JUDGMENT

B. P. JEEVAN REDDY, J. - This appeal is preferred by the Gujarat Maritime Board against the order dated 14-6-1996 passed by the National Consumer Disputes Redressal Commission rejecting the objections filed by the appellant.

2. The appellant had provided finance to one Shri Ramesh Chandra Gordhandas Faldu for purchasing a vessel, "Chandra Vasa". The amount of loan provided was Rs 11,25,000. The vessel was mortgaged in favour of the appellant (as a successor to the Director of Ports, Government of Gujarat). In the year 1982, Ramesh Chandra sold the said vessel to the first respondent, Shri Haji Daud Haji Harun Abu, for sum of Rs 3,00,000.

3. In June 1987 the said vessel, on its voyage from Dubai to Bombay, was caught in a hurricane and sank at sea. The vessel was insured with the United India Insurance Company Limited, the third respondent in this appeal. When Haji Daud laid a claim for the insurance amount, the insurance company refused to pay the amount to him on the ground that he has no insurable interest in the vessel, whereupon Haji Abu laid a complaint before the National Consumer Commission. The Commission recorded the following findings in its order dated 12-1-1995 :

"Though the complainant claims to have paid the consideration of Rs 3 lakhs in full, he was unable to produce the stamped receipt in token of having paid the balance consideration of Rs 2 lakhs to the owner of the vessel. The ownership of the vessel was registered with the Gujarat Maritime Board, Gujarat. According to the Maritime Board, the purchaser Shri Haji Harun Abu was only an administrator of the vessel but not the owner of the vessel.

The insured had paid the amount of consideration of Rs 3 lakhs in full : Rs 1 lakh as earnest money deposit and the balance of Rs 2 lakhs by way of bank draft. He has however, not been able to produce the receipt in support of the payment of Rs 2 lakhs. It is, however, not clear to us as to how the opposite party can maintain that the complainant had no insurable interest in the vessel and that therefore, no liability could arise under the policy of insurance. It was the duty of the insurance company to have verified the title of the insured at the time of insuring the vessel and issuing the policy of insurance. This was not a matter in the special and exclusive knowledge of the insured only. The proposer for insurance could have easily asked to produce his title to the vessel which he was getting insured by payment of premium from time to time.

The agreement of sale is between the registered owner of the vessel and the purchaser, i.e., the complainant before us. It appears that the title in this property was not transferred in the name of the complainant inasmuch as the mortgagee [The expression mortgagee obviously refers to the appellant herein.] also had an interest in the property along with the purchaser. The possession of the vessel and its custody was with the complainant. In fact it is seen from the communication of 25th September, 1992 by the Gujarat Maritime Board to the insurance company that the insured [The expression insured refers to Haji Abu.] was considered by the Board as an administrator and averred that the insurance amount should be paid only to the Maritime Board."

(The appellant-Board was not a party to the proceedings at this stage.)

4. Having recorded the said findings, the Commission yet found that the complainant/insurer was "the de facto owner of the vessel" that he was in possession of the vessel and had insured it with the third respondent and that no other person had laid a claim for the insurance amount. On that basis, it concluded :

"From the totality of these facts, there is no doubt that the complainant has insurable interest in the property and the repudiation or non-payment of the claim on the ground that the insured had no insurable interest was not correct, fair or proper. In the result, there has been deficiency of service on the part of the insurance company. We theref