Pradeep Nandrajog, J.

1. M/s. Weston Tubes Pvt. Ltd. (hereinafter referred to as Weston) is engaged in the business of manufacturing PVC flexible pipes. The National Insurance Company Ltd. (hereinafter referred to as ‘National’) is engaged in the business of insurance. Vide Ex.P-1, through its Divisional Office No. X at Hanuman Road New Delhi National undertook to indemnify Weston the loss arising out of, amongst other calamities fire, limited to Rs. 15,00,000/- (Rupees Fifteen Lacs only) for one DG Set and machinery, tools and accessories at its factory in Gali No.10, Samaipur, Badli for the period commencing from May 06, 1995 to May 05, 1996. Vide Ex.P-2, National undertook to indemnify Weston the loss arising out of, amongst other calamities fire, limited to Rs.5,00,000/- (Rupees Five Lacs only) for stock of finished and unfinished goods including raw material used to manufacture PVC pipes at its factory in Gali No.10, Samaipur, Badli for the period commencing from October 08, 1995 to October 07, 1996.

2. Weston imported a corrugator machine manufactured by a company Olmas in Italy along with moulds and dies and claims that on May 01, 1996, it delivered a letter mark ‘B’ at the Division X office of National at Hanuman Road, New Delhi which was statedly received by Sh.M.M.Dutt the Senior Divisional Manager, at 5:00 PM on May 01, 1996 requesting that the cover of the policy of insurance Ex.P-1 be enhanced by further sum of Rs.20,00,000/- (Rupees Twenty Lacs only); and along with the letter enclosed premium in sum of Rs.929/- (Rupees Nine Hundred and Twenty Nine only) vide cheque No.731758 dated May 01, 1996 drawn on Canara Bank, Cannaught Circus Branch, New Delhi. It is the case of Weston that being informed that the file concerning the policy of insurance had been transferred to Division No.V at Hemkunt Tower, Rajender Place, Weston was assured that the necessary cover note would be issued on the next day.

3. A fire broke out at the factory of Weston in the intervening night of May 01, 1996 and May 02, 1996. In the pleadings of the parties there is no reference to the time when the fire broke out but from the cross examination of PW-1, it would be apparent that the suggestion given by National was that the fire took place in the night between 12:00 mid-night to 12:30 midnight.

4. With respect to the proposal, mark ‘B’ of Weston, requesting for the cover to be enhanced by Rs.20,00,000/- (Rupees Twenty Lacs only) for the plant and machinery under mark ‘B’, National issued endorsement, Ex.P-3, and since everything turns thereon, we note its contents. Ex.P-3 reads as under:- “National Insurance Company Limited (Regd. Office : 3, Middleton Street, Calcutta –700071) Division NO.V, 7th Floor, Hemkunt House, Rajendra Place, New Delhi- 110008.

ENDORSEMENT Endorsement No. 350500/E/31/96/96…………………. Dated 6/5/96 attaching to and forming part of Policy No.350500/351000/1100568/95 covering 6/5/95 to 5/5/96 in the name of M/s.Canara Bank, H-54, Connaught Place, N.Delhi M/s. Western Tubes (P) Ltd. 2468 Prayag House, Gali Nalwa Pahar Ganj, New Delhi-1.

It is hereby understood and agreed w.e.f. 2/5/96 to 5/5/96 that:-

1. The insureds estimate value of vehicle is increased/reduced to Rs…………

2. Registration No. of Vehicle is corrected/changed/substituted to read as “…………….” are not as stated in the schedule.

3. The insured is entitled to ………… % No Claim Discount/Malus as from inception.

4. The ……………. Is interested under the above policy, subject to Endt. No………… printed in the policy.

5. The above said policy stands cancelled, on pro-rate/short period basis.

6. The insureds address is changed to read as under and not as already stated therein:

7. The above said policy is transferred to ……………………………. with effect from ………………….

8. The Sum Insured under the above said policy is enhanced by Rs.20,00,000/- as per your letter dated 1/5/96 recd. by us on 2/5/96.

9. The names mentioned herein are added/deleted from the policy.

10. Hence