The complaint arose out of a repudiation whereby the opposite party National Insurance Co. Ltd. declined to indemnify the claim of the loss of cement bags during their transit from Ahmedabad – Sanghi Industries Ltd. to Kochi. The loss occurred as the consignment of cement was offloaded at Kochi and the cement bags affected by heavy rainfall. The repudiation letter dated 14.03.2016 is extracted hereunder: “TO, M/s SANGHI INDUSTRIES LTD, 10th FLOOR, KATARIA ARCADE, OFF:-S.G. HIGHWAY, POST:- MAKARBA. DIST:- AHMEDABAD, GUJARAT. Dear Sir, SUB-: Claim under Marine Policy no. 301200/21/12/4400000291/1000602 dated:- 18/01/2013. Declaration amount Rs.3,96,00,000/- transit from Ahmedabad - Sanghi Industries Ltd to Cochin Port, kerala. Date of loss:-29/01/2013. This has reference to the captioned subject. We received the intimation for loss on 31/01/2013 regarding the damage of Cargo dispatched under Bill of lading no.- 001/S11 dated:- 16/01/2013 at Cochin port due to heavy downpour. The estimated loss was Rs. 2,65,64,000/-. Responding to that THOMAS GROM SURVEYORS were appointed to assess the loss. Surveyor after inspecting the loss observed the following points with specific remarks on it:- Out of the 5000 MT of Cement dispatched, approximately 3689.5 MT which was discharged and stacked in the jetty for onwards transportation to the warehouse got affected due to unexpected rain between 0200 hrs & 0300 hrs on 29/01/2013. The bottom layer is reported to have sustained extensive damages. It was advised to take immediate steps to segregate and commence the salving of the damage material to minimize the loss and avoid further aggravation of damages. Moreover, the said cargo was discharged and stored in open for two days without covering with tarpaulin against the caution by the port authority. Surveyor has visited the warehouse near Ernakulum Warf for conducting the survey and assessing the loss. However, he could not carry out the survey as the reportedly water damaged cement bags were not taken out from the jumbo bags in which it was carried. These jumbo bags were found dumped in the warehouse in a haphazard manner. After a delay of more than four months or so you have decided unilaterally to dispose off the subject quantity of cement bags in 'As is where is' condition. Also, as per the broking slip cover demanded was Inland Transit ITC A (All Risk cover) SRCC AIR Loading and unloading, Multi transit clause & Transshipment clause Declaration for utilized Sl to be made every 30 days Excess 0.5 percent of Consignment Minimum of 10,000/- Intermediary Storage for 60 days. But the said consignment was sent through vessel via sea rout, which was against the cover demanded. Considering the above facts we reached to following conclusions:- - The said consignment was sent via sea rout against the cover demanded.
- Delay in segregation has aggravated the loss & it does not come under the purview of the cover.
- You have not taken reasonable care to protect the cargo during the storage. Also there are indication of improper packing of the cargo as the water proof plastic jumbo bags got damaged by rain water.
- You did not co-operate in the process of assessment & disposed the cargo unilaterally.
In view of the above fact: your claim is Repudiated, which please note. We absolve ourselves from any further liabilities arising out of this claim. Thanking you, Your Faithfully Authored Signatory” This is a complaint that was heard on 05.10.2023 where the following submissions were recorded: “Heard learned counsel for the complainant and the learned counsel for the opposite party. The damage caused to cement bags during transit is sought to be indemnified contending that the risk was covered under the policy which allows the complainant to seek a claim as the transhipment was damaged during transit. It is the contention of the learned for the complainant that the journey clause contained in the policy mentions transhipment anywhere in India from warehouse to warehouse through any of the three modes of vessel/road/rail. It is submitted that the damage was caused after the cement bags were discharged from the vessel and were kept at a jetty on account of non-availability of the warehouse with regard to which certain facts have been stated in the pleadings. It is submitted that it was an act of God that rain poured in as a result whereof the cement bags were damaged to a great extent. The contention is that till the cement reaches the warehouse, the same should be presumed under transit and therefore covered under the risk policy. It is further stated that the repudiation letter erroneously proceeds to deny liability on the ground that the risk also did not cover transit/transport by vessel. In para-5, the complaint categorically states the coverage of the policy and the transit of the goods permissible through a vessel, which has been denied in para-5 of the written statement. It is therefore submitted that the repudiation letter proceeds on an erroneous assumption of facts and law and consequently the complaint deserves to be allowed. Learned counsel for the Insurance company refutes the said submission contending that the policy is categorical for transhipment only by rail or road through vehicles or wagons. It is also stated that the policy was brokered through M/s Unison Insurance Broking Services who had also forwarded the proposal of the complainant making a request only for inland transit and hence any transportation by vessel was not covered. Consequently, the repudiation on that ground is justified. It is further submitted that the stacking of the cement at the jetty and not inside the warehouse at the wharf remains unexplained and consequently any damage caused while the cement was stacked at the jetty in the open air was not covered under the policy and cannot be treated as a transhipment or the cement stored in transit. The question as to whether the discharge of the cement and its stacking at the jetty would still amount to a stoppage during transit and would thus be covered under the policy has to be examined for which the learned counsel for the complainant submits that she will be assisting the Bench with the aid of certain authorities on the subject. List on 26.12.2023.” The matter had been adjourned vide order dated 26.12.2023 to enable the learned counsel for the opposite party/Insurance Company to bring on record the copy of the insurance policy and the terms thereof. The said policy has been filed along with the application dated 05.02.2024 and a copy whereof has been served on the learned counsel for the complainant. There is no dispute about the said policy having been issued regarding the coverage in question. The duration transit clause is as follows: “DURATION 5 Transit clause This insurance attaches from the time the goods leave the warehouse and/or the store at the place named in the policy for the commencement of transit and continues during the ordinary course of transit including customary transhipment, if any, - Until delivery to the find warehouse at the destination named in the policy or
- in respect of transits by Rail only or Rail and Road, until Expiry of 7 days after arrival of the railway wagon at the final destination railway station or
- in respect of transits by Road only until expiry of 7 days after arrival of the vehicle at the destination town named in the policy whichever shall first occur.
