1. The complainant, M/s. Bengani Food Products Pvt. Ltd., is a company incorporated under the Companies Act, 1956 and engaged in the business of exporting foodgrains including cattle feed and poultry feed from India and they claim to be a recognised, 'export house' by the Government of India. In the course of their business, they buy grains from markets all over India and move the same by railway rakes to warehouses, hired by them and finally dispatch them to the buyers outside India. The complainant obtained a marine insurance policy from the Opposite Party Insurance Company (OP) for a sum assured of Rs. 200 crores, bearing Policy No. 101100/21/06/4400000553 for the period from 25.01.2007 to 24.01.2008. It is stated in the consumer complaint that a consignment of poultry feed of 40 rakes was received by the complainant which was unloaded at the Shalimar Railway Warehouse/godown on 07.02.2007. Due to sudden heavy rainfall on 7th and 8th February 2007, the said consignment was damaged, and the complainant duly informed the Insurance Company about the same vide letter dated 09.02.2007, stating therein that the value of the goods was Rs. 212 lakhs and approximate loss was around Rs. 48 lakhs, and also requested the OP for appointment of a surveyor. The surveyor was duly appointed by the OP Insurance Company. The complainant vide two letters sent on 10.02.2007 asked the OP to make arrangements for disposal of the material as the same could not be used as poultry feed due to deterioration in quality. It was also stated that the estimated loss had increased from Rs. 100 lakhs to Rs. 130 lakhs. However, the complainant requested the OP to make payment of Rs. 212 lakhs as cost of material plus further expenses made in the movement of material through Railways. The surveyor inspected the stocks, had correspondence with the complainant and ultimately, vide his letter dated 06.03.2007, assessed the loss as Rs. 62,25,012.77ps. The complainant, however, requested for reassessment of the loss and wrote various letters to the OPs, saying that the material was deteriorating day by day and the loss had also increased due to delay in disposing of the salvage by the OP. The surveyor gave his final survey report on 22.05.2007, making an assessment of Rs. 36,17,610/- for the loss. The complainant, however, refused to accept the said assessment and sent a demand notice dated 09.04.2008 to the OPs for settlement of the claim. The complainant also filed a writ petition in the Hon'ble High Court at Kolkata regarding their claim. Vide order dated 27.06.2008, the Hon'ble High Court directed the OPs to intimate the reasons for repudiation of the claim to the complainant within two weeks from the receipt of the order. The OPs sent a copy of letter dated 07.09.2007 to the complainant along with a covering letter dated 17.07.2008 saying that the OP had already treated the claim as 'No claim' under para 5 of Inland Transit (Railway/Road) of Clause A. The complainant filed the present consumer complaint, demanding a sum of Rs. 3,06,38,351/- from the OPs including interest.
2. The complaint was resisted by the OP by filing a written statement in which they stated that the complainant vide their letter dated 09.02.2007, had intimated that they booked 2490.460 MT of maize vide RR No. C187680683 dated 30-31/1/2007, ex-Dewangree to Shalimar which arrived at Shalimar Railway shed on 07.02.2007. Out of the total quantity, 260 MT was sold by the complainant, leaving a balance of 2230.46 MT, which was dumped at the railway siding for further delivery. The said material was damaged due to heavy rain which started on 08.02.2007 at about 4:00 PM. The complainant had stated in their letter dated 09.02.2007 to the OP that the loss was about Rs. 48 lakhs. The OP deputed M/s G.S. Sahu as surveyor who visited the site of loss on the same day, i.e., 09.02.2007, but the complainant could make arrangements for survey on 11.02.2007 only. The surveyor noticed that the stock was adversely affected due to inaction on the part of the complainant for mobilising trucks to remove the bags of maize, lying in open railway yard. It was also observed by the surveyor in his letter dated 13.02.2007 addressed to the complainant that the maize was packed in second-hand gunny bags with low cloth strength, which resulted into tearing of bags on handling. The consignment should have been packed in new gunny bags as per the Policy. It was stated by the surveyor that the material was meant for dispatches to Bangladesh and for that purpose, a rake consisting of 38 wagons was placed around 2 PM on 10.02.2007 on the indent made by the complainant. The officials of the inspection agency M/s. SGS were stationed at the railway siding for pre-dispatch inspection, but the rake was withdrawn on the request of the complainant. The surveyor also mentioned that the complainant had taken absolute possession of the goods from the Railways on 07.02.2007 under clear RRs. A part quantity of the material was dispatched and the remaining material was dumped at the siding for onward dispatch to Bangladesh border. The transit policy had, therefore, ceased.
