G.D. McNair, J.

1. The plaintiffs early in 1942 insured with the defendantcompany one of their houses at Pyinmana in Upper Burma, against loss or damageby fire for a year from 21st January 1942. The premises were destroyed by fireon 15th March 1912 and the plaintiffs claimed payment of Rs. 15,000 the totalamount for which the property was insured.

2. Burma had by this time become one of the theatres of thewar with Japan, and the defendant company were not satisfied as to the originof the fire and the conditions prevailing at Pyinmana at the time, and theyrefused to admit liability. The plaintiff in June 1943 filed the present suitto enforce his claim. The defendant company in December 1943 applied for a stayof proceedings on the ground that the parties had agreed to Rangoon as theforum for the settlement of their disputes.

3. On 28th January 1944, Ameer Ali J. ordered that allissues arising out of the pleadings which require no evidence other thancorrespondence, including the question of the stay of the suit be tried as apreliminary issue. In pursuance of this order the following issues were framedby Gentle J. and the first three have now come before me for trial,

Issues:

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

(b) Has such condition become frustrated or void

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

(d) Should this suit be stayed by reason of the saidcondition

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

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

(b) Has the defendant company or its agents by conductand/or correspondence, waived and/or is it estopped from relying upon condition19 of the Policy

3. Does any cause of action arise within the Jurisdiction ofthis Court and/or can the plaintiffs maintain the suit in this Court in lightof the provision stamped upon page 1 of the Policy relating to Rangoon

4. The parties have agreed to call oral evidence in supportof their pleas with liberty to recall their witnesses on the other issues. Itis not disputed that Pyinmana has been, since the fire, and is now in enemyoccupation.

5. The difficulty of obtaining evidence in regard to theclaim is obvious and this no doubt is responsible for the preliminary trial ofthese issues.

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

7. On 8th March 1942, Rangoon was occupied by enemy forcesbut they had not reached Pyinmana on 15th March when the fire which destroyedthe insured premises broke out.

8. The plaintiffs lodged a claim with the local agent of thedefendant company at Pyinmana, The claim was forwarded through Maymyo to thedefendant companys manager for India and Burma in Calcutta and the plaintiffswere apparently invited to negotiate further with him.

9. The policy was not issued until 3rd April 1942 but it isnot disputed that the premises were covered continuously from 27th January.During April correspondence took place in regard to the claim between theplaintiffs and the defendant companys manager in Calcutta. The defendantcompany relying on the terms of the policy and pending the receipt of furtherinformation refused to admit the claim until they were satisfied as to theorigin of the fire and the conditions prevailing in Pyinmana at the time.

10. On 9th May 1942 plaintiff 3, one of the partners in theplaintiff firm and their manager Mahomed Osman called at the defendantcompanys office in Calcutta and an interview took place, Mr. Jenner, thedefendant companys manager, and Mr. Tar Mahomed differ in their recollectionof what was said during that interview to which I shall refer later. On 17thJune 1942 the company wrote that on the information at present before them theycould not admit liability and they referred the plaintiffs to the conditions ofthe policy and in particular to condition No. 6 which exempts the company fromliability if the loss is due to, among other causes, warlike operations orcivil commotion or abnormal conditions occasioned thereby, and places theburden of proof on the insured. They adopted the same attitude in their letterof 27th August 1942. In January 1943, the plaintiffs submitted an affidavitfrom Mr. Kapila who was alleged to have been the Sub-divisional Officer andMagistrate at Pyinmana at the time of the fire, and pressed for settlement oftheir claim on the ground that they had now supplied the information required.The defendant company replied on 9th May 1943 that Mr. Kapila while dealingwith the manner in which the insured premises caught fire gave no informationas to the origin of the fire which was alleged to have spread to theplaintiffs premises, nor as to the general conditions prevailing in thelocality 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 tothe conditions of the policy and particularly to condition 6.

11. On 4th June the suit was filed. The defendant company inaddition to the reasons already mentioned for contesting the claim plead thatthe suit is not maintainable in this Court inasmuch as the parties agreed thatthe venue for settlement of the claim and the forum for trial should beRangoon. They further rely on condition 19 of the policy which confines thecompanys liability to 12 months from the happening of the loss or damageunless the claim is the subject-matter of pending action or arbitration.

