1. The plaintiffs early in 1942 insured with the defendant company one of their houses at Pyinmana in Upper Burma, against loss or damage by fire for a year from just January 1942. The premises were destroyed by fire on 15th March 1942 and the plaintiffs claimed payment of Rs. 16,000 the total amount for which the property was insured.

2. Burma bad by this time become one of the theatres of the war with Japan, and the defendant company were not satisfied as to the origin of the fire and the conditions prevailing at Pyinmana at the time, and they refused to admit liability. The plaintiff in June 1943 filed the present suit to enforce his claim. The defendant company in December 1943 applied for a stay of proceedings on the ground that the parties had agreed to Rangoon as the forum for the settlement of their disputes.

3. On 28th January 1944, Ameer Ali, J. ordered that all issues arising out of the pleadings which require no evidence other than correspondence, including the question of the stay of the suit be tried as a preliminary issue. In pursuance of this order the following issues were framed by Gentle, J. and the first three have now come be-fore me for trial.

Issues:

1. (a) What is the effect of the condition of the policy referred to in para. 3 of the plaint?

(b) Has such condition become frustrated or void?

(c) Has the entire contract of insurance been frustrated and/or become impossible of performance or void?

(d) Should this suit be stayed by reason of the said condition?

(e) Has the defendant company or its agent, by conduct and/or correspondence, waived and/or is it estopped from insisting upon the performance of the said conditions?

2(a) Inasmuch as this suit was not filed within 12 months of 15th March 1942 (the date of the alleged loss), is the defendant company liable under the policy for loss or damage, if any by reason of condition 19 of the policy?

(b) Has the defendant company or its agents by conduct and/or correspondence, waived and/or is it estopped from relying upon condition 19 of the Policy?

3. Does any cause of action airse within the jurisdiction of this Court and/or can the plaintiffs maintain the suit in this Court in light of the provision stamped upon page 1 of the Policy relating to Rangoon?

4. The parties have agreed to call oral evidence in support of their pleas with liberty to recall their witnesses on the other issues. It is not disputed that Pyinmana has been, since the fire, and is now in enemy occupation. The difficulty of obtaining evidence in regard to the claim is obvious and this no doubt is responsible for the preliminary trial of these issues.

5. Before I deal with the questions to be determined the facts may be shortly stated. The defendant company was incorporated in Australia but carried on business through Messrs Steel Bros., & Co. Ltd., as their agents in Burma. The insurance was effected temporarily on 21st January 1942 and a cover note was issued on that date.

6. On 8th March 1942, Rangoon was occupied by enemy forces but they had not reached Pyinmana on 15th March when the fire which destroyed the insured premises broke out.

7. The plaintiffs lodged a claim with the local agent of the defendant company at Pyinmana. The claim was forwarded through Maymyo to the defendant company's manager for India and Burma in Calcutta and the plaintiffs were apparently invited to negotiate further with him.

8. The policy was not issued until 3rd April 1942 but it is not disputed that the premises were covered continuously from 27th January. Daring April correspondence took place in regard to the claim between the plaintiffs and the defendant company's manager in Calcutta. The defendant company relying on the terms of the policy and pending the receipt of further information refused to admit the claim until they were satisfied as to the origin of the fire and the conditions prevailing in Pyinmana at the time.

9. On 9th May 1942 plaintiff 3, one of the partners in the plaintiff firm and their manager Mahomed Osman called at the defendant company's office in Calcutta and an interview took place. Mr. Jenner, the defendant, company's manager, and Mr. Tar Mahomed differ in their recollection of what was said during that interview to which I shall refer later. On 17th June 1942 the company wrote that on the information at present before them they could not admit liability and they referred the plaintiffs to the conditions of the policy and in particular to condition No. 6 which exempts the company from liability if the loss is due to, among other causes, warlike operations or civil commotion or abnormal conditions occasioned thereby, and places the burden of proof on the insured. They adopted the same attitude in their letter of 27th August 1942. In January 1943, the plaintiffs submitted an affidavit from Mr. Kapila who was alleged to have been the Sub divisional Officer and Magistrate at Pyinmana at the time of the fire, and pressed for settlement of their claim on the ground that they had now supplied the information required. The defendant company replied on 9th May 1943 that Mr. Kapila while dealing with the manner in which the insured premises caught fire gave no information as to the origin of the fire which was alleged to have spread to the plaintiff's premises, nor as to the general conditions prevailing in the locality in which the insured premises were situate about the time of the fire. They again refused to admit liability and once more referred the plaintiffs to the conditions of the policy and particularly to condition 6.

