Lallubhai Shah, Acting C.J.
1. The plaintiffs sued the defendants in this case on what was described in the plaint as a protection note Exh. X 1 in the case. The defendants contested their liability under this document, and among the various defences the preliminary defence raised was that the document upon which the plaintiffs sued being unstamped, the suit was not maintainable. Upon the preliminary issue the trial Court decided in favour of the defendants, and dismissed the suit.
2. The question in this appeal from the judgment of Mr. Justice Marten is whether the document in question is a 'policy of sea insurance' within the meaning of the Indian Stamp Act (II of 1899) or it is merely a 'letter of cover or engagement to issue a policy of insurance' within the meaning of the 'General Exemptions' relating to policies of insurance in Article 47 of Schedule I of the Indian Stamp Act. The learned trial Judge is of opinion that the unstamped memorandum Exh. X 1 falls within the exemption; and if that view is right, it is clear that, as it is not stamped, and as no stamp can be now received in respect of it, the suit will be unmaintainable.
3. The whole question is whether the document in question satisfies the requirements of the definition of 'policy of sea insurance' within the meaning of the Indian Stamp Act. The document is worded thus:-
Given in writing by the undersigned persons. To wit; That we accept the liability on goods shipped from the port of Muscat in the boat Jeramprasad Tandel Ibram for Bombay Bunder. That liability is to exist up to the time the said goods have been discharged on the Bombay Sunder having pasted any intermediate ports. The insurance is accepted in accordance with the usage of English Policies without damage. The amount is to be paid within six months from the date of the loss deducting therefrom discount at the rate of 20 per cent. Through broker Tha: Dewkaran. The signatures are to be duly affixed to the stamped pakka (i.e., formal) policy.
4. The risk undertaken by each of the executants is stated to be Rs. 3750. The document is initialled by defendant No. J and another person whose legal representatives are on the record as defendants Nos. 2 to 4. This document definitely renders the executants liable for a certain sum for the insurance of the goods shipped by a particular boat and the period is definitely stated.
5. Under Section 2, Clause (20) of the Indian Stamp Act, a policy of sea insurance means 'any insurance made...upon any goods, merchandise or property of any description whatever on board of any ship or vessel...' The expression 'policy of insurance' in the preceding clause is defined as including 'any instrument by which one person in consideration of a premium engages to indemnify another against loss, damages or liability arising from an unknown or contingent event.' Assuming, without deciding, that the contract in question was entered into in consideration of a premium, it would be a policy of sea insurance within the meaning of Section 2(20).
6. It is urged, however, on behalf of the respondents that in form it is only a protection note or a letter of cover and that the executants contemplated a formal policy to be drawn up later. It is no doubt true that the document does refer to a formal policy duly stamped to be prepared; and it may be said that in form it is not a policy of sea insurance. But these considerations, in my opinion, are not decisive of the question as to whether the document in substance can be treated as a 'policy of sea insurance' within the meaning of the Indian Stamp Act. It may be that some protection notes may in terms cover a period only up to a time when the formal policy should be drawn and in some cases it may be open to an insurer to refuse to issue the policy according to the terms of the note. Such protection notes would clearly be within the scope of the General Exemption under Article 47. It may also be that a document such as we have in the present case may be in form a letter of that nature; but if in substance and in terms it satisfies all the essential conditions of a 'policy of sea insurance,' I do not see any reason why the plaintiffs should not get the benefit of that view of the document. If it is a policy of sea insurance, it is open to the plaintiffs under Section 85(a) of the Indian Stamp Act to pay the necessary stamp with the prescribed penalty and to ask the Court to admit the document in evidence. If it is merely a letter of cover or engagement to issue a policy of insurance within the meaning of the exemption, he cannot do so, and the suit must undoubtedly fail, The nature of the document must really be determined with reference to the terms of a particular document without attempting to lay down any general test for distinguishing a protection note from a formal policy. It may be that the document may in form appear to be a protection note; still, if in terms it satisfies the requirements of the definition of 'policy of sea insurance' within the meaning of the Indian Stamp Act, for the purpose of the Stamp Act it would be open to the party to contend that it is a policy of sea insurance, and as such, capable of being received in evidence subject to the payment of the stamp with the necessary penalty.
7. It is urged on behalf of the respondents that this document is merely a 'contract for sea insurance', and that under Sub-section (1), it cannot be valid unless it is (sic)in policy. But the 'sea policy' or policy of sea insurance is defined under Section 2(20), and if this document satisfies the requirements of that definition, I do not see why it should not be so treated, The essentials of a 'sea-policy' as indicated in Section 7, Sub-section (3), are present in this case. That being my view of the particular document, I think that it is admissible in evidence on payment of the necessary stamp and penalty.
8. I may refer to the case of In re Marine Insurance Certificated I.L.R. (1884) 19 Bom. 130 It was a decision under the Stamp Act of 1879. The provisions of that Act were different from those of the Act of 1899 bearing on this point. It is, however, an instance, in ' which the certificate of insurance, which contemplated in terms an exchange for a duly stamped policy was treated as a policy of insurance within the meaning of the Indian Stamp Act of 1879.
9. On behalf of the respondents reliance is placed upon the decision in Home Marine Insurance Co. v. Smith  1 Q.B. 829. That case went up in appeal and the judgment of the Court of Appeal is reported in  2 Q.B. 351. It would appear that in that particular case the document was held to be invalid as a policy not because, a letter of cover could never be a policy, but that the particular document lacked one of the essentials mentioned in Section 95(3) of the Statute of 1891 (54 & 55 Vic. C. 39). It is true that no opinion was expressed that but for that defect it would be a policy of sea insurance. But the ratio decidendi in that case suggests that if it otherwise satisfied the requirements of Sub-section (3) of Section 95 of that Statute, to which Section 7, Sub-section (3), of the Indian Stamp Act of 1879 corresponds, it might have been held to be a sea policy. At any rate, the weight to be attached to the judgment of Mathew J. in that case is very much reduced by the line of reasoning adopted by the Court of Appeal.
10. The document before us is not subject to any such infirmity.
11. I think that initialling is sufficient to indicate the names within the meaning of Section 7(3). At any rate it is not suggested in this case that the initialling is not sufficient. In the case of Home Marine Insurance Company v. Smith the document was merely initialled, and though in the arguments in the Appeal Court this circumstance was mentioned, there is no reference to it in the judgments. Personally I see no reason in this case why it should not be held to satisfy the requirements of Section 7(3). The document in question, it seems to ma, satisfies, though not in form but an substance, the requirements of the definition of the policy of sea insurance. Therefore, it is open to the plaintiffs, on payment of the necessary penalty, to tender the document in evidence. I may add that the scheme of the provisions on this point in the Indian Stamp Act appears to correspond to a large extent to the scheme in the English Statute of 1891; and it may be that the intention of the Legislature was to render such documents inadmissible unless expressed in the form of a regular policy except for the limited purpose of obtaining a proper policy. But, in my opinion, the definition in the Act leaves room for the view which I have taken; and unless the definition of Section 7 is amended, I do not see how such a document could be excluded from its scope.
12. In this view of the matter, I would allow the appeal, reverse the decree of the trial Court and remand the case for decision on the remaining issues subject to the plaintiffs' paying the necessary stamp and penalty in respect of this document. I may add that for the purpose of this judgment we have assumed that there was a payment of premium by the plaintiffs as alleged by them. That is a point in dispute between the parties. It will be open to the trial Court to consider this question of fact as also to consider its effect upon the contract in question.
13. Respondents to pay the costs of this appeal.
14. Costs in the trial Court to be costs in the suit.
15. I concur.