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

The said policy contained a condition to the effect that anyclaim arising in respect of the said insured property should be settled andpaid in Rangoon where also the cause of action for suit should be deemed toarise. This condition and other conditions relating therewith, however, becameimpossible of performance and void as Rangoon was occupied by enemy.

It must be remembered that the policy was issued on 3rdApril 1942 nearly a month after Rangoon had fallen and further that thisendorsement was not only in the policy but is also a specific stipulation inthe cover note, there referred to as a warranty, which is subject to theconditions 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 indealing with commercial matters, and payment is usually made in Rangoon.

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

15. It is clear from his evidence that the company attachedsome importance to the endorsement; and its retention in the policy, althoughRangoon was then in enemy occupation, suggests that the parties did not thencontemplate that such occupation would continue long enough to interfere withthe ultimate adjustment in the Burmese Capital of any claim that might ariseunder the policy.

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

17. He relies first on representations said to have beenmade by Mr. Jenner at an interview between him and Mr. Abdul Shakur Tar Mahomedon 9th way 1942.

18. Mr. Tar Mahomed is at a disadvantage in relating whatwas said at the interview for admittedly it was in English which he neitherspeaks nor understands. His manager Mahomed Osman who accompanied him carriedon the conversation with Mr. Jenner and Mr. Tar Mahomed can only relate thesubstance, so far as he remembers, of what his manager told him at the time.

19. The manager lives near the defendant in Kathiawar and Iam not satisfied that be could not have been called to give evidence. Thesefacts only emerged at a late stage and although these statements are on therecord they are not in the circumstances admissible as evidence.

20. In any event I have no hesitation in accepting Mr.Jenners evidence that he never gave the alleged undertaking i.e., to pay theclaim if he received a satisfactory report of the matters on which the companyrequired further information. Mr. Jenner gave his evidence with completefrankness and said that any branch office might, if satisfied,"admit" a claim but that "settlement and payment" was adifferent matter. One reason being that the claim would have to be met in thecurrency of the country specified, which in this case was Burma, and the Burmarupee had a different value to the Indian rupee. He said further that if theyhad been prepared to admit the claim they would then have "taken legaladvice how to settle the matter."

21. The plaintiffs statements must in any event be receivedwith caution for in the particulars originally given he alleged that thedefendant company made the representation on which he relies on severaloccasions. When directed to give further particulars he confined himself to thesingle interview on 9th May. I have no hesitation in accepting Mr. Jennersrecollection in preference to the plaintiffs and I doubt if the allegedinterview in May 1943 ever took place.

22. The plaintiff further relies on the correspondence. Acareful perusal of the correspondence appears to me to support the defendantcompanys case rather than the plaintiffs.

23. Throughout the correspondence they refer to and rely onthe conditions of the policy. This is apparent in their letters of 17th Juneand 27th August 1942 and 9th May 1943. Stress is laid on condition 6 becausethe company would not admit liability until the insured had discharged theburden 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 onlyarise for consideration after the claim had been admitted or rejected. Thedefendant company was never satisfied with the evidence and never admitted theclaim.

25. The plaintiff further relies on the fact that the policywas issued subsequent to the enemy occupation of Rangoon. Both the plaintiffand the defendant company agreed to the policy as issued and I have suggestedtheir possible reasons. Moreover the endorsement on the policy merely affirmedthe condition agreed to in the cover note.

26. Counsel for the defendant company argues that the pleasof waiver and estoppel were only put forward at a late stage, and were an afterthought to which the plaintiffs seek to adapt the facts. No such plea wasraised in the plaint nor was it relied on in the application for stay of thesuit, and it cannot be supported on the mere ground that the defendant companyremained 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 itmay be evidence of waiver."

