New Delhi (PTI): The National Consumer Commission has said an insurance company cannot incorporate an exclusion clause to keep moulds out of the policy cover for machinery in a plastic industry.

"The exclusion clause may be applicable to other industries, but for plastic industries, it is part and parcel of the machinery and is usually required to be made as per customer's specification," Commission President Justice M B Shah said.

The claim of National Insurance that moulds were not covered under the insurance policy was refuted by the Commission, saying that it forms an integral part of machinery in plastic industries.

The Commission also observed that high premiums paid to the insurance company was because of the moulds which cover 90 per cent of the machinery in the factory.

"The insurance cover is mainly for tool and accessories, machinery for a sum of Rs 80 lakhs. This would establish that if moulds are not covered by the insurance policy there was no question of paying premium for such a large amount," it said.

The Commission's observation came on the petition of Glorious Plastics Limited, whose claim for the losses, suffered during an incident of fire, was rejected by the insurance company.

"By the Advisory Tariff Committee's (TAC) clarification, it is made clear that qua plastic industries moulds are integral part of the machine and hence not to be equated with the moulds which are used in other industries," Justice Shah said.