' ABDUL RAHIM KAZI, J.--This is the Letters Patent Appeal from the judgment delivered by the learned Single Judge in Suit No,245 of 1966, whereby, the Suit of the appellants/plaintiffs was dismissed with costs. The case of the appellants briefly is that the appellants had set up a factory at Kotri for oil extraction having covered godowns to stock the finished products and raw material, etc., while the respondents are the Insurance Companies. It is contended that the appellants, sometime in the beginning of June 1966, approached the respondent 1 for an insurance policy to cover certain risks which was accepted by them but with a condition superimposed that the insurance coverage would be shared for liability in the proportion of 75% by respondent No,1 and 25% by respondent No,2 which arrangement was accepted by the appellants and also by respondent No,2. The parties thereafter had several meetings and as a result of discussions contractual terms were thrashed out and the respondents gave them the insurance coverage but before the policy was issued and prior to acceptance of liability for loss the respondents wanted to inspect the factory, which inspection was conducted by Mr. R.M. Allden, the Manager of respondent No,1 on behalf of both the companies, who personally visited the factory in November 1965, January, February and April 1966, and after satisfying himself, that all the requirements of the policy having been carried out by the appellants, the respondents vide their letter dated 21-6-1966 conveyed the acceptance of the insurance coverage and confirmed that as from 8th June 1966, the respondents were on the risk for the sum assured. It is also contended that the policy of the insurance effective 8-6-1966 to 31-7- 1966 was issued on 29-7-1966 in consideration of the premium paid by the appellants, insured the appellants against the loss or damage, to the said property caused by:- "(A ) Hurricane or Typhoon.
(B) Rain, provided the building(s) in respect of which the claim is made or containing the property in respect of which the claim is made is so damaged by any of the perils specified in "A" supra as to admit rain water to the interior of the said building(s).
(c) Flood which shall mean:--
(1) The overflowing or deviation from their normal channels or either natural or artificial water- courses. And
(1) Any flow or accumulation of water on the ground except when such flow or accumulation be of water emitted from any water supply main, tap, valve or the like, as per terms contained in the Policy.
' The above Assurance was an open cover policy depending on the stocks held at particular times."
2. It is further the case of the appellants that on the night of 22-6-1966, during the subsistence of their insurable interest Hyderabad Region and Kotri were lashed by a hurricane and a typhoon and extensive loss/damage was caused as per full particulars mentioned in the schedule attached to the plaint, specially the loss caused to the roof, the walls and the inside due to heavy rainfall and also complete splashing of the windows-panes. Such intimation was given to the respondents on 23-6-1966, first verbally on telephone and subsequently by a letter of the same date and that the respondents promised to pay the loss after certain formalities were gone through and suggested that surveyor J.B.Stevenson be appointed which was accepted by the appellants and the said surveyor subsequently made certain enquiries and collected informations from the appellants. It is contended that the appellants demanded the payment of Rs, 2,50,000 and they were assured of part payment but all of a sudden for reasons unknown to them the respondents unilaterally and illegally by their letter dated 23-7-1966 intimated the appellants that their claim had been rejected on an allegation that their declaration with regard to the claim was false. The appellants therefore, filed the suit claiming a sum of Rs, 2,92,451.51 on account of the losses/damages with interest at 9% per annum.
3. The respondents filed joint written statement, wherein, they denied to have inspected the factory as alleged. They stated that Mr. R.M. Allden had been on the site in March 1965 but the purpose of his visit was not to inspect the factory of the appellants in connection with the proposal of insuring the stocks therein against the risks of rain, hurricane and cyclone damage, which proposal was for the first time verbally made to Mr. R.M. Allden on 11-6-1966 and thus there was no occasion to inspect the site prior to that. It was further claimed that the insurance coverage given to the appellants as communicated by letter dated 21-6-1966 was subject to the terms and conditions as mentioned in the said letter. The issuance of policy documents dated 29-7-1966 was not denied, but it is contended that the same was subject to the warranty that the building in which stocks were to be stored or which contained the insured stocks was so constructed as not to admit access to rain water in the ordinary course. This policy had not been complied with and that the building was not constructed in such a manner as to prevent access of water in normal circumstances to the interior of the said building. Glasses were not fixed in windows and ventilators, nor any such evidence was traceable or produced at the time the surveyor went to inspect the sites. It is also alleged that the portion of the appellants' stocks was stored on open plat-form which was not covered by the policy while remaining portion of stocks stored in the go down and the factory I was damaged by reason of the breach of the warranty, as said above and therefore, they were not liable under the policy. In short the case of the respondents is that they were not liable as the appellants had not fulfilled the warranty. It is further their case that it was not possible to ascertain and segregate the damage caused by damage to the roof, from the damage caused by the absence of glass panes in the windows and ventilators and by the absence of doors in the go down and also that the respondents were not liable because the go down premises were not complete on 22-6-1966, and therefore, the claim was rejected.
