1. Sri Sitarama Rice Mills Company are the owners of the factory building wdh godowns at Dosapadu, Krishna District. On 19-1-1960, they insured the factory and machinery with the Jupiter General Insurance Company Ltd., the first defendant in the suit, against loss or damage that, may result by fire or lightning for one year between 1-1-1960 and 1-1-1961. One Kodali Venkatasubba Rao took a lease of the factory with the machinery from the plaintiffs and sub-leased the same to one Venkineni Venkataratnam. Venkineni Venkataratnam in his turn sub-leased the proper-ty to one Kotes-wara Rao, the third defendant in the suit. The plaintiffs filed O.S. No. 44 of 1958 on the file of the Subordinate Judge's Court, Gudivada, against their lessee, Venkatasubba Rao and others, and obtained an injunction against the lessee from sub-leasing the property. The plaintiffs' case is that their lessee, Venkatasubba Rao, had no right to sub-lease or assign his interest and more so after they had obtained an injunction order in O.S. No. 44 of 1958, on the file of the Subordinate Judges' Court, Gudivada. The third defendant also insured the factory and machinery against loss or damage as a result of fire or lightning with the General Assurance Society Ltd., on 11-11-1959 for one year. On 31-I-I960, the plaintiffs' factory was destroyed by a fire accident and the plaintiffs claimed the assured amount of Rs. 50,000 under the policy taken by them from the first defendant. The surveyor of the first defendant-company estimated the damage at Rs. 17,500 and this is admitted as correct by all the parties. The first defendant-company relied on Clause 16 of the policy, exhibit A-1, granted by it in support of its contention that it is not liable to contribute more than the rateable proportion of such loss or damage as estimated by the surveyor in view of the fact that there was a valid and subsisting insurance on the date of the fire accident, namely, the insurance effected by the third defendant with the second defendant. The plaintiffs have alleged in paragraph 10 of their plaint that the insurance effected by the third defendant, Koteswara Rao, with the second defendant-company was without their knowledge or consent and that the third defendant had neither power nor authority to make any contract for and on their behalf. They denied having had any benefit of the insurance effected by the third defendant. They claimed to recover the entire amount from the first defendant or in the alternative from both defendants 1 and 2.
2. The third defendant remained ex parte in the suit. The second defendant pleaded that the third defendant had no insurable interest and that the insurance policy obtained by him had been brought about by misrepresentation and suppression of facts and that therefore they were not liable on the insurance policy, that there was no privity of contract between them and the plaintiffs and that there could be no claim for contribution against them.
3. The parties did not adduce any oral evidence in the trial court and the documents were marked by consent. The trial court accepted the plaintiffs' case that they never authorised the third defendant to insure their property and that there was no privity of contract between them and the second defendant. But it did not accept the contentions of the second defendant that this was not a case of a double insurance in which the first defendant could claim any contribution from the second defendant and that even if the first defendant had any such right of contribution, they should have pursued their remedy by following the third party procedure under Order VIII-A, C.P.C. In the result, the trial court granted decree to the plaintiffs for a sum of Rs. 9,722.22 with proportionate costs against the first defendant and Rs. 7,777.78 with proportionate costs against the second defendant.
4. The General Assurance Society Ltd., the second defendant, have preferred Appeal No. 776 of 1963 against the decree and judgment passed against them. The plaintiffs have preferred Appeal No, 168 of 1964 against the decree and judgment of the trial court refusing to give a joint decree against both defendants. They have restricted the claim to a sum of Rs. 7,777.78 inasmuch as the first defendant has admitted liability for payment of the balance.
