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TMI Blog2009 (8) TMI 1232X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) of policy whereunder the respondent was barred from raising any claim under the policy after expiry of 12 months from the date of payment of claims on merits. 3. The brief facts relevant for purpose of deciding these objections are that a fire took place at the factory of the respondent on 13th April, 2001. The building, machinery and stock of the respondent were insured with the petitioner. The petitioner was informed about this fire and the loss suffered by the respondent on 14th April, 2001. The petitioner sent its surveyor and assessor, who visited the premises on 16th April, 2001. The surveyor of the petitioner against the revised claim of ₹ 1,21,78,020/- raised by the claimant/respondent assessed the loss and approved the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. The respondent singed a full and final settlement under a disbursement voucher on 5th March, 2002. After receiving this full and final settlement in January, 2002, the respondent/claimant sent a notice to the petitioner on 23 rd April, 2004, i.e., after more than 2 years, raising a dispute that the claim of the respondent was settled at a very less amount and that he was coerced to sign the full and final settlement at the time of releasing the payments; first in September, 2001 and then in January, 2002. He also alleged that consent for full and final settlement was given by him under economic coercion. He raised a further claim of ₹ 51.96 lakh and invoked arbitration clause and appointed from his side an Arbitrator. The petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion or arbitration; it being expressly agreed and declared that if the Company shall disclaim liability for any claim hereunder and such claim shall not within 12 calendar months from the date of the disclaimer have been made the subject matter of a suit in a court of law then the claim shall for all purposes be deemed to have been abandoned and shall not thereafter be recoverable hereunder. 7. Counsel for the respondent submitted that the period of 12 months as laid down in the policy was contrary to the law of limitation and this clause of the policy would fall within the mischief of Section 28 of the Contract Act and was therefore void. 8. The issue raised by the petitioner regarding clause 6(b)(ii) and the plea taken by the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned under Section 28 of the Contract Act, as originally placed. We have, accordingly, chosen to deal with this matter under that provision. xxxxx xxxxx xxxxx xxxxx 13. In Sujir Ganesh Nayak case to which primary reference has been made by the learned counsel for the parties, while dealing with an identical situation where a contract contained a provision prescribing a period of limitation shorter than that prescribed by the Limitation Act, it was held that the contractual provisions was not hit by Section 28 as the right itself had been extinguished. 14. Mr. Sharma has, however, submitted that in view of the observations in some paragraphs in Food Corpn. Of India case, the observations in Sujir Ganesh Nayak case were liable to reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the forfeiture or waiver of the right itself if no action is commenced within the period stipulated by the agreement. Such a clause in the agreement would not fall within the mischief of Section 28 of the Contract Act. To put it differently, curtailment of the period of limitation is not permissible in view of Section 28 but extinction of the right itself unless exercised within a specified time is permissible and can be enforced. If the policy of insurance provides that if a claim is made and rejected and no action is commenced within the time stated in the policy, the benefits flowing from the policy shall stand extinguished and any subsequent action would be time-barred. Such a clause would fall outside the scope of Section 28 of the Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no case would the insurer be liable for any loss or damage after the expiration of twelve months from the happening of loss or damage unless the claim is subject of any pending action or arbitration. Here the claim was not subject to any action or arbitration proceedings. The clause says that if the claim is not pressed within twelve months from the happening of any loss or damage, the Insurance Company shall cease to be liable. There is no dispute that no claim was made nor was any arbitration proceeding pending during the said period of twelve months. The clause therefore has the effect of extinguishing the right itself and consequently the liability also. Notice the facts of the present case. The Insurance Company was informed about the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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