1. ' This suit was filed on 21-3-1966 against Premier Insurance Company of Pakistan Ltd. For the recovery of Rs, 40,00,000 with. Interest. Originally there were 5 plaintiffs. Original Plaintiff No, I was United Oriental Steamship Company, a partnership firm, with Plaintiffs Nos. 2 to 5 impleaded as partners of Plaintiff No, I. The case of the plaintiffs was that they were registered owners of the vessel s. s. Ilyas Bakhsh which ship was insured by Premier Insurance Co. Against war risks with effect from 2-9-1965. The plaintiffs informed the Insurance Company on 16-9-1965 that according to information received by the plaintiff the vessel was seized and subsequently impounded by the Government of India at Bombay. The plaintiffs gave notices of abandonment of the ship on the ground that there was no likelihood of the plaintiffs regaining possession of the ship and claimed Rs, 40 lacs on the ground that the vessel had been covered against war risks by the Insurance Company. The defendant Insurance Company filed a written statement (Exh. 3) on 1-9-1966 denying the claim of the plaintiffs. The fact of plaintiff No, 1 being a registered partnership firm was denied. According to the defendant Insurance Company, no contract of insurance was concluded between the parties. The abandonment of the vessel was also challenged as ineffective and invalid. The value of the ship as Rs, 40 lacs was also disputed and it was averred that previously the plaintiffs had at all times declared the value of the vessel to be Rs, 15 lacs for the purposes of actual total loss and constructive total loss.
2. On the application of the defendant Insurance Company, relying upon the provisions of the War Risks Insurance Ordinance, 1965, Government of Pakistan and Pakistan Insurance Corporation were impleaded as Defendants Nos, 2 and 3 as third parties. A joint written statement was filed on behalf of the Defendants Nos. 2 and 3 on 3-1-1980. On behalf of the Pakistan Insurance Corporation (Defendant No, 3) the defence has been taken that the Corporation was only a delegatee of the Central Government and was not personally liable in any manner and as such no decree could be passed against the Corporation. Further, on behalf of the Defendants Nos. 2 and 3, it has been pleased that the admitted position of the plaintiff was that the vessel in question was impounded by the Indian Authorities on 7-9-1965 whereas the War Risks Insurance Ordinance, 1965 was promulgated on 9-9-1965 and as such there was no question of extending the provisions of the War Risks Insurance Ordinance, 1965, to the case of the vessel s. s. "Ilyas Bakhsh". The jurisdiction of this Court was also challenged on the ground that the Ordinance of 1965 was a special statute and a machinery was provided for the settlement of all claims arising under the 1965 Ordinance.
3. In this case, several applications for amendment of the plaint were filed, one after the other, on account of changing circumstances. As observed earlier, Plaintiffs Nos. 2 and 5 were joined as partners of Plaintiff No, 1, United Oriental Steamship Company. Later on it was averred on behalf of the plaintiffs that on an arrangement between the partners, the partnership business of United Oriental Steamship Company with all its assets and liabilities was transferred to two partners, namely Shaikh Muhammad Anwar and Shaikh Muhammad Iqbal, and as such the partnership firm was reorganised with two partners only i,e, Shaikh Muhammad 'Iqbal and Shaikh Muhammad Anwar. The original Plaintiff No, 2 (Shaikh Mian Maula Bakhsh) and Plaintiff No, 5 (Shaikh Maqbool Ahmad) were dropped as plaintiffs and the amended plaint filed on 11-10-1971 shows only three plaintiffs i,e, United Oriental Steamship Co., Shaikh Muhammad Anwar and Shaikh Muhammad Iqbal.
2. ' By an order passed under the provisions of Pakistan Maritime Shipping (Regulation and Control)
3. Ordinance III of 1974, the management of United Oriental Steamship Company was taken over by the Federal Government which later on acquired the whole of the proprietary interest of the partners el United Oriental Steamship Company. On 31-8-1975 Pakistan Shipping Corporation Act, 1975 came into force and a Corporation was established under this Act known as Pakistan Shipping Corporation and by an order dated 29-10-1975 all proprietary interest of United Oriental Steamship Company was transferred to Pakistan Shipping Corporation w. e. f. 31-10-1976. By Ordinance XX of 1979 Pakistan National Shipping Corporation was established which substituted Pakistan Shipping Corporation. The last amended plaint filed in this case on 17-12-1979 shows Pakistan National Shipping Corporation as the sole Pakistan with Premier Insurance Company of Pakistan Ltd., Pakistan Insurance Corporation and Federation of Pakistan as the three defendants.
4. Following consent issues were framed by order dated 14-11-1966-
(1) Whether the plaintiff No, 1 is the registered partnership ?
(2) Whether the ship s. s. Ilyas Bakhsh was insured by the plaintiffs with the defendants? If so for what amount and for what period the insurance was effected?
(3) Wether the ship s. s. Ilyas Bakhsh was seized and impounded by the Government of India at Bombay? If so, when the said ship was seized and/or impounded and for what reasons?
(4) (a) Whether the plaintiffs validly abandoned the ship s. s. Ilyas Bakhsh in favour of the defendants by their letter dated the 20th September 1965? If so, to what effect?
(b) If the answer of the Issue No, 4(a) is in affirmative, did the defendants assume the ownership subsequent to the above abandonment? If so, to what effect?
(5) Whether the second abandonment notice of the plaintiffs dated 9th March, 1966 is valid and/or binding on the defendants?
(6) Whether the plaintiffs have refused-neglected/failed to bring the ship s. s. Llyas Bakhsh from Bombay to Karachi? If so, to what effect?
(7) What is the value of the ship s. s. Ilyas Bakhsh and to what amount the plaintiffs are entitled?
(8) General.
6. On behalf of the plaintiff, three witnesses were examined in Court namely, Khan Wajahat Jamil (Exh. 9). Saleem Ahmad Aijazi (Exh. 10) and Kaleem Akhtar (Exh. 78). Apart from these three witnesses, evidence of two other witnesses on behalf of the plaintiff was recorded on commission.
4. These witnesses were Captain A. M. Khan, Director of Shipping, Government of Pakistan, and Commander Muhammad Abdul Aziz, Principal Officer, Mercantile Marine Department, Government of Pakistan. On behalf of Defendant No, I, Premier Insurance Company of Pakistan Ltd. Muhammad Choudhary, their Secretary (Exh. 79) was examined. Defendants Nos. 2 and 3 did not lead any evidence. The witnesses who have given evidence also produced certain documents. Apart from this, various documents have been brought on record and exhibited by consent of learned counsel.
