1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF JULY, 2025 PRESENT THE HON'BLE MR JUSTICE S.G.PANDIT AND THE HON'BLE MR JUSTICE T.M.NADAF REGULAR FIRST APPEAL NO.268 OF 2011 (MON) BETWEEN: WIMCO LTD A COMPANY INCORPORATED UNDER THE COMPANIES ACT, HAVING ITS REGISTERED OFFICE AT INDIAN MERCANTILE CHAMBERS, RAMJI BHAI KAMANI MARG, BELLARD ESTATE, MUMBAI, REPRESENTED HEREIN BY ITS SENIOR MANAGER (LEGAL) MR MUKESHKUMAR ...APPELLANT (BY SRI. R SREEHDAR, ADVOCATE) AND THE MYSORE MATCH CO. LTD., A COMPANY INCORPORATED UNDER THE COMPANIES ACT HAVING ITS OFFICE AT B H ROAD, SHIMOGA …RESPONDENT (BY SRI. MURUGESH V CHARATI, ADVOCATE) THIS APPEAL IS FILED UNDER SECTION 96 OF CPC PRAYING TO a) SET ASIDE THE JUDGMENT AND DECREE DATED 1.10.2010 PASSED IN O.S.NO.271/1987 AND DISMISS THE SAID O.S.271/1987 FILED BY THE RESPONDENT AGAINST THE APPELLANT; b) ALLOW THIS APPEAL WITH COST, ETC THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 10.06.2025 AND COMING ON FOR ‘PRONOUNCEMENT OF JUDGMENT’ THIS DAY, T.M. NADAF J., PRONOUNCED THE FOLLOWING: 2 CORAM: HON'BLE MR. JUSTICE S.G.PANDIT AND HON'BLE MR. JUSTICE T.M.NADAF CAV JUDGMENT ( PER: THE HON’BLE MR JUSTICE T.M.NADAF ) This appeal is by the defendant under Section-96 of the Code of Civil Procedure (for short ‘CPC’), calling in question the judgment and decree dated 01.10.2010, in Original Suit No.271 of 1987, passed by the Principal Senior Civil Judge and C.J.M., Shivamogga, whereby the suit filed by the plaintiff seeking for damages was decreed partly, quantifying the damages at Rs.8,86,299/-, with interest at 6% per annum, from 31.12.1984 till the date of payment. 2. A brief outline of the facts leading to filing of the present appeal are as under: The plaintiff, owner of Mysore Match Company Limited, leased the company in favour of WIMCO Limited/defendant on 18.07.1977 under a lease agreement. On the basis of the said agreement, the defendant has taken over the entire factory consisting of the building, entire plant as well as the machinery. In the year 1982-83, due to some misunderstandings as contended by the plaintiff that the Officers of the defendant dismantled the machinery, replaced 3 the valuable parts with used and cheap materials, allowed the machineries to rust and never attended to timely repairs of the buildings and also not maintained regular service, whereby damaged building, machinery and electrical motor and electrical installation. The defendant has not taken care of entire building, as well as machineries and equipments, as he was ordinarily expected to take care of the lease hold properties, which drove the plaintiff to file a suit in O.S. No.156/1983. On 14.11.1983 an inventory was done. Subsequently, an interim order of temporary injunction passed against the defendant from manufacturing any core veneers. 3. The defendant took the temporary injunction order in appeal before this Court. This Court confirmed the order of temporary injunction passed against the defendant and dismissed the appeal. In the meanwhile, a compromise was reported to the Court in O.S.No.156/1983 on 12.07.1984. In pursuance of the compromise, the defendant agreed to deliver possession of the lease hold premises and the machineries on or before 31.05.1985, with a fifteen days clear notice. The defendant had expressed to hand over the property on 31.12.1994. The plaintiff in a joint inspection held between 22.12.1984 to 29.12.1984, noticed certain damages said to have been done to the lease hold properties and the same was given for estimation. On that, the experts said to 4 have given their opinion quantifying the value of damages on the basis of inspection conducted on 29.12.1984 and 30.12.1984. The plaintiff thereafter said to have made several requests to the defendant to make good the damages, as the request were not honored present suit came to be filed claiming a sum of Rs.23,11,386/- as damages to the building, machinery and electrical equipments in O.S. No.271/1987 before the Principal Senior Civil Judge & C.J.M., Shivammoga. 4. In pursuance to the notice issued, the defendant appeared through the counsel and filed written statement denying the entire case put forth by the plaintiff, inter-alia contending that the property leased was purchased by the plaintiff in the year 1940. It was more than 40 years old as on the date of lease. Even according to the plaintiff, as contended by the defendant, the factory was running till the year 1968 and due to certain contingencies stopped manufacturing and the factory premises was kept closed till 1977 and it was only in 1977, the property leased to the defendant. At that point of time, after taking the property on lease under lease agreement the defendant had effected certain repairs to the buildings, machineries and electrical parts by investing considerable expenditure for running the factory. The plant and the machineries including the building and electrical 5 equipments were abandoned for a period of nearly 10 years as stated supra, without there being any periodical maintenance which caused rusting to the plant machineries, the building became weak for non-maintenance and plants had rooted in several parts of the building causing immense damage to the building which had been repaired by the defendant. The defendant apart from denying the damages said to have been caused by it, also submitted that the experts were incompetent, biased and submitted the inspection report only to suit the untenable claims made by the plaintiff and sought for dismissal of the suit. 5. Upon completion of the pleadings, the trial court framed eleven issues and two additional issues, which reads as follows: “1) Whether the suit is properly instituted? 