- (1.)This is a plaintiff's appeal against a decree of reversal made by the High Court of Madras by its judgment and order dated 28.04.2006.
(2.)The facts, which are not in dispute, are as follows:-
The plaintiff is a company engaged in the manufacture and sale of metal powders and red phosphorous having its manufacturing unit and administrative office at Maravankulam, Thirumangalam, Madurai District. The plaintiff had purchased 15.06 metric tonnes of yellow phosphorous from M/s. Metallgeseliachaft AG, Frankfurt, West Germany under Invoice No. 410 64821 dated 06.06.1983 for a value of US$ 23,946 C&F. The said commodity was booked through M.V. "Palam Trader" to be delivered at Bombay Port and from the Bombay Port to the plaintiff's factory at Maravankulam. The goods were insured for a sum of Rs. 2,65,000/- under Insurance Policy dated 24.06.1983 with the Divisional Office of the defendant-insurance company at Madurai. The policy specifically included and covered amongst other risks "loss due to non-delivery of the goods at Maravankulam."

(3.)While in transit the ship caught fire on 18.10.1983. The first intimation of the mishap was communicated to the plaintiff on 05.01.1984 by Richard Hoggs International Limited, Greece who appear to be the agents of the owners of the vessel "Palm Trader". By the aforesaid intimation, the plaintiff was informed that the estimate of the cost of repairs to the ship are much higher than the ship's insured value and, therefore, the ship owners consider the vessel as a total loss and had given notice of abandonment of the ship to the underwriters. The aforesaid facts were very promptly communicated to the defendant insurance company by the plaintiff on 06.01.1984 which was followed by a claim to indemnify the plaintiff for the value of the goods insured i.e. Rs. 2,65,000/-. Thereafter, it appears that the defendant repudiated its liability on 15.07.1985 on the ground that the ship was abandoned by its owners due to bankruptcy and, therefore, the claim made by the plaintiff was covered by an exclusion clause i.e. Clause 4.6 of the Institute Cargo Clauses which formed a part of the terms and conditions of the Insurance Policy. Clause 4.6 is to the following effect:
"4.6 Loss damage or expense arising from insolvency or financial default of the owners managers charterers or operators of the vessel."