5. Before dealing with the issues framed in this case, I may refer with some detail to the documentary evidence. Exh. 11 is a letter dated 2-9-1965 of the plaintiff Company addressed to the Insurance Company. This letter refers to the telephonic conversation of the same day between the parties and then requested the Insurance Company to insure ss. Ilyas Bakhsh against War Risks for three months effective from the date of the letter i,e, 2-9-1965. On this letter there is the following endorsement by Muhammad Choudhury (D. W. 1), Secretary of the Insurance Company "Cover will commence after we have received confirmation from London."
6. Exh. 12 is another letter of the plaintiff-Company addressed to the Insurance Company on the subject of `War Risks Insurance of our Fleet'. The letter is dated 3-9-1965 and it was in continuation of the previous letter dated 2-9-1965 (Exh. 11). The letter reads as follows "Dear Sir, War Risks Insurance of our Fleet ' Further to our letter of yesterday's date and with reference to the telephonic conversation we had with you this morning we request you to insure our two vessels s. s. Anis Bakhsh and s. s. Anwar Bakhsh against War Risks Insurance with immediate effect for a period of three (3) months for a sum insured of Rs, 40,000 each. S. s. Anis Bakhsh is already in Chittagong and s. s, Anwar Bakhsh is due to reach Colombo today from where she will proceed for Chittagong.
7. ' In order to enable you to assume the Risks with immediate effect we enclose a Bank Guarantee issued by the United Bank Limited, in your favour for Rs, 50,000 valid up to 20th September, 1965.
8. Kindly advise us the premium payable for s. s. Ilyas Bakhsh s. s. Anwar Bakhsh and s. s. Anis Bakhsh enabling us to send you our cheque. Meanwhile kindly confirm that you are holding us fully covered. Yours faithfully, for United Oriental Steamship Co.
9. (Sd.)
10. (S. A. Aijazi), Claims Officer.
11. ' End l : Bank Guarantee for Rs, 50,000."
12. ' Exh. 12 shows that a bank guarantee for Rs, 50,000 was enclosed with this letter. Although this bank guarantee has not been produced but in the evidence there has been no denial on the part of the Insurance Company.
13. ' Exh. 10/3 is a letter dated 7-9-1965 of the Insurance Company addressed to the plaintiff-Company giving notice of cancellation of all War Risks Covers granted by the Insurance Company on the various ships of the plaintiff-Company. It is further mentioned in this letter that in order to enable the Insurance Company to continue the War Risks Covers the plaintiff-Company should confirm that they agree to pay the Insurance Company premium at the revised rates to be determined in London.
14. ' Exh. 10/4 dated 7-9-1965 is the reply of the plaintiff-Company whereby they confirmed that the rates and terms of War Risks Insurance which might be determined by London from time to time will be acceptable to the plaintiff-Company and authorised the Insurance Company to negotiate the Insurance and keep the same continued without any break.
15. ' Exh. 10/5 is another letter dated 8-9-1965 of the plaintiff-Company under cover of which letter, a cheque for Rs, 21,200 was enclosed as War Risks Insurance Premium for two other ships of the plaintiff-Company for a sum of Rs, 40 lacs each for a period of one month effective from 3-9-1965.
16. As regards the ship in question, it was mentioned as follows :- "As regards ss. Ilyas Bakhsh we understand that you have arranged Insurance from London and locally effective from 2nd September, 1965 and the confirmation of the Pakistan Insurance Company to the extent of their statutory cession is still awaited. Kindlya dvice us of the premium payable for this vessel so that we may send you our cheque."
17. ' Exh. 10/6 is also a letter dated 8-9-1965 of the plaintiff-Company addressed to the Insurance Company and it reads as follows:- "Dear Sir, War Risks Insurance ' With reference to the discussion our Partner Mr. S. M. Anwar, had with you this morning we enclose herewith our Cheque No, CAT 140874 dated 8-9-1965 for Rs, 31,800 (Rupees thirty-one thousand eight hundred only) drawn on the United Bank Limited, Karachi representing the premium for War Risks Insurance of s. s. Ilyas Bakhsh effective from 2nd September, 1965 and also for s. s. 'Anis Bakhsh' and s. s. Anwar Bakhsh effective from 3rd September, 1965 for a sum insured of Rs, 40,00,000 each. Kindly let us have your official receipt immediately and War Risks Insurance policies in due course."
18. ' At the bottom of this letter (Exh. 10/6) there is an endorsement on behalf of the Insurance Company acknowledging the cheque for Rs, 31,800.
19. ' Exh. 10/7 is a letter dated 9-9-1965 of the Insurance Company whereby the Insurance Company acknowledged that the plaintiff-Company had sent the premium for Ilyas Bakhsh but stating that they could not confirm the cover in regard to commencement date or the amount of insurance or duration or scope, etc. On this ship and wanted the plaintiff-Company to inform the Insurance Company whether the ship was under duress at the time plaintiff had made the proposal to the Insurance Company i,e, 2-9-1965 and whether the ship was under duress on the 3rd, 4th or 5th September, 1965.
20. ' By their letter dated 10-9-1965 (Exh. 10/9) the plaintiff-Company informed the Insurance Company that at the time of placing the insurace on 2-9-1965 the ship in suit was not under duress and further upto the 5th of September. 1965 position remained unchanged to the best of their knowledge. It was also mentioned in Exh. 10/9 as follows :- "There is, however, no doubt whatsoever about your assumption of the risk and the dates which is 2nd September, 1965 in respect of s. s. Ilyas Bakhsh and 3rd September, 1965 in respect of s. s. Anis Bakhsh and Anwar Bakhsh."
21. ' By letter dated 16-9-1965 (Exh. 10/13) the plaintiff Company informed the Insurance Company that the ship Ilyas Bakhsh was impounded on 7-9-1965 at noon according to the cable dated 15-9-1965 received by the plaintiff-Company from their Beirut Agents and as desired by the Insurance Company the photostat copy of the cable was enclosed. It was further stated in this letter as follows:- "You have still not sent us the cover effective from 2nd September, 1965 although you have confirmed several times verbally and in person and on telephone that we are being held covered.
22. We do not understand the reason for you not giving us the letter confirming the cover and, therefore, we have to request you to send us the cover note or a letter confirming the cover from 2nd September, 1965.
23. ' We trust that you will now immediately issue the required letter or cover note."
24. ' Letter dated 25-9-1965 (Exh. 10/14) of the Insurance Company addressed to the plaintiff-Company is reproduced here :- "Dear Sirs, War Risks s. s. Ryas Bakhsh ' We refer to your letter of the 2nd September, 1965 asking us for War Risks Insurance Cover on ss.
