1. The Appellant is a wholly owned Public Sector Undertaking of the Government of Orissa. The Appellant finances medium and large scale industries within the State of Orissa and is also involved in setting up joint sector industries with private entrepreneurs. The Appellant extended a term loan of Rs.40,74,000/- to M/s. Josna Casting Centre Orissa Pvt. Ltd. As the loan amount was not repaid, the Appellant exercising its power under S.29 of the State Finance Corporation Act, 1951 , took over the assets of M/s. Josna Casting Centre Orissa Private Limited on 14/02/1992. On 23/01/1996, the Appellant insured the said assets with Respondent No. 1 for a sum of Rs.46,00,000/- under the Miscellaneous Accident Policy, Rs.60,40,000/- under the Fire Policy and Rs.46,00,000/- under the Burglary and House Breaking Policy.

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