An insurance company is liable to pay for damages caused by a strike even if the policy contains an exclusionary clause for such damages if the exclusionary clause is not incorporated into the policy and the insurance company has not disclosed the existence of the clause to the insured.

K. Ramaswamy, J. — We have heard learned Counsel on both sides.

2. Both the appeals are heard and disposed of together since claims arising out of them arise out of the same cause of action.

3. These appeals arise from the orders dated January 12, 1995 of the National Consumer Redressal Commission (the “Commission”, for short) made in Original Petition Nos. 62 and 102 of 1993. Admittedly, the respondent was holding two policies. First policy covered the period from March 31,1986 to March 31,1987 and the second policy covered the period from April 1, 1987 to March 31,1988. During the said period, admittedly, due to the employees’ strike the leather in process was damaged due to the spoilage. The respondent laid claims for damages caused during the first period for a sum of Rs. 4,99,453.23 and for the second period for Rs. 5,000/- amount to the total of Rs. 5,04,453.23 with interest from the date of the claim. The Tribunal accepted the claim and directed payment of the said amount with interest @ 18% from one month after the date of the claim. The respondent’s appeal Nos. 11443-44/95, though arise from the impugned order, is for the claim of consequential loss in the sum of Rs.14,00,000/-.

4. Mr. Suri, the learned Counsel for the appellant-Company contended that insurance coverage is only riots and strikes and malicious damages and spoilage “under spoilage item 8” clearly enumerates as under :

“Stocks or leather of all kinds in process during soaking, liming, fleshing tanning, wet blue, sammying, splitting, shaving, dye liquering setting, vacumming drying.”

The learned Counsel relying upon these clauses, seeks to read Clause (b) of “Section 2 — Fire Policy ‘C of Part II — Fire Policies, Endorsements, Clauses and Warranties” as recommended by Tariff Advisory Committee constituted under Section 64(U) of the Insurance Act, 1958. Since these recommendations are made by the Advisory Committee which is a statutory authority binds the appellant-insurer they are integral part of the policies referred to hereinbefore. Resultantly, by operation of Clause (b), the insurance does not cover if loss or damage results from total or partial cessation of work or the retarding or interruption or cessation of any process of operation or omissions of any kind. According to the learned Counsel, since the damage was caused due to the strike organised by the workmen of the insured, by operation of Clause (b), the appellant-insurer is not liable for the loss to the goods while the leather remains unattended in its process during the period of strike. We are unable to agree with the learned Counsel. It is true that the Advisory Committee is a statutory body which has gone in and recommended the policies for riot, strike and malicious damages. The clause would exclude the Insurance Company from the coverage, if the loss or damage resulted from total or partial cessation of work or the retarding or interruption or cessation of any process of operation or omissions of any kind which would include strike by its workers. This may be due to either the operational inconvenience due to non-supply of the electricity or strike by the employees or any cause but the insured must be put on notice of this clause.

5. It is a fundamental principle of Insurance Law that utmost good faith must be observed by the contracting parties. Good faith forbids either party from concealing (non-disclosure) what he privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. Just as the insured has a duty to disclose, “similarly, it is the duty of the insurers and their agents to disclose all material facts within their knowledge, since obligation of good faith applies to them equally with the assured.

6. The duty of good faith is of a continuing nature. After the completion of the contract, no material alteration can be made in its terms except by mutual consent. The materiality of a fact is judged by the circumstances existin