3. The complainant in their reply sent to the surveyor on the same date stated that the material was dumped at Shalimar Railway siding just to release the wagons. They managed to lift 262.640 MT on the same day and planned to lift the balance on 08.02.2007, but due to heavy rains, the plans got affected. It is also stated in the reply that they tried their best to save the material by arranging plastic and tarpaulin cover on the morning of 08.02.2007 when the rain started, but due to heavy rainfall, the damage was caused. The complainant, however, denied that the material was meant for export to Bangladesh. They stated that if the material was to be exported to Bangladesh, they would have directly loaded the same from Dewangree itself to Bangladesh. They also stated that as per practise, second-hand gunny bags were used for packing the material in maize industry.
4. The surveyor replied to them on 16.02.2007 that usually, on placement of rake, the trucks were requisitioned in sufficient number to unload the material directly into the trucks to avoid further reloading cost from dumped heaps. The surveyor also stated that the unloading could have been done within the stipulated time of 9 hours and moreover, there was sufficient time available to the complainant from 6:00AM to 2:00PM of 08.02.2007 for lifting of the material because the rain came around 2:30PM on 08.02.2007. the arrangement for covering of the whole heap was not adequate as stated in the earlier letter as well.
5. The OP have further stated in the written statement that the surveyor submitted his preliminary report dated 24.02.2007, pending assessment of the estimated loss, in which he stated that the complainant had not taken immediate measures for clearance of damaged maize, till the onset of rain on 08.02.2007 and moreover, many bags of the stacks were found torn and their contents had spilled over and cattle were seen eating up the spilled maize. There was further correspondence between the surveyor and the insured, regarding the assessment of the loss, having been made as Rs. 62,25,012.27/-. In the mean time, the surveyor requested the railway goods superintendent, Rishra, Hooghly to confirm the particulars regarding maize transactions from Rishra. Based on the information received from railway goods superintendent, Rishra, the surveyor sent a letter dated 23.03.2007 to the complainant, saying that 10910.4 qtls. maize were taken from Shalimar Yard to Rishra in 63 trucks on 14th and 15th February 2007, which shows that this quantity of 10910.4 qtls. was not damaged and the remaining quantity 10950.7 qtls. was in the possession of the complainant. It was alleged that there was suppression of material facts on the part of the complainant. After taking into account the quantity sent to Rishra, the surveyor made a fresh assessment of the total loss amount, amounting to Rs. 33,13,106.36ps. The insurance company stated that taking into consideration the report of the surveyor, and the fact that the complainant had taken delivery of the material as on 07.02.2007, they decided to repudiate the claim.
6. The complainant filed their rejoinder affidavit in which they denied that they could not make arrangements for the visit of the surveyor to the site on 09.02.2007. They also denied that they had not taken any immediate measures for clearance of dumps on 07.02.2007 and 08.02.2007 till the onset of rain, and there was damage to the stocks due to the inability of the complainant to mobilise the trucks for the movement of stocks in time. The complainant stated in the rejoinder that the maize grain deteriorated day by day, due to want of proper care on the part of the OPs as well as the surveyor. They also denied that they made any misrepresentation regarding 10910.4 qtls of stocks.
7. The OP Insurance Company filed their evidence affidavit which has been taken on record. The affidavit by Sh. G.C. Sahu surveyor in which he has stated that the loss was assessed at Rs. 36,17,610/- based on the investigation made by them, is also on record. On the other hand, the complainant did not file any affidavit evidence, despite several opportunities provided to them. Both the parties have, however, filed their written submissions.
