1. The plaintiff in this suit claims to recover the sum of Rupees 20,000 together with interest and costs under a policy of insurance against loss by fire being No. 1260486 issued by the defendant company on 26th November 1927 in respect of building No. 57, Abbotabad Cantonment, which was destroyed on 20th November 1928. The policy, as stated, was issued on 26th November 1927 and insured the plaintiff in the sum of Rs. 20,000 against fire in respect of the building owned by him at Abbotabad for one year from 3rd November 1927 to 3rd November 1928, upon which date the policy is stated to be renewable. On 20th November 1928 the premises insured were completely destroyed by fire, but on the 18th the plaintiff had posted to the defendant company a cheque for Rs. 85 on account of the renewal premium. Actually the amount of the renewal premium was Rs. 100, but he was allowed a discount amounting to Rs. 15 by reason of which the company, on receipt of the cheque on 26th November 1928, sent him two receipts, one for Rs. 85 and another for Rs. 100 formally renewing the policy. At that time the company had no knowledge of the fire, and a letter informing them as to the fire was despatched on 22nd and received on 28th November. This appears from a letter written by the company bearing the latter date in which they confirmed as follows a telegram sent to the plaintiff on the same day:
Renewal receipt No. 88 under policy No. 1260486 for Rs. 20,000 covering 57 cantonment hereby withdrawn and cancelled stop premium of Rs. 85 being returned to you stop our letter of 26th November and enclosures are also hereby withdrawn and cancelled stop letter follows.
2. Summarizing the position the insured sent his cheque in renewal of the policy before the fire; the company formally renewed the policy in ignorance of the fire; subsequently on learning of the fire they purported to withdraw and cancel the renewal receipt. For the present purpose it is not suggested that the plaintiff ought to have informed the company of the fire before the company could post the renewal receipt, nor for the present purpose has it been suggested that everything was otherwise than perfectly bona fide. I say 'for the present purpose' because though three issues were submitted and accepted I have been invited by learned Counsel on both sides first to try issue las it may determine the whole suit. The issues are as follows: (1) Was the policy in force on 20th November by reason of the payment and acceptance of the renewal premium on 26th November (2) Was the renewal of the policy, if any, procured by fraudulent concealment of the fact of the destruction of the risk by the plaintiff (3) Did the plaintiff commit any breach of condition of the policy as alleged in para. 6 of the written statement. At the hearing Mr. Banerjee for the company stated in relation to issue 3 that he would confine himself to the particulars given in paras. 6(i), 6(ii) b, 6(iii) and 6(v) of the written statement. Before considering the question to be determined I should state that neither side wished to call any oral evidence nor has the evidence taken on commission been referred to and I gave every opportunity to tender any documentary evidence which it was desired to use. I have been informed that all material documentary evidence has been exhibited and it consists exclusively of the very few documents to which I shall have to refer. I further wish to draw attention to the letter of 28th November 1928 from the company to the plaintiff which says:
As the fire is stated to have taken place on the 20th instant we are not liable as we had clearly intimated to you in our letter of the 14th idem that we would not cover the risk until we receive your further instructions which did not reach us until the 26th instant.
3. On my drawing Mr. Banerjee's attention to this passage, he said that nothing turned upon it, and he did not desire to go into any question which that paragraph might be considered to have foreshadowed. The contention advanced on behalf of the plaintiff which purports to be expressed in issue 1 and to which no objection has been taken, even if the point has not been expressly pleaded, is that actually there was no renewal; that the word 'renewal' is really misused in the policies, that under the policy itself the plaintiff was continuously insured until and by reason of the renewal. This is based upon the clause of the policy which runs as follows:
The company hereby agrees with the insured (but subject to the conditions printed on the back of this policy, and to any other conditions thereon otherwise expressed) that if, after payment of the premium, the property above-described or any part thereof, shall be destroyed or damaged by fire or lightning at any time between 3rd November 1927 and 4 o'clock in the afternoon of 3rd November 1928, or during any subsequent period for which the insured shall pay to the company, and the company shall accept the sum required for the renewal of this policy, the company will pay or make good all such loss or damage etc.