5. There is no privity of contract between the plaintiffs and the second defendant-company who issued the exhibit B-1 to the third defendant. It is alleged in paragraph 5 of the plaint that the plaintiff's lessee, K. Venkata-subba Rao, had no right to sub-lease their factory, machinery and godown and that the ultimate sub-lease in favour of the third defendant, after they had obtained an injunction order in O.S. No. 44 of 1958 on the file of the Sub-Court, Gudivada, is void. In paragraph 10 of the plaint the plaintiffs have clearly stated that the insurance effected by the third defendant with the second defendant is without their knowledge or consent and that the third defendant had neither power nor authority to make any contract for and on their behalf. If the suit claim is based on any contractual liability, the plaintiffs cannot sue the second defendant in the absence of any privity of contract. If the suit claim is based on any delictual liability, there is no allegation that the third defendant committed any delict. Under the Motor Vehicles Act, there is a statutory liability on insurance companies under the third party insurance policies granted by them, but there is no such statutory liability in the case of fire insurance policies. Thus the contention of the second defendant that on the pleadings it cannot be made liable for the suit claim, or for any part of the same, is fully justified.
6. The second defendant-society are entitled to raise all the defences that are open to them against the third defendant. It is clear from Ivamy onGeneral Principles of Insurance Law (page 218) that a condition precedent to be read with the policy is that the assured has an insurable interest in the subject-matter of insurance and that otherwise the policy never attaches, but is void ab initio. Paragraph 623 in Halsbury's Laws of England, III edition, volume 22, page 310, deals with the necessity of insurable interest in a contract of fire insurance and it is as follows :
'A contract of fire insurance, like all other contracts of insurance, requires an insurable interest in the subject-matter of the insurance to support it ; in the absence of insurable interest, the assured can suffer no loss, and the contract becomes a mere wager. '
7. Paragraph 624 deals with the interests which are insurable and it is as follows :
'The precise nature, extent or value of the interest is, however, irrelevant. An equitable or beneficial interest of any kind is as effective for this purpose as a legal interest. Interest is not restricted to ownership ; it may arise under a contract relating to the subject-matter, or it may be founded upon lawful possession. Thus, a finder who takes the object which he finds into his possession has an insurable interest in it. Similarly a defeasible or precarious interest is capable of supporting an insurance. '
8. Chapter 5 in Ivamy's General Principles of Insurance Law deals with insurable interest. At page 19 of the book it is stated that, apart from any question of contract, the mere fact of possession, if lawful, is sufficient to give an insurable interest. In the foot-note 15, it is stated that a finder has an insurable interest, but a trespasser has not. But as pointed out in Porter's Law of Insurance, eighth edition, at page 41, an insurable interest does not mean a perfect legal interest, for, if it did, there are some buildings on which it would be difficult for any one as owner to effect a valid insurance. It is pointed out by the author that there must be a valid subsisting contract capable of being enforced between the parties themselves in order to constitute an insurable interest or right of action against the insurer.
9. Sri N. C. Raghavachari, appearing for the second defendant, urged that having regard to the averments in the plaint it could not be said that the third defendant had any insurable interest. But the matter is not free from difficulty. The third defendant filed I.A. No.. 1085 of 1959 in O.S. No. 44 of 1958 on the file of the Subordinate Judge's Court, Gudivada, for the appointment of a commissioner to inspect the mill buildings and godowns and report about their condition. It is clear from the order, exhibit A-5, that the court permitted the third defendant to continue to remain in occupation of the mill buildings, machinery and godowns, subject to his depositing Rs. 7,116 into court. It appears from the order that the present plaintiffs filed a counter-pleading that the third defendant was allowed to remain in possession of the factory, machinery, etc., out of grace, though he had obtained a sub-leaseduring the pendency of the suit. Paragraph 448 at page 221 of Macgillivary's Insurance Law, fifth edition, volume I, is relevant for the present discussion, and it is as follows :
' The mere possession of property is probably sufficient to give the person in possession an insurable interest in it. Even if the possession is wrongful as against the true owner, such as that of a mere trespasser, it is a right which is recognised by law as available against all the world except those who can show a better title ..... A person in possession of propertymay sue a third person who has negligently damaged or destroyed it, and may recover from him the full amount of damage up to the total value of the property, and it would seem to follow that a person in possession of property has on that ground alone an insurable interest to the full value.
