JUDGMENT RANA BHAGWAN DAS, J. - Both the appeals arise out of the judgment dated 4.2.1991 passed in Suit No. 10/1975, brought by respondent M/s. Haji Habib & Company against the appellant Pakistan Insurance Corporation, Pakistan through Pakistan Insurance Corporation, Alpha Insurance Company Ltd. And M/s. United Oriental Steamship Company decreeing the same in the sum of Rs. 1,75,000- against the appellant as well as M/s. Alpha Insurance Company in High Court Appeal No. 93/1991 and dismissing the same as against respondent United Oriental Steamship Company as time-barred.
2. Case of the respondent-plaintiff in a nut-shell was that on 2.12.1971 they had delivered to the carrier "Anis Bakhsh" belonging to respondent No.3 at Chittagong 330 chests of tea valued at Rs.
1,75,000/- for shipment to Karachi. The said consignment valued at Rs. 1,75,000/- was insured with appellant M/s. Alpha Insurance Company Ltd. Under Marine/War Risk Insurance Policy No. MAK/18999, dated 4th December, 1971. This appellant also issued a policy of insurance in respect of the said consignment on 31.12.1971 as required by the War Risk (Goods in Transit) Insurance Scheme (hereinafter referred to as the Scheme) for the similar amount. The respondent paid requisite premium to this appellant against the said policy as well which was issued by the. Appellant Insurance Company as agent of appellant Pakistan Insurance Corporation. It was averred that the consignment belonging to the respondent never reached Karachi and for reason of non-delivery of the cargo, respondent suffered a loss valued at Rs. 1,75,000/-. They lodged their claim with the appellants directly as well as through: the Traders Association of Pakistan, Karachi but without any response hence the suit.
3. Insurance claim was resisted by the appellants in their respective written statements. Appellant Alpha Insurance Company Ltd. Did not deny the issuance of the said insurance policy but according to both appellants, correctness of the value, quality and quantity of the consignment could not be verified by them. In any event, the risk was also not covered by the said insurance policies. Remaining defendants also denied the claim for the reason that the same was not legally sustainable. Respondent M/s. United Oriental Steamship Company denied the delivery of the consignment to them as well as its value. According to this respondent, if any Mate's Receipt had1 been issued to the respondent-plaintiff on behalf of this respondent, the same was only on printed form and many of such forms were available with the shippers from the agents of the carriers at Chittagong. Validity and genuineness of the receipt was therefore, denied. It was however not denied that the vessel "Anis Bakhsh" had been captured by enemy during the Indo-Pakistan War of 1971 in the then East Pakistan and the cargo shipped thereon had been lost. Both the appellants in High Court Appeal No. 80/1991 raised legal objections with regard to the validity of the War Risk Insurance Policy as according to them the respondent had suffered no loss; secondly that there was no evidence on record to show that the respondent at the relevant time had any insurance interest, thirdly that the loss, if any had taken place before issuance of the policy under the Scheme and lastly that the journey of the vessel had already commenced before the commencement of the War Risk Insurance Ordinance, 1971 (hereinafter referred to as the Ordinance, 1971).
4. On the pleadings of the parties as many as 13 issues were settled by the learned Single Judge but it is not necessary to reproduce them for the purpose of deciding these appeals.
5. While in support of its claim, plaintiff examined PW Abdul Jabbar as its Manager at its Chittagong office and Muhammad Mukhtar Ahmed, Surveyor attached to the M/s. Mackinnon Mackenzie & Co.
Ltd., no evidence was adduced by any of the defendants.
6. Upon assessm ent of the evidence on record, learned Single Judge came to the. Conclusion that the goods mentioned in Mate's Report No. 83, dated 2. f2.1971 were delivered to the carrier and that they acted as Bailee of the goods. He accepted the receipt as valid and genuine for all purposes.