8. In its written submissions, the complainant reiterated the issues taken in the consumer complaint, saying that the material got damaged due to heavy rainfall at Shalimar Railway Station and that they had promptly informed the insurance company about the damage. When the maize is exposed to water, it catches fungus, which, in turn, produces mycotoxins which are harmful to livestock. Further deterioration leads to aflatoxin and all these facts were brought to the notice of the OP. The complainant deserved to be compensated for loss of their business. Referring to para 5 of Inland Transit (rail/road) Clause A, the complainant stated that the insurance coverage was up to the warehouse at the destination station. The claim had, therefore, been wrongly repudiated by the Insurance Company.
9. On the other hand, it was stated by the OP Insurance Company that the material was handed-over by the railway authorities to the complainant on clear RR on 07.02.2007. Some of the material was loaded by the complainant in 14 trucks and sent to the buyers, whereas the remaining material was kept lying at the railway open siding and it was damaged in the rains. The dumping was made at open railway yard for future allocation and distribution, as and when required. The surveyor also came to know through investigation that the complainant had dispatched 10910.40 qtls of maize in 63 trucks from Shalimar to Rishra for onward dispatch to Bangladesh. Further, the complainant had violated clause 8 of Insurance Policy by not taking adequate steps to minimise the loss and by packing maize in second-hand gunny bags. The company was, therefore, absolved of its liability from indemnifying the loss, because of violation of the terms and conditions of the policy. The damage to the material could have been avoided if the packing material was of good quality and also, if the goods were removed from the Shalimar open railway siding. Since the policy had ceased immediately after the complainant took delivery from the railway authority at Shalimar yard under the RR, the claim was not payable.
10. We have examined the material on record and given our thoughtful consideration to the arguments advanced before us.
11. From the facts and circumstances on record, it is not disputed that the consignment of 24,700 qtls. of maize reached Shalimar Railway Station from Dewangree at 9:15 AM on 07.02.2007. It has come in the report of the surveyor that the rake consisting of 40 wagons was handed over to the complainant on surrender of clear RR. The unloading was completed at 7:15 PM on the same day. A part of the quantity, 2626.70 qtls. in sound condition was sent on 07.02.2007 itself to two buyers, Chaitanya Agriculture Products 1900 qtl. and Sakshi Commercial 726.70 qtls. The rest of the material, i.e., 22073.30 qtl. was dumped at Shalimar Railway open yard. It is also made out that there were heavy rains which started on the afternoon of 08.02.2007 that resulted in damage to the said material. The surveyor has brought out in his report that the complainant did not make any arrangements for movement of the material from the Railway station and its storage at appropriate place. They could not mobilise labourers and trucks for moving the material from the Shalimar Railway siding, otherwise the material could have been moved to a safer place before the onset of the rains. The complainant had a sale contract dated 02.02.2007 for 2100MT with M/s. Shalimar Pallets Limited and a verbal contract of 2500MT with M/s. Aram Bagh Hatcheries Limited also, but these contracts were cancelled by the parties after their inspection of affected maize on 11.02.2007 and 12.02.2007 respectively. This factor shows that the insured had no intention of moving the material from Shalimar Railway siding to any warehouse or a safer place.
12. It is further stated in the report of the surveyor that the insured placed rake indent No. 32 to the Shalimar Railway Authorities on 07.02.2007 at 1320 hrs. for dispatch of 2200MT maize from Shalimar to Darshana when the unloading operation from the original rake were going on. This indent was placed by paying an amount of Rs. 15,000/- in cash to the Railways vide money receipt No. 377015 dated 07.02.2007. On the basis of the indent, the Railways arranged 38 wagons and placed them at Shalimar at about 13:30 hrs on 10.02.2007 for loading of maize. However, the said indent was cancelled by the insured at about 2:18PM on 10.02.2007, stating reasons of water damage to maize. These facts also make it clear that the insured had no intention of moving the material from Shalimar Railway yard immediately after arrival on 07.02.2007 and used the said place for transit purpose only. In their first letter dated 09.02.2007 sent to the OP after the damage had taken place, the complainant had themselves stated that about 2230.46 MT of material had been dumped at Railway siding for further delivery. The intention of the complainant is, therefore, clear that they wanted to deliver the material to other parties from the Railway siding only. We are, hence, in agreement with the surveyor that the Shalimar Railway Yard was not a place in ordinary course of transit and any loss during storage at that place shall not be payable under the policy. The contention of the OP, therefore, that the material was duly handed over to the complainant on 07.02.2007 is, therefore, not controverted from the facts and circumstances on record.
