Date: 13-12-2016

Sri Debasis Bhattacharya, Member

Briefly narrated, case of the Complainant, is that, it took a Marine Cargo Open Insurance Policy from the OP, which was valid for the period from 25-06-2011 to 24-06-2012.  During currency of the said policy, an unfortunate incident of theft of insured materials, that was imported from abroad, took place.  The matter was duly reported to South Port Police Station, Kolkata. Also, the matter was informed to the OP by the Complainant vide its email dated 05-07-2011 and thereafter, it lodged necessary insurance with the OP for a sum of Rs. 25,06,919/-.  On the basis of such information, a Surveyor was appointed by the OP to assess the loss, who filed preliminary survey report on 13-07-2011.  However, the OP, vide its letter dated 29-07-2011 repudiated the bona fide claim of the Complainant.  Despite its vigorous perseverance, as the OP stood its ground, albeit illegally and mala fidely, left with no other choice, Complainant filed this case.

OP contested the case by filing W.V. It is stated by the OP that the policy was issued to the Complainant for CIF imports, where the liability of the Indian Importer started only at the tail end of the transit, i.e., movement of cargo from the discharge point to the premises of the Insured.  As per policy, the tail end of the transit was covered as per Inland Transit (Rail/Port), Clause B and SR&CC only.  As per terms and conditions of ITC B, the liability arises only if the damage has been caused by any of the following: fire, lightening, breakage of bridges, collision with or by the carrying vehicle, overturning of the carrying vehicle, derailment or accident of like nature to the carrying railway/wagon/vehicle.  The OP duly intimated the Insured the reason behind repudiation of its claim vide letter dated 29-07-2011 and also answered to the queries raised by the Insured later.  Claiming that liability of the Insurer is always subject to terms and conditions of the policy, it is asserted by the OP that there was no deficiency in service on it’s part and as such, it prayed for dismissal of the complaint case.

The core issue to be decided in this case is whether repudiation of Complainant’s claim by the OP can pass muster judicial scrutiny.

Decision with reasons

We have heard the submissions advanced by the Ld. Advocates of respective parties.  Besides, we have also carefully gone through the materials on record and considered the authority of Hon’ble Supreme Court, referred to by the Ld. Advocate for the Complainant reported in AIR 1996 SC 2054, (2001) 6 SCC 477, and AIR 2007 SC (Supp) 508.  Ld. Advocate for the Complainant also referred to a decision of Hon’ble National Commission reported in I (2007) CPJ 48 (NC).

Undisputedly, the peril occurred during the validity period of the Insurance Policy in question.  OP has not disputed the factum of timely intimation about the occurrence of peril to the police as well as to it.  It appears from the photocopy of Preliminary Survey Report dated 13-07-2011 that the Surveyor assessed the loss at Rs. 19,50,212.74.  However, the OP, vide its letter dated 29-07-2011, repudiated the claim on the ground that the peril occurred was not covered within the ambit of the insurance policy concerned.

In this regard, it is asserted by the Complainant that it took the said Insurance Policy from the OP for the first time on 25-06-2008 and since then, it renewed the same in time without any break.  Moreover, vide its email dated 01-07-2011 none other than the Marine Department of the OP confirmed that the terms and conditions of policy no. 0830004143 would be the same as per last year.  However, as soon as it got wind of the peril that was intimated to it on 05-07-2011, it unilaterally altered the terms and conditions of the policy behind the back of the Complainant with a clear intention to deprive the Complainant of its legitimate due. 

We have carefully read between the lines of photocopies of all the four insurance policies on record.  However, for the purpose of brevity of discussion, let us take into consideration primarily the Insurance Policies covered the period from 25-06-2010 to 24-06-2011 and also from 25-06-2011 to 24-06-2012.  On a tour through the same, we discover certain discrepancies.  For better illustration, relevant portions of the same are appended below.

It appears from the above that whereas in the previous year, i.e., 2010-2011, the policy wordings denoted “tail end transits, Inland transit (Rail/Road) Clause B”, in the next year, i.e., 2011-2012, policy wordings was changed to, “For CIF Imports where the liability of Indian importer starts from the discharge port cover to be on Inland Transit (Rail/Road) Clause-B & SR&CC”.

There is nothing on record to show that the Complainant was duly taken into confidence about such changes beforehand. In our considered opinion, the Insurer cannot unilaterally alter policy wordings without keeping the Insuree in the know of such changes before issuing the same, where the Insuree is a customer/consumer of the Insurer for some products for continued/ continuous earlier years.  

Be that as it may, let us now consider whether such alteration in respect of policy wordings had any adverse impact insofar as claim of the Complainant was concerned.

It is contended by the Ld. Advocate for the Complainant that while extending the insurance coverage from 25-06-2011 to 24-06-2012, the Complainant insured was informed by email dated 01-07-2011 that the coverage “would be as per last year”.  However, the policy coverage was issued for the 4^th year on 12-07-2011, by which time the claim had already been lodged on 05-07-2011 and such policy was issued with a new clause, “For CIF imports where the liability of Indian importer starts from the discharge port cover to be on Inland (Rail/Road) Clause B & SR&CC”. 