Learned Single Judge further held that the ship was destroyed as a result of bombardment by enemy and it was sunk along with entire cargo, therefore, this was a case of total loss. By virtue of Section 8 of Ordinance, 1971, which postulated compulsory insurance of goods in transit upon break out of Indo-Pakistan War, he held that1 the appellants were liable to pay the insurance claim.
7. At the hearing Mr. Abdul Rauf learned counsel for the appellant addressed us on behalf of the appellant which were adopted and endorsed by M/s. Ghulam Abbas Pishori and M. Iqbal Siddiqui learned counsel for the parties, while Mr. Yawar Farooqui learned counsel for the respondent No. 1 defended the impugned judgment and decree in these appeals.
8. In support of the appeals, Mr. Abdul Rauf contended firstly that respondent No. 1 had no insurable interest in the goods inasmuch as the goods had been destroyed before the taking out of the insurance policy. He further submitted that the insurance policy Ex.7, dated 4.12.1971 though contained a clause that it was subject to Institute War Clause attached indeed no such clauses were attached to the policy document. Moreover, Section 19 imposed a complete embargo on the insurance companies on carrying on insurance business covered by the Scheme referred to above except by an agent of Pakistan Insurance Corporation, therefore, this policy was neither valid nor could be insurer base any War Risk claim on such policy. Likewise, second insurance policy Ex.9 issued by M/s. Alpha Insurance Company on 31.12.1971, as agent for Pakistan Insurance Corporation could apt be enforced for the reason that according to the plaintiff himself, goods had been destroyed long before the taking out of this policy. Learned counsel referred to the evidence of plaintiff's witness Abdul Jabbar stating that the goods in question were loaded on the ship on 2.12.1971 whereas the ship was sunk four days after it was loaded with the goods. Learned counsel was of the view that since the goods were not in transit as defined in the interpretation clause of Ordinance, 1971, the claim could not be decreed. Lastly, learned counsel relied upon Section 16-A of the Ordinance, 1971 which provides that notwithstanding anything contained in this Ordinance, unless the Federal Government by notification in the official Gazette, otherwise directs, no premium shall be payable on a policy of insurance taken out in pursuance of this Ordinance in respect of any goods or properties situated in East Pakistan nor shall any claim be payable for any damage suffered by any goods or property to which such a policy or insurance relates.
9. In order to appreciate the contentions advanced at the Bar, it is necessary to refer to the interpretation clauses in relation to the terms "Goods in Transit" and "Goods or Property insurable under this Ordinance" which have been defined in clauses (g) and (h) of Section 2 of the Ordinance respectively and read as under:- "(g) "Goods in Transit" means such goods as are being imported into Pakistan or are shipped or otherwise despatched from one Province to another or are in transit in the same Province by railways, inland steamer, barge or a vehicle:
(h) "Goods or property insurable under this Ordinance"
(i) in relation to any goods, means goods, which are for the time being insured against i.e with an insurer registered in Pakistan and includes--
(a) any spares and stores and other consumable material kept in the premises of a factory for the upkeep, maintenance and running of the factory provided such material are insured against i.e with an insurer registered in Pakistan;
(b) any material, commodities or articles lying within the precincts of a port or on barges or on ships and are intended either for export or for movement outside the port are in Pakistan for final disposal and are insured against i.e with an insurer registered in Pakistan;
(ii) in relation to any goods in transit, means all goods which are imported into Pakistan or shipped or otherwise despatched from one Province to another or are in transit in the same Province by railways, in land steamer, barge or a goods vehicle, but does not include goods which are in transit by a ship that sailed from a port of shipment before the coming into force of this Ordinance; Provided that........................... "
10. It may be observed that Ordinance, 1971, was promulgated on 5.12.1971 hut vide Ordinance XXXVII of 1972 was given retrospective effect from 3.12.1971. Under Section 4, Federal Government was required to prepare scheme undertaking to insure properties against perils of war, whereas under Section 8, owners of goods unless exempted by the provisions of this Section were compulsory required to take out policies of insurance against war risk rendering any contravention of such provisions punishable under Section 13. Under Section 15 a War Fisk Insurance Fund as to be established for inter alia discharging all liabilities of the Government under the Ordinance. Now claim framed under Section 8 would cover the war risk in relation to goods in transit which Scheme was published on 5. 12.1971 and para 3 thereof reads as under:- "3. Obligation of an owner of goods in transit.- (1) Every owner of goods in transit required to take out a policy under sub-section (1) of Section 9 insofar as it relates to goods in transit shall take out a policy issued under this Scheme and pay the premiums provided therefor.