10. On 4th June the suit was filed. The defendant company in addition to the reasons already mentioned for contesting the claim plead that the suit is not maintainable in this Court inasmuch as the parties agreed that the venue for settlement of the claim and the forum for trial should be Rangoon. They further rely on condition 19 of the policy which confines the company's liability to 12 months from the happening of the loss or damage unless the claim is the subject-matter of pending action or arbitration.

11. Issue 1 relates to an endorsement on the face of the policy. Para. 3 of the plaint reads:

“The said policy contained a condition to the effect that any claim arising in respect of the said insured property should be settled and paid in Rangoon where also the cause of action for suit should be deemed to arise. This condition and other conditions relating therewith, however, became impossible of performance and void as Rangoon was occupied by enemy.”

12. It must be remembered that the policy was issued on 3rd April 1942 nearly a month after Rangoon had fallen and further that this endorsement was not only in the policy but is also a specific stipulation in the cover note, there referred to as a warranty, which is subject to the conditions of the policy.

13. Mr. Jenner explains the reasons for its incorporation. The mofussil Courts, he says, are not as competent as the Rangoon Court in dealing with commercial matters, and payment is usually made in Rangoon.

14. The evidence would be available in Rangoon and a suit in some other Court would probably necessitate the taking of evidence on commission. He said further that a refusal to accept this condition might result in the rejection of the proposal for insurance.

15. It is clear from his evidence that the company attached some importance to the endorsement; and its retention in the policy, although Rangoon was then in enemy occupation, suggests that the parties did not then contemplate that such occupation would continue long enough to interfere with the ultimate adjustment in the Burmese Capital of any claim that might arise under the policy.

16. The plaintiff in the letter from his solicitors of 16th August 1944 gives particulars of his plea that the defendant company waived, or are estopped from insisting on, the performance of this condition.

17. He relies first on representations said to have been made by Mr. Jenner at an interview between him and Mr. Abdul Shakur Tar Mahomed on 9th May 1942.

18. Mr. Tar Mahomed is at a disadvantage in relating what was said at the interview for admittedly it was in English which he neither speaks nor understands. His manager Mahomed Osman who accompanied him carried on the conversation with Mr. Jenner and Mr. Tar Mahomed can only relate the substance, so far as he remembers, of what his manager told him at the time.

19. The manager lives near the defendant in Kathiawar and I am not satisfied that he could not have been called to give evidence. These facts only emerged at a late stage and although these statements are on the record they are not in the-circumstances admissible as evidence.

20. In any event I have no hesitation in accepting Mr. Jenner's evidence that he never gave-the alleged undertaking i.e, to pay the claim if he received a satisfactory report of the matters on which the company required further information. Mr. Jenner gave his evidence with complete frankness and said that any branch office might, if satisfied, “admit” a claim but that, “settlement and payment” was a different matter. One reason being that the claim would have to be met in the currency of the country specified, which in this case was Burma, and the Burma rupee had a different value to the Indian rupee. He said further that if they had been prepared to admit the claim they would then have “taken legal advice how to settle the matter.”

21. The plaintiff's statements must in any event be received with caution for in the particulars originally given he alleged that the defendant company made the representation on which he relies on several occasions. When directed to give further particulars he confined himself to the single interview on 9th May. I have no hesitation in accepting Mr. Jenner's recollection in preference to the plaintiffs and I doubt if the alleged interview in May 1943 ever took place.

22. The plaintiff further relies on the correspondence. A careful perusal of the correspondence appears to me to support the defendant company's case rather than the plaintiffs'.

