1998 (7) TMI 708 - HC - Indian Laws

Summary

Issues Involved:
1. Validity of the suit.
2. Entitlement of the plaintiff to the suit claim.
3. Amount of compensation or damages the respondent firm is entitled to.
4. Existence of stock on the date of the fire accident.
5. Claim for gunny bags and stock pertaining to Mr. Agarwal.
6. Appropriate rate of interest on the awarded amount.

Detailed Analysis:

1. Validity of the Suit:
The Court did not specifically address the validity of the suit as a separate issue, indicating that the suit was accepted as validly filed without dispute.

2. Entitlement of the Plaintiff to the Suit Claim:
The plaintiff, a registered firm dealing in Ghee and red-chillies, claimed compensation for the loss of stock due to a fire accident. The stock was insured under a valid insurance policy. The defendant-insurer contested the claim, arguing that the stock amount was exaggerated and not properly accounted for. The Court, after examining the evidence, decreed the suit in part, awarding Rs. 66,271/- with subsequent interest at 18% per annum, rejecting the claim for stock belonging to Mr. Agarwal and the cost of gunny bags.

3. Amount of Compensation or Damages:
The Court had to determine the amount of compensation or damages the respondent firm was entitled to. The plaintiff provided evidence through witnesses and documents, including the day-book, ledger, and stock register. The Court found that the accounts were maintained in the regular course of business, making them relevant under Section 34 of the Indian Evidence Act. However, the Court noted that entries alone were insufficient to charge liability without independent evidence of their trustworthiness.

4. Existence of Stock on the Date of the Fire Accident:
The Court examined whether the stock existed on the date of the fire accident. The plaintiff's evidence included testimonies from partners, ryots, and commission agents, as well as purchase vouchers. The Court accepted the evidence showing the stock's existence by 3-6-1981 and applied the presumption of continuity under Section 114(d) of the Evidence Act. The Surveyor's report (Ex.B7) indicated total damage, supporting the plaintiff's claim of stock loss in the fire.

5. Claim for Gunny Bags and Stock Pertaining to Mr. Agarwal:
The Court rejected the claim for gunny bags and stock pertaining to Mr. Agarwal. The existence of Mr. Agarwal's stock was not shown in the stock register, and there was no insurance coverage for the gunny bags. The Court found no compelling reason to differ from the trial Court's findings on these items.

6. Appropriate Rate of Interest:
The trial Court awarded interest at 18% per annum, which was contested. The Court modified the interest rate to 12%, aligning with the usual rate allowed by courts for commercial transactions.

Conclusion:
The appeal by the defendant-insurer was dismissed, and the cross-objections by the plaintiff were also dismissed. The Court directed both parties to bear their respective costs. The judgment was modified to reduce the interest rate from 18% to 12%.