' Following issues were framed in the suit.
(1) Whether the defendants had agreed to issue policy without warranty?
(2) Whether the policy issued by the defendants contained terms contrary to the terms agreed upon between the parties?
(3) Did the plaintiffs obtain the insurance cover by concealment of material facts?
(4) Did the plaintiffs accept the policy?
(5) Whether the defendants had inspected the factory before covering the risks and its effect?
(6) Whether the factory premises were built in a manner to prevent access of water and whether glasses were fixed to the windows, doors and ventilators?
(7) What were the warranties, if any, with regard to the godowns?
(8) Had the plaintiffs stored the insured stocks in the .Godowns so constructed as not to admit access to rain water?
(9) To what reliefs are the plaintiffs entitled to?"
5. The appellants/plaintiffs have examined their Director Dorab Shah and four other witnesses.
While, the respondents/defendants examined Mr. R.M. Allden, their Manager and five other witnesses.
6. We have heard the arguments of the learned counsel for the parties. Mr. Riazul Hassan, appearing for the appellants has mainly argued that the said warranty has been included by the respondents subsequently to defeat the claim of the appellants. He has vehemently contended that initially at the time when the proposal was given in early June, 1966, the said warranty was not included and that Mr. R.M. Allden, the manager of respondent No,1 had accepted the proposal without any warranty and therefore, the respondents are liable for the loss and damage caused due to hurricane and typhoon. In order to appreciate the above-said contention of the learned counsel it will be necessary to examine the proposal given by the appellant: which has been produced in evidence as Exh. 8/2. This is the letter dated 8-6-1966 covering insurance risks for two different stocks, on at Kotri and the other at Karachi, the first part whereof reads, "Policy to cover insurance on stocks of raw and finished materials stored at A/11, S.I.T.E., Kotri for Rs,10,00,000 covering risks of:-- "(1) Fire only (2) Spontaneous Combustion.
(3) Riot and Strike. (4) Flood, Typhoon & Hurricane. (5) Explosion Cover."
' This letter shows that against item No,4 words "excl roofless god" are written. This letter has been replied by the respondent No,1 vide their letter dated 21-6-1966, as Exh.6/19, which according to the appellants is the acceptance of the proposal. This letter on its second page very clearly states, "Kindly note that cover for Flood, Hurricane and Typhoon will be excluded in respect of stocks contained in the roofless godown which we shall be pleased to cover also for this particular risk once its construction with roof, doors and windows is complete." A reference may also be had to a letter dated 13-6-1966, Exh.7, written by Mr. S.V.A.Durbari to the appellants which shows that stocks at Kotri were contained in preparatory godown or roofless godow n .
7. All the above facts show that the godowns where the stocks of the appellants were stored, were either roofless or were at preparatory stages inasmuch as there were no doors fixed and that the windows and ventilators were without glass panes.
8. Mr. Mansoorul Arifin, learned counsel for respondent No,2 repelling the above contention, has argued that in case the above-said warranty was not there, then how could the same find place in the pleadings and why the appellants examined their witness Nooruddin, a fitter, to prove that the glass panes were got fitted by them. The appellants have examined this witness at length to show that in compliance with the requirements of the warranty they had got the window panes fitted.
This witness Nooruddin does not inspire confidence as he has given out in his deposition that he does not hav,e any shop nor' does he remember the building where he sits. He also states that he got his bills prepared by another person Nooruddin but he does not know his address or whereabouts. Mr. Arifin has also drawn our attention to the Surveyor's reports Exh.13/1 to 13/4 which showed that the godown did not have. Sufficient space to store 49 thousand bags as claimed and that there was no evidence whatsoever showing that the windows or ventilators contained glass panes. It also showed that there were no doors and there was space at the eves, between the walls. And the roofs, nor they have given satisfactory proof of the actual stocks in hand and the position located at the time of the storm as the stock books were written only upto 30-4-1966. They also reported that the warranties under the policy had not been adequately observed. Mr. Mansoorul Arifin has also drawn our attention to the admission given by Mr. Dorab Shah with regard to the above-said condition of the said godown and warranty.