25. Ilyas Bakhsh. Although no sum insured was mentioned in your letter, we have been endeavouring to provide cover for you up to the extent of Rs, 40,00,000 (Rupees forty lacs only) on this vessel but at the same time we made it absolutely clear to you, in the course of our several conversations, that in view of the war like operations prevailing at that time, it might not be possible for us to arrange cover for such an amount without sufficient notice. We also mentioned to you that cover granted by us would be to extent for which we would be able to make adequate reinsurance arrangements and from the time and date we would be able to make such arrangements. It was also pointed to you that cover granted would be subject to the vessel being not under duress at the time of attachment of our cover or on any date between the 2nd September, and 5th September, 1965 or any date prior to that.
26. ' In view of all the above and subject to ss. Ilyas Bakhsh not having been under duress on any date between the 2nd September, and 5th September, 1965 or any date prior to that, we are pleased to provide you provisional cover for Rs, 30 lacs (Rupees thirty lacs only), effective from the 2nd September, 1965 up to the 20th September, 1965 taking into account the notice of cancellation served by us on the 7th of September, 1965, against War Risks. If we are able to make any improvement in the sum insured we shall advise you of the same. We would, however, make it absolutely clear that we are under no obligation to increase the sum insured any further but nevertheless we will make all efforts to increase the cover.
27. ' The cover granted for War Risks would be subject to our standard policy conditions, terms, warranties etc. And provisions of the Institute War & Strike Clauses-Hulls time."
28. ' The plaintiff-Company replied by letter of the same date i,e, 25-9-1965 (Exh. 10/15) which letter is also reproduced here :-- "War Risk Insurance Ilyas Bakhsh.
29. ' We are in receipt of your letter of 25th instant and have to point out that although we missed to mention the sum insured for War Risk Insurance of the above vessel you were very well aware from the telephonic negotiations that the cover required by us in the amount of Rs, 40,00,000. We also put on record that on our firm instructions you placed the reinsurance for Rs, 40,00,000 with some of the local companies of which we are aware. It is also to record that at the time of placing the insurance with you viz. 2nd September, 1965 there were no War Like operations between India and Pakistan. We must also point out that you received confirmation of reinsurance from London for their share and as verbally told by you the remaining portion of the business was subscribed by the local companies. We have also to draw your attention to the following sentences that you have written on a copy of our letter dated 2nd September, 1965 :- ' The Cover will commence after I have received confirmation from my reinsurers at London.'
30. ' It is beyond doubt that you received the confirmation of your reinsurers from London and, therefore, there cannot be any question of reduction in the sum insured.
31. ' In your letter under reply you have confirmed the cover effective from 2nd September, 1965 and, therefore, we do not "understand the condition placed by you regarding the duress between the period 2nd September, 1965. If the vessel was not under duress on the 2nd September, 1965 as it was the condition imposed by you stands null and void as the material date is the 2nd September, 1965 from which date you have accepted the risks.
32. ' According to our information the vessel has been impounded by the Indian Government on the 7th September, 1965. We therefore, hereby claim the sum of Rs, 40,00,000 and abandon the vessel to you."
33. ' It would be noticed from Exh. 10/15 that plaintiff's claim was that the ship had been insured against War Risks in the sum of Rs, 40 lacs. Further, as the ship had been impounded by the Indian Government on 7-9-1965, according to the information received by the plaintiff-Company, the plaintiff-Company abandoned the ship to the Insurance Company and claimed a sum of Rs, 40 lacs from the Insurance Company.
34. ' Exh. 10/16 is a letter of the Insurance Company disputing the stand taken by the plaintiff and stating that their provisional cover in the sum of Rs, 30 lacs would be subject to the provisions, clauses and conditions etc. Stated in their letter of 25-9-1955 (Exh. 10/14). As regards the claim of the plaintiff and the notice to abandon the ship to the Insurance Company it was pointed out that 'impounding' of the ship did not constitute a claim under the Institute War Risks clauses and, therefore, the Insurance Company could not accept any liability for abandonment of the ship and denied all liabilities and declined to accept the abandonment.
35. ' The plaintiff-Company wrote another letter dated 29-9-1965 (Exh. 10/17) reiterating their previous position. The Insurance Company replied by their letter dated 1-10-1965 (Exh. 10/18) confirming the position taken by the Insurance Company in their letter dated 25-9-1965 and stating that the deposit premium paid by the plaintiff-Company was accepted without any commitment whatsoever of the extent of cover or its commencement date. By letter dated 2-10-1965 (Exh. 10/19) the plaintiff-Company again made their claim for Rs, 40 lacs observing that since the vessel had been impounded by the Government of India and the Officers and Crew also been interned the plaintiff should get immediate settlement of their claim.
36. ' Exh. 10/21 is a letter dated 21-10-1965 of the Insurance Company. It is reproduced here :- "s. s. Ilyas Bakhsh---War Risks Insurance ' We have received cable advices from London that it is absolutely necessary to keep `Ilyasbakhsh' covered against War Risks as per Institute War & Strike Clauses. The reason for this continuance of cover is that our reinsurers at London understand that the Indian authorities maintain that Ilyashakhsh' has been impounded and not seized. The vessal, therefore, continues to be your property and it is desirable to have the ship insured against any probable loss which may occur under the War Riks Insured perils.
37. ' We have not as yet been advised of the Additional Premium required but we would advise you to please send us a cheque in the sum of Rs, 20,000 purely as a deposit amount. We will advise you the final premium as soon as possible when an adjustment may be made in the deposit amount either by a fresh payment from you or by refund by us."
38. ' After this letter, another letter dated 26-10-1965 (Exh. 10/22) was written by the Insurance Company and it reads as follows:- "We refer to our letter of the 21st October, 1965 and several subsequent telephonic requests to Mr. Aijazi asking you to please remit a sum of Rs, 20,000 as Deposit Premium for continuation of War Risks Insurance on the above vessel. We have explained the circumstances necessitating the continuation of this cover and unless premium is paid without delay protection cannot be obtained."
39. ' Under cover of their letter dated 28-10-1965 (Exh, 10/23), the plaintiff-Company sent a cheque of Rs, 10,000 as premium for the War Risks insurance of the ship in question for two months in the sum of Rs, 40,00,000 commencing from the date of expiry of the last insurance cover. The Insurance Company acknowleged the receipt of Rs, 10,000 by their letter dated 30-10-1965 (Exh. 20) but took the position that at the rate of 0.25 per cent. The amount of Rs, 10,000 was the premium for one month and not for two months. Thereafter further correspondence was exchanged between the parties. The plaintiff-Company was taking the position that the initial cover for the ship in question was in the sum of Rs, 40,00,000, whereas the stand of the Insurance Company was that it was in the sum of Rs, 30,00,000 and they were trying to get the amount of the cover increased. By letter dated 2-12-1965 (Exh. 21) the Insurance Company informed the plaintiff-Company that they had increased the cover of the ship to Rs, 35,00,000 for the period from 2-9-1965 to 20-9-1965. It may also be mentioned that in the correspondence on tehalf of the Insurance Company the notice of abandoment was not accepted by the Insurance Company. As observed earlier, by their letter dated 25-9-1965 (Exh. 16), while making a claim of Rs, 40,00,000 against the Insurance Company, the plaintiff-Company also gave the notice of abandonment of the vessel. Exh, 24 is a letter dated 9-3-1966 of the plaintiff-Company in which again the same claim of Rs, 40,00.000 is made. It was mentioned in this letter that the vessel was impounded and seized by the Government of India and this position continued till the writing of that letter. It was further mentioned that there was no possibility of the return of the said vessel to the plaintiff-Company and as such it was a total loss.
