1. This suit has been filed for the recovery of Rs. 25,994.55 under a marine policy dated 25-3-1966 for one year issued by defendant No. 3 for the benefit of the plaintiff and defendant No. 1 to cover the loss by perils of sea etc. Of fishing trawler A.I Naveed belonging to defendant No. 1 and mortgaged with the plaintiff in consideration of the cash credit facility to the limit of Rs. 20,000 granted to defendant No. 1. The defendant No. 2 offered the guarantee. The necessary documents were executed. The mortgage bond executed by defendant No. 1 is dated 20 April 1964. The letter of guarantee executed by defendant No. 2 December 1964. The defendant No. 1 also execut--ed a promissory note dated 16th December 1964, in favour of defendant No. 2 who, then endorsed ft in favour of the plaintiff.
2. It is said that the trawler left the fish harbour and went to sea for fishing on 24th July 1966 and since there has no trace either of it or the crew. The defendant No. 1 finding that the trawler had not returned although it had gone out for a day, lodged report with the police as well as sent intimation to the Mercantile Marine Department and other authorities on 27th and 28th July 1966. The plaintiff and defendant No. 3 were also informed. There was correspondence between the parties inter se and also with the various authorities and some efforts were also made to trace the trawler and the crew but there was no success. The plaintiff called upon the defendant No. 3 by a notice dated 25- 8-1967 to pay the entire amount o--- rupees one lag on the basis of the total loss of the trawler.
3. The defendant No. 3 denied the liability on the ground inter alia that the trawler had not been lost due to the perils of sea or any other risk covered by the policy. This reply was sent by letter dated 8th September 1967. Consequently this suit was filed.th The defendants Nos. 1 and 2 did not appear to contest the suit and ex parte decree was passed against them. The defendant No. 3 has contested the suit on various grounds. It was pleaded that the suit was not maintainable and it was bad for misjoinder of parties and causes of action. The execution of the insurance policy was admitted but it was denied that the trawler was totally lost between 24th and 28th July 1966 or at any time whatsoever while out in the sea or anywhere else.
4. For the loss of the trawler he put the plaintiff to strict proof. The liability to pay the insured amount was denied. It was admitted that the plaintiff had filed the claim for the alleged loss of the launch bat the plaintiff and defendant No. 1 avoided and failed to establish the loss by perils as were covered by the policy or otherwise. An allegation was also made that they did not co-operate in the investigation of the claim and furnish true and complete information in order to take up the matter with the concerned authorities for the investigation of the alleged loss or the recovery of the trawler and in general to act in confirmity with the principle of uberima fides. The insurance for an amount of Rs. One lag was taken out as a result of misrepresentation of the plaintiff and defendant No. 1 as regards the value of the trawler which in fact was worth far less than rupees one lag.
5. Consequently the defendant No. 3 was not bound to indemnify the plaintiff or defendant No. 1 on the basis of the policy. The: claim filed by the plaintiff was, therefore, rejected. Furthermore, no cause of action had arisen to the plaintiff as against the: defendant.
6. On the basis of the pleadings following issues were framed: "(1) Against what risks was the fishing launch `Al-Naveed` insured by defendant No. 3?
(2) Whether the fishing launch was totally lost?
(3) Whether the plaintiff and the defendant No. 1 mis--represented the value of the launch to the defendant No. 3? If so, to what effect ?
(4) Whether suit is bad for misjoinder of parties and/or the causes of action ?'
7. Both the parties examined a number of witnesses and produced several documents. The plaintiff examined Abdul Sattar, Survey Clerk in Mercantile Marine Department, Government of Pakistan Exh.
8. 5, Mohd. Ilyas, Inspector Marine Fisheries Department, Government of Pakistan Exh. 6, Abdul Rehman, Head Constable Police, Dock Police Station Exh. 7, Mohd. Agha Kazi, Preventive Officer Sea Customs, Karachi Exh.
8. All Mohd. Memon, Sub---Accountant, National Bank of Pakistan, Fish Harbour Branch, Exh. 10, A.I Akbar Baloch, S. H. O. Dock Police Station Exh. 48, Nisar A.I, Sub- Accountant, National Bank of Pakistan, Nazimabad Branch, Exh. 53 and Hakimuddin. Manager, National Bank of Pakistan, Karachi Exh. 54 while the defendant No. 3 examined Z. A. Ansari from the office of the Assistant Director-General Shipping, Ministry of Defence Exh. 9, Ahmad Fasih, Accountant, Fishermen Co-operative Society Exh. 50, Sarwat A.I Insurance Surveyor Exh. 56, Mahboob Mooraj Insurance Surveyor Exh. 57 and Aziz Salimuddin Haider, an Insurance Surveyor Exh.
58. No effort was made by either party to examine defendant No. 1 who was the owner of the launch.
9. The reproduction of the evidence of the various witnesses need not detain me as the evidence does not throw much light on the cause of loss or the disappearance of the trawler although some witnesses were examined at length. Even the learned counsel conceded that there was not much to depend upon. I will, however, review the main points of evidence on one side and the other to which reference had been made by the learned counsel for the parties.