4. It is submitted that though the policy might lapse, and indeed would have lapsed and come to an end on 3rd November 1928, if either the insured had declined to renew or the company had refused to accept his premium nevertheless it continued to have effect until the matter of the renewal was determined one way or another and that, in that view the policy was for a year or a 'subsequent period.' If that is the correct construction of the document it is contended that the plaintiff was insured at the time of the fire, and that it was not open to the defendant company, on learning of the fire after the policy had been renewed, to withdraw and to return the premium. On the other side it has been argued for the company that the policy was for one year, but that it could be revived upon payment and acceptance of the renewal premium which must be taken to be subject to the continued existence of the subject-matter of the policy, and that the company was entitled to withdraw and cancel the renewal, the property having been destroyed before it received the premium and issued the receipt. I have been referred to passages in several text-books including Lord Halsbury's Laws of England, 'Vol. 17, 526, in which the learned author sets out the following passage:
When the policy provides that there shall be no insurance until the renewal premium has been accepted by the insurance office, and a loss accrues during the 15 days and before payment of the premium it seems that in the absence of any condition so framed as to show a contrary intention, the insured is not entitled to recover.
5. The policy with which this suit is concerned does not provide totis in 'verbis' that there shall be no insurance until the renewal premium has been accepted by the insurance office as Mr. Pugh has been careful to point out, for such a provision would cut the ground from beneath his feet. But it is a matter for consideration whether the terms of this policy do not come to the same thing in that, the word 'or' being used disjunctively, the clause contemplates not a continuing period indefinite in length, but two periods of which the first ends on 3rd November 1928 after which the next period begins during which the policy holder will not be insured until the renewal premium has been paid and accepted. Two cases are referred to under the passage quoted and indeed a considerable number are cited in the text-books quoted. I have invited learned Counsel for the company to cite the authorities themselves, but he has assured me that after having read them all, none would furnish any assistance except one to which I shall refer presently. I am also referred to a well-known authority on the law of fire insurance (Bunyan's Law of Fire Insurance 6th Edn., 241) where the following occurs:
If the premium is not paid within 15 days and the fire occurs, the acceptance of the premium by the office in ignorance of the disaster will not revive the policy. If neither party were aware of the fire unless there was express agreement that the insurance should date back by the insertion of some words equivalent to 'lost' or 'not lost,' it would be open to the office to contend that the acceptance of the premium being for the renewal of the insurance assumed that the subject-matter of the insurance continued to exist.
6. Passages have also been read from a recent edition of the well-known book on fire insurance by Welford and Otter Barry, 3rd Edn., 181, where among others occurs the following:
The effect of the revival is not to continue the contract formerly existing, but to establish an entirely new one. If therefore a loss has already happened without the knowledge either of the insured or the insurers the revived policy will not, even if ante-dated to the date at which the former policy expired, be treated as applying: to such loss unless it is clearly the intention of the parties that it shall do so.