40. By letter dated 10-3-1966 (Exh. 25) the Insurance Company, while acknowledging the receipt of letter dated 9-3-1966 of the plaintiff-Company, informed them that they had earlier declined to accept the abandonment by their letter dated 27-9-1966 and that they again declined to accept the abandonment. In the correspondence a further stand was taken on behalf of the Insurance Company that the vessel was likely to return to Pakistan in due course and the plaintiff-Company was advised to lodge their claim with the Government of Pakistan. Another stand taken on behalf of the Insurance Company was that impounding was in the nature of temporary detention and did not constitute a claim under the Institute War Clauses and therefore, the Insurance Company could not accept any liability. As the claim was not paid by the Insurance Company, the present suit was filed.
6. Issue No, (1) is whether United Oriental Steamship Company is a registered partnership concern.
41. Exh. 78/2 is an extract from the Register of Firms maintained by the Registrar of Firms, Karachi and it shows that United Oriental Steamship Company was a registered partnership. Even otherwise on behalf of the defendants no argument was addressed before me on issue No, (1). Issue No, (1) is accordingly decided in the affirmative.
7. Issue No, (2) is whether the ship s. s. Ilyas Bakhsh was insured by the plaintiff-Company with the defendants and if so, for what amount and for what period the insurance was effected. On this issue the stand on behalf of the plaintiff has been that the ship in question was insured with Premier Insurance Company of Pakistan Limited w. e. f. 2-9-1965 against War Risks in the sum of Rs, 40,00,000. On behalf of defendant No,1 i,e, the Insurance Company, it was contended that no contract of insurance was concluded between the parties and as such the ship was not insured with them. It was argued that premium had been paid after the risk had already accrued; that there was no consensus between the parties as to the amount for which the ship had been insured; and that no cover or insurance policy had been issued by the Insurance Company on the ship in question in favour of the plaintiff-Company. Mr. Shah Jamil Alam, learned counsel for the plaintiff, and Messrs Fazlur Rehman and Mansoorul Arfin, who appeared on behalf of Defendant No, I, had taken me through the entire correspondence for the purpose of establishing whether a contract had been concluded between the parties or not and if a contract had been concluded what were the terms of this contract. I have already referred to the relevant correspondence brought on record on this point. I have found it difficult to accept the plea raised on behalf of the defendant No, I that the ship was not insured with them.
42. ' It was argued on behalf of the Insurance Company that no premium had been paid prior to the impounding of the vessel by the Indian authorities on 7-9-1965. Exh. 10/1, letter dated 2-9-1965 of the plaintiff-Company addressed to the Insurance Company, requests for insurance of the vessel in question for three months effective from 2-9-1965. A cheque of Rs, 2,000 was supposed to have been enclosed with this letter but there is a note at the bottom of this letter, which states that the cheque would follow next morning. It may, therefore, be taken that no cheque was enclosed with Exh. 10/1. The second letter dated 3-9-1965 (Exh. 10/2) of the plaintiff-Company is in continuation of Exh. 10/1. Exh. 10/1 and Exh. 10/2 are, therefore, to be read in conjunction. In Exh. 10/2, a request is made to insure two other vessels of the plaintiff-Company for a period of three months for a sum of Rs, 40 lacs each. In the last paragraph of Exh. 10/2 it is mentioned as follows :- "In order to enable you to assume the risks with immediate effect we enclosed a bank guaranted issue by the United Bank Limited in your favour for Rs, 50,000 valid up to 20-9-1965. Kindly advise us the premium payable for s. s. Ilyas Bakhsh, s. s. Anwar Bakhsh, and s. s. Anis Bakhsh enabling us to send you our cheque. Meanwhile kindly confirm that you are holding us fully covered."
43. If Exh. 10/1 and Exh. 10/2 are read together, it would follow that a request had been made for insurance of the three vessels including s. s. Ilyas Bakhsh in the sum of Rs, 40 lacs each and that the bank guarantee, "which bad been enclosed for Rs, 50,000 was in respect of the insurance on all the three ships. A point had been raised on behalf of Defendant No, 1 that this bank guarantee could only be in respect of the other two vessels, as in Exh. 10/2 a request had been made only for insurance of the other two vessels. However, as observed earlier, Exh. 10/2 is to be read in continuation of and in conjunction with Exh. 10/1 and in my view it is clear that request had been made for insurance of the three vessels including s. s. Ilya Bakhsh for a sum of Rs, 40,00,000 each and the bank guarantee in the sum of Rs, 50,000 was in respect of insurance on all the three vessels. According to Exh. 10/2, the bank guarantee enclosed with that letter for Rs, 50,000 was valid up to 20-9-1965. Prior to the expiry of this period, the premium in respect of s. s. Ilyas Bakhsh had been paid by the plaintiff-Company to defendant No, 1 and this was acknowledged by defendant No, 1 by their letter dated 9-9-1965 (Exh. 10/7). The fact that the ship in suit had been covered against war risks has not been denied by the defendant No, 1 in their letters. It has also not been denied in the correspondence by the Defendant No, 1 that the premium had been received from the plaintiff-Company in respect of the insurance on the ship. In this connection a reference may be made to certain letters. Exh. 10/16 is a letter dated 27-9-1965 of defendant No, 1, which also acknowledges that s. s. Ilyas Bakhsh was covered but the cover was in the sum of Rs, 30 lacs. Then there are letters dated 21-1-1965 (Exh. 10/21) and dated 26-10-1965 (Exh. 10/22) in which the Insurance Company writes about continuation of the cover in respect of ss. Ilyas Bakhsh. If there had been no cover, there would be no question of "continuation" of the cover. These two letters also support the stand taken on behalf of the plaintiff-Company that s. s. Ilyas Bakhsh had been covered against war risks w. e. f. 2-9-1965. Letter dated 30-10-1965 (Exh. 20) of the Insurance Company also talks about continuation of the cover w. e. f. 20-9-1965 against War Risks "to keep the cover uninterrupted." Then there is Exh. 21, which is a letter dated 2-12-1965, whereby the Insurance Company informs the plaintiff-Company that they had increased the cover on the ship to Rs, 35 lacs for the period from 2-9-1965 to 20-9-1965. This further confirms that the ship had been covered against War Risks from 2-9-1965 to 20-9-1965.
