D.K.SETH, J. - (1.) The Questions & the Facts : The question to be answered in this case is as to the invocability of the risk/peril clause of the Insurance Policy covering the goods in transition. In order to answer the question, it is necessary to refer to the facts in brief. "Plaintiff/respondent sought to recover a sum of Rs. 49,48,407/- on the strength of a policy of insurance issued by the defendant containing Institute Cargo Clause (C). The plaintiff claimed that the goods were insured for safe arrival at Calcutta. But the goods did never arrive at Calcutta. The goods were lost by non delivery and the peril insured against. Alternatively, it was contended that the goods were reasonably abandoned since unavoidable, inasmuch as it could not be retrieved without incurring excessive and unreasonable expenditure exceeding the value of the goods. This resulted in constructive total loss due to peril/risk insured. The notice of abandonment was given to the defendant through a letter dated 11th August, 1988. Subsequent thereto, the plaintiff instituted a suit in Singapore. The suit ultimately resulted in sale of the goods and payment into Court. After taking into account of the monies received a sum of Rs. 48,76.729.41p. became payable ." "The defendant disputed the claim on two grounds viz.: (1) the goods were never lost and in fact they were very much in existence at the material point of time and consequently there was no question of loss of the said goods; (2) the concerned policy was Institute Cargo Clause (C) restricting the policy to be construed in contrast with Institute Cargo Clause (A). Apart from the main two points, the appellants had also raised (3) a question of limitation; (4) as well as a question with regard to the payment for the transaction which was not proved and due to which an adverse inference ought to have been drawn on account of non production of the books of accounts; and (5) that the Warehouse-to-Warehouse clause does not mean an absolute indemnity, it only denotes duration, it does not enhance the heads of risk." "The learned single Judge had decreed the suit, against which the present appeal has been filed by the defendant/appellant." Both the learned counsel had made their respective submissions in respect of their contentions days together and referred to various decisions cited at the bar, to which we shall be referring at appropriate stage as would be necessary." Limitation:
(2.) In view of Section 3 of the Limitation Act, it is the duty of the Court to examine as to whether the claim is barred by limitation even if it is not raised. The suit was filed on or after 7th August, 1992. The limitation would run from the date of occurrence causing the loss, or the date of denial of the claim partly or wholly (Art. 44(b), 1st Division, Part II of the Schedule of the Limitation Act). A suit filed three years after the date of such repudiation or denial of the claim would be barred by limitation after the expiry of the prescribed period as defined in Section 2(i) of the Limitation Act unless it is shown that the period of limitation stood extended in terms of the provisions contained in Part III of the Limitation Act. It is apparent that the first claim was lodged by the plaintiff through its letter dated 21st/29th April, 1988 (Exhibit "K"), followed by a formal claim, 24th June, 1988 (Exhibit 3). This claim was repudiated/denied by the defendant /appellant by its letter dated 8th July, 1988 (Exhibit 5). Our attention was drawn to the subsequent correspondence between the parties. But this correspondence does not establish extension of period of time. In Bank of America National Trust and Savings Association v. Chrimas (Kyrlaki), 1993 (1) Lloyd's Law Reports 137 at p 151, relied upon by the learned counsel for the appellant, it was held that the cause of action arises at the date of the causalty unless three are conditions displacing the general principles. In this case, we do not find any condition displacing the general principle. 1. It has also been pointed out that though the suit could have been filed both at Calcutta and at Kualalampur/Singapore, but no suit was filed at Calcutta and that no explanation has been offered for non filing of the suit at Calcutta . The evidence of Sri Pilial in question Nos. 459 to 469 had admitted that under the Sue and Labour Clause, the insured had general obligation under the policy of Insurance. The plaintiff was required to take steps against the Charterer -cum-Seller and that the plaintiff could have filed a suit abroad and also at Calcutta. It did neither. 2. From the questions during examination of Sri Piliai being Question Nos. 112- 132, 365, 366 and chief 60, Sri Piliai stated that the Reserve Bank of India did not sanction foreign exchange on their application. Therefore, it was not possible for the plaintiff to file the suit abroad. 3. It is contended on behalf of the appellant that this part of the evidence cannot be accepted since no copy of the application has been disclosed. The alleged refusal of the Reserve Bank of India has also not been established. It is also significant that no enclosure of Exhibit 'H' being letter dated 12th July, 1988 was tendered in evidence. At the same time, the plaintiff filed a suit in Singapore but the plaintiff did not disclose the plaint thereof. These proceedings however, were taken much later in 1989 though the material time was June/July, 1988. As such these steps though taken are of no relevance. 4. The learned counsel for the respondent pointed out that the series of correspondence itself show that the matter was not finally determined and in the facts and circumstances of the case it cannot be said that the suit was barred by limitation. 5. From the facts disclosed, it appears that the claim was denied/refused on 8th July, 1988 finally. Subsequently, at the request of the plaintiff, the defendant had undertaken to help in ascertaining the situation through its office abroad (Exts. 12, 13, 14). It may be noted that the subsequent correspondences by the defendant were marked 'without prejudice.' Even then these letters were issued in January and February, 1989, whereas the suit was filed on or after 7th August, 1992. The letter in Ext. 'R' also is not an admission. The reiteration of the earlier stand on re-examination of the case does not amount to extension of period of limitation. The letter dated 17th January, 1989, Exhibit 12, was marked "without prejudice." This exhibit shows that the defendant had extended its good gesture to inform the plaintiff that the goods were not lost and could be recovered. Whereas, Exhibit 13 addressed by the plaintiff indicates that the plaintiff had taken steps for arranging re-shipment. In Exhibit 14 marked "without prejudice" addressed by the defendant the liability to bear the expenses for re-shipment was denied, whereas Exhibit 15 shows that the vessel was still under arrest and lying at Hong Kong. These exhibits reiterated the stand taken in the letter dated 1st of April, 1991 (Judges Brief, Serial No. xxvii). Reiteration of this earlier letter repeated the stand taken in Exhibit 5. None of these exhibits can be construed to attract the effect of Part HI of the Limitation Act extending the period of limitation. The conduct of the defendant/appellant in this regard clearly indicates that in order to help tracing out the situation, the defendant had extended its good office and that too without prejudice. Such a gesture does not seem to extend the period of limitation by admission or otherwise when on the face of Exhibit 5 (8th July, 1988) the defendant had already declined/denied its liability. No material is on record, neither our attention was drawn to any such record which would attract the principles provided in Part III of the Limitation Act for the purpose of extension of the period of limitation. In the absence of any such extension, unless the suit was filed within three years from July, 1988, the suit was hopelessly barred by limitation and was liable to be dismissed. 6. Moreso on account of the reasons enumerated in paragraph 5.7 hereafter viz. that under Cl. 9 of the policy the contract of carriage stood terminated on account of the unseaworthiness of the ship at port other than its destination, due to which the insurance policy stood automatically terminated. In the absence of any request by the plaintiff for extension of the cover contemplated in Cl. 9, the insurance could not be extended to cover the goods after June/July, 1988. The insurance coverage ceased and the goods were without any insurance cover after June/July, 1988. 7. In the present case, it appears that the suit was instituted on or after 7th August, 1992 beyond the period of limitation viz. three years from 8th July, 1988 which expired on 7th July, 1991 and as such the suit was barred by limitation. On merit :
(3.) Though we have held that the suit was barred by limitation, yet we propose to decide the question on the merit as well, since both the counsel had elaborately argued on the merit. Whether the claim is established :;