10. The bare facts have not been disputed. The trawler belonged to defendant No. 1 and it was mortgaged with plaintiff in consideration of the cash credit facility granted to him to the extent of Rs. 20,000. The insurance policy of the trawler for an amount of rupees one lag to cover the risk against perils of sea, barratry etc. For a period of one year commencing from 15-3-1966 was taken out in favour of plaintiff as mortgagee and defendant No. 1 as mortagagor. The necessary documents were executed. So according to this the plaintiff was one of the original parties to the insurance policy. The insurance premium as revealed by the bank account of the defendant No. 1 was also paid by the plaintiff and debited in his account.
11. It is said that on 24th July 1966 the trawler went out for trawling and did not return nor there was any trace of it. The, intimation of the alleged loss was sent by the defendant No. 1 on 27th and 28th July 1966 to the various authorities as well as the plaintiff and defendant No. 3. He also lodged report with the police. Nothing so far is known about the incharge of the trawler as well as its crew.
12. There was --some correspondence between the parties inter se as well as with the authorities but as is indicated by the evidence the authorities held no inquiry into the cause of the loss of the trawler as there was no report of any crime or casualty. The defendant No. 1 informed the defendant No. 3 on their query that the name of the captain (incharge) was Yousif son of Ahmad, Baldia Colony, Karachi, while he did not know the particulars of the driver and the members of the crew and as a matter of practice in the fisheries, they were appointed by the Tindal (Captain) himself. This letter is Exh. 10/15 dated 19th September 1966. Here it may be pointed out that the name and address of the Tindal shown in the Fishing Permit Exh. 6/1 dated 7-2-1966 is Faqir Mohd./Ibrahim Kanasi, Bhutt village, and the number of crew permitted is ten including driver, greaser, deckhand, watchman etc. The evidence also shows that in case Tindal is not available the trawler is manned by the next incharge who is usually the driver and in that event the port clearance is given in the name of the alternate person but no such change was intimated to wlarine Fisheries Department. The fishing season is from 1st September to 31st March nevertheless there is no prohibition if the fishing trips are made during the off season but the trawlers move about in the proximity of the coast. The permit remains valid so long the Tindal is not changed.
13. Since the defendant No. 1 was not examined, it is not possible to ascertain whether he himself made any effort to contact the Tindal or the members of the crew or they or any of them was available or survived in case the trawler was lost by perils of sea or otherwise. Even no other witness was produced to show whether the Tindal or any of the members of the crew was seen or heard of or not since that time. Sarwat A.I who is an insurance surveyor who was examined by defendant No. 3 stated in his evidence that he checked up from all the port agencies from which information could be gathered regarding the movement of ,the trawler but no evidence was forthcoming regarding its alleged disappearance. He also checked up from customs authorities, police authorities, mercantile marine department, fisheries department and crew of other trawlers as well as made a search for the Tindal for about a month but no clue was found as, according to him, his address was vague. He simply came to know from the custom authorities that the trawler bad a port clearance and It was also confirmed by them that the trawler had left and had not come back. He was further inform--ed that they had no record of declaration that Yousif was Tindal of this voyage nor there was declaration of Faqir Mohammad Tindal. He also stated that the attitude of defendant No. 1 was not helpful but at his request the wife of defendant No. 1 deputed one bank employee to show the house of the Tindal but no tangible information was received.
14. Some ladies in the locality were contacted but they seemed very agitated and told him to contact their men who would return in the evening. However, one old man told him that if he wanted to see Yousif, he should come late in the evening or early in the morning, but he did not go there. He had also obtained the name of Tindal shown in the Permit but he made no inquiry about him. Aziz Saleemuddin Hyder surveyor who is another witness for the defendant No. 3 stated that he made inquiries about both the Tindals Namely, Faqir Mohd. Shown in the permit and Mohd. Yousif shown by defendant No. 1 but there was no trace of any of them.
15. Upon these facts and circumstances I now proceed to treat the issues.
16. Issue No. I.-There is no dispute in respect of this issue. The relevant portion of the policy covering the terms and risks reads as under: "Terms.-To cover T. L. O. As per T. L. O. (Hulls) clauses attached. Warranted that during the period 1st June to 30th August the vessel will be moored at Karachi Harbour. Warranted trading within West Pakistan Waters only.
17. Risks.-During the Adventures and Perils which the Insurance contended to bear and do take upon themselves in this Voyage they are of seas, Men of War, Fire, Enemies, Pirates, Rovers, Thieves, Jettisons, Letters of Mart and Countermart, Surprisals, Takings and Sea, Arrest, Restraints and Detainments of all Kings, Princes and people, of what Nations, Conditions, or Quality, so ever, Barratry of the Master and Mariners ; and of all other perils, Losses and Misfortunes, that have or shall come to the Hurt, Detriment or Damage of the subject-matter of this insurance ; and in case of any Loss or Misfortune; it shall be lawful to the insured, their Factor, Servants and Assigns to sue, labour and travel for, in and about the Defence, Safeguard and Recovery of the said subject- matter of Insurance without Prejudice to this Insurance ; to the Charges, whereof the Insurers will bear in proportion to the sum hereby Insured. And, it is especially declared and agreed that no acts of the Insurers or Insured in recovering, saving, or preserving the property insured, shall be considered as a waiver or acceptance of abandonment and the Insured shall contribute ratably towards any expenses incurred by the Insurers in recovering saving or preserving the property aforesaid.