27. In Dawsons 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 setsout 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 defendantfrom denying the existence of some fact essential to establish the cause ofaction, or (to put it in another way) by preventing a defendant from assertingthe existence of some fact the existence of which would destroy the cause ofaction. It is a rule of evidence which comes into operation if (a) a statementof the existence of a fact has been made by the defendant or an authorisedagent of his to the plaintiff or some one on his behalf, (b) with the intentionthat the plaintiff should act upon the faith of the statement, and (c) theplaintiff does act upon the faith of the statement. On the other hand, waiveris contractual and may constitute a cause of action; it is an agreement torelease or not to assert a right.

I have refused to accept the plaintiffs evidence (if it isevidence) that Mr. Jenner stated that the claim would be paid in Calcutta, andI can find no representation or statement of fact by the defendant company orits agent on the faith of which the defendant was intended to act or upon thefaith of which the defendant acted; nor is there any evidence which can be saidto constitute an agreement that the defendant company would not rely on theendorsement.

28-29. In regard to cl. 19 of the policy, I am similarly ofopinion that there has never been any waiver and that the defendants are notestopped from relying on this condition.

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

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

31. Mr. Dey for the plaintiff argues that this clause isvoid because it operates so as to defeat the provisions of the law oflimitation. This identical clause was the subject-matter of a decision in theRangoon High Court, A.N. Ghosh v. Reliance Insurance Co., 11 Rang. 475 :(A.I.R. 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 theright 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 circumstancesthe Insurance Company should be under no liability under its policy.

With respect that is a view with which I entirely agree. Theplaintiff is not limited as to the time within which he may bring a suit; therestriction is on the time during which the company will accept liability forloss.

32. The plaintiff again seeks to impute a waiver of thiscondition from the defendant companys inaction in commenting on the affidavitthat was tendered from Mr. Kapila.

33. The affidavit was forwarded to them on 29th January1943, and it was not until 9th May 1943, that the defendant company wrote toexplain 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 saidwith equal reason that the defendant company delayed in rejecting the affidavitbecause they were making their own enquiries. Assuming that both parties werehonestly trying to abide by the terms of the contract the natural cause fordelay would be attributable to the difficulty they both experienced inobtaining reliable information from a country which was being rapidly overrunby the enemy, where documents were lost, and officials could not be traced. Thepleas of waiver and estoppel have been set up by the plaintiffs and I have nohesitation in holding that they have not been established by the evidence.

34. There remain the issues which raise the difficultquestion whether the capture of Rangoon, and its continued occupation by theenemy has brought about a state of things which makes Rangoon an impossiblevenue for settlement of the contract and trial of the claim and therebyliberates both parties from their obligations.

35. The plea has been based on the ground of frustration andis the subject-matter of Issues 1(b) and (c). On those issues, the plaintiffargues that in the circumstances which have occurred the stipulations in theendorsement, viz., that the claim should be settled and paid in Rangoon andthat legal proceedings in respect of the claim should be instituted in acompetent Court in the city of Rangoon, have through no fault of the partiesbecome incapable of fulfilment.

36. He argues, however, that the contract is divisible andthat the endorsement is not a condition, and the frustration of this clausedoes not bring about the frustration of the entire contract.

37. Reverting to the facts. The cover note is dated 4thFebruary 1942. Rangoon was occupied on 8th March 1942. The insured premiseswere destroyed by fire a week later on 15th March and the Directors purport tosign and issue the policy at Rangoon on 3rd April 1942, insuring the premisesfor one year from 21st January 1942. In the cover note the stipulation relatingto Rangoon is described as a warranty. The warranties are numbered and printedon 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.

38. In the policy this stipulation is endorsed on the frontpage of the document with a rubber stamp.

39. There is a proviso that the conditions of the policywhich are printed on the back shall constitute the basis of the policy. It isadmitted that Rangoon has been in enemy occupation ever since 8th March 1912,and the date of its liberation must be indefinite.

