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2025 Supreme(Kar) 684
IN THE HIGH COURT OF KARNATAKA AT DHARWAD BENCH
SACHIN SHANKAR MAGADUM, G. BASAVARAJA, JJ.
United India Insurance Company Limited - Appellant
Versus
Jayavant Products Limited - Respondent
Regular First Appeal No. 100049 of 2020
Decided On : 06-06-2025
Advocate Appeared:
For the Appellant : S.K. Kayakamath
The court upheld the principle of indemnity and clarified the burden of proof on the insured to demonstrate losses incurred due to a fire, affirming the trial court's award of damages.
Headnote:(A) Insurance Act, 1938 - Principles of Indemnity - The plaintiff (Pub. Ltd. Co.) filed for recovery of Rs.3.53 crores against the defendant (Insurance Co.) regarding loss from fire affecting insured goods worth Rs.2.27 crores. The trial court decreed the claim for Rs.1.56 crores with interest at 8%. The defendant contested liability, alleging policy violations. (Paras 6-25)
(B) Evidence - Burden of proof lies with the plaintiff to establish loss. The trial court relied on credible evidence including a fire certificate; thus, orders were deemed justified. (Paras 22-24)
(C) Judgment follow-up - The defendants failed to provide sufficient evidence of policy breaches. The original suit's judgment was confirmed on appeal. (Paras 25).
Facts of the case:
A fire at plaintiff's godowns resulted in the loss of stock worth Rs.2.27 crores. Claims submitted were rejected by the defendant based on allegations of fraud and policy violations.
Findings of Court:
The trial court found the plaintiff entitled to partial relief, awarding Rs.1.56 crores.
Issues: The key issues included proof of insured goods at the time of loss and validity of claim rejection by the insurer.
Ratio Decidendi: The appellate court upheld the trial court’s finding; absence of cogent evidence supporting fraud allegations against the plaintiff.
Result: Appeal dismissed.
| Table of Content |
|---|
| 1. appeal against trial court judgment. (Para 1 , 2) |
| 2. plaintiff's insurance claim and circumstances of loss. (Para 3 , 5 , 6) |
| 3. defendant's arguments against plaintiff's claim. (Para 4 , 10 , 12) |
| 4. defendants challenged the claim citing policy violations and lack of evidence. (Para 8 , 9) |
| 5. court assessed the evidence and found no grounds for interference with the trial court's ruling. (Para 13) |
| 6. burden of proof and presumption of authenticity. (Para 14 , 22) |
| 7. evidence considered and assessment of loss. (Para 23 , 24) |
| 8. final order dismissing the appeal. (Para 25) |
JUDGMENT :
G. BASAVARAJA, J.
1. The appellant in this appeal is assailing the judgment and decree dated 31st August, 2019 passed in Original Suit No.243 of 1998 by the Principal Senior Civil Judge, Hubballi (for short hereinafter referred to as the “trial Court”).
2. For the sake of convenience, the parties in this appeal are referred to with their rank and status before the trial Court.
3. Facts in nutshell leading to this appeal are, Plaintiff filed suit against defendants seeking recovery of Rs.3,53,70,000/- with interest at the rate of 21% per annum on insurance amount of Rs.227.04 lakh. It is stated in the plaint that the plaintiff is a Public Limited Company duly registered under the Companies Act, 1956. Defendant No.1 is an Insurance Company carrying its business in General Insurance having its Head Office at Chennai and Divisional Office at Hubballi. Plaintiff is a Small-scale Industry having its manufacturing unit at Sherewad village, Hubballi Taluk and for the past several years carrying on business in manufacturing Hill-Grass Brooms, Plastic Brooms, Toilet brushes, etc. in the name and style as "Monkey Brand Brooms", "555 Brand Brooms", "Scented Brooms". The products of the plaintiff have acquired name and fame and are available in every nook and corner of the country and every household is acquainted with the plaintiff’s brand of brooms. The plaintiff has 100 employees directly working under it and nearly 500 employees are working through labour contractors and the annual turnover of the plaintiff-company is about Rs.8.00 crore and the employees, dealers and distributors are depending upon the production and marketing of the plaintiff-company. It is contended that the plaintiff-Company has taken three Go-downs-A, B & C on lease as Jaratarghar godowns situate at Gabbur, Hubballi and also has another godown at the factory premises at Sherewad. The plaintiff-company is procuring hill grass from North-eastern States like West Bengal and Assam and as the hill grass is available only in the months of January and February, the plaintiff-company is constrained to purchase the requirement of the company for the entire year during those months and stock them in their godowns at Gabbur, Hubballi. It is further contended that the plaintiff-company has sophisticated and modern machinery in its factory for manufacturing brooms and other products and in that regard all the machinery, equipments, raw-material, finished products, including packing material, were insured with the defendant No.1 under its Hubballi Branch for a sum of Rs.4,24,00,000/- under Policy No.0711002/0/11/13/01011/97-98 dated 21st July, 1997 out of which, Gabbur godowns were insured for a sum of Rs.2,25,00,000/- by paying premium of Rs.3,44,250/- and the defendant No.1 issued policy under cover note in conclusive proof of contract of insurance which is based on the principles of Uberrima-fides. It is also contended that the details of raw- materials, stocks and valuation of each godown and factory premises and its machinery were given in the proposal form and the same had been accepted by the defendant No.1. It is contended that in the intermediate night of 22nd and 23rd August, 1997, a fire accident took place in Jaratarghar A, B & C Godowns resulting in entire stock worth Rs.2,27,04,000/- burning down to ashes. These godowns were insured for fire, malicious damages, etc. for an amount
