Tuesday, July 24, 2012

Non delivery in Marine Insurance - unpaid driver escapes with liquor lorry


The purpose of taking a Marine Insurance Policy is to cover the goods whilst they are moved from one to place to another.  The coverage is governed by the clauses attached to the Policy and in India – it would be ‘Inland Transit (Rail/Road) clause’ when the transit is by road / rail and Institute Cargo Clauses [C/B/A] when moved by sea. 

Besides the basic perils, there is ‘Theft, Pilferage and Non-delivery’ attached specifically to policies extending coverage. 

In legal parlance, Non-delivery, is failure to convey or transfer a legal instrument or goods as required by law or custom.  The coverage offered under Marine Policy is primarily one providing indemnity  when the consignment in its entirety is not delivered at destination by the Carrier to whom the goods were entrusted.

When the coverage is only for basic [listed perils] extended to cover TPND [Theft, Pilferage, Non delivery] – short delivery or shortage of contents in a package where package itself is delivered will be outside the purview of coverage.   There have been varied interpretations depending the nature and circumstances of non-delivery and Courts have held that where the goods are not delivered by the Carrier because the vessel was arrested would not be construed as non-delivery.  Also a mis-delivery where goods are delivered by the contracted Carrier to a wrong party on production of bill of lading is construed outside the purview of this coverage. 

However with this ‘TPND’ clause incorporated also, the policy is not to provide wholesome coverage against ‘any loss of package arising out of whatsoever cause’.  Some simplest of examples of ‘non delivery’ still not within the purview of coverage  could be – seizure by Public authority, package jettisoned by the carrier [when the coverage is on restricted terms], misdelivery especially on production of documents, consignment taken to wrong destination by a carrier …….

The cargo owner knows the value of their goods – it is not only the inherent value, the commercial value, or the Invoice value of the goods – also there is the potential profits that would be realized upon sale of goods at destination, the loss of market, market share, potential good will and other issues – hence generally, cargo owner would not like a loss to happen, even when they are fully protected by insurance.  Still, you often come across instances of ‘high value cargo’ entrusted to literally unknown operators / carriers and often even basic check of vehicle / driver records are not carried out.

There have been instances where the carrier or the lorry driver ran away with the high value cargo, thus causing a huge loss to the cargo owner.  The risks is more when the cargo carried is one of high commercial value and which is an item sought after by the market consumer.  Thus a sophisticated machinery is lesser risk than that of white goods.  A consignment of cigarettes which can be sold in black market is potential bad risk.   The New Indian Express, Chennai reports of an interesting case where the driver escaped with a fully loaded van worth 14 lakhs of goods. 
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The newspaper article states that ‘Irked over his employer not paying his salary, a 32-year-old driver escaped with a van loaded with TASMAC liquor worth Rs 14 lakh from its godown at Ambattur Industrial Estate.  Hours after he threw a party to his friends with the stolen liquor in his hometown in Tiruvannamalai district and much before he could sell the rest of goods and vehicle to make easy money, he landed in police net.
photo and news from the New Indian Express - Chennai Edition

Police said they arrested L Baskar of Lourdh Madha Street, Sembiumpakkam, Polur Taluk in Tiruvannamalai district for allegedly escaping in a van with TASMAC liquor after tracing his cellphone signal. Baskar had worked for a person called T Vijaya Vasudevan (32) of Senthil Nagar, Kolathur, who had a contract to supply liquor from the TASMAC godown at Ambattur Industrial Estate to shops in and around Chennai, for the past one month. Police sources said Baskar claimed that he stole the vehicle with the liquor as he was upset with his employer for deducting his salary to compensate the expenses incurred on the van after it was damaged when it met with an accident 10 days back.  On Saturday, Baskar had taken the liquor from the godown and had supplied them to shops at Thirumangalam, Anna Nagar. He had later gone to a outlet at Koyambedu to supply liquor but had to return to the godown as he had reached the shop past closing time. After reaching Ambattur, Baskar parked the van in front of the godown as he could leave the rest of the goods back since it was already billed’…

So a case of non-delivery of consignment – the entire truck load missing after entrustment to a Carrier………

Totally unconnected to this :  Nondelivery report :  In the Internet's standard e-mail protocol SMTP, a bounce message, also called a Non-Delivery Report/Receipt (NDR), a (failed) Delivery Status Notification (DSN) message, a Non-Delivery Notification (NDN) or simply a bounce, is an automated electronic mail message from a mail system informing the sender of another message about a delivery problem. The original message is said to have bounced without deliverance to the recipient.

With regards – S. Sampathkumar.

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