Judgment

Srinivasan, J.-The respondent is a public limited company carrying on business of publishing a newspaper “The Hindu”. It purchased a Dakota aircraft at a cost of Rs. 3,31,455/- for the purpose of ensuring quicker and speedier transport and delivery of the newspaper. The aircraft was insured with the British Aviation Insurance Ltd., Calcut­ta for a sum of Rs. 4,00,000/-.

2. The terms of the insurance policy enabled the insurer to opt for replacement of the aircraft in the event of loss or damage thereto in an accident. The relevant clauses in the policy are in the following terms:

“Section 1

Loss or Damage to Aircraft

Subject to the terms conditions and limits hereof the company will at their option pay or replace or make good accidental loss of or damage to the aircraft as described in the Schedule hereto (hereinafter referred to as “the aircraft”) including standard component parts thereof temporarily detached in connection with overhaul or repair while in the custody or control of the Insured (unless other similar component parts have been substituted) whilst the aircraft is

In flight

Taxying

On the ground

Moored”

Conditions 7 and 8 of the “General Conditions” read as follows:

“7.