9. Mr. Muhammad Nasim, Advocate, arguing the case for the respondent 1, has drawn our attention to the two letters written by the appellants to the surveyors, Mr. J.B. Stevenson & Co., placed on record as Exh.8/5 and Exh.8/6, wherein they have written that the windows and ventilators were fixed with glass panes before the storm occurred and the doors were fixed temporarily with A.C.
Sheets.
' From this he has argued that the very fact the such letter was written shows that at least at the time of the proposal this was not the condition. In this context he has also referred us to the deposition of the witness Dorab Shah Exh.8. On the very second page of his deposition as per paper-book, he states, "before cyclone we had fitted the glass panes to the windows and ventilators of the preparatory godown. In other places the glass panes had been fitted. As far as I remember Nuruddin was the person who had fitted the glass panes in the factory and the godown". This goes to show that the denial of the appellants that there was no such warranty is untrue. Had there been no warranty, then they would not have admitted that they got the windows and ventilators fitted with glass panes. In order to corroborate the above appellants examined the said Nuruddin, who, as we have already discussed, is not a trustworthy witness. Moreover, this fact is belied by the evidence of the surveyor.
10. Mr. Riazul Hassan, learned counsel for the appellants, has relied on paragraph 1-33 at page 21 of 'The Law of Insurance" by Raoul Colinvaux, Fourth Edition, which reads as under:-- "1-33. Loss before issue of policy.--Cases where the loss occurs before the issue of a policy requires special care:
(i) Where no building contract has been formed, an offer to insure cannot be accepted after the loss so as to bind the insurers (Canning v. Farquhar (1886) 16 Q B D 727:
(ii) Where there is provisional cover, e.g. a cover note, the assured will of course be able to recover.
(iii) Where the assured is not covered, but there is a binding contract to issue a policy, the doctrine of frustration applies, thus if the assured becomes mortally ill before the policy is issued and the risk begins to run the contract is automatically dissolved. "An agreement to undertake to relieve against risks necessarily assumes that when it comes to be fulfilled by issuing the policy the events are still risks, and does not apply if before fulfilment, and there being no delay for which the insurer is alone responsible, the events have been converted into certainties." This does not mean that a mere change in the risk dissolves the contract, however commercially disastrous to the insurer; the peril insured against must virtually have become a certainty.
(iv) Where the loss occurs, unknown to the insurers but known to the assured, and they afterwards issue a policy which they were not bound to issue, they will be entitled to avoid it on the ground of the failure of the assured to disclose the loss.
(v) Where the loss occurs, unknown to both parties, prior to the contract of insurance. In that case, unless the policy is made "lost or not lost" as marine policies normally are, the policy will be void on account of mutual mistake as to a matter going to the root of the contract. Thus where a life insurance policy was renewed by agreement, and unknown to both parties the "life" was already dead, it was held that the whole transaction was founded on a mistake and that the assured could not therefore recover. The principle is the same as in the case in which the sale of a life policy after the assured had died was held void.
' Thus in no case can the as urged recover where the loss occurs before the beginning of the term covered by the policy, nor, it will be seen from the above propositions, will a policy normally have retrospective effect unless it is made "lost or not lost". Voyage policies and policies of reinsurance may, however, have retrospective effect without those words. But even a life policy may be retrospective provided the intention of the parties is made clear."
11. We do not dispute the proposition as given in the above proposition but we are of the view that the same does not apply to the instant case as is apparent from the plain reading of the same. Mr. Riazul Hassan, has also relied on the case of Coleman's Depositories Limited and The Life and Health Assurance Association (1907) 2 K.B. 798)), but even this case, in our view, does not help the appellants. The learned Single Judge has discussed the evidence of the parties and their witnesses at length and we do not find any reason to interfere with his findings.
12. In view of the above, we find no substance in the present appeal which is dismissed with no order as to costs.
13. The above 'are the reasons for the short order dated 8-11-1988, dismissing the appeal with no order as to costs.