18. Warranted free of capture, seizure, arrest, restraint or detrainment, and the consequences thereof or of any attempt thereat ; also from the consequences of hostilities or warlike operations, whether there be a declaration of war or not ; but this warranty shall not exclude collision contact, with any fixed or floating object (other than a mine or torpedo) standing heavy, weather or fire unless caused directly and independently of the nature of the voyage or services which the vessel concerned or, in case of collision any other vessel involved therein inform--ing by a hostile act by or against a belligerent power ; and for the purpose of this warranty "power" includes any authority maintaining naval, military or air forces in association with a power.
19. Further warranted free from the consequences of civil war, revolution, insurrection, or civil strife arising therefrom, or piracy."
20. It is clear that the policy among others covers the risks or perils of sea and barratry which are material to determine the entitlement of the plaintiff to their claim under the policy.
21. Issue No. 2.-This, in fan is the vital Issue in this case. I have already outlined the facts and circumstances as well as the relevant evidence and it is clear that considering the case in its factual aspect, the material brought on record is inconclusive. In other words, it is not possible to determine as a fact as to what is the cause of loss or disappearance of the trawler. Only this much is settled that the trawler left the harbour on 24th July 1966 and since then neither the trawler has been heard of nor it is known what became of the Incharge and the crew of the trawler. The efforts to trace them in the circumstances proved futile.
22. It is to the credit of the learned counsel that they made no pretensions about the state of affairs.
23. Being conscious of the inconclusiveness of the evidence, they proceeded to present their arguments on the basis of the presumption which can be drawn in such cases It was emphasised by the learned counsel for the plaintiff that since the trawler left the harbour for trawling and had not returned and had not been heard of, the presumption arose that she was lost by perils of sea and it was for the defendant No. 3 to prove the negative. On the other hand the learned counsel for defendant No. 3 conceded that in such circumstances the presumption was in favour of the loss by perils of sea covered by the policy but urged that in order to rebut the presumption the defendant was required to explain that it could not have happened in that manner. To support these contentions the learned counsel invoked in aid the principle propounded by the Courts in England.
24. With the concession made by the learned counsel for defen--dant No. 3, my task has been pat in a narrow compass and I need not pursue it further and analyse the authorities sought in aid but a counsel on a point of law is not binding on the party whom hr represents and it is equally the duty of the Court to satisfy itself about the soundness and propriety of the concession so made. A further consideration which has weighed with me is that it is a new point of considerable importance.
25. The research made by the learned counsel has revealed no precedent in Pakistan nor I have been able to find any. In Pakistan there is also no statute dealing with Marine Insurance. Although there is Insurance Act of Pakistan but it deals with different subjects. Consequently it is of no help in determining the main questions which arise in cases of Marine policy.
26. As in England, the precedents in Pakistan have binding force To put it in the words of our eminent jurist, Mr. A. K. Brohi in his treatise on Fundamental Laws of Pakistan at p. 595 (Para 183) "The authority of the precedents in our system of law I commensurate with the status of the tribunal that renders the judgment. The rule is that every Court binds the lower Courts and that some Courts even bind themselves". The legality and principles of the judicial proceedings have been fully discussed by him in paras. 182 and 183.
27. The Insurance Law in England is divided into Marine and Non-Marine Law. The Marine Law was the first to develop and its development continued for a long time since 1776 when Lord Mansfield became Lord Chief Justice, His judgments, principally in Marine cases, now form the back-bone of English, American and Dominion Insurance Law. A large volume of case-law, English, American, and Dominion is available for ascertaining the principles of Marine Law, whereas the decisions of those Courts are not binding on the Courts in Pakistan, nevertheless the English decisions, having judicial background and history, apart from their persuasive value, have been invariably consulted and mostly followed in absence of any statutory provision, precedent to peculiar circumstances prevailing in Pakistan.
28. PLD 1951 FC 73), may be noted: "The Common Law signifies rules, customs and recognized principles, which are not set down in writing fn Acts of Parliament. The binding powers of the Common Law as a law emanate from long and immemorial usage and universal acceptance throughout the realm. The authenticity of these customs, rules and maxims, rests entirely upon reception, and usage as declared by the Judges.
29. There are, therefore, only two sources of law which is applicable to Great Britain and the Colonies, namely, precedents and Statute Law."
30. It was held by the Supreme Court of India in the case of Builders Supply Corporation v. Union of India (AIR 1965 SC 1061), that the rules of Common Law relating to substantive rights which had been adopted by this country and, enforced by judicial decisions, amount to law in force in the territory of India at relevant time within the meaning of Article 372 (1) of the Constitu--petition. It was further held that the relevant expression law in force includes not only Statutory Law, but also custom or usage having the force of law and as such, it must be interpreted as including the Common Law of England which was adopted as the law of this country before the constitution came Into force. Consequently, in the absence of any Statute on the subject, the Common Law doctrine of priority of State debts was applied.