2) Whether the plaintiff proves that the plant and machinery were in good and running condition as on the date of lease? 3) Whether plaintiff proves that it was obligatory on the part of the defendant to maintain and take due care of the leased property? 4) Whether the plaintiff proves that the defendant dismantled machineries, replaced valuable parts as alleged in para-5 of the plaint? 5) Whether defendant damaged electrical motors and installations? 6 6) Whether the plaintiff proves that the defendant have caused damages to the leasehold property to the extent mentioned in para-11 of the plaint? 7) Whether the defendant proves that the plaintiff was to reimburse the amount spent for starting machinery and the amount spent for structural additions as contended? 8) Whether the defendant proves that he has Incurred expenses of Rs.1,75,629-88 paise to start the factory? 9) Whether the suit is barred by limitation? 10) To what relief the plaintiff is entitled? 11) What decree or order? Addl. Issues: 1) Whether the suit is hit of the compromise decree in O.S.No.154/83, as contended by the defendant? 2) Whether the suit is barred under Order-2, Rule-2 CPC?” 6. At an earlier point of time on 16.11.2000 the suit came to be decreed partly quantifying the damages at Rs.13,60,415/- with proportionate court cost and directed the defendant to pay the above amount within three months from the date of judgment. Feeling aggrieved by the judgment and decree, the defendant preferred an appeal under Section–96 of the CPC before this court in RFA No.229/2001. The plaintiff appeared through its counsel and finally the matter was heard and disposed off by the Co-ordinate 7 bench of this Court on 24.06.2009, whereby this Court having come to the conclusion that the oral and documentary evidence led in by the plaintiffs falls short to prove the actual loss sustained by way of damages caused to the building, machineries and electrical equipments / parts. 7. This Court in the judgment supra has noticed that the plaintiff has not constructed the building. It has purchased a running match factory in the year 1940. No documents were produced to show when actually the original factory was established, when the machineries were purchased by its vendor and so also the electrification was made to the building in order to prove the actual amount spent to establish the factory and the loss caused by defendant no.2. Findings of this Court stated in paragraph Nos.14 to 18, are as follows: “14. After hearing the parties, we notice that the Plaintiff Company has not constructed any building on its own. The plaintiff Company has purchased the running Match Factory in the year 1940. No documents are produced by the plaintiff to show when actually the original Factory was established and constructed and in which year these machineries were purchased by its Vendor and also the electrification made to the building in order to prove the actual amount spent by the plaintiff-Company to establish the Factory and the lost actually suffered on account of damages, if any caused by the defendant. PW2-Petel was an employee of the plaintiff-Company. 8 He deposed that he joined the Company in the year 1940 when the Company was started and he further admits that the Company was closed in the year 1967 and thereafter In the year 1977 it was leased to the defendant. PW3 has been examined to show the damages caused to the machineries leased out to the defendant by the plaintiff. He is an Electrical Engineer. According to him, he has assessed the damages caused to the machineries to an extent of Rs. 10,67,350/-. He admits that in the Arbitration proceedings which was pending between the plaintiff and defendant, his Report was held to be wrong and he has prepared the Report as per Ex.P6 in the absence of the defendant's representative. In other words, it is a Report prepared at the instance of the plaintiff behind the back of the defendant. He admits that he does not undertake the erection and commission of machineries. He further admits that he was not aware of the conditions of the machineries in the year 1966 when the plaintiff's Factory has closed. Similarly, he was not aware of the conditions of the machineries leased out to the defendant in the year 1977. He also do not know the year of manufacturing of those machineries and the value of the machineries when