7. I observe that earlier the learned author discusses two opposite views expressed as to the renewal 'of a policy, whether it is a fresh contract or whether it is a continuing contract relating back to the original policy, and not a fresh one, and writes that the view as to the renewal of a fire policy being a fresh contract appears to be correct, and if this is so it should dispose of Mr. Pugh's point, but obviously the terms of the policy should be considered in each case. I will now consider Pritchard v. Merchants and Tradesmen Mutual Life Insurance Society (1858) 27 LJC P 169, the only authority cited in the course of the argument and one to which constant reference is to be found in the text-books. That was a Life Insurance case and by the policy the premium had to be paid on or before the 13th October in every year during the life insured. It was provided that, the policy should be void if the premium was not paid within 30 days after it became due, but it might be revived within, three calendar months on satisfactory proof of the health of the insured. It appears that the person whose life was insured died on 12th November 1855, and on 15th November 1855, that is, more than 30 days from the due date for payment of the premium, but within three months the annual premium was paid and the company gave a renewal receipt, neither the plaintiff nor the defendant being aware of the fact that the person insured was already dead. The question was whether in such circumstances the sum assured was recoverable from the insurance company. The learned Judges all agreed that the plaintiff was not entitled to recover. Williams, J., observed that the payment was void and ineffectual as it was made and received on the implied understanding on both sides that the insured was then alive. Crowder, J., said that the premium was accepted under mistake, and the transaction was altogether void. It is contended that the case is materially different because the policy was to be void if the premiums were not paid by the due date though it could be revived within a certain period, whereas in this particular case the policy continued to be operative. That appears to me to beg the question. If this policy does run on as Mr. Pugh expressed it, then the matter is not open to further argument, but it appears to me the more correct to say that the renewal of a policy is a fresh contract dating back to the date of the expiry of the original contract. Pitchard v. Merchants Insurance Society (1858) 27 L J C P 169 is not on all fours with the case, but it appears to me that there are principles underlying it which make it applicable. The passage which makes most appeal to me is that to be found at the conclusion of the judgment of Crowder, J., where he observes that:
the common sense of the matter is entirely in favour of the defendant. They accepted the premium under a mistake, and the transaction is altogether void.
8. There is no question in this case of mistake in the technical sense, but the common sense of the matter must be that the company would not have accepted the premium had they known that the loss had already occurred. They would have been entitled to decline it in any case, and can it therefore be said that having accepted it in ignorance of the fire they are bound by the terms of the policy to pay on a loss which had already occurred when they accepted it I find it impossible to accept this view on any reasonable basis and, for the reasons stated, it appears to me that the contention of the defendant company is correct and that the suit must be dismissed with costs.
9. This is an appeal from the judgment and decree of my learned brother Buckland, J., who dismissed the suit of the plaintiff whereby he claimed Rs. 20,000 upon an Insurance Policy issued by the defendant company against risk of fire in respect of certain premises of plaintiff No. 57 Abbotabad Cantonment in the North-western Provinces. The policy was originally issued on 3rd November 1927. The number of the particular policy with which we are concerned is. 1260486. We have been referred to the terms of the policy which for the present purposes are as follows:
The company hereby agrees with the insured that if, after payment of the premium, the property above described, shall be destroyed or damaged by fire or lightning at any time between 3rd November 1927 and & o'clock in the afternoon of 3rd November 1928 or during any subsequent period for which the insured shall pay to the company, and the company shall accept the sum required for the renewal of the policy, the company will pay or make good all such loss or damage.
10. The policy extends, to begin with, till 4 o'clock on 3rd November 1928 and unless something had been done by that time, the effect of the policy had been expended. On 27th October accordingly, some time before 3rd November the company issued a reminder asking for its premium. There was correspondence upon the question whether or not on this and certain other policies the plaintiff could get 15 per cent commission. The company was minded to allow 15 per cent commission. By its letter of the 31st October it wrote to the plaintiff asking him to send a remittance for the renewal premium less 15 per cent discount when the necessary renewal receipt would be issued. The company pointed out to the plaintiff that as the policy had already expired they had wired him accepting his terms as to discount. On 8th November the plaintiff sent a cheque for premiums on two other policies and asked the company to renew them. With reference to the policy now in question they said:
as regards the renewal of the policy No. 1260486 for Rs. 20,000, we beg to say that we will get it renewed during next month.
11. On the 14th November the company wrote to the plaintiff to say:
you state in the last paragraph of your letter that you wish to renew the policy some time next month, i.e. December. In this connexion I have to inform you that the policy in question has already expired on the 3rd instant and you are therefore not covered in the meantime. Should you desire to take out a fresh policy at any later date, please let us know when we shall hold the risk covered.