23. Throughout the correspondence they refer to and rely on the conditions of the policy. This is apparent in their letters of 17th June and 27th August 1942 and 9th May 1943. Stress is laid on condition 6 because the company would not admit liability until the insured had discharged the burden of proof which they alleged lay on him under that condition.

24. The endorsement referred to ‘settlement and payment,’ and to possible litigation being confined to Rangoon. These factors would only arise for consideration after the claim had been admitted or rejected. The defendant company was never satisfied with the evidence and never admitted the claim.

25. The plaintiff further relies on the fact that the policy was issued subsequent to the-enemy occupation of Rangoon. Both the plain, tiff and the defendant company agreed to the policy as issued and I have suggested their possible reasons. Moreover the endorsement on the policy merely affirmed the condition agreed to in the cover note.

26. Counsel for the defendant company argues that the pleas of waiver and estoppel were only put forward at a late stage, and were an after thought to which the plaintiffs seek to adapt the facts. No such plea was raised in the plaint nor was it relied on in the application for stay of the suit, and it cannot be supported on the mere ground that the defendant company remained inactive. As was said by Lord Bowen in Selwyn v. Garfit, (1887) 38 Ch. D. 273 at p. 284, “Delay is not waiver, inaction is not waiver though it may be evidence of waiver.”

27. In Damons Bank Ltd. v. Nippon Menkwa Kabusihki Kaisha, 62 I.A 100 at p. 108 : (A.I.R (22) 1935 P.C 79), Lord Russell of Killowen sets out the essential ingredients of estoppel and waiver:

“Estoppel is not a cause of action. It may (if established) assist a plaintiff in enforcing a cause of action by preventing a defendant from denying the existence of some fact essential to establish the cause of action, or (to put it in another way) by preventing a defendant from asserting the existence of some fact the existence of which would destroy the cause of action. It is a rule of evidence which comes into operation if (a) a statement of the existence of a fact has been made by the defendant or an authorised agent of his to the plaintiff or some one on his behalf, (b) with the intention that the plaintiff should act upon the faith of the statement, and (c) the plaintiff does act upon the faith of the statement. On the other had, waiver is contractual and may constitute a cause of action; it is an agreement to release or not to assert a right.”

28. I have refused to accept the plaintiff's evidence (if it is evidence) that Mr. Jenner stated that the claim would be paid in Calcutta, and I can find no representation or statement of fact by the defendant company or its agent on the of which the defendant was intended to error upon the faith of which the defendant acted; nor is there any evidence which can be said to constitute an agreement that the defendant company would not rely on the endorsement.

29. In regard to cl. 19 of the policy, I am similarly of opinion that there has never been any waiver and that the defendants are not estopped from relying on this condition.

30. Clause 19 is a clause which is frequently found in fire insurance policies. It reads:

“In no case whatever shall the company be liable for any loss or damage after the expiration of twelve months from the happening of the loss or damage unless the claim is the subject of pending action or arbitration.”

31. Mr. Dey for the plaintiff argues that this clause is void because it operates so as to defeat the provisions of the law of limitation. This identical clause was the subject-matter of a decision in the Rangoon High Court, A.N Ghosh v. Reliance Insurance Co., 11 Rang. 475 : (A.I.R (21) 1934 Rang. 15), where a similar argument was put forward and rejected. “It is not a case” said Leach, J.

“of the clause stating that the insured shall not have the right to sue after 12 months. If it did that it would in my opinion be void, but it is a case where the parties have agreed that in certain circumstances the Insurance Company should be under no liability under its policy.”

32. With respect that in a view with which I entirely agree. The plaintiff is not limited as to the time within which he may bring a suit; the restriction is on the time during which the company will accept liability for loss.

33. The plaintiff again seeks to impute a waiver of this condition from the defendant company's inaction in commenting on the affidavit that was tendered from Mr. Kapila.