It was purchased. He further admits in para-8 of the cross-examination that he cannot say what parts of machineries were missing and he also unable to say the parts which are missing. He, however admits that he cannot give costs each of the missing machineries. He further admits in para-13 of the cross-examination, he prepared the report based on the instructions given by one Ramakrishna, Director of the plaintiff's Company. He admits that Ramakrishna had informed him that in the year 1977 when the machineries was leased to the defendant, those machineries were in working conditions and based on such instructions of Ramakrishna, he has prepared his report as per Ex. P6. He however admits that if Factory had been closed for 10 years prior to the leasing of the property, the value shown in his report as per Ex.P6 will not be the actual value and it would have been less. He has been cross-examined at length. He however submits that the fee payable to him would be based on the Valuation report. He further accepts that if he show more value, his fees will 9 also be Proportimately increased. Therefore, a suggestion is also made to him that he has prepared report as per Ex.P6 at the instance of the plaintiff and valuation is prepared showing the damages caused at higher rate only to get more Valuation fees. 15. Similarly, PW4- Shivanand has been examined to assess the damage caused to the electrical lines. In the cross-examination he admits that he was not aware that the plaintiff's Factory was closed in the year 1966 and he further admits that the electrical lines found in the premises was more than 40 years old. He admits that while submitting the Report, he has not opened the electrical line in order to ascertain the actual damages or loss. Similarly, he admits that he has not examined in detail the amount which required for repair and the cost of the wire and other materials. He also admits that no documents were given to him while preparing the Report. 16. PW5, one Iyanna is a retired Engineer. He also admits in the cross-examination that he assessed the value of the building and damage caused to it treating that the said building had been constructed 15 years prior to the submission of his Report and he has submitted a report as per Ex. P9 and he further admits if really buildings had been constructed 40 to 60 years back, the value shown by him in his Report would not be a correct Report. He has also been cross-examined in detail. By looking into the tenor of cross- examination and the admission made by PW5, it is clear that he has prepared the report as if the building was constructed 15 years prior to the submission of his Report. Admittedly the report is of the year 1984. The plaintiff Company itself had purchased the building in the year 1940. As on the date of report, the plaintiff-Company had acquired the property 44 years prior to the Report. But there is nothing to show when actually the plaintiff-Company was constructed by its vendor and no material is placed before the court below. Admittedly, though the Factory was running from 1940 to 1968 by the plaintiff, from 1968 to 1977 the Factory had been closed and the factory was not maintained by the plaintiff. From 1977 to 1984 the defendant was running the Factory. The defendant has produced 10 photograph to show the condition of the plant and machinery and the building when the property was leased to the defendant. From looking into these photographs which are marked as Ex.D33 to 47 discloses that the building was ordinary A.C. sheet building constructed long back and it was not a new construction. 17. From the discussion of the evidence of PWs.3 to 5, It is clear that the Factory in question which is inclusive of plant, machineries and electrical fittings were more than 50 years. When a building has been used for more than 50 years and if the landlord has failed to maintain the building by making repairs and paintings from time and due to its natural wear and tare it is bound to cause A damage to the building and the value of the building would be diminished. Similarly, if an electrical lines are of more than 50 years due to usual wear and tare they are also bound to be damaged. So also the case of the machineries. The trial court without considering these facts, though has come to the conclusion that the evidence of PW 3 to 5 cannot be accepted in toto without there being any actual material placed by the plaintiff on its own. As assessed the damage and has decreed the suit. We could not have taken a different view than the one taken by the trial court provided the trial court has assigned proper reasons to award damages. It is no doubt true, has written a lengthy Judgment and the discussion runs to several pages on each of the points, but unfortunately the plaintiff had not placed any material to show how the plaintiff is entitled to claim damages as awarded by the trial court. In a suit for damages, the burden of proof is heavy on the plaintiff as we pointed out earlier. Evidence of PW1 and PW2 are of