1 FA.441.91 w xobj ndm IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION FIRST APPEAL NO. 441 OF 1991 WITH CROSS OBJECTION (stamp) NO. 16344 OF 1991 The New India Assurance Company Limited. ... Appellant Versus 1. Messers Yeshwant Printing Press. 2. Arvind Dattatraya Potnis. ... Respondents ----- Mr. Kamal Khata with Mrs. N.D.Motiwala i/b Motiwala and Company for the Appellant. None appears for the Respondents. ----- CORAM : A.S.OKA, J. DATE : 02 nd August, 2011. ORAL JUDGMENT: 1 The Appellant who is the original defendant has taken an exception to the judgment and decree dated 8 th February, 1991 passed by the learned Civil Judge (Senior Division), at Nashik in a suit filed by the Respondent Nos.1 and 2. 2 Briefly stated, the case made out by the Respondents – 2 FA.441.91 w xobj plaintiffs is that they acquired machinery from M/s.Quadritek Phototype Setter and Editor Terminal (Itek) from U.S.A. for the purposes of their business. The case made out in the plaint is that M/s.C.Chunilal and Company, clearing agent, cleared the consignment from the Air India International, at Bombay Airport. Survey was carried out and it was found that one unit of machine was in a damaged condition. The case made out in paragraph No.4 of the plaint is that Appellant issued various insurance covers to the Respondent in respect of the suit consignment leading to the contract of indemnity between the Respondents and the Appellant. In paragraph No.5 of the plaint, it is contended that there was a damage to the machine in transit from Thane to Nashik. Reliance is placed on survey reports. In paragraph No.8 of the plaint, it is alleged that the Appellant on 23 rd February, 1984 and 16 th March, 1984 repudiated the claim of the Respondents. In paragraph No.12 of the plaint, it is alleged that the cause of action arose firstly on 8 th November, 1982 and 24 th February, 1983 and also on or about 16 th March, 1984. In paragraph No.13 of the 3 FA.441.91 w xobj plaint, it is stated that the letter dated 23 rd February, 1984 was received by the Respondents on 5 th March, 1984 and letter dated 16 th March, 1984 was received on 23 rd March, 1984. It is contended that the letters are the acknowledgments within the meaning of Section 18 of the Limitation Act, 1963 (hereinafter referred to as “the Limitation Act”). It is contended that 14 th to 16 th March, 1987 were Court holidays and therefore, the suit was filed on 17 th March, 1987 which is within the prescribed period of limitation. The suit was filed claiming amount of Rs.1,49,243.53. A sum of Rs.1,10,756.49 was claimed as interest. A prayer was made for grant of further interest at the rate of 18% per annum. 3 The Appellant filed written statement raising various contentions including the bar regarding limitation. The trial Court partly decreed the suit by directing the Appellant to pay a sum of Rs. 1,49,243.53 with interest at at the rate of 6% interest from the date of filing of the suit till realization. There is a cross objection filed by the Respondents as regards rejection of the claim for interest. 4 FA.441.91 w xobj 4 The learned counsel appearing for the Appellant has taken the Court through the averments made in the plaint, relevant documents and the findings recorded by the trial Court. Apart from the merits, his submission is that on plain reading of the averments made in the plaint, the suit was barred by limitation. His submission is that in the plaint itself, it is disclosed that on 8 th March, 1984, a letter dated 23 rd February, 1984 sent by the Appellant repudiating the claim of the Respondents was received by the Respondents. He submitted that the limitation started running from 8 th March, 1984. He submitted that further letter dated 16 th March, 1984 is only by way of confirmation of the earlier letter dated 24 th February, 1984 and the said subsequent letter does not extend the period of limitation. His submission is that the suit was barred by limitation and finding of the trial Court on this aspect is perverse. None appears for the Respondents. 5 I have carefully considered the submissions. Article 44 of the Limitation Act reads thus: 5 FA.441.91 w xobj “Description of suit Period of limitation Time from which period beings to run 44. (a) On a policy of insurance when the sum insured is payable after proof of the death has been given to or received by the insurers Three years The date of the death of the deceased, or where the claim on the policy is denied, either partly or wholly, the date of such denial. (b) On a policy of insurance when the sum insured is payable after proof of the loss has been given to or received by the insurers. Three years The date of the occurrence causing the loss, or where the claim on the policy is denied, either partly or wholly, the date of such denial.” The present case will be governed by clause (b) of Article 44. Therefore, the limitation is of three years from the date on which the claim on the policy is denied either wholly or partly. 6 The Respondents have relied upon the letter dated 23 rd February, 1984 sent by the Appellant which is at Exhibit – 41. In the second last paragraph of the said letter, the Appellant has clearly informed the Respondents that liability for the damages in question 6 FA.441.91 w xobj does not fall within the policy of the insurance. The letter dated 16 th March, 1984 at Exhibit – 42 specifically records that the Appellant was reiterating its stand taken vide letter dated 23 rd February, 1984. 7 In the plaint, it is asserted that the letter at Exhibit – 41 has been received by the Respondents on 8 th March, 1984. Mr. Arvind Dattatraya Potnis, the Respondent No.2 was examined as a witness by the Respondents. The witness has made a reference to Exhibit – 41 in his examination-in-chief. The witness has stated thus: “..... The defendant has informed to me on 23.2.1984, that he is not accepting my claim. That letter is at Exhibit No.41.” (underlined supplied) 8 Thus, the Respondent No.2 who was a partner of the Respondent No.1 correctly understood that by letter dated 23 rd February, 1984 at Exhibit – 41, the Appellant informed the Respondents that the Appellant is not accepting the claim of the Respondents based on the policy of insurance. In the same paragraph, the witness has reiterated that the Appellant had 7 FA.441.91 w xobj mentioned in the said letter that the Appellant was not accepting the claim of the Respondents. The suit has been filed on 17 th March, 1987. 9 The trial Court has dealt with the issue of limitation in paragraph No.7 of the judgment. The trial Court has recorded a finding that both the letters do not amount to acknowledgment. The trial Court held that starting point of the limitation will be the date of denial of the claim. The trial Court also observed that the denial has been recorded in both the letters at Exhibit – 41 and at Exhibit – 42. However, the trial Court proceeded to erroneously observe that limitation can start from 16 th March, 1984. 10 The denial referred to in clause (b) of Article 44 was communicated by the letter dated 23 rd February, 1984 at Exhibit – 41, which was admittedly received by the Respondents on 8 th March, 1984. Therefore, as per clause (b) of Article 44 of the Limitation Act, the period of limitation started running from 8 th March, 1984. The suit has been filed on 17 th March, 1987. Thus, the suit was clearly barred 8 FA.441.91 w xobj by limitation. 11 Thus, on plain reading of the averments made in the plaint and on consideration of evidence, the suit was barred by limitation and therefore, the impugned decree will have to be set aside only on the ground that the suit was barred by limitation. 12 As the claim was barred by limitation, the cross objection for enhancement cannot be considered on merits. 13 Hence, I pass the following order: i. The impugned judgment and decree dated 8 th February, 1991 is quashed and set aside on the ground that the suit was barred by limitation ; ii. Special Civil Suit No.105 of 1987 stands dismissed ; iii. The appeal is allowed accordingly ; vi. The Cross Objection (stamp) No.16344 of 1991 stands dismissed ; and 9 FA.441.91 w xobj v. There will be no order as to costs. [ A.S.OKA, J ]