Strict adherence to insurance policy conditions is essential for claim validity; failure to comply results in dismissal of claims.

1. The present suit is filed for the recovery of sum of Rs. 4,44,155/- with further interest @ 9% p.a. on the principal amount of Rs. 3,50,000/- from the date of the suit till the date of decree and @ 6% p.a. from the date of the decree till payment and/or realisation. Some of the material facts of the present case are briefly enumerated as under:

2. The plaintiff No. 1 are a partnership firm and are inter alia carrying on business of manufacturing and selling safety razor blades, having their factory and place of business at T. T. Blade Building, 9A Saki Naka, Andheri, Bombay-72. The plaintiff No. 2 are a Banking Company incorporated under the Indian Companies Act and having their registered office at Mangalore and branch office inter alia at Mahim. The defendants are an Insurance Company carrying on business of General Insurance prior to its nationalisation. On nationalisation of the General Insurance business under the provisions of the General Insurance (Acquisition and Transfer of Undertakings) Act, 1972, the defendant-company has been merged with the General Insurance Corporation w.e.f. 1-1-73. The said General Insurance Corporation was taken over by the defendant-company namely The United Fire and General Insurance Co. Ltd. Thus, the defendants are the successors in title of a company known as Madras Motor and General Insurance Company Limited as.

3. The plaintiff No. 1 for the purpose of its business made an application to the plaintiff No. 2 for giving various credit facilities. Amongst the other credit facilities, the plaintiff No. 1 also sought a demand cash credit facility on the basis of hypothecation of various movable properties. On 7-6-71, on agreement was executed by and between the plaintiff No. 1 and plaintiff No. 2 hypothecating various goods belonging to the plaintiff No. 1 with plaintiff No. 2. It is the case of the plaintiffs that the hypothecation of goods was blades in process as well as finished blades lying at the factory premises of the plaintiff No. 1. It is the case of the plaintiff No. 1 that the said hypothecation agreement was renewed on 10-7-72. However, the description of the goods remained the same. In view of the fact that the goods were hypothecated by the plaintiff No. 1 with plaintiff No. 2, plaintiff No. 1 obtained an Insurance Policy from the defendants on account of plaintiff No. 2 who as a creditor to whom goods were hypothecated had an insurable interest in the said hypothecated goods. The defendants were requested by the plaintiff No. 2 to issue an insurance policy in respect of goods and stocks hypothecated by the plaintiff No. 1 with plaintiff No. 2. It is the case of plaintiffs that the said policy was valid for the period 9-6-72 to 9-6-73. The total claim under the policy was for Rs. 3,50,000/-. Thus, the defendants undertook to indemnify the plaintiffs against any loss which may be caused to the plaintiffs in respect of the insured goods. The said insurance policy was a fair insurance policy. It is the case of the plaintiffs that accordingly as per the request of the plaintiff No. 2, the defendants issued a fair insurance policy dated 14-6-72 being policy No. F. 195740. The said policy described the said goods as under :
"On stock of raw materials, such as steel strips, tools, spared, die punches and such other materials pertaining to the Insured's trade belonging to them and under hypothecation to the Bank whilst stored and/or lying in the ground floor of the premises of I Class construction situate at Survey No. 14, Hissa No. 5, Plot No. 9A