We stayed in The Residence Portomare for two weeks in May 2012 and ate at the Bombay Palace several times and had many take-aways, and was never disappointed. I think this is the only true Indian restaurant in the area.
Like someone else said, the restaurant is often quite empty but don't let this put you off at all, it certainly is no reflection on the service or food. The decor might be a little dated but it is clean and comfortable.
If you like Indian food you must give this place a try.
Denis and Christine