Mr. Bunyon was of that opinion ; but the authorities are not unani-ous on the point, and it is arguable that the insurable interest arising from the possession of any property is a limited interest corresponding to the market value of the right of possession or to the responsibility of the person in possession to the owner for accidental damage to or loss of the property. '
10. In Marks v. Hamilton Pollock,  21 L.J. Exch. 109, held that an insolvent who had acquired property after he had obtained his discharge and insured it, but subsequently the discharge was revoked, had an insurable interest in the property as he was in possession of the same as the apparent owner, responsible to those who were the real owners. Thus, it could not be said that the third defendant had no insurable interest and that the policy taken by him was ab initio void.
11. The main question for consideration in these appeals is whether the Jupiter General Insurance Company, the first defendant in the suit, can restrict their liability and claim that they are not liable to pay or contribute more than their rateable proportion of the loss or damage sustained by the plaintiffs by virtue of Clause 16 in the policy, exhibit A-1, issued by it. Clause 16 in exhibit A-1 is as follows :
' If at the time of any loss or damage happening to any property hereby insured, there be any other subsisting insurance, or insurances, whether effected by the insured or by any other person or persons, covering the same property, this company shall not be liable to pay or contribute more than its rateable proportion of such loss or damage. '
12. It is true that this clause in the policy, exhibit A-1, is worded so generally that it is possible to contend that the first defendant-company shall not be liable to pay contribution more than its rateable proportion by reason of the third defendant effecting the policy, exhibit B-l, over the same property. But it is the duty of the court, as pointed out by Jessel M. R. in(1)  21 L.J. Exch. 109, .North British and Mercantile Insurance Co. v. London, Liverpool and Globe Insurance Co.,  5 Ch.D. 569, to adopt that which is a reasonable construction as contrasted with that which, if not absurd, would be a very unlikely construction. The learned judge has rightly observed at page 577 of the decision that one must read the condition in a sensible way, and not assume that these great companies intended to entrap their policy-holders and to destroy the value of the contract of indemnity by reason of the accidental contract of somebody-else, which had no connection with the subject-matter of the contract, or with the price paid for the insurance. The learned judge had to consider the following clause contained in the insurance policies in that case :
' In all cases where any other subsisting insurance or insurances, whether effected by the insured or by any other person, covering any other property hereby insured, either exclusively or together with any other property in and subject to the same risk only, shall be subject to average, the insurance on such property under this policy shall be subject to average in like manner. '
13. The suit in that case was instituted for the purpose of ascertaining the liability of certain fire insurance companies under the policies granted by them in respect of the loss by fire of a large amount of grain and seed belonging to Messrs. Rodocanachi & Co., merchants, and stored in the granaries of Messrs. Barnett & Co., wharfingers. Messrs. Barnett & Co., the wharfingers, were absolutely responsible for the safety of the goods entrusted to them and they were liable to make good the loss of the grain whether caused by their negligence or otherwise. They had in their usual course of business effected insurance with the Liverpool, London and Globe and other insurance companies by means of what are called wharfingers policies in order to indemnify them against the consequence of loss by fire, etc. Messrs. Rodocanachi & Co., the merchants and owners of the goods, insured their grain themselves, with North British and Mercantile Company. The question that arose for decision in that case was 'whether a fire having occurred, and a great loss having been sustained, the companies who were liable on the merchants' policies were liable to contribute anything to the amount of that loss, which the wharfingers' policies alone would be more than sufficient to cover. The insurance companies who had granted the wharfingers' policies alleged that by reason of the act of Rodocanachi & Co. in insuring gratuitously, so far as the wharfingers were concerned, the grain in question, their liabilities had been diminished by an amount proportionate to the amount insured by the merchants' policies. But this contention was negatived mainly on the ground that the wharfingers were primarily liable to make good the loss or damage sustained by the owners of the goods. Reliance was placed on the condition in the wharfingers' policies(1)  5 Ch.D. 569,.that in all cases where any other subsisting insurance or insurances, whether effected by the insured or by any other person covering the property, their liability to pay damages would be proportionately reduced. We have already referred to the observations of Jessel M. R. with regard to the construction of the said clause. Hellish LJ. dealt with this condition in the following terms (page 585) ;