40. I have little doubt that the endorsed stipulation wasintended to be a condition of the policy. Each party seeks to draw a conclusionin his favour from the fact of the endorsement not being included in theprinted conditions on the back of the policy. The reason is probably that theform of policy is a standard form which appears in the text books on Insuranceand a stipulation or condition regarding the place where the contract should besettled or sued upon would vary according to the locality in which the policywas issued. The fact that it was specifically endorsed on the policy suggeststo my mind that it was looked upon of sufficient importance to justify itsbeing termed a condition. That view is supported by the evidence of Mr. Jennerand we find that the plaintiffs have referred to it as a "condition"in para. 3 of their plaint. The question then arises whether this conditionbecame impossible of performance by reason of the continued and indefiniteoccupation of Rangoon by enemy forces. In my opinion that is precisely what hashappened. The parties when they agreed to Rangoon as the place for thesettlement of their difference must have contemplated that Rangoon or at anyrate the jurisdiction of the relevant Courts at Rangoon would be operativeeither in Rangoon or by transfer to some other place in Burma. In fact thatexpectation has not been fulfilled. Emergency legislation has been introducedby Burma Act 6 of 1943 conferring a limited jurisdiction, in matters ofurgency, on the High Courts in India including the Calcutta High Court, butthat Act does not include jurisdiction in commercial matters of the natureinvolved in this suit and it is argued on behalf of the defendant company thatthe Legislature intended that commercial suits which would ordinarily be triedin Rangoon should await trial until the liberation of that city.

41. We cannot speculate regarding the intentions of thelegislature. Our concern is rather with the question whether the indefinitepostponement of the determination at Rangoon of the ultimate settlement ortrial of any claim under the contract at Rangoon absolves the parties fromadherence to this particular condition. In my opinion it does.

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

43. Assuming that I am right in my view that this conditionbecame impossible of performance, the further question arises whether in thecircumstances the entire contract is dissolved. The defendant company contendsthat it is, on the ground that the endorsed condition is of the essence of thecontract. The plaintiff on the other hand argues that it was a collateral orsecondary condition which does not go to the root of the contract but merelyregulates 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 willact in arriving at a decision:

The principles upon which it will now be held that acontract has been frustrated are well established. Probably they have nowherebeen more succinctly stated than by Lord Loreburn in Tamplin (F.A.) SteamshipCo., 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 thecircumstances in which it was made, not of course to vary, but only to explainit, in order to see whether or not from the nature of it the parties must havemade their bargain on the footing that a particular thing or state of thingswould continue to exist. And if they must have done so, then a term to that effectwill be implied, though it be not expressed in the contract.... No Court has anabsolving power, but it can infer from the nature of the contract and thesurrounding circumstances that a condition which is not expressed was afoundation on which the parties contracted.

Whether this result follows from a true construction of thecontract or whether it is necessary to imply a term or whether again it is moreaccurate to say that the result follows because the basis of the contract isoverthrown, it is not necessary to decide; the principle is well established.But it is 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, atp. 255:

Further it is to be observed that the disturbing cause mustgo to the extent of substantially preventing the performance of the wholecontract. Interference leaving a considerable part capable of performance willnot 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 LeistonGas Co. v. Leiston U.D.C., (1916 2 K.B. 428 : 85 L.J.K.B. 1759) if it berightly decided, might have been added. I would willingly adopt this viewexcept that I should prefer the expression contract as a whole instead ofthe whole contract.

This dispute, however, as in so many of these cases, centresnot upon the principles to be applied, but upon their application to the factsof the individual case.

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

45. It provides that the conditions printed on the back areto form the basis of the contract and although the endorsed condition is notincluded in the printed form, reliance is placed on Mr. Jenners statement thatunless it had been included the business would probably have been refused.Moreover, the condition was considered of sufficient importance to be printedand termed a warranty in the cover note. When we examine the various conditionsin the contract we find a reference to action or to legal proceedings in cls.4, 6, 13 and 19 of the contract.

46. In cls. 4 and 6 the burden of proof is laid on theassured. Clauses 13 and 16 provide the time within which action is to bebrought. By reason of the endorsement the action is to be tried in the RangoonCourt 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 showthe interdependence of the one on the other.

47. The endorsement to my mind goes to the root of thecontract for, if you take away the endorsed condition you modify cls. 4, 6, 13and 19 inasmuch as you enlarge the possible nature of the proof and the placeswhere action may be brought.

