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In Pushpalaya Printers, this Court held:

"Where the words of a document are ambiguous, they shall be construed against the party who prepared the document. This rule applies to contracts of insurance and clause 5 of the insurance policy even after reading the entire policy in the present case should be construed against the insurer"

Section 60 of the Marine Insurance Act defines 'constructive total loss' in the following terms:

"60. Constructive total loss defined.--

(1) Subject to any express provision in the policy, there is a constructive total loss where the subject-

occurring in Section 64 of the Act.'"

[See also M/s. Pandey & Co. Builders Pvt. Ltd v. State of Bihar & Anr. 2006 (11) SCALE 665] Interpretation of 'constructive loss' contained in Section 60 is subject to any express provision in the policy. The definition of constructive total loss, therefore, as contained therein would be subject to any other clause which may be in the policy. The policy contained a clause which was not in commensurate with the said provision. We, in a case of this nature, have to give effect to the terms of insurance.

The Division Bench of the High Court has referred to Middows (supra), which has expressly been reversed by the House of Lords in Rickards v. Forestal Land Timber and Railways Co., Ltd. 1941 (3) All ER 62] wherein it was clearly held that the notice of abandonment can be given.

In Halsbury's Laws of England, Fourth Edition Volume 25, Reissue 2003, page 257, 'constructive loss' has been defined as follows:

"Subject to any express provision in the policy, there is a constructive total loss where the subject matter insured is reasonably 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 is in each case a question of fact.

In particular, 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 unlikely 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;"

The likelihood of recovery must be judged in the light of the probabilities as they would have appeared to a reasonable assured at the moment when he knew of his loss and could have given notice of abandonment. The former rule of law that a frustration of the venture by an insured peril gives rise to a constructive total loss under a voyage policy on goods, although the goods themselves are not damages, has not been altered. [See Rickards (supra)] It is again undisputed that after the ship became unseaworthy, Appellant took steps to recover the value of the cargo with a view to minimize its loss due to non-delivery. It, therefore, fulfilled its contractual obligation in that behalf. Sale of cargo was allowed by the High Court of Singapore in suit No. 711 of 1989. It was only at that stage, Appellant could come to the conclusion that the cost of recovering and getting the cargo back to Calcutta would cost more than if the sale was effected at Singapore. The cause of action arose then. The learned Single Judge has taken specific note of the said fact stating that Appellant had sought for advice of Respondent as to whether the sale would go through at Singapore or in Calcutta by its letter dated 12th August, 1989 which was marked as Ex. S, relevant portion whereof reads as under: