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5.10 Thus, it is clear that the policy was not an all risk policy and that there has been breach or infraction of the risk covered as discussed above.

Constructive total loss/abandonment : The principle vis-a-vis the present case :

6. Subject to any express provision in the policy constructive total loss can be said to have occurred where the subject-matter insured is abandoned on account of its actual total loss appearing to be unavoidable, or because it could not be preserved from actual total loss without an expenditure, which would exceed its value when the expenditure had been incurred. Whether these conditions as to constructive total loss are or are not satisfied in each case is a question of fact. There is a constructive total loss (1) where the assured is deprived of the possession of his ship or goods by a peril insured against and (a) it is immaterial that he can recover the ship or goods, as the case may be, or (b) the cost of recovering the ship or goods, as the case may be, would exceed their value when recovered; or (2) in case of damage to a ship, where she is so damaged by peril insured against that the cost of repairing the damage would exceed the value of the ship when repaired; or (3) in case of damage to goods, where the cost of repairing the damage and forwarding the goods to their destination would exceed their value on arrival.

6.1 There are, thus, two main grounds on which a constructive loss may be founded. The assured may, by the perils insured against, be deprived of the possession. The insured property in circumstances, which make it unlikely that he can recover it within a reasonable time. For instance, it may be captured by the enemy, or by the assured's own Government, or by pirates, or a ship may be deserted by the master and crew. In the second place, although the assured may not be forcibly dispossessed of the insured property, it may be so damaged by the perils insured against that the high cost of repairing the damage or of carrying the goods to the port of destination, makes it in a commercial sense impractical to incur the cost. (Arnold, Articles 308, 834, 835, HB, Vol. 25, Edn.).

6.2 In the present case, the goods were very much in existence. Therefore, it could not be said in June/July, 1988 that the goods were actually lost. The constructive loss by way of abandonment can be proved only if the insured is able to establish that it was not possible to retrieve the goods or that the cost would have exceeded the value of the goods or would not have been commercially viable. It is apparent that the goods were not arrested, it was the ship that was arrested, The ship was arrested at a port other than the destination on account of its unseaworthiness, a peril, which is excluded from the insurance coverage under the policy. There was nothing to point out that the insured had ever attempt to retrieve the goods or the insured/plaintiff had been able to establish through certain proof that the cost of reshipment would have exceeded the value or was commercially unviable. On the other hand it had intended the insurer to bear the cost of reshipment that the insurer declined. There is nothing to show that the plaintiff had taken any step to reship or that the cost would have been unviable.

9.6 The facts disclosed in this case evidently establishes that the vessel was unseaworthy and as such was not allowed to complete the voyage, a circumstance which excludes the liability of the insurer and the right of the insured to sustain the claim.

Conclusion :

10. For all these reasons, we are of the view (1) that because of the fact of denial by the insurer by its letter dated 8th July, 1988 (Ext. 5) coupled with the termination of the policy and its non-extension after the Cargo Safety Construction Certificate and Load Line Certificate expired on 15th July, 1988 and on account of plaintiff's failure to discharge its obligation either to obtain re-shipment of the goods soon thereafter and the failure to take a decision to sell the goods locally immediately and filing of the suit after 7th August, 1992 clearly indicates that the claim of the plaintiff was barred by limitation and the suit ought to have been dismissed; (2) the plaintiff has not been able to prove that he had taken all steps to avoid the delay; (3) the policy was not an all risk policy but was circumscribed and restricted by reasons of the Institute Cargo Clause (c) containing the restrictive clauses enumerated in paragraph 5 hereinbefore; (4) the plaintiff has not been able to establish its claim by discharging the burden lay upon it to sustain the claim on merit and that the goods were not lost when the claim was lodged; (5) the plaintiff has not been able to prove constructive loss by reason of abandonment; (6) that by reason of Sections 20 and 32 of the Evidence Act, it was proved that the goods were still in existence and were in good condition; and (7) that the loss cannot be ascribed to any peril insured as discussed hereinbefore.