44. It is, therefore, established that the ship s. s. Ilyas Bakhsh was cover against War Risks by defendant No, 1 Insurance Company w. e. f. 2-9-196 to 20-9-1965 and that a bank guarantee for Rs, 50,000 had been furnished by the plaintiff-Company in favour of the Insurance Company, which was valid upto 20-9-1965 and this guarantee covered the premium payable in respect of the three ships including s. s. Ilyas Bakhsh and that within the period of the validity of this bank guarantee the premium in respect o s. s. Ilyas Bakhsh had been paid by the plaintiff-Company and received b the Insurance Company, as would be evident from Exh 10/7, which is a letter dated 9-9-1965 of the Insurance Company.
45. The other point in this regard is the amount of the cover. The plaintiff's case is that the cover was in the sum of Rs, 40,00,000, whereas, according to defendant No, 1, it was initially in the sum of Rs, 30,00,000 and later on increased to Rs, 35,00,000. A reference may be made here to Exh. 10/17, which is a letter dated 29-9-1965 of the plaintiff-Company in which it I mentioned that premium amounting to Rs, 10,600 calculated at 0.25 per cent was paid, to the Insurance Company on a sum of Rs, 40 lacs. Now, receipt of this premium is not denied by the Insurance Company. In reply to this letter, the Insurance Company sent their letter dated 1-10-1965 (Exh. 10/18). In this letter neither the receipt of the premium is denied nor the fact that the premium had been paid at the rate of 0.25 per cent. Which would make the amount of the cover to Rs, 40 lacs. Later on also the insurance cover was extended and for the other period also the cover was for Rs, 40,00,000, an this is admitted by defendant No, 1 in Exh. 20, which is their letter dated 30-10-1965. The two periods for which s. s. Ilyas Baksh was insured are, therefore, from 2-9 1965 to 20-9-1965 and from 20-10-1965 to 19-11-1965 and for both periods the cover was in the sum of Rs, 40,00,000. This findin is also confirmed from the deposition of Muhammad Choudhury, Secretar of the Insurance Company, who gave evidence on their behalf as Exh.
79. I may refer to the following statement which he made during the course of his cross- examination :- "We had reinsured s. s. Ilyas Bakhsh with the reinsurer in London. It was in September, 1965. It could be for Rs, 40 lacs.
46. ' It is correct that defendant No, 1 would have the record of the reinsurance. I cannot recall the rate of the premium or the amount of the premium paid to the reinsurer for s. s. Ilyas Bakhsh. 1 cannot recollect as to whether defendant No, 1 paid the premium to the reinsurer on the basis of increase rate. I cannot say, as to whether reinsurer had put only one condition for re-insuring the vessel in question, namely, as to whether the vessel was under dutess between 2nd September to 5th September, 1965.
47. ' It is correct that London reinsurer had re-insured s. s. Ilyas Bakhsh, to follow fortune by Defendant No, 1.
48. ' According to me Defendant No, 1 must have kept informed the reinsurer about the suit claim so that in case this Court decides in favour of the plaintiff. Defendant No, 1 may claim the same from the reinsurer."
8. It was contended by Mr. Fazlur Rahman, learned counsel for the Insurance Company, that in the instant case admittedly no policy had been issued and as such even if the Court comes to the conclusion that an agreement by correspondence was reached, such a contract would not be valid in view of section 7 of the Stamp Act, 1899. Section 7 reads as follows :- "7. Policies of Sea-Insurance.. -(1) No contract for sea-insurance (other than such insurance as is referred to in section 506 of the Merchant Shipping Act, 1894) shall be valid unless the same is expressed in a sea-policy.
49. (2)No sea-policy made for time shall be made for any time exceeding twelve months.
50. (3)No sea-policy shall be valid unless it specifies the particular risk or adventure, or the time, for which it is made, the names of the subscribers or under-writers, and the amount or amounts insured.
51. (4)Where any sea-insurance is made for or upon a voyage and also for time, or to extend to or cover any time beyond thirty days after the ship shall have arrived at her destination and been there moored at anchor, the Policy shall be charged with duty as a Policy for or upon voyage, and also with duty as a policy for time."
52. ' Reference was also made to section 2 (20) of the Stamp Act which define "Policy of sea- insurance" or "se a Policy". It was also contended that section 7 of the Stamp Act, 1899 is in pari materia with section 22 of the English Marine Insurance Act of 1906 which provides that a contract of marine insurance is inadmissible in evidence unless it is embodied in a marine policy in accordance with the Marine Insurance Act, 1906. It was also urged that section 2(13-A) of the Insurance Act, 1938 presupposes that there must be a formal marine insurance Policy containing the terms of insurance failing which other evidence about sea-insurance will be inadmissible in evidence.
53. In my view there is a distinction between the English Law and the statutory law in Pakistan on this point. Under the provisions of the English Marine Insurance Act, 1906 apparently a contract of sea- insurance is inadmissible in evidence and not valid unless it is expressed in a formal policy. This is, however, not so in Pakistan Law. Section 7 of the Stamp Act no doubt specifies that no contract for sea-insurance shall be valid unless the same is expressed in a sea-policy, but the word "sea- policy" employed in section 7 is not restricted in meaning to a formal policy but will also mean a document or documents which are covered by the definition of this term in section 2(20) of the Stamp Act.In the case of Tricambji v. Verji Kanji (1) the question before a Division Bench of the Bombay High Court was whether a protection note issued by an insurance company could be treated as a Policy of sea-insurance and, therefore, admissible in evidence. The Bombay High Court answering this question in the affirmative observed as follows :-- "The nature of the document must really be determined with reference to the terms of a particular document without attempting to lay down any general test for distinguishing a protection note from a formal policy. It may be that the document may in form appear to be a protection note ; still if in terms it satisfies the requirements of the definition of "policy of sea-insurance" within the meaning of the Indian Stamp Act, for the purpose of the Stamp Act it would be open to the party to contend that it is a policy of sea-insurance, and as such, capable of being received in evidence subject' to the payment of the stamp with the necessary penalty.
54. ' It is urged on behalf of the respondents that this document is merely a "contract for sea- insurance", and that under section 7, subsection (1) it cannot be valid unless it is expressed in a sea policy But the "Sea policy" or policy of sea-insurance is defined under section 2(20), and if this document satisfies the requirements of that definition, I do not see why it should not be so treated.