13. Further, the OP Insurance Company has raised the plea that the complainant packed the material in question in used second-hand gunny bags and hence, violated the packing instructions. It is a fact admitted by the complainant in his letter dated 13.02.2007 addressed to Sh. G.C. Sahu, surveyor that, 'As per the custom and practise followed in maize industry, people generally used second hand gunny bags only and not new gunny bags. They generally get torn after 3 or 4 times handling'. The complainant maintained that there was no clear instruction to use new gunny bags only. In this regard, it has been brought out in the report given by the surveyor that many bags at the Shalimar Railway Siding were found torn and their contents spilled over and cattle were seen eating up the spilled maize. The surveyor made the above observation during his inspection of the stacks on 09.02.2007 on the spot. The surveyor has also pointed out in his report that 'many cows, buffaloes, goats were seen eating up the spilled maize in the open yard of the railways.' It is evident, therefore, that the bags used for the consignment of maize were not of appropriate standard/quality. It is made out, therefore, that the action of the complainant in using second-hand gunny bags led to avoidable damage to the grains.
14. The OP Insurance Company have also taken the plea that there was not adequate arrangement for covering the material with tarpaulins or HDPE sheets. In the letter dated 13.02.2007 sent by the complainant to the surveyor, they stated that 'they tried their best to save the material by arranging plastic and tarpaulin cover immediately in the morning of 08.02.2007 when rain started, but rainfall was heavy and stormy which caused the damage.' The version given by the complainant gives the impression that the tarpaulin and plastic cover etc. was not adequate. The surveyor has stated in his final report as the cause of loss that the stacks were covered by the tarpaulin at the top of the stacks. The outer periphery was left uncovered due to small length and width of the tarpaulin. The box kept at the outer periphery suffered greatly as compared to the bags placed at centre and at the top. The lower tier of the stacks suffered damage due to accumulation of water on the floor. It is clear from these facts that the complainant failed to provide adequate cover to the stocks to prevent or minimise damage due to rains.
15. From the entire set of facts and circumstances covering this case, it emerges that when the consignment of maize reached the Shalimar Railway siding and delivery of the material was given to the complainant against RR for unloading the grains from the railway wagons and for its further movement, storage, disposal, etc., it was the primary responsibility of the complainant to take adequate steps to safeguard the material from possible damage due to vagaries of weather or other eventualities etc. The complainant ought not to have used second hand damaged gunny bags for transporting the grain to Shalimar Railway Station. Had they not used second hand and damaged gunny bag
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s, the loss due to rains would have been much lesser. Moreover, they did not disclose it to the insurer that they would be transporting grain in old and damaged gunny bags. Had they done that, the insurer would probably not have insured their goods, considering the risk involved in use of damaged gunny bags for transportation. Further, from the spot inspection by the surveyor and further inquiries etc. it is revealed that the complainant did not take immediate steps to move the consignment to a safer place, rather they were making efforts to dispose of the material by selling to one party or the another or to move it to another destination for the purpose of export to Bangladesh. As already mentioned, the complainant had stated in their letter of intimation dated 09.02.2007 to the OP Insurance Company that the material was meant for further delivery. In his letter dated 13.02.2007 sent to the complainant, the surveyor has highlighted the issues that the complainant had not exercised reasonable care in averting or minimising the loss as they did not make adequate arrangement for handling the material promptly on 07.02.2007 and 08.02.2007 and also they did not keep the dumped heaps covered till the onset of the rains. Moreover, the covered sheets were not big enough to envelop the whole heap. The OP Insurance Company, therefore, rightly contended that after the material was handed over to the complainant at Shalimar Railway Station, the complainant failed to exercise reasonable care of the same and hence, did not perform his duty, laid down in clause 8 of the policy, otherwise the damage to the stocks could be avoided/minimised. 16. From the discussion above, it is held that the Insurance Company has rightly repudiated the claim of the complainant in respect of the damage suffered to the stocks in question. There is, therefore, no merit in this consumer complaint and the same is ordered to be dismissed, with no order as to costs. Revision Petition dismissed.