An insurance company is not liable for loss or damage caused by metal fatigue unless the insurance policy specifically covers such loss or damage.

R.L. KHURANA, J.—The plaintiff is a limited company incorporated under the Companies Act, 1956. It has a Fruit Processing Plant at Parwanoo in District Solan. In such plant, 18 numbers of Tanks have been installed in the cold storage chamber. Such tanks have the storage capacity of 4.20 lacs litres of apple juice concentrate. Two other tanks with the storage capacity of 50,000 litre of apple juice concentrate have been installed in the pre-cooling chamber outside the cold storage chamber.

2. The complete plant and machinery, tools, accessories etc. alorigwith the stock of apple juice concentrate, Aroma and chemicals whilst lying in the cold storage was insured by the plaintiff for a sum of Rs. 6,24,65,000/- during the period 17.9.1990 to 16.9.1991 vide insurance policy Ex. PW-1/1, covering the following risks :—

1. Fire.

2. Lightening.

3. Explosion/implosion but excluding loss of or damage to boilers (other than domestic boilers) economisers, or other vessels, machinery or apparatus in which steam is generated or other contents resulting from their own explosion/implosion.

4. Impact by rail/road vehicles or animal.

5. Aircraft and other aerial and/or space devices and/or articles dropped therefrom, excluding destruction or damage occasioned by pressure waves caused by such devices.

6. Riot, strike and malicious damage as per clause printed thereon.

3. Additional premium was paid by the plaintiff to cover the risk of earthquake also, since under the general terms of the policy such risk was not covered.

4. On 26.11.1990 it was noticed that storage tank No. 2 had collapsed on one side causing damage and leakage to the apple juice concentrate. Before the collapse, the tank contained 35,779 Kgs. of apple juice concentrate out of which 27,040 kgs. of juice concentrate was damaged due to leakage. Telegraphic information about the damage and loss was given to the defendants on the same day and a claim for Rs. 8,10,270/- towards the damage and loss was lodged on 4.1.1991. The Surveyors appointed by the defendants after necessary enquiry and investigation, assessed the loss at Rs. 5,42,522.60 paise. However, the Surveyors opined that the defendants were not liable under the policy since the same was not covered under the terms of the policy. In the opinion of the Surveyors the damage and loss had occurred due to metal failure/fatigue of the stainless steel plate used at the bottom of the storage tank. The claim of the plaintiff was accordingly repudiated by the defendants on 27.3.1992 vide letter Ex. PW1/6. Hence the present suit for recovery of Rs. 13,93,664.40 paise, that is, Rs. 8,10,270/- as the loss and damage and Rs. 5,83,394.40 as interest at the rate of 18% per annum from 1.1.1991 to 31.12.1994, came to be filed on 2.1.1995.

5. The defendant while resisting the suit admitted the insurance. It was pleaded that the loss and damage, if any, suffered by the plaintiff was not covered under the terms of the policy of insurance. The plaintiff, therefore, was not entitled to any compensation. Objections as to maintainability of the suit, limitation and the suit not having been filed through a competent and authorised person were also raised.

6. On the pleadings of the parties, the following issues were framed on 19.9.1996 and 7.4.1998:—

1. Whether the suit has been filed by the duly authorised person on behalf of the plaintiff? OPP

2. Whether the plaintiff is entitled to the amount claimed in the suit? OPP

3. Whether the loss sustained by the plaintiff was not covered by the terms of the insurance policy? OPD

4. Whether the suit is not maintainable? OPD 4-A. Whether the suit of the plaintiff is time barred as per terms and conditions of the insurance policy, as alleged?OPD

5. Relief.

7. Both the parties have led oral as well as documentary evidence in support of their case. I have heard the learned Counsel for the parties and have also gone through the record of the case. My findings on the above issues are as under :— Issues No. 4 and 4-A.

8.