55. The essentials of a "sea-policy" as indicated in section 7, subsection (3), are present in this case.
56. That being my view of the particular document I think that it is admissible in evidence on payment of the necessary stamp and penalty."
57. ' In Ahmed Shah v. Grindlay (1. Co. (2) also a similar question was under consideration. Tayabji, J.
58. Took the view in that case that in construing a document, it is not the form of the document, but the nature of the terms which has to be seen and if the terms contained in the document satisfy the requirements of the definition of a "policy of sea-insurance" in the Stamp Act, \the document is a sea-policy and admissible as such, though styled a "certificate insurance". It was further observed by Tyabji, J. That the question whether the document is or is not a marine and war insurance policy is to be decided not by reference to the English Marine Insurance Act, 1906 or on English decisions based on the provisions of that Act, but in accordance with the provisions of Stamp Act, 1899. {{FOOT NOTE}}
(1) AIR 1923 Born. 142 (2) AIR 1944 Sind 98 {{FOOT NOTE}} I am in agreement with the above views expressed in AIR 1923 Born. 142 and AIR 1944 Sind 98.
59. Contention of Mr. Fazlur Rahman, learned counsel for the Insurance Company, that unless the contract of sea-insurance is contained in a formal insurance policy, it is invalid, therefore, is not accepted. I have already discussed in sufficient detail the correspondence exchanged between the plaintiff and the Insurance Company. In my view the documents brought on record constitute a contract of sea insurance between the plaintiff (United Oriental Steamship Co.) and the Insurance Company as requirements of subsection (3) of section 7 have been satisfied.
60. ' Another contention raised by the learned counsel appearing for the Insurance Company was based on section 35 of the Stamp Act. It was argued that a contract of sea-insurance is chargeable with the prescribed stamp duty, and as such duty has not been paid, the correspondence on the basis of which the plaintiff claims that a contract of sea-insurance has come into existend cannot be admitted in evidence. It may be observed that objection in this behalf was not taken on behalf of the Insurance Company at the time the correspondence was exhibited. As the documents have been exhibited and neither any objection was taken at the time of recording evidence nor any request was made to frame an issue on this question, the documentary evidence cannot be rejected on this objection raised during the stage of arguments.
61. However, the exchequer cannot be deprived of the stamp duty to which it was entitled and the plaintiff is also liable to pay penalty in terms of proviso (a) to section 35 of the Stamp Act.
62. ' On Issue No, 2 my finding is that the ship s. s. Ilyas Bakhsh was insured against war risks by defendant No, 1 Insurance Company for two periods i. e. From 2-9-1965 to 20-9-1965 and from 20- 10-1965 to 19-11-1965 and for both periods the cover was in the sum of Rs, 40,00,000.
9. Issue No, 3 relates to the seizure/impounding of s. s. Ilyas Bakhsh by the Government of India at Bombay. In their written statement, the Insurance Company denied that the ship in question bad been seized or impounded by the Government of India. The assertion of the plaintiff that they had been irretrievably deprived of the possession of the ship was disputed. It was further pleaded that the plaintiff themselves accepted the ownership of the ship after the first abandonment by requesting the Insurancy Company to insure the ship by their letter dated 28-10-1965.
63. ' Mr. Shah Jamil Alam, learned counsel for the plaintiff had referred to para. 1099 of Arnold on the Law of Marine Insurance and Average, 14th Edition, which paragraph is reproduced here :- "1099.-The best general statement of the circumstances which confer on the assured on ship a prima facie right to give notice of abandonment is contained in the following passage from the judgment of Story, J. In the American case of Peele v. Merchanta' Insurance Co. (1822-3 Mason, R- 27) : "The right of abandonment has been admitted to exist where there is a forcible dispossession or ouster of the owners of the ship, as in cases of capture, etc. ; where there is a restraint or detention which deprives the owner of the free use of his ship, as in cases of embargoes, blockades, and arrests ; where there is a present total loss of the physical possession and use of the ship, as in cases of submersion ; where there is a total loss of the ship for the voyage, as in cases of shipwreck, so that the ship cannot be repaired in the port where the disaster happens; ' where the injury is so extensive, that by reason of it the ship is useless, and making the repairs would exceed her value."
64. ' We will consider the different cases same what in the above order. First, therefore, the assured on the ship has a right to give notice of abandonment immediately he hears that his ship has been forcibly taken out of his possession and control by capture ; for from the moment of capture he is deprived of the free disposal of his vessel at all events for a time, and perhaps for ever. "The ship" as Lord Mansfield says, "is lost by capture though she be never condemned at all, nor carried into any port or fleet of the enemy." Immediately, therefore, the assured receives intelligence that his ship is captured, he has a right to give notice of abandonment ; and he may insist on such notice, and recover as for a total loss, provided the capture, and the total loss occasioned thereby, continue to the time of bringing the action.
65. ' However, as we have just seen, if before action is brought, the ship be recaptured and restored to the possession or control of her owners, either in an undamaged or only partially damaged state, the assured cannot insist on his notice of abandonment and recover as for a total loss, even though the loss was total at the time he gave such notice. The principle of English law in fact is, as we have already seen, that the nature of the dandification at the time of action brought is the sole criterion of the right to recover as for a total loss."
66. I am conscious that the principles governing the right of the assured to give notice of abandonment and make a claim on the insurance company which are mentioned in paragraph 1099 of Arnold on the Law of Marine Insurance and Average (14th Edition) reflect the American and Engish law on the subject. A perusal of the aforesaid principles nevertheless indicates that these are based on equity and good reason. In the absence of any statutory law or judicial decisions to the contrary in Pakistan, I am of the view that these principles can be borrowed and applied by the Courts in Pakistan for deciding questions where such principles may be relevant. According to Story, J., the right of abandonment has been admitted to exist where there is a forcible dispossession or ouster of the owners of the ship or where there is a restraint or detention which deprives the owner of the free use of his ship. Lord Mansfield has said that the ship is lost by capture though she may never be condemned at all. A further principle mentioned is that the capture and the total loss occasioned thereby must continue till the time of bringing the action. No statutory provisions or decision to the contrary in Pakistan was cited by the learned counsel for the insurance company. Further I may repeat that these principles are based on equity and good reason.
