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Petitioner: THE PAKISTAN GENERAL INSURANCE CO., LTD. VS Respondent: FAZAL AHMAD
P L D 1960 (W
P L D 1960 (W. P.) Lahore 135
Before B. Z. Kaikaus and A. S. Faruqui, JJ
THE PAKISTAN GENERAL INSURANCE Co., LTD. ---Defendant‑Appellant
Versus
FAZAL AHMAD‑Plaintiff‑Respondent
Regular First Appeal No. 44 of 1954, decided on 27th Novem ber, 1959.
Contract‑Interpretation‑----Commercial contract ‑ Written part to prevail against printed‑Insurance of goods against fire Written schedule of policy covering also "hazardous goods" while type‑written slip attached to policy as matter of course excluding such goods from risk‑ Written schedule to prevail as against attached slip, to which specific attention of insured had not been called. It is a settled principle in respect of commercial contracts and indents that the written part of it prevails against the printed part in case of any inconsistency.
Where the written part of a contract of fire insurance expressly allowed the keeping of hazardous goods in the godown in question, held that this must prevail against a warranty which was attached to every policy as a matter of course regardless of the terms of the contract.
Fazal Din for Appellant.
M. Iqbal Hussain and Maqbool Ahmad for Respondent.
Dates of hearing : 18th and 19th November, 1959.
JUDGMENT
FARUQUI, J.‑-----This is a Regular First appeal against the judgment of Mr. M. Saleem, Senior Civil Judge, Rawalpindi, whereby he granted a decree to the plaintiff‑respondent‑ for Rs. 45,693‑14‑3 with proportionate costs.
2. The plaintiff‑respondent, Fazal Ahmad, a dealer in automobiles and spare parts and accessories, Proprietor of Northern Motors, situated at 40 Edwards Road, Rawalpindi took out, on the 19th of January, 1951, three insurance policies with the defendant Company. Of these the policies Nos. 405 and 406 were in respect of tools, plants, cars and trucks etc. The third policy No. 407 with which we are concerned related to the stock‑in‑trade, namely; spare parts, accessories, tubes and new batteries etc. which used to be stored in the godown, known as the Godown of Northern Motors. This insurance was for the period from 19th January, 1951 to 19th of January, 1952. The value of this policy was Rs. 50,000.
3. On the night between the 4th and 5th of September, 1951, the godown in question caught fire and the contents were mostly destroyed, The salvage was sold to the plaintiff himself by the company for Rs. 3,000. The plaintiff asserted that the total loss from the fire amounted to Rs. 55,763‑14‑9, but as the policy was for Rs. 50,000 only, he claimed in the suit a sum of Rs. 47,000 after giving credit to the company for the value of the salvaged goods.
4. The defendant denied the plaintiff's claim in toto. It was averred that the respondent had placed hazardous goods in the godown which was in breach of warranty No. 3 subject to which the policy had been issued that the tire was pre‑planned and that the goods destroyed by fire were not the goods insured with the defendant, and lastly, that the value of the goods as alleged by the plaintiff Was exaggerated.
5. The plaintiff respondent filed a replication to the written statement. He denied that he placed any hazardous goods in the godown or that the fire was pre‑planned. He further asserted that the policy covered both hazardous and non‑hazardous goods and that he was not bound by the so‑called warranty No.3. Upon these pleas the learned trial Court framed the following issues :‑
(1) Whether there was any breach of any warranty and condi tion of the policy ?
(2) What goods out of the original insured goods were lying in the godown at the time of the fire ?
(3) Whether the fire was pre‑planned, and what is its effect ?
(4) What was the value of the goods which were damaged by fire ?
(5) Whether the fire was due to hazardous goods not covered by the policy ?
(6) To what amount the plaintiff is entitled ?
On all these issues, the learned trial Court found in favour of the plaintiff. On issue No. 4, however, he found that the total value of the goods damaged by fire was Rs. 48,693‑14‑3. Deducting from it the sum of Rs. 3,000 which was the price of the salvaged goods, he granted the plaintiff a decree for Rs. 45,693‑14‑3.