31. There is one authority of the Privy Council dealing with Marine Insurance case from British Columbia. It is the case of Capt. J. A. Cates Tug and another v. The Franklin Fire Insurance Co. (AIR 1927 P C 188), to which the provisions of section 60 (2) of the Marine Insurance Act, 1906 with regard to total loss and notice of abandonment were applied.
32. Thus, it can be safely concluded that the principles of common law, so far they are not repugnant to our laws, can be applied in Pakistan, as customs, practice and usage are alsoincluded under Article 225 of the Constitution of Pakistan (1962), in the definition of law includes, as it does, practice, usage and custom having the force of law.
33. The Marine Insurance Act contains definitions, rules of interpretation and numerous provisions governing the rights of parties. This Act cannot, of course be applied to Pakistan, but so far as we have to interpret the policies, the meaning attached to the words and the expressions in the Act and in the English judgments, on Marine Insurance whether before or after 1906, as also the usages relating to interpretation of expressions employed in insurance policies, will be quite relevant.
34. Thus so far as matters apart from the interpretation of English policies are concerned, English judgments and the Marine Act can be of help only in determining that is consistent with equity, justice and good conscience. We cannot, however, be affected by any technical provisions in the Marine Insurance Act and the decisions of the English Courts in respect of those provisions. In the Marine Insurance Act, the vital provisions in respect of missing ship is embodied in section 58. It reads: "where the ship concerned in the adventure is missing and after the lapse, of reasonable time no news of her has been received, an actual total loss may be presumed". Since this is special rule of evidence laid down by the Act !t cannot, as such, be applied to Pakistan but, nevertheless, if the principle is consistent with justice, equity and good conscience, a serious thought can be paid to it, of course, subject to the condition that it does not violate the rule laid down by the Evidence Act in force in Pakistan.
35. All that he needs to do is to establish a prima facie case. When p he has done this, the onus shifts to the insurers to show on the balance of probabilities that the loss was not caused by a peril insured against.
36. A total loss in insurance law is one on account of which the assured is entitled to recover from the under-writer the whole amount of his subscription it may be actual or constructive. The meaning of the expression actual total loss is reasonably clear on the face of it while in case of constructive total loss it is less clear and it covers a state of affairs intermediate between actual total loss and a partial loss. According to Lord Abinger as expressed in the leading case of Roux v. Salvador ((1836)
37. 3 Bing. N C 286), an actual total loss means that if in the progress of the voyage the object becomes totally destroyed or annihilated, or if it be placed, the reason of the perils against which he insures, in such a position that it is wholly out of the power of the assured or of the under-writer to procure its arrival. Another observation may be noted as under: "Every effective deprivation of the spes recuperandi amounts to an actual total loss: if the thing insured be in the hands of strangers, not under the control of the assured ; if by any ,circumstances over which he has no control, it can never, or within no assignable period, be brought to its original destination-in such cases the fact of its remaining in specie at any forced termination of the risk is of no importance. The loss is in its nature total to him who has no means of recovering his property, whether his inability arise from its annihilition or from any other insuperable obstacle."
38. A constructive total loss means, where the thing insured has been reduced to such a state. Or placed in such a position, by the perils insured against, as to make its total destruction or annihilation though not inevitable, yet highly imminent, or its ultimate arrival under the terms of the policy, though not utterly hopeless, yet exceedingly doubtful. For constructive loss the insurer is equally liable.
39. Considering the facts of the present case, the total loss may .Be placed in two alternatives (a)
40. Perils of Sea and, (b) Barratry. "Perils of the Sea" means that damage be done by the unexpected and fortuitous action of the Sea. It does not include the ordinary action of the winds and waves.
41. "Barratry" is any fraudulent or criminal conduct against the owner of the shop or goods by master or mariners in breach of the trust reposed in them, and to the injury of the owner, which obviously will be without the consent, knowledge or connivance of the owner.
42. After having dealt with some of the vital points, I now, proceed to examine the authorities referred to by the learned counsel for the parties.
43. The learned counsel for defendant No. 3 quoted two authorities (1) La Compania Martiartu v. The Corporation of the Roay Exchange Assurance ((1923) 1 K B 650) and Banco De Barcelona and others v. Union Marine Insurance Company Limited ((1926) 134 L T R 350).
44. "In an action by a ship owner against underwriters on a policy of marine insurance there is a presumption of a loss by perils of the sea, when the insured ship having sailed out of portion an intended voyage has never been heard of against Green v. Brown 1774 Sta. 1199. But when the insured ship having been lost the owner gives some evidence of a loss by perils of the sea and the underwriters offer a reasonable explanation of the loss and show that it was probably due to an event not insured against, for example the scutling of the ship with the connivance of the owner, then, if the evidence leaves the Court in doubt to which cause the loss is attributable, the plaintiff fails to prove his case and the defendants are entitled to judgment."
