( 1 ) THIS appeal by the second defendant, an Insurance Company under the name and style Fukumchand Insurance Company is directed against the judgment and decree dated 3-2-1973 in O. S. No. 9 of 1970 on the file of the Court of the II Additional Civil Judge, Belgaum, by which the court-below held the second-defendant liable to the suit claim to the extent of Rs. 1,66,231-15 on the basis of a Credit Indemnity Policy dated 28-12-1967 issued by it in favour of the plaintiff.

( 2 ) THE facts, in so far as they are material for the disposal of this appeal, are the following : plaintiff, Bank of Baroda, is a Nationalised Bank, Defendant-1 is a firm of partners of which defendants 1 (a) to 1 (f) are stated to be the partners. On 28-1-1967, first defendant executed what is styled as a "cash Credit Agreement" with the plaintiff and secured cash credit facility to the extent of Rs. 2,00,000/- for the purpose of its business. By way of security the movable assets of the firm were hypothecated in favour of the creditor-Bank. In addition, under a mortagage by deposit of title-deeds certain immovable properties situate at Wadgaon, Belgaum, mahadevpur and Angol were offered as