48. It may be as the plaintiff points out that the basis orunderlying object of the contract was to effect an insurance, but in offeringto indemnify the plaintiff in the event of loss in terms of the contract, thedefendant company expressly stipulated that the settlement of that loss and thelegal question of liability were to be decided in Rangoon. If that conditionbecomes impossible the entire contract is frustrated.

49. There remains the question raised in issue (3) whetherany cause of action arises within the jurisdiction of this Court and whetherthe suit is maintainable in the light of the endorsement.

50. In view of my decision that the entire contract has beenfrustrated no cause of action remains and this issue would not arise butinasmuch as it has been argued at some length before me and the case may gofurther I will deal with it on the assumption that the contract has not beenfrustrated.

51. The endorsed condition provides that the entire cause ofaction shall be deemed to arise in Rangoon but assuming that this conditionalone has been frustrated the question remains whether any part of the cause ofaction 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.

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

53. We must assume then that for all practical purposes theforum chosen by the parties is no longer available. On this assumption can itbe said that this Court has no jurisdiction to entertain this claim Thedefendant company carry on business in Calcutta and by mutual consent thenegotiations in connection with the claim were transferred to Calcutta when Burmawas occupied by the enemy. Moreover I gathered from Mr. Jenners evidence thatif he had been satisfied that the company was liable, some method of paying theclaim would have been devised in spite of the occupation of Rangoon. Mr.Chaudhuri for the defendant company argues that there is no obligation to payanywhere 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 hadan account with the Berlin branch of the defendant Bank who also had a branchin London. On the outbreak of war in 1914, the plaintiff demanded payment ofhis credit balance from the London Branch of the Bank. It was held that therewas no obligation on a Bank to pay in one country a debt due to a customer oncurrent account in another country and the suit was dismissed. In so decidingthe case Rowlatt J. distinguished the case of Leader and Co. v. Direction derDisconto-Gesellschaft, (1914) 31 T.L.R. 83, where the plaintiff succeeded onthe ground that the Berlin branch had been asked by the customer to remit themoney to London and a refusal to send the remittance at the customers expenseto London, was a refusal by the Bank to perform its obligation and gave rise toa cause of action. The case is not on all fours with the present case becausethere is no obligation between an insurer and the assured, as there is betweena bank and its customer but the analogy remains.

54. In two recent cases in this Court, Ramnicklal Chhaganlalv. Vivekanand Mills Co. Ltd., : 49 C.W.N. 58 and DhanmalMarwari v. Jankidas Baijnath, : 49 C.W.N. 123, it has beenheld that an agreement by the parties to confine the settlement of theirdisputes to one of two Courts having jurisdiction does not oust thejurisdiction of the Court which is excluded by the agreement but may be aground for staying the suit. The question of jurisdiction has not been arguedthough the plaintiff contends that he has a right to sue in Calcutta where thedefendant company carries on business. The argument is confined to the questionwhether there can in the circumstances be any obligation on the company to meetthe claim in Calcutta.

55. The present plaintiff preferred his claim in Burma, hewas referred to the defendant companys Calcutta office where their manager forIndia and Burma is to be found yet when he seeks to prosecute his suit here heis met with the plea that this is not the correct forum.

56. I hold that the endorsed condition does not in thecircumstances of this case prevent this Court from entertaining the suit. Thechosen forum is not, and will not be, available for an indefinite period, andit would not be reasonable in the circumstances to stay the suit and refer theparties to the forum to which they had agreed. This disposes of three issueswhich I have been trying.

57. On Issue 1(a) I hold that the effect of the endorsedcondition is to confine the settlement of the claim and any action thereon, toRangoon;

(b) that such condition became frustrated;

(c) and that such frustration rendered the entire contractvoid;

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

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

(b) No.

Issue 3.-Yes.

58. My decision on these issues disposes of the claim andthe suit is dismissed with costs, including all reserved costs. Certified fortwo counsel.

.

Dawood Tar Mahomed Bros. and Ors. vs. Queensland InsuranceCo., Ltd. (20.12.1944 - CALHC)