45. As is observed, the rule as Maid down in the case of Green v. Brown was approved. I, therefore, referred to the authority which is also reported in the English Reports Volume XCIII, 1909 at page 1126. It is a short judgment and so I reproduce it in extenso as under: "The ship "Charming leggy" was insured in 1739, from North Carolina to London, with a warranty against captures and seizures. And in an action the loss was said to be by sinking at sea. All the evidence given was, that she sailed out of port on her intended voyage, and has never since been heard of. And (1200) several witnesses proved, that in such a case the presumption is that she foundered at sea, all other sort of losses being generally heard of. The underwriter insisted, that as captures and seizures were excepted, it lay upon the assured to prove the loss happened in the particular manner declared on. But the Chief Justice said, it would be unreasonable to expect certain evidence of such loss, as where everybody on board is presumed to be drowned ; and all that can be required is the best proof the nature of the case admits of, which the plaintiff has given ; he therefore left it to the jury, who found the loss according to the plaintiff's declaration."
46. This seems to be one of the earliest authorities, if not the first one, on the question of presumption arising in such cases.
47. "At the trial the plaintiffs' claim was based solely on a loss by perils of the sea. There has been some apparent difference of opinion on the proper application of the rules relating to onus of proof to cases like the present. It seems desirable, therefore, that I should state at the outset what I conceive to be the relevant rules of law that have to be applied in deciding issues such as are here raised by the pleadings. It is indisputable that marine insurance cases afford no exception to the general rule that before a plaintiff can become entitled to judgment he must prove his case, that is to say, he must establish his cause of action to the reasonable satisfaction of the tribunal. The sinking of a ship by the wilful act of the ship officers is not a peril of the sea, though it may be barratry if it be done against the wishes of the owners."
48. The view expressed in the latter portion of the observation that it may be barratry if the ship was sunk by the wilful act of the officers of the ship against the wishes of the owner, is borne on the meaning of the term "Barratry". To the same effect view was expressed by the House of Lords in the case of La Compania Martiartu v. Royal Exchange Assurance Corporation (1) confirming the decision in (1923) 1 K B 650, already dealt with as first authority. It was observed "if the owners were not privy to this fraud they can evidently support a claim for a barratrous loss ; but of course, if they themselves were accomplices in the fraud, the case is not one of barratry". The necessity for emphasising the aforesaid view has arisen as I was given to under--stand during the course of the arguments that the employees of the owner were his agents and if they were to scuttle the ship even though without connivance of the owner, the risk was not covered by the policy. It is, therefore, clear that what was stated at the bar is not supportable. The policy in the present case clearly covers the risk of barratry. The relevant portion of the policy has already been reproduced.
49. On the other hand the learned counsel for the plaintiff quoted six authorities ((1924) 131 L T R 741)
50. Kanji Dwarkadas v. Haridas Purshottam (13 Bom. L R 1211), Munro Brice & Co. v. War Risks Association Limited and others ((1918) 2 K B 78), Regina Fur Company Ltd. v. Bossom ((1958) 2 L1. L R 425), Slattery v. Maucc ((1962) 1 L1. I. R 60), The British & Burmese Steam Navigation Company and others v. The Liverpool & London War Risk Insurance Association and The British & Foreign Insurance Company ((1917-18) 34 T R L 140) and Compania Maritina of Barcelona v. Wishart ((1917-18) 34 T L R 251).
51. Taking up the first authority (13 Bom. L R 1211) the learned counsel invited my attention to the observation : "In law a policy-holder has nothing further to do in case of total loss but to give intimation of that loss at the earliest possible opportunity to the insurer and then claim moneys payable under his policy." The facts are that in 1899 the craft on its voyage, met with bad weather, and stranded off Minkin Dari, a German Protectorate. Its crew abandoned the ship and its cargo.
52. The German authorities saved some of the cargo ; and then sold the wreck and the saved cargo.
53. The sale proceeds were made over to the owner of the craft. The claim was abased on the clause covering risks by perils of sea. The claim was resisted on technical grounds. One of them was that the claim could not be established without the production of the Mahajan's 'majur'. This plea was rejected and it was in this connection that aforesaid observation was made. So this authority has no application.
54. "In an action on a policy Insuring against loss by perils of the sea with a clause excepting loss by capture, seizure, and consequences of hostilities, it is not necessary for a plaintiff whose ship has been lost at sea to prove that it was not lost by the expected causes.
55. Against the conclusion reached above, two appeals were filed. One was filed by the plaintiff against the decision whereby his claim on War risks was disallowed. The other appeal was filed by the defendant against whom the claim was allowed on the risks of sea perils. The appeals were consolidated. Both the appeals were allowed and it was held that the proper conclusion on the facts was that both ship and the cargo were lost through war perils and not through perils of sea.
56. So the claim on the insurance policy covering the war risks was allowed and the claim on the insurance policy covering the perils of sea was dis--allowed. However, the judgment as Re: Munro, Brice do Company v. Martine (1920) 3 K B 94) ; Same v. The King, does not show any discussion about the application of the rule of the onus of roof as was expressed in the judgment against which the appeals had been filed. One of the judgments referred to in the appeals was the case of Bird v. Keep ((1918) 2 K B 692) from which I would like to reproduce the following passage appearing at pages 701-702 drawing the distinc--petition between conjecture and inference and eventual result from balancing probabilities.
