Summary
Transit insurance for a helicopter shipped in knocked-down condition did not continue while it was retained and assembled in Delhi for flight to Bhopal. That decision changed the insured subject matter and exceeded the ordinary course of transit; naming Bhopal as destination did not override termination terms. The insured also failed to prove that the tail-boom damage occurred during covered transit. The compensation orders were set aside and the complaint dismissed.
Issues
- Whether assembly and retention for flight fell within the ordinary course of insured transit.
- Whether naming Bhopal as destination preserved cover despite termination clauses.
- Whether the insured proved damage during the insured period.
Provisions considered
- Clauses 5, 6, 8 and 15, Institute Cargo Clauses (Air Cargo), incorporated in the insurance policyApplied termination, continuation by notice, insured-loss and reasonable-dispatch terms to the helicopter shipment. (¶¶ 17, 25, 27, 29, 30, 31, 32, 34, 35, 38, 39)
Held
- Insurance terms receive a reasonable commercial construction consistent with the whole instrument. Courts cannot substitute terms or extend liability beyond the agreed risk. Under Clause 5 the earliest stipulated termination event governs; the named ultimate destination does not itself guarantee continuing cover. (¶¶ 13, 14, 15, 16, 17, 39)
- Transit includes interruptions reasonably incidental to further carriage. Whether a deviation remains within ordinary transit depends on the policy and facts; storage for the assured’s commercial convenience outside the requirements of carriage may end cover. (¶¶ 18, 19, 20, 21, 22, 23, 24, 25, 30, 31)
- The contemporaneous letter showed an intention to assemble the knocked-down helicopter in Delhi and fly it to Bhopal. Unpacking and assembly for that purpose altered the insured subject matter and introduced operational risks outside this transit policy. Storage awaiting repair in these circumstances was not ordinary transit, and no continuation notice was given under Clause 6. (¶¶ 26, 27, 28, 29, 30, 31, 32)
- The assured bore the burden of showing on a balance of probabilities that the claimed loss occurred within the insured risk and period. It produced no supporting evidence and had accepted the surveyor’s finding that damage occurred in November after customs clearance. It could not rely merely on the ultimate destination to establish coverage. (¶¶ 33, 34, 35, 36, 37, 38)
- The windscreen claim fell within the policy deductible and its rejection was not challenged before the Court; the dispute concerned the tail boom. (¶ 12)
Result
Insurer’s appeals allowed; National and State Commission orders set aside and consumer complaint dismissed. No costs; pending applications disposed of.