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Friday, January 1, 2021

15 crore mobile sets heist .. .. cargo lost in transit - Prudence and Insurance !!


Covid 19 has maimed the economy, they say ! .. .. but there are sales – and yesterday a textile showroom witnessed thousands thronging and subsequently sealed by authorities ! – it is stated that there aren’t many options if you want a smaller smartphone, with Apple’s iPhone 12 Mini, iPhone SE 2020, and the Google Pixel 5 being three of the more prominent recent examples.  In every web, am inundated with news of OnePlus 8 (6GB, 128GB)  selling at Rs. 39,999 (MRP Rs. 41,999)  

Amazon Great Indian Festival 2020 and Flipkart Big Billion Days sales kicked off last week to mark the Navratri festive season ahead of Diwali. Both Amazon and Flipkart sales promise the “lowest” prices on popular smartphones ! and high discounts in Electronics and many other items – people are on a purchasing spree !     Apart from discounts, these sales also tempt with a bunch of  bundled offers that can further lower the effective price of these deals.  Sales and market activity are good for the Nation, someone said !

Insurers  evaluate the risk and the premium is based on exposure, the probable chance of occurrence, frequency and severity.  Burglary insurance provides indemnity for loss or damage to property insured from the premises insured directly resultant from acts of burglary. There is risk of theft /burglary during Marine transits too.  From an Insurance angle, it is not the value of the goods,  alone that matters.  Goods that can be sold easily in retail and grey markets [eg. Cigarette packs / batteries] are bad risks as compared to those which cannot be sold easily [eg. Special medicines].  Smaller items with high value [eg.,diamond rings] are worser risk than bulky items like machinery. Again those who have ready market in retail [eg mobile phones] are  bad risks as compared to those which cannot be sold so easily [say precision machinery].  In contrast, exhibition items / objects with antique value are higher risks unless proper security arrangements are in place.

Goods are moved from one place to another either due to sale or otherwise – the movement involves a Carrier and insurance of such goods in transportation is ‘Marine (Cargo) Insurance’ covering perils that could affect the cargo during the transit.  The primary duty of the carrier is to transport and handover the goods at destination, much in the same manner as they were entrusted .. .. .. there could be some loss or damage occurring during transit and the Carrier would try to protect themselves through the provisions of enactments ! Goods may not be delivered at destination – risk of non-delivery : dictionary meaning :  goods as handed to carrier not received at destination i.e., not delivered by them.  It can arise out of host of factors including fire, theft, neglect, failure, refusal to deliver, wrongful acts of employees handling and more – on the part of carrier, vendor, bailee et al.

Until 1824, Lloyd's and two insurance companies, the London Assurance and the Royal Exchange Insurance, were the only entities allowed by law to conduct marine insurance business in the United Kingdom.  Lot evolved after that with the expansion in the no. of companies and types offered.  For long it was the  historic S.G. form, which had its own origins in the 17th Century.

How prudent are people ?  -  long ago (in early 1990s) a famous Manufacturing Unit at Tuticorin imported equipments worth 30 lakhs (huge value those days) and from airport, they were taken to Tuticorin being booked as parcel in ‘passenger bus’ on payment of Rs.85/-  The goods were lost in transit, the Carriers had to pay nothing and Insurers too repudiated the claim !

Though it would appear that it is the responsibility of the Carrier to deliver safely, some might be startled to know that as per  Sec 12 of Carriage by Road Rules 2011 – the liability of the Carrier for loss or damage of the goods is restricted to 10 times the freight !  If the value is declared to the Carrier and freight paid to that effect, their liability would be the value of cargo !.  Insurers thus end up paying huge value claims without recourse of recovery against the carriers, rather the value of recovery would be very small proportion of the value of the claim. Generally, Insures restrict their exposure by ‘per bottom limit’ ie., the limit per sending ie., the maximum value of a specific consignment per conveyance and there is another restriction of ‘per location’ limit too.  BUT – no such restriction would apply when the coverage is a specific transit policy ie., when value / transit / details are specific to a single transit.

With this lengthy background, now read the newsitem in Times of India and Daily Thanthi, Chennai edition.  Ten men hijacked a truck carrying Rs 15 crore worth of mobile phones from Chennai to Mumbai after attacking and tying up the driver and cleaner near Krishnagiri in the wee hours of Wednesday. The gang members, all of them heard speaking among themselves in Hindi, later abandoned the truck after transferring the loot to their vehicle and dumping the driver and cleaner.

“As many as 14,400 mobile phones in 1,440 boxes from a Redmi mobile phone unit at Poonamallee in Chennai were being transported by DHL Express,” said C Murali, Hosur DSP. K Sathish Kumar, 29, of Poonamallee was at the wheel and N Arun, 24, of Coimbatore was the cleaner. Sathish Kumar left Poonamalle around 3pm on Tuesday and after a halt for dinner at Vellore around 8pm resumed the journey around 10.30pm. Around 2am on Wednesday, when the truck neared Melumalai, a hilly area between Krishnagiri and Shoolagiri on the the Chennai-Bengaluru national highway, another truck blocked the way and six men got in. “They attacked Sathish Kumar and Arun before blindfolding them and tying their hands and feet. They then set out in the same truck,” the DSP said.  A few minutes later, the gang stopped the truck on the road side and four others from the second truck joined them and the trussed-up driver and the cleaner were taken out and dumped in a clump of bushes some distance from the road. “The two trucks then drove to Azagupavi, 8km from Melumalai, where the DHL Express truck was found,” the DSP added. The 10 men did not cover their faces and they all appeared to be from other states,” the DSP said, based on Sathish Kumar’s statement during inquiry.

A little while later, Satish Kumar and Arun managed to cut their bonds and came on to the road. They stopped an ambulance of the 108 service and narrated their plight. The driver took them to the government hospital in Krishnagiri town. Later, he helped Sathish Kumar inform the Hosur town police of the heist. Soon Murali, Soolagiri inspector Saravanan and other officers arrived at the spot. Salem range DIG Pradip Kumar and Krishnagiri SP Bandi Gangadhar reached there. “We have formed 17 teams to nab the culprits,” Pradip Kumar told TOI. The gang members had left no clue but investigators were scouring footage from CCTV cameras at the spot in an attempt to identify the truck and the thieves.The Soolagiri police registered a case.

Most likely this transit too was insured and this would result in 15 Crores + customary uplift of 10% over the value, as insured under the policy.  Most unlikely that Insurers would have sought additional details nor restricted such high value transit in a single truck or imposed any additional condition / warranty on safety / security .. .. ..

This is not the first time, in Aug 20,   in broad daylight, a gang of 6-7 robbers who followed a truck carrying mobile phones consignment from Chennai to Mumbai, waylaid the truck and robbed off mobile phones worth approximately Rs. 6 crore near Nagari along the Andhra Pradesh-Tamil Nadu border.  According to Nagari Circle inspector, a truck with Maharashtra registration number MH 04 HD 6477, carrying a consignment of 15,000 mobile phones was on its way to Maharashtra from Sriperumbudur in Chennai.   On that occasion too, a  gang of robbers had  followed the vehicle from its originating point, waylaid the truck after it passed the last Tamil Nadu checkpost and entered the state of Andhra Pradesh, near Nagari. The gang of robbers  thrashed the driver and pushed him off the truck, tied him up and hijacked the vehicle along with the mobile phones consignment.

There are lessons to be learnt in every situation, every loss .. .. .. who learns decides their fate!  If one continues to face situations in the same manner, results could no longer be different !

With regards – S. Sampathkumar


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