The repudiation of the insurance claim was valid as coverage ceased upon delivery, and the insured failed to take reasonable care to protect the goods as required under the policy terms.

JUDGMENT :

AUGUSTINE GEORGE MASIH, J.

1. The Appellants challenged the repudiation decision dated 07.09.2007 of Marine Transit Open (Declaration) Insurance Policy claim of M/s Bengani Food Products Pvt. Ltd., being Appellant No. 01 herein, by the National Insurance Company Ltd., being Respondent No. 01 herein, owing to damage of goods while being in transit at the Shalimar Railway Godown at Howrah in West Bengal. Vide impugned order dated 18.02.2016, the National Consumer Disputes Redressal Commission at New Delhi affirmed the repudiation of the said insurance claim, which is now being challenged through this Civil Appeal.

2. M/s Bengani Food Products Pvt. Ltd. (hereinafter the “Appellant-Insured”) is a company dealing in the export of poultry and cattle feed. On the other hand, the National Insurance Co. Ltd. (hereinafter the “Respondent-Insurer”) is the concerned insurer for the marine open transit policy.

3. The relevant facts pertaining to this matter are that the Appellant-Insured had obtained a Marine Insurance Policy from the Respondent-Insurer which had a coverage of INR 200 Crores for the period between 25.01.2007 to 24.01.2008. The consignment consisting of maize meant for the commercial use in poultry feed weighing 24,700 quintals in railway rake of 40 wagons was unloaded on 07.02.2007 at the Shalimar Railway Yard in Howrah, West Bengal. The stock was dumped at the open siding of the railway yard and out of which around 2,627 quintals were immediately sold to a third-party by the Appellant-Insured. On the evening of 07.02.2007 and then from the afternoon of 08.02.2007, the area experienced heavy rainfall and since the consignment of maize in gunny bags was left in the open siding, it got exposed to rain leading to the fungal contamination and mycotoxins were developed, thereby making it unfit for poultry consumption.

4. The Appellant-Insured informed the Respondent-Insurer regarding the incident vide Letter dated 09.02.2007 seeking instructions for urgent disposal of the maize, valued at INR 2.12 Crores and to stop incurring the Wharfage from Indian Railways. The Respondent-Insurer appointed a surveyor the same day to assess the extent of the loss. The report submitted by the surveyor on 06.03.2007 estimated the loss at INR 62,25,012.77/- (Rupees Sixty-Two Lakh Twenty-Five Thousand Twelve and Seventy-Seven Paise only). Subsequently the report submitted by the surveyor on 22.05.2007, the amount was revised to INR 36,17,610/- (Rupees Thirty-Six Lakh Seventeen Thousand and Six-Hundred Ten only) as it came to light that substantial part of the consignment about 10,910.4 quintal was on 14.02.2007-15.02.2007 shifted to a warehouse in Rishra without intimation to the Respondent-Insurer. As the surveyor took in account the salvage value and made adverse observations that the Appellant-Insured failed to take reasonable preventive measures as there was a delay in mitigating the damage.

5. However, vide letter dated 07.09.2007, the Respondents repudiated the whole claim citing Clause 5 of the Inland Transit (Rail/Road) Clause A of the Insurance Policy. According to the Respondents, the coverage of the insurance had ceased once the goods were unloaded at the Shalimar Railway yard, and the loss occurred outside the period of risk covered under the policy. Clause 8 of the Insurance Policy was also invoked by the Respondents. It was alleged that the Appellant-Insured had failed to exercise reasonable care to protect the goods and breached the p