6. Before us the only finding of the Court below which has been challenged is with regard to issue No. 1. On the other issues, the adverse findings of the Court below were not ques tioned before us nor were the grounds of appeal relating to them pressed. On the material on record this was the only course which the learned counsel for the appellant, could take.
7. With regard to the finding on the issue No. 1 the learned counsel strenuously contended that the warranty No. 3 of the policy which prohibited the keeping of hazardous goods in the premises was an integral part of the contract between the parties and inasmuch as hazardous goods like mobile oil, grease, etc. were admittedly kept by the insurer in the godown in question the company was not liable to indemnify the plaintiff. He pointed out that even in the proposal form signed by 'the insured he bad said "Nil" against the column No. 3 which related to the keeping of any hazardous goods in the building. He urged that the proposals contained in the form were the basis of the contract and inasmuch as the insurer stored hazardous goods in the godown, he was clearly in breach of this condition of the policy and was, therefore not entitled to the claim. In order to understand the argument of the learned counsel, it is necessary to reproduce the term of the warranty which is the main basis of this argument. This term is contained in a typed slip of paper which was attached to the policy. This paper contained seven warranties of which No. 3 reads as follows:‑--
"No hazardous goods to be contained in the building to which this insurance applies, or in any building communicated therewith."
It will be useful to reproduce the schedule of the policy in question in order to understand whether the warranty referred to above is enforceable in this case :‑
SCHEDULE.
Policy No. 407 Name of Insured Fazal Ahmad, Esquire, Proprietor, Northern Motors, 40, Edward Road, Rawalpindi Cantt.
Sum Insured Description Rs. 50,000 Rupees fifty thousand only. Commencing Date One stock‑in‑trade of motor spate 19th January, 1951 parts, accessories tyres, tubes and new batteries only, the property of the insured or held by him in trust or on commission or on joint account with others for which they may be responsible in the Expiry Date event of loss or damage by fire whilst 19th January 1952. stored and lying in a godown known as the godown of "Northern Motors," situate at 40, Edwards Road, Rawalpindi Cantt., Pakistan. Agency Muhammad Shafi, Rawalpindi Branch.
The aforesaid godown is built of burnt bricks set in lime, cement and/or motor with roof of tiles set in cement over wooden planks, rafters and/or iron girders and otherwise used as godowns and/or shops for hazardous and/or non hazardous goods only.
Subject to warranties Nos. 1 to 7 as per type‑written slip attached hereto.
Premium (In lieu of cover note No. F/59.) Rs. 371‑14‑0
Rate @14 As. per cent. less 15 per cent.
We have underlined the portion in the schedule which specifically states that the godown is used for hazardous and for non hazardous goods only. In view of this statement in the schedule which constitutes the specific contract between the parties, how is one to give effect to the warranty No. 3 which prohibits the storing of hazardous goods ? The typed slip of paper contain ing the seven warranties is indiscriminately attached to every policy, whereas the schedule is the written (as against the printed) part of the document which contains the specific terms agreed upon between the parties with regard to that particular policy. Can it then be said that notwithstanding an express term of the contract allowing the storing of hazardous goods by the insured, the warranty No. 3 could still be treated as operative? After giving the matter our careful consideration and in the light of the circumstances which we shall presently state we have no hesitation in holding that the term in the schedule allowing the insured to keep the hazardous goods, must prevail against the warranty upon which the company relies to defeat the plaintiffs' claim. We shall refer only to some of the salient features of the case to demonstrate that it was never the intention of the parties that the warranty No. 3 was to operate in respect of this insurance policy.
8. The premium charged on the insured amount of Rs. 50,000 in this case was Rs. 371‑14‑0 which was at the rate of As. 14 per cent. less 15 per cent. But we find that in the other two policies which were taken out by the respondent on the same date, Exhs. P. 8 and P. 9, the premium charged was at the rate of As. 10 per cent. less 13 per cent. In both these policies the premises were to contain only non‑hazardous goods. There is also yet another policy produced by the respondent which had been issued in favour of Messrs R. A. Mirza & Company by the present appellant Company. This policy is also in respect of stock‑in‑trade of motor spare parts and accessories and is in the sum of Rs. 50,000. In this policy also it is expressly stated that the premises shall he used for non‑hazardous goods only. The premium in this case is Rs. 265‑10‑0 which again works out at the rate of As. 10 per cent. minus 15 per cent. It is, therefore, clear that when the insurance related to non‑hazardous goods only a lower rate of premium was charged and the fact was expressly stated in the statement of particulars in the schedule of the policy.