no assistance since they do not speak anything about the damage caused to the plant and machinery so also the building. We have gone through the evidence of PWs.3 to 5. All of them have inspected the building and submitted the Report at the instance of the plaintiff behind the back of the defendant. They admit in the cross- examination that there was no material supplied to them to show when actually the building was constructed and when actually the machineries had purchased and the value of the machineries. When 11 such an admission of PWs 3 to 5 is obtained by the defendant, it is unfortunate that the trial court without appreciating the admission of the experts has decreed the suit in part. 18. Therefore, we are of the opinion that the plaintiff has failed to prove the actual loss sustained by it, by way of damages caused to the building, plant and machineries and the Judgment of the trial court is not based on proper appreciation of the evidence of PWs.3 to 5. Since there is no proper application of mind, we are of the opinion that the Judgment and decree of the trial court are to be modified and the matter requires to be reconsidered by granting liberty for both the parties to let in further evidence in the matter. Accordingly, we hold all the points against the respondent and in favour of the appellant.” 8. Accordingly, this Court set-aside the Judgment and decree and remanded the matter to the trial court granting liberty to both the parties to let in further evidence in the matter. 9. Subsequent to the remand, the plaintiff except examining one Sri.Vishnu, as PW-6 has produced the valuation report prepared by PW-6 at Exhibit-P16 and not taken any pain to substantiate his claim to show the actual loss caused to stake a claim for damages against the defendant, as has already been held by this Court in the earlier round of litigation. The trial court after hearing the parties, decreed the suit partly quantifying the damages at Rs.8,86,299/-, with interest at 6% per annum, from 31.12.1984 till the date of payment. It is this judgment and decree called in question by the defendant in this appeal. 12 10. Heard Sri.R.Sreedhar learned counsel appearing for the appellant, Sri.Murugesh V. Charati, learned counsel appearing for the respondent. Perused the entire trial court record and appeal papers. 11. Sri.Sreedhar taking us through the judgment passed by this Court in the earlier round of litigation has contended that this Court after going through the entire material, recorded a categorical finding that the evidence both oral and documentary on record falls short to assess the actual loss caused to quantify the damages payable, which the plaintiff is entitled and the defendant is liable to pay. This Court recorded a categorical finding against the witnesses, especially the experts PW-3 to PW5 and the reports submitted by them, stated that the evidence of the witnesses are highly unbelievable and the documents, more especially the reports submitted by the said experts / PW-3 to PW-5 quantifying the damages caused to the building, machinery and the electrical equipments are made up documents at the instance of the plaintiff without their being any substance. This Court having found that the evidence led by the plaintiff falls short to quantify the damages, set- aside the judgment and decree and remanded the matter with 13 liberty to both the parties to let in further evidence to prove the actual loss to quantify the damages. 12. The plaintiff subsequent to remand except examining PW-6 and producing one document Exhibit - P16 i.e., report by PW- 6 has not taken any pain to substantiate its claim to seek damages for the actual loss caused to the building, machinery and electrical equipments as claimed in the plaint. There is no improvement in the case subsequent to the remand in terms of the observation by this court supra. He has submitted that the evidence of PW-6 and the report at Exhibit-P16 is not helpful to the plaintiff to prove its claim against the defendant for alleged actual loss caused to the leased property and accordingly sought to allow the appeal and dismiss the suit. 13. Per contra, Sri.Charati learned counsel appearing for the respondent refuting the submission of the learned counsel for the plaintiff with all vehemence would contend that at an earlier point of time, there was a joint inspection in the year 1984 wherein a joint report was prepared and the damages caused to the building machinery and electrical parts were clearly stated. The defendant has not taken proper care and maintained the property as ordinarily required by a lessee. The lessee is bound under the lease to deliver 14 possession of the property on expiration of lease, whether on efflux of time or on termination, in the same condition under which it was handed over to him at the time of commencement of lease. He has further submitted that, the defendant having not maintained the property, caused severe damage to the building, plant, machinery and electrical equipments which are clearly stated in the documents, as well as by the evidence of PW-6 and Exhibit-P16 fresh report submitted by the said witness quantifying the loss at the rate of Rs.15.50 lakhs, supported the judgment and decree passed by the trial court and sought to dismiss the appeal. 