34. The affidavit was forwarded to them on 29th January 1943, and it was not until 9th May 1943, that the defendant company wrote to explain why they found it unsatisfactory. I cannot accept any such contention. Speculation as to the motives of the parties may be endless and it may be said with equal reason that the defendant company delayed in rejecting the affidavit because they were making their own enquiries-Assuming that both parties were honestly trying to abide by the terms of the contract the natural cause for delay would be attributable to the difficulty they both experienced in obtaining reliable information from a country which was being rapidly overrun by the enemy, where documents were lost, and officials could not be traced. The pleas of waiver and estoppel have been set up by the plaintiffs and I have no hesitation in holding that they have not been established by the evidence.

35. There remain the issues which raise the difficult question whether the capture of Rangoon, and its continued occupation by the enemy has brought about a state of things which makes Rangoon an impossible venue for settlement of the contract and trial of the claim and thereby liberates both parties from their obligations.

36. The plea has been based on the ground of frustration and is the subject-matter of issues 1(b) and (c). On those issues, the plaintiff argues that in the circumstances which have occurred the stipulations in the endorsement, viz., that the claim should be settled and paid in Rangoon and that legal proceedings in respect of the claim should be instituted in a competent Court in the city of Rangoon, have through no fault of the parties become incapable of fulfilment.

37. He argues, however, that the contract is divisible and that the endorsement is not a condition, and the frustration of this clause does not bring about the frustration of the entire contract.

38. Reverting to the facts. The cover note is dated 4th February 1942. Rangoon was occupied on 8th March 1942. The insured premises were destroyed by fire a week later on 15th March and the Directors purport to sign and issue the policy at Rangoon on 3rd April 1942, insuring the premises for one year from 21st January 1912. In the cover note the stipulation relating to Rangoon is described as a warranty. The warranties are numbered and printed on the back of the document and this stipulation is number 9 of the 9, nos. 1, 2, 4, 6 and 9 are incorporated in the contract.

39. In the policy this stipulation is endorsed on the front page of the document with a rubber stamp.

40. There is a proviso that the conditions of the policy which are printed on the back shall constitute the basis of the policy. It is admitted that Rangoon has been in enemy occupation ever since 8th March 1942, and the date of its liberation must be indefinite.

41. I have little doubt that the endorsed stipulation was intended to be a condition of the policy. Each party seeks to draw a conclusion; in his favour from the fact of the endorsement not being included in the printed conditions on the book of the policy. The reason is probably that the form of policy is a standard form which appears in the text books on Insurance and a stipulation or condition regarding the place where the contract should be settled or sued upon would vary according to the locality in which the policy was issued. The fact that it was specifically endorsed on the policy suggests to my mind that it was looked upon of sufficient importance to justify its being termed a condition. That view is supported by the evidence of Mr. Jenner and we find that the plaintiffs have referred to it as a “condition” in para 3 of their plaint. The question then arises whether this condition became impossible of performance-by reason of the continued and indefinite occupation of Rangoon by enemy forces. In my opinion that is precisely what has happened. The parties when they agreed to Rangoon as the place for the settlement of their difference must have contemplated that Rangoon or at any rate the jurisdiction of the relevant Courts at Rangoon would be operative either in Rangoon or by transfer to some other place in Burma. In fact that expectation has not been fulfilled. Emergency legislation has been introduced by Burma Act 6 of 1943 conferring a limited jurisdiction, in matters of urgency, on the High Courts in India including the Calcutta High Court, but that Act does not include jurisdiction in commercial matters of the nature involved in this suit and it is argued on behalf of the defendant company that the Legislature intended that commercial suits which would ordinarily be tried in Rangoon should await trial until the liberation of that city.

42. We cannot speculate regarding the intentions of the legislature. Our concern is rather with the question whether the indefinite postponement of the determination at Rangoon of the ultimate settlement or trial of any claim under the contract at Rangoon absolves the parties from adherence to this particular condition. In my opinion it does.

43. It is impossible for any Court to speculate as to the duration of the war, or the period during which Rangoon will be in enemy occupation. It is enough that events which are of public notoriety indicate the duration as one about which there is no apparent certainty of which a Court of justice can take cognizance.