67. Mr. Shah Jamil Alam, learned counsel for the plaintiff, took up the position that the ship was seized on 7-9-1965 by the Indian authorities in Bombay as per cable dated 15-9-1965 received by the plaintiff-Company from their Beirut agents and this was immediately intimated to the Insurance Company by letter dated 16-9-1965 (Exh. 10/13). This was confirmed by another letter of the plaintiff-Company which is dated 25-9-1965 (Exh. 10/15). In these two letters the plaintiff-Company used the words impounding of the ship but according to learned counsel for the plaintiff the ship had been seized by the Indian authorities on 7-9-1965 and not impounded, which word had been wrongly used in the two letters. There has been some difference between the_ parties whether the ship was seized or impounded. According to me,, however, - the fact whether the ship was seized or impounded is not relevant. What is relevant is whether the ship was detained or put under restraint by the Indian authorities and the fact that it was detained or put under restraint has not been disputed by the Insurance Company. The evidence, oral as well as documentary, on the record also establishes that the ship was detained by the Indian authorities which deprived the plaintiff-Company of its free use. It has been a case of forcible dispossession of the owner of the ship.
68. ' In his cross-examination, plaintiff's witness Saleem Ahmad Aijazi (Exh. 10) had been asked is a question to which he replied as follows :- "As soon as the war broke between India and Pakistan, all Indian vessels were detained in Pakistan whereas the Pakistani vessels were detained in India."e ' In my view this a correct statement of the facts. Nothing to the con trary has been brought on the record.
69. ' On Issue No, 3, therefore, the finding is that the ship s. s. Ilyas Bakhsh was detained by the Indian authorities in Bombay with effect from 7-9-1965 which resulted in the ouster of possession of the plaintiff-Company and deprived them of its free use since then. The ship was detained on account of the war declared between India and Pakistan.
10. Issue No, 4(a) is about the abandonment of the ship s. s. Ilyas Bakhsh by the plaintiff-Company in favour of the defendant Insurance Company by their letter dated 25-9-1965 (Exh. 10/15). I have already found on Issu No, 3 that the ship was detained by the Indian authorities on 7-9-1965, which resulted in the ouster of possession of the plaintiff-Company and deprived them of its free use since then. In such circumstances, as the ship was covered by the defendant-Insurance Company against war risks, the plaintiff-ompany became entitled in law to give a notice abandoning the vessel in favour of the Insurance Company and making a claim for total loss. Issue No, 4 (a is accordingly answered in the affirmative.
11. Under issue No, 4(b), the point requiring determination is whether the plaintiff-Company assumed ownership of the vessel subsequent to its abandonment through plaintiff's notice dated 25-9-1965 and if it is so, what is its effect. Issue No, 5 is whether the second abandonment notice dated 9-3-1965 of the plaintiff-Company is valid and/or binding on the defendant-Insurance Company. Issues Nos. 4 (b) and 5 are taken up together M/s. Fazlur Rahman and Mansoorul Arfin, who appeared on behalf of the defendant-Insurance Company, referred to four steps/actions taken by the plaintiff-Company which, according to learned counsel, not only collectively but also individually amount to assumption of ownership of the vessel by the plaintiff after the same had been abandoned by them through notice dated 25-9-1965 (Exh. 10/15). It was argued that by these actions the notice of abandonment stood nullified and the plaintiff-Company could not maintain its claim for total loss against the Insurance Company.
70. ' Firstly, it was pointed out that after 25-9-1965 the plaintiff-Company approached the Insurance Company for covering the vessel for further period and this indicates that the ownership of the vessel had been assumed by the plaintiff after its abandonment on 25-9-1965 in favour of the Insurance Company. I do not agree. In this case a further cover was taken on the pursuasion and Insistence of the Insurance Company. Exh. 10/21 and Exh. 10/22 are letters dated 21-10-1965 and 26- 10-1965 of the Insurance Company addressed to the plaintiff (reproduced in para. 5 of this judgment) in which the plaintiffs were advised about the absolute necessity of continuance of the insurance cover failing which it was made more or less clear that plaintiff would not be able to recover its loss. If in these circumstances the plaintiff is advised and then persuaded to take insurance cover for a further period, such action would not amount to assumption or resumption of ownership of the vessel by the plaintiff after 25-9-1965 so as to nullify the abandonment notice of 25-9-1965.
71. ' It was then contended that the second notice of abandonment was given by the letter dated 9-3- 1966 (Exh. 24) of the plaintiff which signifies that till that date the ownership of the vessel remained vested in plaintiff and the first notice dated 25-9-1965 was nullified. In Exh. 24, the plaintiff makes specific reference to their earlier notice of abandonment dated 25-9-1965 and then stated that the said vessel was "impounded and seized" by the Government of India and remained so and there was no possibility of the return of the said vessel to the plaintiff and as such it was a total loss. It was then stated as follows :- "We abandon the said vessel to you and claim a sum of Rs, 40,00,000 under the War Risks Insurance."
72. ' This letter of 9-3-1965 (Exh. 24) has to be read in continuation of the previous notice dated 25-9- 1965. This letter confirms the earlier notice and informs the Insurance Company that the position of the ship has remained unaltered with no chance of the ship coming back. The last sentence in the letter about abandoning the ship is, therefore, not to be taken as a fresh or second notice of abandonment, it is merely a reiteration of the notice dated 25-9-1965. Exh. 24, therefore, should not be interpreted to mean that the first notice dated 25-9-1965 had been withdrawn or stood nullified or that the plaintiff had assumed ownership of the vessel.
73. ' The third action taken by the plaintiff, according to Mr. Fazlur Rehman was that the ship had been arrested by the Bombay High Court in its admiralty jurisdiction in proceedings to which the plaintiff-Company had been made as a party in the capacity of a defendant and the ship was released by order dated 22-12-1966 (Exh. 10/26). It was contended that plaintiff-Company was joined as owner of the vessel and Kalim Akhtar (Exh. 78) a witness of the plaintiff, has admitted that the plaintiff on coming to know of the arrest, paid the amount claimed in the Bombay High Court admiralty suit 10/66 and then received the release order (Exh. 10/26). In my view this action also does not nullify the abandonment notice dated 25-9-1965. This action has to be judged in the background of the facts and not in isolation. Insurance Company in this case was disputing not only the abandonment notice but was also raising other pleas referred to earlier in this judgment. It was not a case where the cover was admitted without any reservations and the notice of abandonment accepted. Plaintiff-Company was placed in a vulnerable position. The action taken by the plaintiff. Company to pay the claim of the claimant in Bombay High Court Admiralty Suit No, 10/66 in the light and background of these facts and circumstances did not prejudice or affect the notice of abandonment of their right to make a claim against the Insurance Company. The action taken by the plaintiff is to be treated as an act by way of abundant caution to protect further their interests.
74. ' In this regard the last action pointed out by the learned counsel for the Insurance Company is the Bill of Sale dated 18-6-1970 (Exh. C. W. 2/5), This document shows that on the basis of arrangements of distribution of family properties vide agreement dated 18-6-1970 the ownership of the she was transferred from the names of the four owners to two owners. It was contended that by this overt act of transfer, the partners of the plaintiff-Company were declaring and confirming their ownership of the ship I 1970 i. e. Nearly five years after the notice of abandonment. The Bill o Sale itself shows that the document was being executed pursuant to a family arrangement for distribution of family properties. The Bill of Sale (Exh. C. W. 2/5) affects neither the notice of abandonment nor the plaintiff' right to make a claim for total loss.
