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