(2) An owner of good:? In transit who has fulfilled such of his obligations under :sub-clause (1) as have fallen due shall be entitled to the pay ment of compensation admissible to him under the Ordinance, Rules and the Policy by the Central Government: Provided that where an owner of goods in transit could not fulfil his obligations under sub-clause
(1) for reasons which, to the satisfaction of the Central Government, were beyond his control, he shall also be entitled to the same benefits as aforesaid, but a sum equal to the amount of the premium plus surcharge and interest, if any, remaining unpaid on the date of compensation, shall be deducted there from,"
11. There appears to be sufficient force in the submission of the learned counsel when he states that the policy Ex, 7, dated 4.12.1971 being issued without any authority of the Central Govern ment was void and could not be enforced in view of the restrictions imposed on the insurance companies, in any event, subsequent insurance policy issued on 31.12.1971 as agent of the Pakistan Insurance Corporation could be enforceable at law provided the goods were covered by the Scheme a nd could be treated as "goods in transit" a contemplated in the Ordinance, 1971. From the evidence on record, we find that the vessel on which the goods were shipped had not yet sailed from the port of Chittagong and was destroyed by enemy action while it was still barged, it may be has be held that the consignment of the plaintiff may be treated as "goods" but not "goods in transit" in strict sense of the terms as it may be seen that Section .2(h)(i)(b) which relates to definition of goods includes any materials, commodities or articles lying within the precincts of a port or on barges or on ships and intended either for export or for movement outside the port area in Pakistan. This certainly tends to show that the commodities on board of vessel are to be treated as "goods" and as "goods in transit". Since v^e are of the view that the, vessel said not actually sailed' from the port of Chittagong, the consignment in question had to be treated as being situated in East Pakistan and thus covered by this provisions of Section 16 which unequivocally postulates that damage suffered by such goods will not be covered by policy issued under the Ordinance. The things, would have been entirely different had the vessel sailed from the port of Chittagong as contemplated, on or after 3rd December, 1971 and the goods on board the vessel in terms of Section 2(h) could have been treated as goods in transit and thus covered by the Scheme in respect of War Risk.
12. With utmost respect and profound regards to the learned Single Judge, we are in entire agreement with the reasoning advanced in respect of delivering the goods to the carrier, the issuance of Mate's Receipt as well as the Scheme under the Ordinance, 1971. It seems that this aspect of the Scheme escaped his notice as there is no discussion with regard to the essential condition in respect of the goods as "Goods in Transit" which is absolutely necessary for insurance covered against War Risk.
13. Learned counsel for the appellant referred to Single Bench decision reported as Hassan Ali 6 Co. v. Federation of Pakistan (1992 M LD 1085) in support of his contention that the consignment was covered against War Risk but we are constrained to observe that in the reported case goods were actually in transit and therefore the insurance claim was decreed whereas in the present case, we have held that the goods of the respondent were not in transit during the relevant period. Likewise Mr. Abdul Rauf referred to Haji Razzaq Haji Habib Janoo v. Islamic Republic of Pakistan (1986 CLC 740) which is a case in relation to Civil Commotion Compensation Funds Ordinance (XXI/1971) and thus hardly attracted in the circumstances of the case.
14. For the aforesaid facts and reasons, both the appeals are allowed and impugned order is recalled with the modification that appellants shall refund the premium amount received from the respondent No. 1 with interest at 14% from the date of suit till payment.