57. "In the case of Kerr v. 4yre Steam Shipping Co. (1915) A C 217, 233 Lord Shaw draws the distinction between conjecture and inference in these words: "The distinction is as broad as philosophy itself. It is that an inference rests upon premises of fact and a conjecture does not". In the case of Owners of Ship Swansea Vale v. Race (1912) A C 238, 239 where the unexplained disappearance from a ship at sea of a seaman on duty as office of the watch was held a sufficient ground for infering that he accidentally fell overboard and met his death by accident arising out of his employment, Lord Loreburn said: "What you want is to weigh probabilities, if there be proof of comparing and balancing probabilities at their respective value, the one against the other."
58. It, therefore, follows that to choose between two alternatives in case of uncertain cause, the matter should be decided on the force of probabilities, by weighing the probabilities presented by each side.
59. "I think that a defendant-whether he is an underwriter or any other kind of defendant-is entitled to say, by way of defence, 'I require this case to be strictly proved, and admit nothing'. Where such is the defence, the onus remains throughout upon the plaintiffs to establish the case they are alleging. Where such is the form of the pleading, it is not only not obligatory upon the defendants but it is not even permissible for them to proceed to put forward some affirmative case which they have not pleaded or alleged ;and it is not, therefore, right that they should by cross-examination of the plaintiffs or otherwise, suggest such an affirmative case."
60. It was further ruled that if such is form of defence, the defendant cannot be permitted to attempt, by evidence or cross-examination, to establish some affirmative case of which no proper notice has been given by way of pleading to the other side or to lead evidence solely directed to the credit of the witnesses.
61. " The point I have to decide depends upon whether the principles enunciated in the cases to which I have referred put the onus upon the plaintiff where the claim under the policy is for "loss by fire", to exclude a fire caused by his own act. The point as far as I know has never been decided, and counsel have been unable in their researches to find any case bearing directly upon this point. In my judgment the onus of proof in cases such as the one before me is different from the onus of proof in the "perils of the sea" cases. The risk of fire insured against is quite obviously not confined to an accidental fire. If the ship had been set alight by some mischievous person, but without the plaintiff's connivance, there can tie no doubt but that the plaintiff would be entitled to recover. Of course, the plaintiff cannot recover if he was the person who fired the ship or was a party to the ship being fired. This result, however, does not depend upon the construction of the word "fire" in the policy, but on the well-known principle of insurance law that no man can recover for a loss which he himself had deliberately and fraudulently caused. It is no more than an extension of the general principle that no man can take advantage of his own wrong.
62. This action was tried with the aid of Jury and it was held that the plaintiff had neither caused or connived at the destruction of the yacht nor the claim was fraudulently made but the representa-- petition as to the value of the yacht was untrue and this representa--petition was material. So on account of the false representation that was made the claim was dismissed.
63. On further study I have been able to lay hands on a few authorities. Presently I deal with them.
64. The first authority is in the case of Twemlow and others v. Osman ((1809-1811) 9 R R 670). The ship sailed from Liverpool on 14th April 1807 and did not reach the destination till 11th June 1807. One of the clerks of the plaintiff was examined and he swore that the ship had not been heard of since then. On the basis of this evidence the claim was allowed, although no witness from the destination was called. It may also be noted that the loss was laid in one count to be by capture ; and in another by the perils of the seas.
65. The second case is of Haustman v. Thornton ((1816-17) 17 R R 632). This was an action on a policy of insurance of ship and cargo. She sailed from Havannah on her homeward voyage and thereafter was never heard of. It was laid down as under : "There is no fixed rule of law upon this subject. When the circumstances are laid before a Court and jury, the presumption will be governed by them. It is to be presumed that the ship is lost, inasmuch as she has not been heard of for nine months. If she be discovered afterwards, it will be for the benefit of the underwriters. She is in fact abandoned, and will belong to them."
66. The third case is of Koster v. Reeld ((1898) 14 R C 358--). It was held that where it is proved that a ship sailed on the voyage insured, and never arrived at the port of destination ; that is prima perils of the sea : and a rumour that some of the crew survived does not throw the burden upon the assured to call them or show that the endeavours had been made to procure their attendance.
67. The appeal was heard by four learned Judges. I would like to reproduce the view of two of them to extenso as under: "Bayley, J.-I am of the same opinion When it is said that a ship has not been heard of, I take that to mean that no intelligence ha: been received from persons capable of giving an authentic account; and not that mere rumours have never been heard. In that sense the vessel in question had never been heard of. But although such evidence has frequently been given, it cannot in all cases be essential. In the present case the plaintiff was owner of the goods, not of the vessel, and the underwriters might have just as good means of inquiring about the crew as the plaintiff had. Why then is it not as reasonable to call upon them to prove affirmatively that Intelligence of the ship had been received, as upon the plaintiff to prove the negative? In the absence of any such evidence, I think it was fair to presume that the ship perished at sea.
