Deterioration of Stock Policy (DOS Policy)

of Stock Policy (DOS Policy)


Whether the Word ‘action’ in clause 8(b) means
only suit

Held: We
hold that the words ‘action or suit’ in clause 8(b) of the policy being
different words and used in the same clause it is to be presumed that they
carry different meaning. If the expression ‘action’ is construed as meaning
‘suit’ only the expression ‘action’ becomes redundant. The meaning has to be
construed strictly keeping in mind that the terms of the policy is drawn up by
the insurer and the interest of the insured depands on the interpretation of
the terms. The expression ‘action’ in the circumstances means and includes
legal notice and not suit. The insured has taken action by making his claim
through legal notice. We therefore do not agree with the High Court Division
that the word ‘action’ in clause 8(b) means only ‘suit’.

Chaina Marine Products Ltd. Vs. Bangladesh
General Insurance Co. Ltd. 10 BLT (AD) 81