44. Assuming that I am right in my view that this condition became impossible of performance, the further question arises whether in the circumstances the entire contract is dissolved. The defendant company contends that it is, on the ground that the endorsed condition is of the essence of the contract. The plaintiff on the other hand argues that it was a collateral or secondary condition which does not go to the root of the contract but merely regulates the manner in which it is to be worked out. In Denny Mott & Dickson Ltd. v. James B. Fraser & Co. Ltd., 1944-1 ALL E.R 678 at p. 687 : (1944 A.C 265), Lord Porter sets out the principles upon which the Court will act in arriving at a decision:

“The principles upon which it will now be held that ??? has been frustrated are well established. Probably they have nowhere been more succinctly stated than by Lord Loreburn in Tamplin (F.A) Steamship Co. Ltd. v. Anglo Mexican Petroleum Products Co. Ltd., 1916-2 A.C 397 at p. 403 : (85 L.J.K.B 1389).

‘The Court……ought to examine the contract and the circumstances in which it was made, not of course to vary, but only to explain it, in order to see whether or not from the nature of it the parties must have made their bargain on the footing that a particular thing or state of things would continue to exist and if they must have done so, then a term to that effect will be implied, though it be not expressed in the contract…. No Court has an absolving power, but it can infer from the nature of the contract and the surrounding circumstances that a condition which is not expressed was a foundation on which the parties contracted.’

Whether this result follows from a true construction of the contract or whether it is necessary to imply a term or whether again it is more accurate to say that the result follows because the basis of the contract is overthrown, it is not necessary to decide; the principle is well established. But it in the contract as a whole which has to be considered, not a part only. As is said in Pollock on Contracts, 11th Edn., edited by Professor Winfield, at p. 255:

‘Farther it is to be observed that the disturbing cause must go to the extent of substantially preventing the performance of the whole contract. Interference leaving a considerable part capable of performance will not be an excuse.’

‘For this proposition London and Northern Estate Company v. Schlesinger (1916-1 K.B 20 : 85 L.J.K.B 369) is quoted, and I think Leiston Gas Co. v. Leiston U.D.C, (1916-2 K.B 428 : 85 L.J.K.B 1759) if it be rightly decided, might have been added. I would willingly adopt this view except that I should prefer the expression ‘contract as a whole’ instead of ‘the whole contract.’

This dispute, however, as in so many of these cases, centres not upon the principles to be applied, but upon their application to the facts of the individual case.”

45. The contract now under consideration is, as I have already mentioned, a standard form of policy to be found in the text books.

46. It provides that the conditions printed on the back are to form the basis of the contract and although the endorsed condition is not included in the printed form, reliance is placed on Mr. Jennet's statement that unless it had been included the business would probably have been refused. Moreover, the condition was considered of sufficient importance to be printed and termed a warranty in the cover note, When we examine the various conditions in the contract we find a reference to ‘action’ or to legal proceedings in cls. 4, 6, 13 and 19 of the contract.

47. In cls. 4 and 6 the burden of proof is laid on the assured. Clauses 13 and 16 provide the time within which action is to be brought. By reason of the endorsement the action is to be tried in the Rangoon Court according to the procedure and the law which is acceptable in that Court. These clauses must be read in conjunction with the endorsed condition and show the interdependence of the one on the other.

48. The endorsement to my mind goes to the root of the contract for, if you take away the endorsed condition you modify cls. 4, 6, 3 and 19 inasmuch as you enlarge the possible nature of the proof and the places where action may be brought.

49. It may be as the plaintiff points out that the basis or underlying object of the contract was to effect an insurance, but in offering to indemnify the plaintiff in the event of loss in terms of the contract, the defendant company expressly stipulated that the settlement of that loss and the legal question of liability were to be decided in Rangoon. If that condition becomes impossible the entire contract is frustrated.

50. There remains the question raised in issue (3) whether any cause of action arises with, in the jurisdiction of this Court and whether the suit is maintainable in the light of the endorsement.

51. In view of my decision that the entire contract has been frustrated no cause of action remains and this issue would not arise but inasmuch as it has been argued at some length before me and the case may go further I will deal with it on the assumption that the contract has not been frustrated.