14. Having heard the learned counsel appearing for the parties, perused the record especially evidence of PW-6 and Exhibit- P16 which are let in by the plaintiff subsequent to the remand to substantiate its claim, the points arise for our consideration are: i) Whether the trial court is justified in quantifying the damages at Rs.8,86,299/-, with interest at 6% per annum, from 31.12.1984 till the date of payment? ii) Whether the impugned judgment and decree passed by the trial court requires interference at the hands of this Court? 15 15. It is undisputed that neither the plaintiff constructed the building nor the machineries were purchased by it or the electrification was done by it. As admitted by the plaintiff he has purchased the running match factory in the year 1940, the factory was running till 1968 and thereafter for certain financial constraints and unavoidable circumstances, the factory came to be closed till the year 1977. It was also undisputed that at an earlier point of time, the trial court once partly decreed the suit which came to be challenged before this Court in appeal in RFA No.229/2001. This Court having found that the evidence both oral and documentary falls short to prove the actual loss suffered by the plaintiff to direct the defendant to make good the damages, remanded the matter with liberty to let in further evidence. What transpired from the record is that the plaintiff, subsequent to remand except examining the PW-6 and producing the report prepared by the said witness not let in any evidence nor produced any document to show the actual loss / damage as on the date of handing over the possession by the defendant in the year 1984. The factory was closed and abandoned for a period of 10 years from 1968 to 1977 and subsequently it was leased to the defendant and thereafter in 1984 possession was handed over. 16 16. This Court being the last fact finding Court under Section-96 of CPC re-appreciated the evidence and the documents produced by the plaintiff in order to ascertain and satisfy that the trial court was justified in partly decreeing the suit quantifying the damages. As stated supra, this Court has already opined in the earlier round of litigation that the entire evidence both oral and documentary falls short to quantify the actual loss. The only available document now to be looked into is the evidence of PW-6 and the report submitted by him. The report submitted by PW-6 is of the year 2010 and the possession of the property was handed over in the year 1984. 17. Though the trial court has discarded to look into the evidence of PW-6 and report submitted by the said witness, this court being the first appellate court and the appeal being the statutory first appeal, we deem it safe and proper to consider the evidence of PW-6 and the report at Exhibit-P16. As per the evidence of PW-6 , he was entrusted with the work of valuation of loss caused to the company by Karnataka State Forest Industries Corporation Limited, Shivamooga vide letter dated 28.09.2009. As per the examination in chief the PW-6 has stated that the plaintiff has furnished him information that the company was established in the year 1940-41 and involved in manufacturing of match stick and he 17 had also been informed that the unit stopped functioning since 1985. After visiting the place he found that the factory was not in a functioning state, also not in a position to be restarted due to absolute and irreversible factors. The building was very old and in a dilapidated condition. He had found that the electric power connection was removed and most of the machineries were dismantled and kept inside the building. However, the machineries were kept separately in a room wherein main parts of the machineries were seen and remaining parts of the machineries are partly rusted. He has estimated that the machineries are about 60- 70 years old and he was not able to find out and identify the specific machineries and the purpose of the machineries, as all the machineries were outlived their productive life. There were ten HP motors which were dismantled and kept in office room and are in poor condition. He has categorically stated in paragraph 9 of his examination-in-chief that he cannot exactly say who is responsible for deterioration for the machineries and submitted the value of the plant and machinery are about Rs.15.50 lakhs as on the date of his inspection. He had stated at the time of his examination, officer incharge of the plaintiff company Mr.Dayanand, Mr.Vijaykumar and Hanumanthappa - a production staff were present and assisted him. The damages caused to the machinery are due to improper 18 maintenance, disuse and also due to its age. In his cross examination he has admitted that from 29.08.2009 to 03.09.2009 he has obtained documents pertaining to the Mysuru Match Company. However, he has not produced any documents before the Court to the effect. He has seen the recent audit report and he has stated the valuation of the plant and machine, excluding the land as on 31.03.2008. 