It is also asserted by him that coverage under the policy is casted only when the Insured Complainant assumed insurable interest on the consignment.  Elaborating further, it is contended by the Ld. Advocate for the Complainant that in the instant case, the Insured imported the goods on CIF basis and became the owner, assumed insurable interest only when the goods were discharged at KPT.  At that point, the goods from KPT to Gangarampur Works was covered.  That was the only transit cover issued in the name of the Complainant.  The policy was not at all concerned with the previous transit, i.e., the sea voyage, which was under a separate insurance coverage at the relevant time taken by the Seller (CIF).  The only transit that the policy covered was the transit between KPT and Gangarampur and such transit clearly came within the ambit of “terms of cover inland transit, rail/road, Clause A”, i.e., all risks.  Such road transit between KPT and Gangarampur being independent composite transit cannot be said to be a tail end transit of a sea voyage, covered under a separate insurance policy taken by the seller.  The contractual liability of the particular insurance policy issued in the name of the Complainant was exclusive, independent and concerned with a particular transit which came within the scope of the policy and cannot be interpreted as a rider to a different insurance coverage.  According to the said Ld. Advocate, by no means, the transit from Kolkata Port to its warehouse at Gangarampur can be termed as “tail end transit”. 

The said Ld. Advocate further argued that the insurance policy was basically an all risk policy.  Such comprehensive coverage (all risks) cannot be sabotaged either by an ambiguous clause (tail end transit inland transit, rail-road Clause B) or by a subsequent new clause  [for CIF import where the liability of the Indian importer starts from the discharge port covered to be on inland transit (rail/road) Clause B] surreptitiously and unilaterally incorporated in the policy without the knowledge and consent of the Insured, that too, after giving assurance that terms and conditions would be as per the last year.  Finally, contending inter alia that such repudiation is bad and illegal, he prayed for declaring such repudiation bad in law.

On the other hand, Ld. Advocate for the OP averred that the wordings in the current policy only clarified the earlier terms.  The restriction of coverage imposed under the policy in question was in line with the terms of the previous policy.  The claim in question would not have been admissible even under the Policy for the previous year, i.e., 2010-2011 having attracted the restricted coverage for Tail End Risk. 

In order to have a proper evaluation of the impact of such alleged changes in policy wordings vis-à-vis claim of the Complainant, we have carefully gone through copy of policy illustrations in respect of “Inland Transit (Rail or Road) – Clause B (Basic Cover)” submitted by the OP. 

On a reference to the said policy illustrations, we find that the liability of the Insurer in respect of this clause arises in the event of occurrence of peril, viz., [a] (i) fire, (ii) lightning, (iii) breakage of bridges, and [b] (i) collision with or by the carrying vehicle, (ii) overturning of the carrying vehicle, (iii) derailment or accidents of like nature to the carrying railway wagon vehicle. 

We find, in terms of newly worded policy condition, viz., “For CIF Imports where the liability of Indian importer starts from the discharge port cover to be on Inland Transit (Rail/Road) Clause-B & SR&CC”, also the dimension of indemnity remained the same and identical.  Thus, it does not seem to us that because of such tinkering with policy wordings, the instant claim of the Complainant was impacted in any manner whatsoever.

Now coming to the contention of the Complainant that the term ‘tail end transit’ is not applicable here, but such dispatch of consignment was actually covered under “Inland transit (Rail/Road) Clause (A), that covers all risks, it appears, the Complainant completely misunderstood the term “Tail End Transit”.

There is a basic difference between “Inland transits (Rail/Road)” and “Tail End Transit”.  In case of “Inland transit (Rail/Road)”, the insurance attaches from the time the goods leave the warehouse and/or 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, - (i) until delivery to the final warehouse at the destination named in the policy, or (ii) in respect of transit by rail only or rail and road, until expiry of 07 days after arrival of the railway wagon at the final destination, railway station, or (iii) in respect of transit by road only until expiry of 07 days after arrival of the vehicle at the destination town named in the policy whichever shall first occur.  On the other hand, in the parlance of Marine Cargo Policy, whenever the main cargo policy expires at the port, the transit from the port to the warehouse is considered as tail-end transit. 

Admittedly, the policy in question was not at all concerned with the previous transit, i.e., the sea voyage, which was covered under a separate insurance coverage at the relevant time taken by the seller (CIF) and the Complainant assumed insurable interest over the consignment only when the goods were discharged at KPT.  So, it is amply clear that the policy coverage under the Marine Cargo Open Policy taken by the Complainant for the transit in between KPT and Gangarampur was nothing but a ‘Tail end transit’ and not ‘Inland transit (Rail/Road) Clause (A)’ as contended by it.  Suffice it to register here that the term ‘tail end transit’ was not coined by the OP, but it is a universally accepted term applicable for Marine Cargo Policies. So, the notion of the Complainant that since policy term ‘Tail end transit’ was not properly explained in the policy document, benefit of doubt should be accorded to it, to our mind, is totally misplaced.  Before taking such policy, in its own interests, it was incumbent upon the Complainant to have a fair idea about all policy terms of Marine Cargo Policy and thereafter, choose an appropriate policy to suit its purposes; after all, misconception excuses no man.    

We, thus, find no wrong with the action of the OP, who has rightly repudiated the claim of the Complainant being outside the ambit of risks coverage.

The complaint case, thus, fails.

Hence,

O R D E R E D

that CC/42/2013 be and the same is dismissed on contest against the OP, but without any costs.