Prabha Sridevan, J.
1. The appellant-Insurance Company raises two questions. One is the question of limitation and the other is the question of liability. Two clauses in the Insurance Policy, Ex-B1 are relevant to decide this case. For deciding the question of limitation one looks at the third paragraph of Clause 9:
'It is also hereby further expressly agreed and declared that if the Company shall disclaim liability to the insured for any claim hereunder and such claim shall not, within 12 Calendar months from the date of such disclaimer have been made the subject matter of a suit in Court of law, then the claim shall for all purposes be deemed to have been abandoned and shall not thereafter be recoverable hereunder.'
2. For deciding the question of liability. Coverage (A) is relevant.
'Fire and Allied Perils and Theft(buildings and contents) Insurance: If (1) any of the property described under Coverage 'A' in the Schedule hereto belonging to the insured whilst or held in trust on the premises shall be lost or damaged by (a) Fire, theft or any attempt thereat following upon or occasioned by an actual forcible and violent entry of premises by the person/s committing such theft. or ... '
3. Liability for loss on account of theft:
(a) What happened in this case was a customer came to the respondent's jewellery shop and she asked the respondent's employee to show some ornament. She asked him to show some more samples, when he turned around, she picked up one of the pieces and walked away. Immediately an alarm was raised and doors were closed. Everyone was examined and a police complaint was also lodged. But the jewellery was not found and therefore, the claim was made for the loss on account of theft.
(b) After lodging FIR and the written complaint, the respondent filed a claim to the defendant-company on 06-03-1984. On 17-04-1984, the respondent received a letter from the Divisional Manager of the appellant, Tiruchy repudiating his claim stating that this amount cannot be granted as the policy did not cover the contingency when a gold ornament was stolen when the shop was open during sales. The communication stated that the coverage prescribes insurance cover only when the ornaments are lost by theft by forcible or through violent entry in the premises by the person who commits theft. Since this is not present in this case, the Insurance Company is not liable.
4. Mr. K. Padmanabhan, learned counsel for the appellants submitted that the policy clearly says that theft must be accompanied by violent and forcible entry and if not the policy would not cover the loss.
5. The learned counsel for the respondent, Mr. S. Thiruvenkatasamy submitted that the word 'theft' in this clause cannot be read as though it is qualified by the subsequent phrase namely a forcible or violent entry. The meaning for 'theft' should be that which is given in IPC and if so the loss occasioned to the respondent shall be indemnified by the appellant.
6. The learned counsel for the appellant relied on M/s. National Insurance Company Limited v. M/s. Baland Industries (MDS) 2001 1 CTC 464 and an English case King's Bench Court of Appeal reported in 1920 2 KB 366 (In re An Arbitration between Calf and the Sun Insurance Office).
7. In the English case, the policy of insurance covered loss of articles when they were stolen by theft following upon an actual forcible and violent entry of the person or persons committing such theft and the thief had gone up to stairs to the shop which he entered by violently breaking open the door, leading into the shop and having been taken more goods left the shop through the front door. The Insurance Company denied the liability on the ground that there had been no actual forcible and violent entry. It was held by the Court of appeal that the premises referred to in the policy meant the premises namely the shop the trimming room and fitting room and that the thief having made an actual forcible and violent entry into the shop and removed the goods the Company was liable. Even if the premises included the whole house as there was an actual forcible and violent entry into the room and the premises, there was an actual forcible and violent entry of the premises within the meaning of the policy and therefore, the insurance company was liable.
8. The other judgment that was relied on is M/s. National Insurance Company Limited v. M/s. Baland Industries (MDS) 2001 1 CTC 464. The clause used in the policy in that case was theft following upon burglary and house breaking accompanied by the actual forcible and violent breaking into or out of the premises and the learned Judge held for making the circumstance of actual forcible and violent breaking to accompany both burglary and house breaking, there ought to have been a 'comma' after the house breaking. There is no comma in that case and hence it must be read as theft following upon burglary or theft following upon house breaking accompanied by the actual forcible and violent breaking into or out of the premises. The learned Judge referred to Dino Services Ltd. v. Prudential Assurance Co. Ltd., 1989 1 All ER 422 where the thieves entered the premises by simply using the keys in the normal way to unlock various doors, without causing any physical damage to the locks or to the doors. The question arose whether this involve entry to the premises by forcible and violent means and it was held that in the context of such a policy the word 'violent' accordingly referred to the physical character of the means of entry and not merely to its unlawful character. It followed that the thief by getting entry to the premises simply by using proper keys to unlock the doors of the premises had not entered into the premises by violent means. So the Insurance Company was not held to be liable.