18. PW-6 has categorically admitted in his cross-examination that he has not seen the valuation of the factory building and materials made in the year 1984. He has not conducted any Mahazar on 03.09.2009. He has made notes in his file, but he has not produced the said notes. He has clearly admitted that the report is based on the notes which he had taken on the factory site. He further admits that he has not given any notice of inspection to the defendant. He further admitted in his cross-examination that the photographs which were taken in the year 1977, clearly depicts the actual status of the building as well as the machinery. 19. As could be seen from the evidence of the PW-6, he is not in a position to say as to who is responsible for the damages caused to the building as well as to the machineries as on 1984. Except the evidence of PW-6 and the status report as on 19 2009 prepared by PW-6, the plaintiff has not produced any admissible evidence either oral or documentary to substantiate its claim. The report of PW-6 is not helpful to the plaintiff to prove the actual loss suffered in 1984. The value shown is the wreck value of the machineries as on 2009. It is a settled position of law that the plaintiff has to succeed on his own ground. In a suit seeking for damages, the burden is heavily on the party who claims damages against a party who has caused the damages. The plaintiff has failed to discharge the burden of proof casted on him to prove the actual loss suffered so as to make the defendant liable to pay the damages for the loss suffered. 20. Though a fragile attempt has been made by the learned counsel for the respondent taking this Court through the joint inspection of the year 1984 to contend that the report depicts the actual loss caused. As stated supra, the said document was available before this Court in the earlier round of litigation. This Court after perusing the entire material before it has given a categorical finding that the evidence on record falls short to show the actual loss, so also given clear finding on the evidence PW-3 to PW-5 the experts and the damages assessed by them in their reports as highly unbelievable. In view of short of evidence the plaintiff has failed to discharge the 20 burden casted on it to show the actual loss inspite of affording another opportunity by remanding the matter. 21. The trial court despite having come to the conclusion that the evidence of PW-2 to PW-5 are not helpful to prove the case that apart having observed at para no.25 that the evidence of PW-6 cannot be accepted as the status of the machineries and the building in the year 2009 is different from the status of the building in the year 1984, however proceeded to rely on the earlier documents which had already been appreciated by this Court in the appeal supra and found insufficient to prove the actual loss. The amount quantified by the trial court on the basis of the earlier evidence in the teeth of the findings of this Court in the earlier round of litigation is highly improbable and without application of judicious mind. There is no reason for the trial court to quantify the damages at Rs.8,86,299/-, despite having found that the evidence of PW-3 to PW-5 are unbelievable. In the facts and circumstances of the case, the judgment and decree passed by the trial court is against the propositions of law. 22. In a suit for damages, as per the settled position of law by the Hon’ble Apex Court in catena of cases, the plaintiff has to lay adequate evidence to prove the actual loss suffered so as to claim damages against the wrong doer. 21 23. The trial court has failed to appreciate the materials on record, though having found that the evidence of PW-3 and PW-5 are unbelievable and evidence of PW-6 and Exhibit P16 are not acceptable, proceeded to quantify the damages. In these circumstances the damages quantified by the trial court in the teeth of the earlier findings by this Court is misplaced. 24. In the absence of any clinching evidence to show what was the actual loss caused at the time of handing over the possession in the year 1984 in the given facts and circumstances for the trial court assessing damages after lapse of 41 years is highly improbable. 25. For the foregoing reasons, we have no hesitation to answer point Nos.1 in ‘negative’ and 2 in ‘affirmative’. Accordingly, proceed to pass the following: ORDER i) The appeal is allowed. ii) The judgment and decree dated 01.10.2010, in Original Suit No.271 of 1987, passed by the Principal Senior Civil Judge and C.J.M., Shivamogga is hereby set aside. Consequently, the suit filed by the plaintiff is dismissed. 22 iii) In the facts and circumstances, costs made easy. Sd/- (S.G. PANDIT) JUDGE Sd/- (T.M.NADAF) JUDGE JJ CT: BRS