IN THE SUPREME COURT OF INDIA  

CIVIL APPELLATE JURISDICTION  

CIVIL APPEAL NO. 362       OF 2009   (Arising out of SLP(c) No.  9122 of 2008)

M/s. Malnad Traders …Appellant  

Versus

M/s. New India Assurance Co. Ltd. … Respondent

J U D G M E N T  

B.SUDERSHAN REDDY,J.

Leave granted.  

2. This appeal is directed against the judgment and order

of the High Court   of Karnataka dated 17.8.2007 passed in

RFA No. 959 of 2001   which was allowed in part reducing

the amount of damages of Rs. 1,26,055.87 granted by the

trial court to that of Rs. 48,556/-  only with interest @ 6%

from the date of suit till realization.                                   

3. Brief facts needed for disposal of this appeal are as under:  

4. The  appellant  -  M/s.  Malnad  Traders  (hereinafter

referred  to  as  “the  appellant  firm”)  is  a  registered

partnership firm carrying on its business in Rice Mills and Oil

Mills  at  Shimoga  in  various  buildings,  godowns  and open

yards.  On 7.12.1982, the entire premises of the appellant

firm  including  buildings,  machineries,  equipments  and

stocks in trade were insured with the respondent - M/s. New

India  Assurance  Company Ltd.  (hereinafter  referred  to as

“the respondent company”) under the fire insurance policy

bearing No.1229400593.   On 26.3.1983,  there  was a fire

accident  in  the  business  premises  of  the  appellant  firm

resulting in damage to the insured properties and as well as

injuries to two of its employees.  On 11.4.1983, a detailed

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report of the incident and extent of damages suffered was

sent  to  the  respondent  company.   After  completing  the

formalities,  the  Surveyor  of  the  respondent  company

inspected the premises and prepared a detailed report about

the  extent  of  damages  caused  to  the  properties  of  the

appellant firm. Thereafter the appellant firm lodged its claim

with the respondent company amounting to Rs. 3,33,056.87

as compensation for damages caused to its properties due

to the fire  accident along with documentary evidence.  On

failure of the respondent company in settling the claim, the

appellant  firm  served  a  legal  notice  on  5.7.1984  which

remained  uncared  for  by  the  respondent  company.

Thereafter the appellant firm filed the suit bearing No. 61 of

1986  claiming  inter  alia  an  amount  of  Rs.  3,33,055.87

towards damages along with interest @ 19.5% per annum

before  the  Principal  Civil  Judge  (Sr.  Dn.)  and  C.J.M.  at

Shimoga.  The  Principal  Civil  Judge,  Shimoga  decreed  the

suit for a sum of Rs. 1,26,055.87 and awarded interest at

6% from the date of filing of the suit  till  realization.  The

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respondent company being aggrieved by the same filed RFA

No.  959  of  2001  before  the  High  Court  of  Karnataka  at

Bangalore which  was allowed in part reducing the amount

of damages of Rs. 1,26,055.87 granted by the trial court to

that of Rs. 48,556/- with interest @ 6% from the date of

filing of the suit till realization. Hence this appeal.

5. We have heard the learned counsel  for the appellant

and perused the impugned judgment and the material made

available on record. Despite service of notice none appeared

on behalf of the respondent company.   

6. Appearing  on  behalf  of  the  appellant,  Shri  G.V.

Chandrashekar,  learned  counsel  submitted  that  the  High

Court has committed serious error in reducing the amount

of  damages  without  assigning  any  reason  whatsoever.  It

was  also  submitted  that  the  High  Court  was  under  an

erroneous impression as if the appellant was seeking further

enhancement  of  the  claim  and  in  the  process  made  an

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observation commenting as if the appellant manipulated and

altered the documentary evidence.  

7.  It is  to be noted that  both the courts concurrently

found that the insurance coverage was in respect of entire

premises and machinery installed therein and the policy was

alive and in force on the date of fire accident.  The appellate

court  even  rejected  the  submission  of  the  respondent

company  that  the  appellant  under  document  Exhibit  D-5

agreed to receive a sum of Rs. 21,440/- only in full and final

settlement of the claims.  The appellate court in this regard

came to the conclusion that there was no proof of full and

final settlement of claims in terms of document Exhibit D-5.  

