Summary
The Court enhanced the indemnity for mass mortality of insured prawns by applying the policy’s loss-valuation methods to the State Fisheries Department’s certificate. The insurer could not disregard an independent certificate required by its own policy merely because it was adverse to its interests. The lowest contractual valuation was payable, with the unpaid balance carrying 10% simple interest from the complaint date.
Issues
- Which evidence and contractual valuation method governed quantification after remand.
- Whether the insurer could reject the Fisheries Department certificate required by its policy.
- What balance and interest remained payable.
Provisions considered
- Loss adjustment terms, Brackish Water Prawn Insurance PolicyAdmissible loss was the lowest of the input-cost, unit-cost and fortnightly valuations, calculated on the accepted evidence. (¶¶ 7, 8, 9, 10, 14)
- Clause 10, claims procedure, Brackish Water Prawn Insurance PolicyThe required certificate from Fisheries Department or MPEDA officials could not be rejected merely because its contents disadvantaged the insurer, subject to just exceptions. (¶¶ 11, 12, 13)
Held
- Having rejected much of the second survey report as unsupported surmise, the NCDRC could not convincingly rely on its low average prawn weight. The Fisheries Department certificate’s weight at death was more acceptable in light of the other survey evidence and the policy’s expected yield. (¶¶ 6, 10, 11)
- Utmost good faith binds insurer and insured alike, throughout the contract and thereafter. The insurer had expressly required certification by Fisheries or MPEDA authorities. Subject to just exceptions, it could not ignore that independent certification merely because it supported a larger claim; indemnification had to be fair and bona fide. (¶¶ 11, 12, 13)
- The three valuations were Rs 75,98,361 by input cost, Rs 75,87,750 by unit cost and Rs 79,20,000 by fortnightly valuation. The policy entitled the insured to the lowest, Rs 75,87,750. Crediting Rs 30,69,486.80 quantified by the NCDRC left Rs 45,18,263.20 payable. (¶¶ 7, 8, 9, 14)
- The NCDRC’s 10% simple interest rate was just and equitable. The balance was payable with that interest from the complaint date to realisation within six weeks, with each side bearing its own costs. (¶¶ 14, 15, 16)
Result
Appeal disposed of with enhanced indemnity. Insurer to remit Rs 45,18,263.20 plus 10% simple interest from the complaint date to realisation within six weeks. Parties to bear their own costs.