52. The endorsed condition provides that the entire cause of action shall be deemed to arise in Rangoon but assuming that this condition alone has been frustrated the question remains whether any part of the cause of action can be said to arise in Calcutta. Leave has been granted under cl. 12, Letters Patent, but it is not disputed that such leave can be revoked.

53. Undoubtedly an appropriate Court in Burma would ordinarily be the most suitable Court in which to sue and had such Court been available I have no doubt that both parties would have preferred to sue in the country where the contract was made and where any claim would ordinarily be settled. That course has become impossible, and it would not in my opinion be reasonable to direct the parties to wait for the settlement of their dispute until some indefinite date in the future when a Court may be constituted for the trial of commercial suits arising out of business transactions in Burma.

54. We must assume then that for all practical purposes the forum chosen by the parties is no longer available. On this assumption can it be said that this Court has no jurisdiction to entertain this claim? The defendant company carry on business in Calcutta and by mutual consent the negotiations in connection with the claim were transferred to Calcutta when Burma was occupied by the enemy. Moreover I gathered from Mr. Jenner's evidence that if he had been satisfied that the company was liable, some method of paying the claim would have been devised in spite of the occupation of Rangoon. Mr. Chaudhuri for the defendant company argues that there is no obligation to pay anywhere except in Rangoon and he relies on the case of Clare and Co. v. Dresdner Bank, 1915-2 K.B 576 : (84 L.J.K.B 1443). There the plaintiffs bad an account with the Berlin branch of the defendant Bank who also had a branch in London. On the outbreak of war in 1914, the plaintiff demanded payment of his credit balance from the London Branch of the Bank. It was held that there was no obligation on a Bank to pay in one country a debt due to a customer on current account in another country and the suit was dismissed. In so deciding the case Rowlatt, J. distinguished the case of Leader and Co. v. Direction der Disconto-Gesellschaft, (1914) 31 T.L.R 83, where the plaintiff succeeded on the ground that the Berlin branch had been asked by the customer to remit the money to London and a refusal to send the remittance at the customer's expense to London, was a refusal by the Bank to perform its obligation and gave rise to a cause of action. The case is not on all fours with the present case because there is no obligation between an insurer and the assured, as there is between a bank and its customer but the analogy remains.

55. In two recent cases in this Court, Ramnicklal Chhaganlal v. Vivekanand Mills Co. Ltd., 49 C.W.N 68 and Dhanmal Marwari v. Jankidas Baijnath, 49 C.W.N 123, it has been held that an agreement by the parties to confine the settlement of their disputes to one of two Courts having jurisdiction does not oust the jurisdiction of the Court which is excluded by the agreement but may be a ground for staying the suit. The question of jurisdiction has not been argued though the plaintiff contends that he has a right to sue in Calcutta where the defendant company carries on business. The argument is confined to the question whether there can in the circumstances be any obligation on the company to meet the claim in Calcutta.

56. The present plaintiff preferred his claim in Burma, he was referred to the defendant company's Calcutta office where their manager for India and Burma is to be found yet when he seeks to prosecute his suit here he is met with the plea that this is not the correct forum.

57. I hold that the endorsed condition does not in the circumstances of this case prevent this Court from entertaining the suit. The chosen forum is not, and will not be, available for an indefinite period, and it would not be reasonable in the circumstances to stay the suit and refer the parties to the forum to which they had agreed. This disposes of three issues which I have been trying. On issue 1(a) I hold that the effect of the endorsed condition is to confine the settlement of the claim and any action thereon, to Rangoon;

(b) that such condition became frustrated;

(c) and that such frustration rendered the entire contract void;

(d) and (e) are answered in the negative.

58. Issue 2(a). The defendant company can rely on this condition which exempts them from liability.

(b) No.

59. Issue 3.—Yes.

60. My decision on these issues disposes of the claim and the suit is dismissed with costs, including all reserved costs. Certified for two counsel.

R.G.D

61. Suit dismissed.