12. It is reasonably clear therefore that until the company received the request and had an opportunity to decide upon the matter, the plaintiff was not covered at all. On the 18th November the plaintiff sent a cheque for Rs. 85 in payment of the renewal premium for the above policy and he said: kindly send us the renewal receipt and oblige.' It was quite open to the plaintiff, particularly in view of the language of the company's letter of the 14th November to write to the company to say:
we want some sort of credit for the time since the 3rd November until the time when you receive this letter because we never pay money for nothing,
and I daresay that had they so done the company would have been equally pleased to give them either a new policy altogether dating from the date of the receipt of the plaintiff's letter or would have been equally pleased to extend the period for a corresponding number of days in November 1929. The plaintiff asked for nothing of the sort. He knew that until his letter reached the company he would not be covered. He did not think it necessary, apparently, to haggle about the short period during which, as he knew, he was not being covered. He did not make any particular stipulation for any concession of that kind. It may be that such a matter was not worth troubling about. The letter having been sent with the premium on 18th November, a fire occurred on the 20th. The plaintiff's letter was not received in Calcutta at the branch to which it was addressed until the 26th. It is quite true that the plaintiff had in the meantime, namely on the 22nd, written to the company to say that a fire had occurred, and making a claim. What would have happened if he had telegraphed to the company to say that a fire had occurred we may imagine for ourselves; but he sent a letter which did not arrive in Calcutta until the 28th. The company immediately repudiated their liability and withdrew their acceptance of the premium. The question is whether in these circumstances when this fire occurred on 20th November 1928 the plaintiff was or was not covered. It is not contended that mere posting of the letter of 18th November effected an insurance in itself. It is not contended that the company on 26th November, when they accepted the policy, had any knowledge of the fire; but it is said that as a matter of construction of the clause which I have read from the policy, the company when it accepted the premium in ignorance of the fire on 26th November entered into a contract to the effect that if between the 3rd November and the 27th a fire had occurred, they would indemnify the plaintiff in respect thereof. Mr. Pugh has put this contention in two ways-in one way, as a matter of construction of the contract; and in view of the terms of the renewal of the receipt-he says that the plaintiff with retrospective effect became on 26th November covered as from the 3rd. Another way he puts it is that the plaintiff at least became covered from the date when he despatched the money, namely, the 18th November.
13. In my judgment both the contentions are equally unfounded. It is not usual when stipulating for fire insurance to stipulate with reference to the past. The risk to be guarded against is a risk in the future. The language of this policy is plain and intelligible enough if that primary condition be considered. Speaking of the future it is sensible enough to say that the plaintiff will be covered during the year or during any subsequent period for which he should pay the premium to the company and the company accepts it. The idea is that the ordinary course of business will be that the insurance for the year will be fixed up before that year begins. The language of the policy which is not a matter for any wonder is adapted to the ordinary condition. We are to consider whether it is the intention of this language to put a case in which the company is accepting the insurance premium in respect of a fire taking place in a house on the footing that the fire may or may not have taken place and that if it has taken place the company is going to pay for the damage. If that is so we will have found something unusual in the way of fire insurance contracts. I see in the clause no foundation for an argument that such an unusual contract is contemplated by the clause.
14. Mr. Pugh argues that if the defendant company can say that they are not liable for any risk that eventuated before the 26th, then they have taken some of his money for nothing; that they have no business to take his money for the period between the 3rd and the 26th and that for this reason we must hold that when the insurance company accepts the renewal policy out of time it takes the risk of an accident having happened in the meantime unknown to itself. In my judgment the position is very clear. The plaintiff might well have stipulated for a reduction in his premium of a few rupees or he might quite well have stipulated that the year should be reckoned to run from the 26th. He did nothing of the sort. He asked for the policy to be renewed. He did not in any way put himself to the trouble of taking care that he lost no sum of money however trivial. That does not mean that the company when it accepted the premium on the 26th had undertaken to insure a building which might or might not have been consumed by fire at the time. It appears to me that the judgment of the learned Judge has very fully and carefully examined the relevant principles and that the learned Judge has arrived at a conclusion which is entirely correct. The appeal fails and must be dismissed with costs.
C.C. Ghose, J.
15. I agree.