LAW FOR ALL

interesting question as to the applicability of the 1997 Amendment to Section 28 of the Contract Act, 1872. = In H.P. State Forest Co. Ltd. v. United India Insurance Co. Ltd., (2009) 2 SCC 252, this Court had to decide whether clause 6(ii) of an insurance policy was hit by the unamended Section 28. This clause reads as follows:- “6(ii) 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 declaim 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.” After a copious reference to Food Corporation and S.G. Nayak’s case, this Court held that such clauses would not be hit by Section 28.Considering that the respondents’ first argument has been accepted by us, we do not think it necessary to go into the finer details of the second argument and as to whether the aforesaid clauses in the bank guarantee would be hit by Section 28(b) after the 1997 amendment. It may only be noticed, in passing, that Parliament has to a large extent redressed any grievance that may arise qua bank guarantees in particular, by adding an exception (iii) by an amendment made to Section 28 in 2012 with effect from 18.1.2013. Since we are not directly concerned with this amendment, suffice it to say that stipulations like the present would pass muster after 2013 if the specified period is not less than one year from the date of occurring or non-occurring of a specified event for extinguishment or discharge of a party from liability. The appeals are, therefore, dismissed with no order as to costs.