8. The  damages  claimed  by  the  appellant  firm  were

classified under the following heads:-

1. Damage to building.  

2. Damage to machinery  

3. Damage to electrical wiring.  

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In support of the claim the appellant firm relied on the

documents viz. bills (Exhibit P-6 to Exhibit P-213) and also

oral evidence of PW-2 to PW-9.   

9. PW-2 Ramachandrappa, a building contractor has been

examined  who  stated  in  the  evidence  that  a  sum of  Rs.

30,000/- was spent for purchase of materials and a sum of

Rs.  5,000/- was paid for labour charges towards the civil

works  of  the  building.  The  learned  trial  court  upon

appreciation  of  the  evidence  allowed  only  a  sum  of  Rs.

5,000/-  towards  labour  charges  and  the  amount  spent

towards purchase of building materials  was disallowed for

want  of  proof.  The learned  appellate  court  construed  the

finding of the trial  court as if the appellant firm preferred

appeal  in  that  regard  and  in  the  process  came  to  the

conclusion that there was no proof  regarding  the amount

spent for purchase of materials. In fact, the trial court did

not award any amount in that regard. The approach adopted

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by the appellate court is more or less similar in respect of all

the issues.

10. The  appellate  court  went  on  upholding  the  findings

recorded by the trial court which actually were not in favour

of the appellant firm.  The whole approach adopted by the

High Court was as if  the appellant firm preferred the first

appeal without any merit whatsoever.  The first appeal, in

fact, was preferred by the respondent company.  

11. The  appellate  court  having  upheld  and  accepted  the

reasoning of the trial  court  without recording any reason

whatsoever  modified  the  amount  of  damages  of  Rs.

1,26,055.87  awarded  by  the  trial  court  to  that  of  Rs.

48,556/-.  

12. A perusal of the trial court judgment discloses that it

had not only taken note of oral evidence but of each and

every document filed by the parties and recorded a specific

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finding in respect of each of the items.  The trial court held

that  the  appellant  firm  is  not  entitled  to  a  sum  of  Rs.

2,07,000/- out of the total claim of Rs. 3,33,055.87 in the

following manner:  

1. Item No. 71 for Rs. 88,000.00

2. Item No. 76 for Rs. 30,000.00

3. Item No. 77 for Rs. 47,000.00

4. Item No. 78 for Rs. 40,000.00

Plus Rs.   2,000.00  

Total: Rs.2,07,000.00

The reason adopted in disallowing the claims in respect

of the items referred to herein above has been upheld by

the  High  Court  but  without  recording  any  reason  further

reduced the amount of damages granted by the trial court.

There  is  no  reason  whatsoever  based  on which  the  High

Court  could  have  interfered  with  the  well  considered

judgment of the trial court.  It is clear that the trial court

upon appreciation of evidence upheld the receipts in exhibit

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P-70,  P-71, P-72, P-75, P-77,  P-181 and P-183.  The trial

court also relied upon exhibit  P-190 and P-199.  The trial

court relying upon exhibit P-190, exhibit P-188 and exhibit

P-199 and for the detailed reasons had granted Rs. 5,000/-,

Rs.  8,000/-  and  Rs.  5,000/-  respectively  under  the  said

documents.  Total  amount thus comes to Rs.  1,26,055.87.

The  trial  court  after  an  elaborate  consideration  rightly

deducted the claim in respect of item Nos. 71, 76, 77 and

78 and accordingly allowed only a sum of Rs. 1,26,055.87

towards the damages.  There is not a single reason in the

judgment  of  the  High  court  for  reducing  the  quantum of

damages awarded by the trial court.  

13. For  the aforesaid  reasons,  the  appellant  succeeds  in

this  appeal.   The  impugned  judgment  of  the  High  court

made in RFA No. 959 of 2001 is set aside and the decree

and judgment of the trial court is accordingly restored.  

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14. The appeal is, accordingly, allowed without any order

as to costs.  

……………………………………J.       (Lokeshwar Singh Panta)

……………………………………J.      (B. Sudershan Reddy)

New Delhi;  January 22, 2009  

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