JUDGMENT

L. NAGESWARA RAO, J.

The Appellant is a wholly owned Public Sector Undertaking of the Government of Orissa. The Appellant finances medium and large scale industries within the State of Orissa and is also involved in setting up joint sector industries with private entrepreneurs. The Appellant extended a term loan of Rs. 40,74,000/-to M/s. Josna Casting Centre Orissa Pvt. Ltd. As the loan amount was not repaid, the Appellant exercising its power under Section 29 of the State Finance Corporation Act, 1951, took over the assets of M/s. Josna Casting Centre Orissa Private Limited on 14-02-1992. On 23-01-1996, the Appellant insured the said assets with Respondent No. 1 for a sum of Rs. 46,00,000/-under the Miscellaneous Accident Policy, Rs. 60,40,000/-under the Fire Policy and Rs. 46,00,000/-under the Burglary and House Breaking Policy.

2. The seized assets were put to auction by the Appellant on 22-01-1997 at which point of time it was detected that some parts of the plant and machinery were missing from the factory premises. The Appellant registered an FIR on 25-01-1997 in the Remona Police Station, Balasore regarding the theft/burglary of the plant and machinery. On 07-02-199