9. In fact in the case of policy No. 407 (Exh. P. 8) which was also issued by the company to the plaintiff on the same day as the policy in question, there is the item (C) which expressly relates to the insurance of accessories including mobil oil and grease. The amount of insurance for this item is shown as Rs. 2,000. And yet a few lines under item (C) it is mentioned that the premises are used for keeping non‑hazardous goods only. To this policy was also attached the usual warranty slip. 'It is difficult to understand that, if the Company treated mobil oil and grease as hazardous goods, how were these allowed to be insured by a policy in respect of non‑hazardous goods only. It is plain that the warranty No. 3 in the warranty slip would have no meaning in this case because the hazardous goods, namely, mobiloil and grease, were expressly insured by this policy.
10. In view of all this, we do not see how it could be said that in the case of the policy in question which specifically allowed the keeping of hazardous goods on the premises, the company was still entitled to fall back upon a warranty contained in a slip which was attached to this like every other policy. The only conclusion, therefore, that one can reach is that it was the practice of this company to attach the warranty slip as a matter of course to every policy, but the terms which were intended to be acted upon were contained in the body of the policy itself and they varied from policy to policy. Even otherwise it is a settled principle in respect of commercial) contracts and indents that the written part of it prevails against the printed part in case of any inconsistency. In the present case the written part of the contract which expressly allowed the keeping of hazardous goods in the godown in question must, therefore, be held to prevail against a warranty which is attached to every policy as a matter of course regardless of the terms of the contract.
11. Though the above finding would conclude the matter, we propose to deal briefly with that part of the plaintiff's case wherein he asserts that he was not aware of the terms of war ranty No. 3 upon which the defendant‑company relied to avoid its liability. It must be remembered that the plaintiff was doing business in automobiles and spare parts and accessories and would, therefore, normally be expected to stock the articles, e.g., mobiloil, grease, etc., which have been described as hazardous goods. It would, therefore be reasonable for a person dealing in such trade to expect that all these accessories would be covered by the insurance which he might secure in respect of his stock‑in‑trade. This position is amply borne out by the evidence of Malik Ata Ullah (P. W. 4), Officer‑in‑charge, Eastern Federal Union Insurance Company. This witness stated that for insurance companies, who were members of the Insurance Association of Pakistan, there were rules and regulations framed by the Association which are called Tariff Regulations. By these regulations rates of insurance were fixed for different types of insurance. According to him the rate charged in respect of the insurance of the goods in question should, according to the Tariff rules, have been only annas ten per cent. whereas the defendant‑company has charged fourteen annas per cent. He went on to state that the normal warranty in such policies were those described as warranties, A & Q described in Mufassil General Tariff. These did not contain any term such as provided by warranty No. 3 of the policy in question. This witness of course admitted in cross‑examination that the defendant‑company was not a member of the Pakistan Insurance Association and was not, thus, bound by the Tariff rules framed by the Association. That may be so, but the fact remains that if this was the general practice of the trade, it would be natural for the plaintiff to expect that the policy which he was taking out in respect of his stock‑in‑trade would be of the same kind as was generally issued by the various insurance companies. This being so, if the defendant‑company wanted to impose any extraordinary terms it would be their duty to bring it to the notice of the insured specifically. This was not done in this case. This would equally apply to the proposal form in which the item relating to hazardous goods was shown as nil. We, therefore, uphold the finding of the learned trial Court that the warranty No. 3 would not be binding upon the plaintiff for the additional reason that the terms thereof had not been brought to the notice of the defendant and the defendant had never agreed to it.
12. For the foregoing reasons, we find no substance in this appeal and dismiss it with costs.
A.H. Appeal dismissed.