75. ' Issue No, 4 (b) is decided in the negative. On Issue No, 5 my finding is that the notice dated 9-3- 1965 was only a confirmation of the first notice N of abandonment dated 25-9-1965 and is not invalid.
12. Issue No, 6 is whether the plaintiffs have refused/neglected/failed to bring the ship from Bombay to Karachi. Evidence has come on record that some of the Pakistani ships detained in India during the September, 1965 War were released by Indian authorities and such ships were restored to their Pakistani owners. In this connection reference is made to two letters. One is lett:3r dated 20-9-1966 of the plaintiff-Company addressed to the Director-General Ports and Shipping, Government of Pakistan (Exh. C. W. 6) in which reference is made to the meeting held in the Directorate to review the progress of the exchange of seized ships between India and Pakistan and then information was sought from the Directorate about the fate of s. s. Ilyas Bakhsh and latest developments in that regard. A reply dated 23-9-1966 (Exh. C. W. 7) was received by the plaintiff-Company from the Government of Pakistan to the following effect :- 44 I am directed to inform you that under the present agreement with the Indian Government we are exchanging two ships for two for the time being. India's third vessel viz. Sakeela has a Court injunction taken-out by the agents against her owners. Ilyas Bakhsh, as intimated to us by United Oriental, vide their letter No, Ilyas Bakhsh/65/7162, dated 17-6-1966 is likely to become the property of the underwriters. Sakeela and Ilyas Bakhsh have thus become bracketted and there is no likelihood of their release in the near future."
76. Evidence on record shows that the ship was detained by the Indian authorities on 7-9-1966. Exh. C.
77. W. 7 dated 23-9-1966 shows that according to the Government of Pakistan there was no likelihood of the release of the ship by the Indian authorities. There is nothing on the record to show that the ship could have been brought back to Pakistan on the efforts made by the plaintiff. Issue No, 6 is accordingly decided in the negative as it was not possible to bring back the ship to Pakistan.
78. 13.
13. Issue No, 7 is about the value of the ship. Although the insurance cover against War Risks was for Rs, 40,00,000, it does not automatically follow that in case of total loss the plaintiff are entitled to the total amount. Contract of insurance is a contract of indemnity and the assured is entitled to the actual less which may not be the same for which amount the cover has been taken. In the correspondence exchanged between the parties after the detention of the ship in question by the Indian authorities, I do not find any challenge being made by the Insurance Company as regards the value of the ship. However, D. W. 1 (Muhammad Choudhury (Exh. 79)) produced true copy of a Marine Insurance Policy taken out by the plaintiff-Company in respect of I. s. Ilyas Bakhsh. For one year i.e, from 30-1-1965 to 30-1-1966. This policy was also issued by Defendant No, 1 Insurance Company. It was a dual valuation policy inasmuch as the insured value for purpose of total loss, actual or constructive, was Rs, 15,00,000 and insured value for purposes other than total loss was Rs, 40,00,000. There is, therefore, difference in the valuation for total loss in the War Risks cover and the aforesaid Marine Insurance Policy. In the War Risks cover the value is Rs, 40,00,000 whereas in the Marine Insurance Policy it is Rs, 15,00,000. On 7-9-1965, when the ship was detained and the plaintiff-Company became entitled to claim from the Insurance Company for total loss under the War Risks cover, both the insurances were in force. No explanation has been given by the plaintiff- Company for this difference in the valuation for total loss under the two covers. In the circumstances Its. 15,00,000 is taken as the value of the ship for the purpose of the plaintiff's claim for total loss under the War Risk cover. Issue No, 7 is decided accordingly.
14. I may here refer to the question of liability of the third parties namely Pakistan Insurance Corporation and the Federation of Pakistan who are defendants Nos. 2 and 3 in this suit. As observed in paragraph 2 of this judgment, these two defendants were impleaded as third parties on the application of Defendant No, 1 Insurance Company relying upon the provisions of War Risks Ordinance, 1965. On 8-4-1980, while P. W. 2 Saleem Ahmed Aijazi (Exh. 10) was under cross- examination, the following statements made by the counsel for the plaintiff and the counsel for the plaintiff and by the counsel for Defendant No, 1 Insurance Company were noted by the Court :- "(1) At this stage Mr. Shah Jamil Alam learned counsel for the plaintiff states that in order to curtail the cross-examination his statement may be recorded to the effect that the vessel in question was not covered under the War Risks Insurance Ordinance of 1965. This statement can be used by the learned counsel for the parties.
(2) Mr. Mansoorul Arfin learned counsel for defendant No, 1 states that he does not accept the above position as correct."
79. Under the provisions of the War Risks Insurance Ordinance, 1965 which came into force on 9-9- 1965, no private Insurance Company could underwrite war risk insurance with effect from 9-9-1965 as it became the exclusive domain of the Federal Government. In the instant case, however, the War Risk insurance cover was provided by the defendant No, 1 Insurance Company with effect from 2-9-1965 and the ship was detained on 7-9-1965 by the Indian authorities on which date the plaintiff became entitled to make a claim for total loss and as such. Mr. A. Rauf, learned counsel for Defendants Nos. 2 and 3, was correct in his contention that the question of extending the provisions of War Risk Ordinance of 1965 did not arise in the case of s. s. Ilyas Bakhsh. In my view defendants Nos. 2 and 3 are not liable for the loss of ss. Ilyas Bakhsh.
15. In view of my findings on Issues Nos. 1 to 7, suit of the plaintiff is decreed in the sum of Rs, 15,00,000 against defendant No, I with interest @ 6% per annum from the date of the filing of this suit till realization. Plaintiff shall also be entitled to costs as against defendant No,
1. Suit and claim of defendant No, 1 as against defendants Nos. 2 and 3 are dismissed with no order as to costs. It is further ordered that decree will be prepared in this case after the plaintiff pays the requisite stamp duty and penalty at ten times the duty which would have been payable on an insurance Policy for Rs, 4Q,00,000 against War Risks for the period from 2-9-1965 to 20-9-1965 and from 20-10-1965 to 19-11-1965. Taxing Officer of this Court will ascertain the amount recoverable in this behalf from the plaintiff and before doing so will issue notices to the learned counsel for the plaintiff and learned counsel for Defendant No,
1. As observed earlier, after the amount of stamp duty and penalty has been realized from the plaintiff the decree will be prepared and the amount so realized will be remitted to the concerned authority or Government.