68. Halroyd, J.-I think there was sufficient prima facie evidence of a loss by perils of the sea, and it was just as reasonable to expect the defendants to give evidence to rebut that, as to call upon the plaintiff for evidence In confirmation, At the end of the judgment, American decisions were summarised as under :- "This case is cited in Parsons on Marine Insurance, p. 545, and its doctrine is there approved, and is sustained by Brown v. Nelson, 1 Caines (N Y) 525 ; Gordon v, Bowne 2 Johnson (N Y) 150 (Kent, C. J.) ; Ruan v. Gardner, 1 Washington (U. S. Circ, Ct.) 145 (taken by privateer and not heard of for three years); Paddock v. Franklin Insurance Co, 11 Pickering (Mass) 227. In the last case, Shaw, C. J., said a 'where a vessel has sailed, apparently in a seaworthy condition, and never been heard from, as such an event is of rare occurrence, and the extraordinary perils and dangers to which she is exposed are very great, the law, in the absence of other proof, will presume that the loss was occasioned by some of those perils.' But otherwise (he continues) if the Officers and crew are saved and give a different account. In Merritt v. Thompson 1 Hilton (N Y) Compl. 550, a vessel sailing on a voyage, ordinarily taking four months, was not heard of, nor was her crew, in seventeen and it was held that it must be presumed that she was lost. The same principle in Oppenheim v. Wolf 3 Sandford Chancery (N Y) 571, the case of the Trans--Atlantic Steamship, President ; and so in While v. Vann 26 Marine 363 ; Gerry v. Post 13 H P R (N Y) 118."
69. Lastly, I would like to refer to the decision of the House of Lords in the case of Samuel & Co. Limited v. Dumas ((1924) 130 L T R 771). The action was brought on behalf of the mortgagee against the under--writers on the basis of the Marine Insurance Policy, covering the perils of sea, barratry etc. As in the present case. It was found as a fact that the ship was settled by the master and crew, or some of them with the connivance of the owner but without any connivance or complicity on the part of the mortgagee and held, as per majority view that this was neither a loss by perils of sea nor by barratry nor it could be brought within the general words of the policy, although the mortgagee was innocent and without possession. Lord Cave, while commenting upon the view expressed in the case of Small v. United Kingdom Insurance Corporation ((1897 2 Q B 311)), which was mostly followed, observed as under: "There, in an action by a mortgagee under a policy of marine insurance, it was alleged by way of defence that the ship had been wilfully cast away by her master, who was also a part )RI owner and mortgagor ; and upon the argument of the $preliminary question whether this plea was a sufficient defence to the claim, it was held by the trial Judge (Mathew, J.), that, assuming the plea to be true, the loss was due to barratry and the mortgagee, who had taken part in appointing the master, could recover on that ground. On appeal, the Court of Appeal agreed with that decision but also expressed the opinion "'that, if the mortgagee had taken no part in appointing the master, he could have recovered as for a loss by "perils of the sea." With the later opinion I am unable to agree. It appears to me to be inconsistent not only with the statute afterwards passed, but also with the decisions of this House and of the Judicial Committee ; and I think that Small's case must stand on the ground of the barratry alone. In the present case there is no question of barratry, the- owner having been a party to the fraud and the mortgagee having taken no part in appointing the master and crew."
70. Similarly, Lord Finlay, while rejecting the view taken in the case of Small, observed that tile view so expressed was erroneous and did not correctly state the law as it stood before the Marine Insurance Act, 1906, and the true view of the common law on the point was that which was embodied in the Act.
71. Having dealt with the authorities, I now, wish to outline the rule laid by them, as I feel inclined to derive. Broadly speaking the authorities can be placed in three categories as under.
72. One set of authorities proceeds on the presumption raised from the loss of ship by uncertain cause coupled with the fact that nothing Is heard of her and the crew. It is maintained that if a ship sails on her voyage and nothing is heard of her nor anything is known of the Master and crew, it is to be presumed that she has been lost by perils of sea, covered by the marine policy. Consequently, the onus has been placed upon the insurer to prove to the contrary. In some cases there was evidence of stormy weather and roughness of sea and in others there was none arid, nevertheless, presumption was drawn that the ship vas lost by perils of sea, in the absence of proof of unsea-- worthiness of the ship. "this was, presumably, the earliest, view and was successively followed. Later It was Incorporated In the Marine Insurance Act, 1906.
73. The second set pertains to the cases in which It was known that the ship insured against war risk or marine risk or both, had sunk at the sea during voyage, whether there was any survivor or not, and the insured made the claim on the basis of either policy or in the alternative and the insurer put the insured to strict proof without setting up an expected risk in defence the onus of proof was placed upon the insured to prove the loss by the risk covered by the policy and if he failed to prove, his claim was dismissed. The insured is not however, required to prove the cause of loss conclusively.
74. All that be needs to do is to establish a prima facie case. When he has done this, the onus shifts to the insurer to show that the loss was not caused by a peril insured against and unless he proves this, he has not discharged the onus cast upon him.
75. The third set differs from the second in one respect only, in that, the insurer pleaded a cause excepted by the policy. In this situation both were equally required to prove the pleas taken up by them and the cases were decided on the basis of the balance of probabilities. If, however, the cause was left in a state of doubt, the insured failed in his action, as the balance was made level and the insured did not get rid of the onus of proof.
76. To conclude with the degree of proof required, I may reproduce the observation made by Lord Guthrie in the case of Nobel's Explosive Co. v. British Dominions General Insurance Co. ((1918) W C & Ins. Re. 106) as under -- "Outside the reign of mathematic, proof is never anything more than probability. It is for the Court in each case to say whether the probability is so slight, or so equally balanced by counter- probabilities, or whether the probabilities are so strong and so one-sided as to amount to legal proof. The abstract possibility of mistake can never be excluded."
