Calcutta High Court
Irc Natural Resources Pvt. Ltd vs The New India Assurance Company Ltd on 25 November, 2020
Author: Arindam Mukherjee
Bench: Arindam Mukherjee
ODSL-23 & 24
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
IA NO.GA/1/2020
In CS/82/2020
IRC NATURAL RESOURCES PVT. LTD.
Versus
THE NEW INDIA ASSURANCE COMPANY LTD.
AND
IA NO.GA/2/2020
In CS/82/2020
IRC NATURAL RESOURCES PVT. LTD.
Versus
THE NEW INDIA ASSURANCE COMPANY LTD.
BEFORE:
The Hon'ble JUSTICE ARINDAM MUKHERJEE
Date : 25th November, 2020.
Appearance:
Mr. Jishnu Saha, Sr. Adv.
Mr.Joydeep Sen.Adv.
Ms. Sananda Ganguli, Adv.
Mr. Rohit Banerjee, Adv.
Mr. Shubradip Roy, Adv.
Mr. Soumendranath Gangopadhyay, Adv.
The Court : IRC Natural Resources Private Limited, the plaintiff is the owner of a Mobile Harbour Crane (in short, MHC) which was deployed at the Haldia Dock Complex of the Kolkata Port Trust (now known as Shyamaprasad Mukherjee Port). The said MHC was damaged due to a fire incident that occurred on 27th April, 2019. The New India Assurance Company Limited, the defendant is the insurer of the said MHC. The plaintiff lodged its claim with the defendant. The surveyor engaged by the defendant while processing the claim wanted to know the salvage value of the damaged MHC. The MSTC Limited was 2 approached for holding an auction. In course of the e-auction, the best offer received for the damaged MHC was Rs.78,11,890/-. This was given by one Mohit Steels having their place of business at 144/155, J.N. Mukherjee Road, Ghusuri, Howrah-711 107. The MSTC Limited made over the allotment letter dated 24th December, 2019 to the said Mohit Steels. However, before either Mohit Steels or the plaintiff could remove the damaged MHC from the place at which it is presently located, the defendant informed MSTC Limited not to proceed further with the auction as they have decided to repudiate the claim. The plaintiff's claim was repudiated by the defendant on 24th January, 2020. Since the auction sale could not be completed in favour of Mohit Steels, the damaged MHC is still lying within the limits of Shyamaprasad Mukherjee Port. There is every apprehension on the part of the plaintiff that the Port authorities may penalise the plaintiff for being unable to remove the damaged MHC from within its Port limits even after a considerable period of time. The plaintiff is also apprehensive about the further deterioration of the damaged MHC and says that if the damaged MHC is not allowed to be removed and sold, the salvage value will decrease and that will not inure to anyone's benefit. The plaintiff says that if it succeeds in the suit then the plaintiff will be entitled to the insurance claimed on account of the damaged MHC. The salvage value which the plaintiff may receive by selling the damaged MHC will then be deducted and the defendant Insurance Company shall be liable to pay the balance decretal amount. The plaintiff also says that in the event the plaintiff's suit fail, then also no further claim as against the defendant Insurance Company from the side of the plaintiff will lie. The plaintiff is satisfied with the salvage value offered by Mohit Steels and will continue to do so even if, its suit is dismissed. The plaintiff further says that Mohit Steels despite passage of time is willing to purchase the damaged MHC at 3 the same offered price, that is, Rs.78,11,890/-. If the sale is further delayed, the same will be to the detriment of the plaintiff. Prejudice will also be caused to the defendant as the salvage value is likely to decrease with the passage of time and on a decree being passed, the defendant will have to pay more.
The plaintiff also says that the auction was conducted at the instance of the defendant and/or the surveyor engaged by the defendant through MSTC Limited a reputed government auction house and as such there can be no allegation as against the plaintiff with regard to the salvage value being the offer of Mohit Steels.
The plaintiff, therefore, prays for an order to allow the MHC to be removed from the place where it is lying within the limits of Shyamaprasad Mukherjee Port be made over to Mohit Steels against the consideration of Rs.78,11,890/-.
The defendant Insurance Company says that since they have repudiated the claim the salvage value that may be received by selling the damaged MHC will be in consequential for them. The defendant Insurance Company, however, admits that the MSTC Limited had undertaken the exercise to auction the damaged MHC for recovering the salvage value. The recovery of salvage will also help in mitigation of damages. The defendant Insurance Company, however, says that the cost and expenses for the auction shall have to be borne by the plaintiff and/or adjusted from the sale proceeds that may be received by selling the damaged MHC. The defendant Insurance Company otherwise will be burdened with the expenses to its prejudice.
After considering the materials on record and the submissions made on behalf of the parties, it is clear that the damaged MHC has to be sold for recovery of whatever salvage value it gives to mitigate the damages. There is also as such 4 no dispute raised by the defendant Insurance Company as to the plaintiff's right to sell the damaged MHC and recovery the salvage value.
In the facts and circumstances as aforesaid, the plaintiff will be at liberty to remove the MHC or cause the same to be removed by Mohit Steels subject to any legal or procedural compliance to be made in favour of the Port authorities. The defendant Insurance Company shall render co-operation in the plaintiff removing the MHC or the MHC being caused to be removed by the plaintiff through the purchaser, Mohit. Since the offer of Mohit Steels has come through an e-auction conducted by MSTC at the instance of surveyor engaged by the plaintiff, no fingers can be raised with regard to the value offered by Mohit Steels as the salvage value of the said MHC. The plaintiff will also be at liberty to execute necessary document in favour of Mohit Steels for transferring the damaged MHC in their favour against the consideration of Rs. 78,11,890/-.
It is made clear that a copy of this order shall be served by the parties on MSTC within a fortnight from date of service of this order. The MSTC shall indicate to the parties the expenses incurred for holding e-auction. The plaintiff shall pay such costs and expenses or shall make over such amount from out of the sale proceeds to be receivable by selling the damaged MHC if the cost and expenses have not yet been paid. In the event the cost and expenses have already been paid to MSTC the parties will either add or set off out of their claims and cross-claims if any. In the event plaintiff pays the cost and expenses and ultimately succeeds in the suit, the plaintiff will be entitled to recover the same from the defendant if permissible in law. Nothing further remains to be adjudicated in the instant application, the same is, accordingly, disposed of without any order as to costs.5
Since I have not called for any affidavit, allegations contain in the application are deemed to have not been admitted by the defendant.
In view of the order passed in this application, GA No. 1 of 2020, no further order is required to be passed in GA No. 2 of 2020 and the same is also, accordingly, disposed of without any order as to costs.
(ARINDAM MUKHERJEE, J.) s.pal/nm