' They have used words which are difficult to construe, and which prima facie at the commencement of them do appear to apply to the case, because there is an insurance covering the same property. I agree with what Mr. Fry says, that there is some difficulty in construing the words * covering the same property ' to mean only ' the interest in the same property '. Then it ends by saying the consequence is to be that ' this company shall not be liable to pay or contribute more than its rateable proportion of such loss or damages.' That seems to me plainly to imply that the other company is to be liable to pay the other proportion. Here the facts are such that the other company, for the reasons I have given, are not liable to pay the other proportion, because the other company is not liable to pay anything. It is liable to pay Rodocanachi the moiety or the whole, but then, whether it is the whole or the moiety, it has the remedy over against Barnett, and therefore it is practically liable to pay nothing. In my opinion this 9th clause never could have been intended to apply to a case in which the consequences would be that the insured would be deprived of his full remedy. The object was not to deprive him of his full remedy, but that when there was a liability in several companies, then the loss might be divided equally between them, instead of the one being liable for the whole, and being put to his right of contribution. '
14. Baggallay J. A. has observed as to why the principle enunciated by Lord Mansfield with regard to marine policies should not be equally applied to fire policies. It is clear from the judgment that the question of contribution will arise only in a case of double insurance where the same man is to receive two sums instead of one, or the same sum twice over for the same loss by reason of his having made two insurances upon the same goods. He has observed that the condition in the wharfingers' policy is binding upon the parties to the contract, but that, in his opinion, it really amounts to this, that where there are several policies, and where there, in point of fact, is a double insurance, then in order to do away with the old practice of the insured recovering the whole from one of the several insurance offices, and then the one from whom it was recovered being put to obtain contribution from the others, this clause was put in to say that the insured should, in the circumstances, proceed against the several insurance companies for the proportionate amount of the compensation amount for which they are liable. It was held in that decision that it was not a case ofdouble insurance because the two companies had insured distinct interests, and that, since there was no double insurance, there was no right of contribution either on general common law principles or by reason of the pro rata clause, which had no application.
15. The contribution clause in exhibit A-1 has been introduced only in order to secure to the first defendant the right of contribution wherever it arises. The general principle is that the assured who insures his property cannot recover more than a full indemnity. But for such contribution clause, it would be open to the assured to select the policy upon which to claim his indemnity--if that alone is sufficient for the purpose---and the insurers upon that policy cannot resist liability upon the ground that there are other policies in existence which the assured might have enforced. (See page 415 of Ivamy's General Principles of Insurance Law). At page 416 of the same book it is stated that in order to give rise to a right to contribution the following conditions must be fulfilled : 1. All the policies concerned must comprise the same subject-matter. 2. All the policies must be effected against the same peril. 3. All the policies must be effected by or on behalf of the same assured. 4. All the policies must be in force at the time of the loss. 5. All the policies must be legal contracts of insurance. 6. No policy must contain any stipulation by which it is excluded from contribution. In dealing with the conditions giving rise to right of contribution, it is stated in paragraph 528 at page 267 of Halsbury's Laws of England, third edition, volume 22, that each policy must cover the same interest in the property and the principle is explained in the following passage. :
' Each policy must cover the same interest in the same property, that is to say, each policy must be intended to protect the same assured against the same loss. The policies must, therefore, cover a common interest ; it is not sufficient that they cover the same property. Where separate insurances are effected upon the same property by different persons interested in it for the purpose of protecting their separate interests only, there is no contribution. Thus, there is no contribution when separate policies are effected by bailor and bailee, by mortgagor and mortgagee or by landlord and tenant for their individual protection. Where, however, one of the policies is intended to enure for the benefit of both persons interested, as, for instance, where the bailee, mortgagor or tenant intends to cover the interest of his bailor, mortgagee or landlord as well as his own, a case of contribution arises between such policy and any policy effected by the bailor, mortgagee, or landlord for his separate protection, since both policies, in fact, cover a common interest, namely, the interest of the bailor, mortgagee or landlord.'
