language was simple, clearly understandable, and capable of no ambiguity, then the intention of the parties to such instrument was to be gathered from its contents alone without adverting to any other extraneous consideration. Reliance in this regard is placed in the case titled PLD 2014 Supreme Court 506 "Liaqat Ali Khan and others v. Falak Sher and other), PLD 2014 Lahore 26 Khushi Muhammad and others v. Muhammad Ashfaq and others".
32. It is evident from the documents Exh.R-2 and Exh.R-3 that the issuance date of this letter to the Appellants was 10.01.2007 i.e much before the date of incidence. Since 10.01.2007 these two clauses contained in Insurance Policies were in the knowledge of the Appellants and admittedly they neither challenged the same under section 77 of the Ordinance nor pleaded such a challenge in their Application. The Appellants from the date of knowledge i.e. 10.01.2007 remained silent and never challenged this clause. By remaining silent for such a long time without any challenge, it can be safely held that the Appellants by their silence admitted the clause contained in the Insurance Policies. Therefore, even if the argument of the Appellants is admitted that it was a counter- proposal the counter offer contained in the document culminated in an agreement by their silence as the agreement by silence is an acceptable mode under the law. Reliance in this regard is placed on PLD 2015 SC 212 "Dr. Muhammad Jawaid Shafi v. Syed Rashid Arshad and others".
Once the Appellants waived their rights to object by their silence the clause contained in Exh.R-2 and Exh.R-3 is to be read as part of the agreement as it is a settled position of law that law applicable to the interpretation of the document that Court should lean to any interpretation which effectuates an instrument rather than the one which invalidates an instrument. Reliance in this regard is placed on PLD 2003 SC 215 titled "Saudi-Pak Industrial and Agricultural Investment Company (Private) Ltd., Islamabad v. Messrs Allied Bank of Pakistan and another" and PLD 2013 Sindh 406 titled "Haji Naimatullah v. Federation of Pakistan through Secretary Ministry of Defence and another". It is also a cardinal principle of law that the deed of Contract has to be construed strictly and literally without deviating or anything which was not supported by the intention of the parties and the language of the document nothing can be implied in a contract that was inconsistent with it. Reliance in this regard is placed on "House Building Finance Corporation v. Shahinshah Humayun Cooperative House Building Society and others" (1992 SCMR 19). The consequence of the above discussion is that the document Exh.R-2 and Exh.R-3 represented clauses that were duly agreed upon by the parties and have resulted in a concluded contract.
33. Analyzing this legal position in contrast with the evidence led by the Appellants, it is clearly established that the claim of the Appellants was non-starter, unwarranted and flawed in its scope.
34. There is a fallacy in the argument of the Appellants that the Insurer failed to establish its case.
We are not convinced as the onus was on the Appellants to establish their claim through cogent evidence and unless this onus is not lawfully discharged it cannot shift to the adversary. Reliance in this regard is placed upon 2010 SCMR 1351 titled "Khan Muhammad v. Muhammad Din through LRs". The Appellants being beneficiaries of the insurance claim only produced their directors as witnesses and no independent witness was produced throughout to establish the factum of burglary and consequent loss, which constitute a condition precedent for attracting indemnification clause contained in the Insurance Policies. The evidence of AW-1 and AW-2 denude testimony of any credence. The Appellants failed to discharge onus hence, it can be safely concluded that Issue No.7 was correctly decided against the Appellants.
35. Lastly, a purported challenge thrown by the Appellants against the Surveyors Reports regarding their legality, validity, and impropriety is not also valid or potent, as such Reports were neither challenged in the Application nor before the Commission under Securities and Exchange Commission (Insurance) Rules, 2002. therefore, it is too late in the day to throw a challenge in this regard. It is settled law that where the evidence of Plaintiff is self contradictory and not confidence inspiring then he must fail and where the case is doubtful, the decision must be given in favour of the adversary rather than the claimant. It is so because the plaintiff must succeed on the strength of his own rather than the weaknesses of the other side. Reliance in this regard is placed upon 2022 SCMR 1054 titled "Nasir Ali v. Muhammad Asghar".
36. Despite hectic efforts and able assistance the learned counsel for the Appellants could not persuade us and consequently we hold that the Impugned Judgment and Decree is neither jurisdictionally flawed nor suffer from any misreading or non-reading of evidence and as a consequence, the instant Appeal is dismissed being meritless and devoid of any force. No Order as to costs.