Insurance exclusion clauses require strict proof; mere customer inspection of jewellery is not entrustment, so theft remained covered.

An exclusion clause in a jeweller's block insurance policy was held inapplicable because the insurer had to strictly prove its conditions, including actual entrustment of the jewellery to the customer. Mere permission for an unknown customer to inspect goods in the shop did not amount to legal possession or a relationship of trust, and theft could not be equated with criminal breach of trust for this purpose. Any ambiguity in the policy was construed in favour of the insured. The insurer remained liable under the policy, and the insured's claim was upheld.

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Issues: Whether the exclusion clause in the jeweller's block policy applied to a theft by an unknown customer where the jewellery was not entrusted to him.

Analysis: The policy covered theft, and an exclusion clause had to be strictly established by the insurer. The clause referring to loss occasioned by a customer in respect of property entrusted to him required actual entrustment and a relationship of trust. Mere permission to inspect jewellery in a shop did not amount to handing over possession in the legal sense or to entrustment. Theft and criminal breach of trust are distinct offences, and the meaning of entrustment in context could not be stretched to cover an unknown customer who simply removed the goods. Ambiguity in an insurance contract had to be construed in favour of the insured.

Conclusion: The exclusion clause did not apply, and the insurer remained liable under the policy.

Final Conclusion: The appeal failed and the High Court's decision in favour of the insured was affirmed.

Ratio Decidendi: An exclusion clause in an insurance policy is enforceable only when its conditions are strictly proved, and where liability depends on entrustment, a mere theft by a customer without entrustment does not attract the exclusion; ambiguity is construed in favour of the insured.

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