16. Thus, where the assured under one policy is a distinct person from the assured under the other, each having a separate interest in himself, and neither policy being intended for the benefit of the assured under the other,no right of contribution arises, notwithstanding that the policies all relate to the same object and to the same risk.
17. So far as Marine Insurance is concerned, Section 34 of the Marine Insurance Act, 1963, provides as follows :
' (1) Where two or more policies are effected by or on behalf of the assured on the same adventure and interest or any part thereof, and the sums insured exceed the indemnity allowed by this Act, the assured is said to be over-insured by double insurance.
(2) Where the assured is over-insured by double insurance-
(a) the assured, unless the policy otherwise provides, may claim payment from the insurers in such order as he may think fit, provided that he is not entitled to receive any sum in excess of the indemnity allowed by this Act ;
(b) where the policy under which the assured claims is a valued policy, the assured must give credit as against the valuation, for any sum received by him under any other policy, without regard to the actual value of the subject-matter insured ;
(c) where the policy under which the assured claims is an unvalued policy he must give credit, as against the full insurable value, for any sum received by him under any other policy ;
(d) where the assured receives any sum in excess of the indemnity allowed by this Act, he is deemed to hold such sum in trust for the insurers, according to their right of contribution among themselves. '
18. The following passage from the judgment of Hellish L.J., at page 583, of the decision in North British and Mercantile Insurance Co. v. London, Liverpool and Globe Insurance Co.,  5 Ch. D. 569, is relevant for the present discussion :
' Now I do not know of any English cases on the subject of contribution as applied to fire policies ; but I can see no reason why the principle in respect of contribution should not be exactly the same in respect of fire policies as they are in respect of marine policies, and I think if the same person in respect of the same right insures in two offices, there is no reason why they should not contribute in equal proportions in respect of a fire policy as they would in the case of a marine policy. The rule is perfectly established in the case of a marine policy that contribution only applies where it is an insurance by the same person having the same rights, and does not apply where different persons insure in respect of different rights. The reason of that is obvious enough. Where different persons insure the same property in respect of their different rights they may be divided into two classes. It may be that the interest of the two between them makes up the whole property, as in the case of a tenant for life and remainderman. Then if each insures, although they may use words apparently insuring the(1)  5 Ch. D. 569, whole property, yet they would recover from their respective insurance companies the value of their own interests ; and of course those values added together would make up the value of the whole property. Therefore it would not be a case either of subrogation or contribution, because the loss would be divided between the two companies in proportion to the interests which the respective persons assured had in the property. But then there may be cases where, although two different persons insured in respect of different rights, each of them can recover the whole, as in the case of a mortgagor and mortgagee. But wherever that is the case it will necessarily follow that one of these two has a remedy over against the other, because the same property cannot in value belong at the same time to two different persons. Each of them may have an interest which entitles him to insure for the full value, because in certain events, for instance, if the other person become insolvent, it may be he would lose the full value of the property, and therefore would have in law an insurable interest ; but yet it must be that if each recover the full value of the property from their respective offices with whom they insure, one office must have a remedy against the other. I think whenever that is the case the company which has insured the person who has the remedy over succeeds to his right of remedy over, and then it is a case of subrogation.'