77. Considering the broad principles laid down by the aforesaid authorities and keeping in view the provisions of section 114, Evidence Act, in the light of the circumstances appearing in the present case, it is legitimate to draw a presumption that the loss of the trawler was due to perils of sea. The defendant No. 1 has failed to rebut the presumption, either by evidence or by the balance of probabilities. There is no denial of the fact that the trawler left the harbour in July 1960 and since then neither she has been heard of nor there is any trace of the Tindal and the crew, though by now more than 5 years have elapsed. There is, r of course, nothing on record to indicate that there was something abnormal or unexpected in the weather which may have been experienced during the adventure but there is also nothing to the contrary. It is not unusual that there may be sudden rage of sea during certain period of the year. Probably it may be due to this fact that fishing season is confined to the period from September to March although there is no restriction by law. I venture to say that it is a matter of common knowledge that in the off season including the month of July, there are strong gales with high tides. Exception was taken that the trawler could not go out for trawling beyond the coastal area in July as it was not a fishing season. May it be so, but it is not a circumstance in order to raise an adverse inference. The permission had been granted for fishing throughout the year. No such restriction of condition was imposed under the insurance policy. It was marine policy covering the risk whether the trawling was undertaker; during the season or out of season. It is not contended that the trawler was unseaworthy. There is, however, no evidence to show how far and how long the trawler was taken before it encountered the peril of sea. As laid down in the case of Sadler v. Discon (151 ER 1303) the assured makes no warranty to insurer that the vessel shall continue seaworthy, or that the master or crew shall do their duty during the voyage; and their negligence of misconduct is no defence to an action on the policy, where the loss has been immediately occasioned by the perils insure against. There is no allegation, much less any proof, that the trawler was scuttled or removed to an unknown place with the connivance of defendant No. 1 to commit fraud upon defendant No. 3. Nothing was brought on record that the defendant No. 1 was facing financial strain or otherwise interested in the fraudulent disposal of the trawler. Although it was pleaded in the Written Statement that the trawler was excessively over-- valued and an issue to that effect was framed but, apart from the absence of evidence, in proof of this allegation, this was not pressed by the learned counsel for defendant No. 3 at the time o1 arguments. Consequently no suspicion attaches to the insurance trawler can hardly be thrown away without any substant al gain and it is not suggested that she was an exception. There was no motive or temptation to dishonestly promote such a thing, at least there is no evidence to presume it. It is hard to conceive a pursuit without object or gain. It is not to be expected or conceived that the Tindal and the crew allowed themselves to be drowned to promote the fraudulent design of the owner. True, there is no evidence that they had not drowned but equally there is no evidence that they or any one of them survived. So far none has been traced. The atmosphere would be different if it were not a genuine case of loss. If the loss was procured, the fraud must have been known by this time and the circumstances must represent pretences and not realities. Even no such plea was taken in the written statement and no evidence was led.
78. The learned counsel for the defendant No. 3 also assailed the conduct of defendant No. 1 and emphasised that there was a peculiar calmness about the whsle of the loss and the manner in which it was reported and the way the defendant No. 1 took it and one does not expect that the loss of the trawler of large value should be treated so complacently as was done. I find no force in this contention. The record shows that he sent the intimation to all the concerned authorities as well as the plaintiff and defendant No. 3. There is nothing suspicious about this. The defendant No. 1 was not examined to explain his conduct thus assailed or the circumstances to indicate the efforts made by him. So there is complete absence of evidence in that behalf. It is, therefore, not possible, in the absence of explanation, to assail defendant No. 1. Even otherwise, the mere lack of serious efforts on his part, is not by itself a sufficient circumstance to lead us to the conclusion that the claim of the loss made by him was fraudulent. The evidence produced by defendant No. 3: on the contrary, reveals that the defendant No. 1 not only supplied the address but even his wife deputed one bank clerk to assist Sarwat A.I, insurance surveyor to trace the Tindal but no tangible information was received. Sarwat A.I was, however, told by one old man to come late at night or early morning if he wished to meet Yousif Tindal but he did not go again. I am not impressed with this statement as there is no reason, nor one has been offered, why he should not have visited the place again. But if the statement is true, then he did not avail of the opportunity to collect the necessary information and, therefore, the blame cannot be thrown on defendant No. 1. In any case the defendant No. 1 cannot be wholly blamed.
79. Lastly, it was urged that the name of Tindal shown fin the permit was Faqir Mohd. Whereas the name disclosed by defendant No. 1 was Yousif, although no permission to change the Tindal was sought from the authorities concerned. Though at first thought it may look suspicious but it is not possible to resolve it satisfactorily in the absence of the explanation from defendant No. 1 who has not been examined. It is, however, in evidence that if Tindal named in the permit is not available, the next man, who is usually the driver, takes charge of the trawler. It is also in evidence of another insurance survey, Mr. Saleemuddin that he had made attempts to contact Youaif as well as Faqir Mohammad but there was no trace of them.
80. Issues Nos. 3 and 4.-At the time of arguments these issues were not pressed by the learned counsel for defendant No. 3.