9. In 2001 CTC 464 (cited supra) the theft was committed by removing the poles of a triangular frame guard and it was nothing but actual forcible and violent breaking in the premises and in those circumstances held that the insurance company was liable.
10. In this case the thief had entered the premises during business hours and the entry was neither forcible nor violent. Now the clause clearly says that the insurance policy would be held liable if there was loss or damage by fire, theft or 'any attempt thereat' following upon or occasioned by an actual forcible and violent entry by a person committing such theft. Now it can only be read as 'theft' following upon or occasioned by an actual forcible and violent entry or any attempt thereat following upon or occasioned by an actual forcible and violent entry of premises. The next clause makes it clearer
'... any damage falling to be borne by the insured shall be caused to the Premises by theft following actual forcible and violent entry or any attempt thereat.'
11. Therefore, to read the former clause as separately as though the Insurance Company agreed to cover the loss caused by the theft regardless of whether it was followed by actual forcible and violent entry would not be the correct construction, one must read both clause (1) and (2) together harmoniously to understand the contract between the parties. Therefore, the insurance company cannot be held liable for the loss sustained by the respondent on account of theft not specified in the Coverage 'A'.
12.Limitation: In National Insurance Co. Ltd. Vs . Sujir Ganesh Nayak & Co. the claim was made in respect of 'loss due to riot and strike' endorsement in the policy. The Supreme Court held as follows:
'Contract Act(9 of 1872), S. 28 Contract nsurance Clause in policy providing shorter period than prescribed by law for filing of claim from occurrence Contract covering losses due to riot and strike Insured informing insurer about strike He, however, filing suit for damages after expiry of stipulated period Clause does not curtail limitation Not hit by S. 28 Suit is time barred.'
Therefore, while curtailment of the period of limitation is hit by S. 28 of the Contract Act extinction of the right itself on the ground of failure to exercise within the time agreed upon was held to be permissible and to fall outside the scope of S. 28 of the Contract Act.
13. In this case also the contract stipulated that failure to make the claim a subject matter of suit in a Court of law within twelve months will result in extinguishment of right, the claim shall be deemed to have been abandoned. In fact an identical condition in an Oriental Insurance Company Policy came to be decided by a Division Bench of this Court in The Oriental Insurance Company Limited v. Karur Vysya Bank Limited 2001 2 MLJ 536. There Clause 19 was as follows:
'No.19. In no case whatsoever shall the company be liable for any loss or damage after the expiration of 12 months from the happening of the loss or damage unless the claim is the subject of pending action 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.'
14. It will be seen from the above that it is almost identical to Clause 9 extracted supra. The Division Bench considered whether such a condition was void and also whether the amended S. 28 of the Contract Act would apply whereunder extinction of right unless exercised within a specified period of time if not beyond the period of limitation has also been rendered void and curtailment of limitation period has been made impermissible. The Division Bench held that in the absence of any specific reference in the amended provision of the Indian Contract Act 1977, it is presumed to be prospective and since the Act came into effect on 18-12-1997 it would apply prospectively and also that the above Clause 19 of the policy was valid and acceptable.
15. The same ratio applies to the present case, since the clause does not curtail the limitation period but only extinguishes the right of the insured in the event of the claimant not filing a suit within twelve months from the date of repudiation of his claim.
16. In the case reported in The Vulcan Insurance Co., Ltd., Vs . Maharaj Singh , the Supreme Court held that a Clause, which absolves the insurance company of its liability for any loss or damage after the expiration of 12 months from the happening of the loss or damage unless the claim is the subject of arbitration was not hit by S. 28 of the Contract Act and was valid.
17. In view of the categoric pronouncements referred to above, it has to be held that since the respondent had not filed the suit within 12 months from the date on which his claim was repudiated, his rights under the policy stood extinguished and therefore, the suit is not maintainable and the Insurance Company is not liable. So on both the grounds the appellant succeeds.
18. For these reasons, the judgment and decree of the trial court is set aside. The appeal is allowed. No costs.