19. It is clear from the averments in the plaint and the findings of the lower court that the third defendant effected the insurance with the second defendant without the knowledge or consent of the plaintiffs and that he had neither power nor authority to make such a contract on behalf of the plaintiffs. Hence this is not a case of double insurance to which alone Clause 16 of exhibit A-1 can have any relevance. In Portavon Cinema Co. v. Price and Century Insurance Co.,  4 All E.R. 601, the plaintiffs who were the lessees of a cinema, insured the premises with the first defendant under a Lloyd's policy of insurance against loss by fire. The lessors were desirous of raising a loan on the security of the cinema, and for this purpose, and as a condition of the granting of the loan, took out a policy of insurance with the second defendant. The Lloyd's policy contained a contribution clause in the following terms :
' This insurance does not cover any loss or damage or liability which at the time of the happening of such loss or damage or liability is insured by or would, but for the existence of this policy, be insured by any other policy or policies except in respect of any excess beyond the amount which would have been payable under such policy or policies had this insurance not been effected. '
20. The cinema premises were later destroyed by fire at the time when both policies of insurance were in existence, and on the plaintiff's making a claim(1)  4 All E.R. 601, .under the Lloyd's policy it was contended that the second defendant's policy was an insurance insuring the loss or damage or liability insured by the Lloyd's policy and that it was therefore a case of double insurance and came under the contribution clause of the Lloyd's policy. It was held in that decision that the contribution clause should be applied only to cases which are strictly cases of double insurance, that the taking out of the second policy created no equity in favour of the plaintiffs, there being no intention in the minds of the lessors to give the plaintiffs any interest in the policy moneys and that the second policy had not been taken out by the authority of the plaintiffs, nor had there been any subsequent ratification by the plaintiffs and that in the result no double insurance had been created.
21. For the foregoing reasons, we are unable to construe Clause 16 of exhibit A-1 in the manner contended for by the first defendent as, in our opinion, the said clause could never have been intended to deprive the plaintiffs of their full remedy. On a reasonable construction of that clause it could be invoked only in cases where the plaintiffs themselves or any other person validly claiming title through them or with their authority effected more than one insurance policy in respect of the same subject-matter. It is also clear from what we have stated that the insurance effected by the third defendant with the second defendant was done without the knowledge or consent of the plaintiffs and that the third defendant had neither the power nor the authority to make any contract of insurance with the second defendant. We fail,to see how the act of a stranger like the third defendant in taking the policy, exhibit B-1, could affect the rights of the plaintiffs under exhibit A-1. In the words of Jessel M.R., we must read Clause 16 of exhibit A-1 in a sensible way and not assume that the first defendant company intended to entrap its policyholders and destroy the value of the contract of indemnity by reason of the accidental contract of somebody else like the third defendant and it is our duty to construe the instrument in a rational and reasonable manner and refuse to invoke it when there is no real case of double insurance.
22. Shri N. C. Raghavachari contended that the remedy of the first defendant is to have paid the entire amount claimed by the plaintiffs and enforced their claim for subrogation in the name of the plaintiffs against the second defendant as pointed out in Austin v. Zurich General Accident and Liability Ins. Co. Ltd.,  K.B. 250, 258 ; 15 Comp. Cas. 88 . He urged that if it is a claim for contribution even then the first defendant should have paid the amount due to the plaintiffs and then filed a suit in their own name against the second defendant. He urged that in any event the remedy of the first defendant was to have'sought leave of the court to issue notice to the second defendant as a third party under Order VIIIA, Civil Procedure Code. The case of the first defendant is based(1)  K.B. 250, ; 15 Comp. Cas. 88 on Clause 16 of the policy exhibit A-1. We have already pointed out that the said clause could be invoked only if this is a case of double insurance and in that event the first defendant could rely on Clause 16 of exhibit A-l and contend that they are not liable to pay more than the proportionate amount of the compensation. There is, however no scope for the arguments advanced by the learned advocate for the second defendant that the first defendant should sue in the name of the plaintiffs for subrogation or in their own name for contribution after paying off the plaintiffs.
23. In the result, the decree and judgment of the trial court are modified by decreeing the suit as prayed for with costs against the first defendant and dismissing the suit without costs against the second defendant. Appeal No. 776 of 1963 preferred by the second defendant is allowed with costs. Appeal No. 168 of 1964 preferred by the plaintiffs is allowed with costs against the first defendant and dismissed without costs against the second defendant.