N.B. 1. The period of 7 days referred to above shall be reckoned from the midnight of the day of arrival of Railway wagon at the destination railway station or vehicle at the destination town named in the policy. 2. Transit by rail only shall include incidental transit by road performed by railway authorities to or from railway out-agency.” Learned counsel for the complainant urges that the cover note, which was issued, indicates the mode of voyage to include a vessel as well. However, the risk covered is only inland transit rail or road. The risk coverage clause of the policy does not include any risk regarding the consignment being transported through a vessel. There is no dispute on these facts that cement loaded on a mechanically operated vessel Aarathi Voy.1 was dispatched from the factory of the complainant in Gujarat to Kochi. The vessel reached Kochi on 19.01.2013 and commenced the discharge of the consignment of cement loaded on it on 23.01.2013 which is obviously after four days. The said discharge was completed by 28.01.2013. It is also on record which has been indicated in the surveyor’s report that since the complainant was not provided with sufficient storage space at the wharf, they decided to discharge the cargo on the jetty for onward transmission to their warehouse beyond the wharf. Learned counsel for the complainant has urged that this journey after its discharge at the jetty was to commence by road/rail and therefore even assuming for the sake of arguments that the journey by vessel was not covered under the risk policy, the same covers the transit by rail or road. It is urged that there was no default on the part of the complainant as they were awaiting the transportation of the cement consignment to the warehouse for where it was destined but in the meantime rainfall intervened and some of the cement bags were damaged which is subject matter in the present claim. The request was made to the Insurance Company to indemnify the same but unfortunately, in spite of the indication of the loss suffered in the surveyor’s report, the Insurance Company failed to indemnify the claim. The Insurance Company has also taken a stand that the discharge of the cargo had to be executed at Ernakulam wharf where storage facilities were not available and as such the consignment was dislodged at a jetty at Mattancherry where shelf like arrangements were available with no storage facility for the complainant. Nonetheless, the Insurance Company did not indemnify the said claim which had occurred on account of the loss due to the rainfall and consequently what has to be seen is as to whether the cargo was covered under the transit clause for risk coverage by sea as well or not. In the written version, the Insurance Company in para-5 has taken a clear stand that the policy did not cover the transit of the cargo by vessel and consequently the claim cannot be indemnified. It is for this reason that the learned counsel for the Insurance Company had been called upon to file a copy of the insurance policy which has now been brought on record and the terms of the policy are not disputed. As noted above, the transit duration clause categorically recites that the insurance attaches from the time the goods leave the warehouse or the store at the place named in the policy for the commencement of transit. The goods were lying at the wharf and for almost five days when the rainfall occurred. It was, even for the sake of argument that it was lying in a somewhat warehouse as alleged by the complainant, the journey of the said goods which were insured only by rail or road had not yet commenced as the goods had nowhere been loaded on any truck or on rail on the date when the rainfall occurred. The goods were simply lying stationary at the jetty where the rainfall partly damaged the goods. Consequently, the transit clause nowhere covers the said risk coverage that is the period which was spent by the storage of cement at the jetty after being offloaded at Kochi at the convenience of the insured. Learned counsel for the complainant cited the judgment of the Apex Court in the case of Bajaj Allianz General Insurance Co. Ltd. and Anr. Vs. State of Madhya Pradesh (2020) 18 SCC 376 to urge that this storage is covered under the term ‘transit’, inasmuch as the goods are not supposed to be constantly in motion as held in the aforesaid judgment and therefore they were in transit after being offloaded at Kochi. Having considered the ratio of the judgment relied on by the learned counsel for the complainant, the passage in the present case of the goods was not covered under the policy as explained hereinabove. Thus, the goods were not in transit as covered under the policy. Consequently, applying the ratio of the said decision does not arise. The Insurance Company was therefore justified in repudiating the claim of the complainant. Consequently, the complaint lacks merit and is accordingly dismissed. | 
