How to prove loss and damage due to excessive rainfall and water logging for getting insurance claim?

 That apart, as we have noted from the findings of the NCDRC, the dates on which the alleged damage is stated to have occurred had not witnessed excessive rainfall and the rain was within normal parameters. The failure of the Appellant to examine any expert in regard to the cause of the damage is a significant omission which has been correctly relied upon by the NCDRC. The insurance policy specifically excluded normal wear and tear. In order to establish that this was not a case involving normal wear and tear, the Appellant sought to rely upon what it described as abnormal rainfall and water logging. The evidence on the record did not sustain the basis of such a claim.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 7315 of 2016

Decided On: 25.03.2019

 Mahavir Road and Infrastructure Pvt. Ltd. Vs.  IFFCO Tokio General Insurance Co. Ltd.

Hon'ble Judges/Coram:

Dr. D.Y. Chandrachud and Hemant Gupta, JJ.

Print Page

Whether person aggrieved by breach of contract is required to prove that actual loss or damage was suffered by him?

 It can thus be seen that, in every case of breach of a contract, the person aggrieved by the breach, is not required to prove the actual loss or damage suffered by him, before he can claim a decree and the Court is competent to award reasonable compensation in case of breach, even if, no actual damage is "proved", to have been suffered in consequence of the breach of contract. But the expression "whether or not actual damage or loss is proved to have been caused thereby", as appearing in the said section is intended to cover different types of contracts, which come before the Courts. In case of some contracts, it may be impossible for the Courts to asses compensation, arising from such breach. In such cases, the section dispenses with the proof of such loss or damage and the Court can grant the compensation in terms of the liquidated damages, if the sum named by the parties is regarded as a genuine pre-estimate of such loss. 

IN THE HIGH COURT OF BOMBAY AT GOA

Appeal Under Arbitration Act No. 8 of 2016

Decided On: 10.04.2018

Titagarh Wagons Limited Vs. Chowgule and Company Private Limited

Print Page

Whether burden is on landlord to prove that tenant has caused damage to premises by making alterations?

In so far as the other ground viz. raising of permanent structure is concerned it was the case of tenants that as one block was divided into two blocks and was let out to two tenants, suitable alterations were made by the previous landlord and that they have not made any alterations in the suit premises. The Appellate Court has set aside the findings recorded by the trial Court in this regard by observing that the trial Court has cast burden of proof wrongly on the defendants. The Appellate Court has observed that as the plaintiff had come to the Court with a specific case that it is the tenants who have done these alterations, it was for the landlord to lead evidence to establish that it is the tenants who have done alterations. However, the landlord has not led any evidence in this regards as even according to the landlord, the alterations were made before November, 1976, when he purchased the property, obviously, the landlord does not have personal knowledge therefore, it is for the landlord to lead evidence and the Appellate Court has held that the landlord has not led any evidence adequate to establish that the alterations were made by the tenants, it is further to be seen here that even if it is assumed that alterations were made by the tenants in the suit premises, does not entitle the landlord to decree of eviction against the tenant. As observed by the Supreme Court in its judgment in the case of Venkatlal G. Pitti and another v. M/s. Bright Bros. Pvt. Ltd. MANU/SC/0824/1987 : [1987]3SCR593 the landlord has further to establish that because of the alterations, damage is caused to the building itself. The observations of the Supreme Court in paragraph 21 read as under:

"There are numerous authorities dealing with how the question whether the structure is a permanent structure or not should be judged. It is not necessary to deal with all these. One must look to the nature of the structure, the purpose for which it was intended and take a whole perspective as to how it affects the enjoyment, the durability of the building etc. and other relevant factors and come to a conclusion."

In the present case, it is not even the allegation of the landlord that because of the alleged alterations, any damage is caused to the building or its utility is impaired in any way. In these circumstances, therefore, in my opinion no fault can be found with the findings recorded by the Appellate Court in this regard also.

IN THE HIGH COURT OF BOMBAY

Writ Petition Nos. 4600 & 4599 of 1986

Decided On: 05.02.1998

Sukhlal Chunilal Ghagani Vs. Harish Suvarne & another

Print Page

Whether removal of wall from tenanted premises amounts to damage to suit premises resulting in eviction of tenant?

As observed by the Courts below the front room as used for conducting the shop, appears to be intact, and on the rear side, there is now only one room which is a bigger room instead of two rooms. In my opinion, considering the evidence on record, the appellate Court has correctly negatived the findings as recorded by the learned trial judge on the issue of the petitioner changing the nature of the suit premises by converting into two residential rooms into one big room without the prior written consent of the respondent-landlord as the law would require, thereby causing damage to the suit premises. The observation and findings of the learned trial judge in answering issue No. 4 were patently erroneous and were rightly interfered by the appellate Court. The learned trial judge on the sole basis of the respondent's notice dated 14.10.1985 could not have come to a conclusion that the removal of the wall was a new theory and/or an afterthought and was subsequently introduced by the respondent, when there was a clear admission on the part of the petitioner in the written statement, in accepting the description of the suit tenancy as granted being of three rooms. However, the clear position on record was that there were only two rooms in existence. The Petitioner could not prove that this was not the correct factual position. There was no explanation from the petitioner much less acceptable, to show as to how the nature of the suit premises changed from three rooms into only two rooms. Thus the indefeasible conclusion which could be drawn was that the petitioner had removed one wall to convert the two residential rooms into a one bigger room. There cannot be any other conclusion, which could be deduced from the evidence available on record and as rightly observed by the appellate Court. It is significant that there was no material to show that the petitioner had taken prior permission to undertake any structural change or removal of the wall between the two residential rooms and thus as held by the appellate Court, rightly the provisions of Section 13(1)(a) of the Bombay Rent Act were applicable. The contention as urged on behalf of the petitioner that such structural alteration would not amount to waste of the suit premises to seek eviction under Section 13(1)(a) of the Bombay Rent Act, also cannot be accepted. This for the simple reason that the petitioner could not have made a permanent structural alteration of such nature to the suit premises, demised to him. The law does not confer any right on a tenant to act in such manner unless permitted by the landlord to undertake such changes, which only the landlord can do.

18. Thus, it was not open to the petitioner to structurally alter the suit premises by converting two rear rooms into one room by removing one wall. The wall is admittedly part of a building and definitely act of removal of wall amounts to causing a damage to the suit premises and a permanent injury to the larger premises of which the suit premises is a part. Further the nature of the structural alteration, as undertaken by the petitioner has substantially changed the character of the demised premises and thus, necessarily such acts on the part of the petitioner amounted to waste of the suit premises attracting Section 13(1)(a) of the Bombay Rent Act and entitling the respondent to a decree of eviction of the residential premises.

IN THE HIGH COURT OF BOMBAY

Writ Petition No. 6464 of 1999

Decided On: 28.11.2017

 Prafulkumar Damaji Gala Vs. Narayan Govind Gavate and Ors.

Hon'ble Judges/Coram:

G.S. Kulkarni, J.

Citation: 2018(2) MHLJ 735

Print Page

Whether rights of prior user of Trade Mark will prevail over registered user of Trade mark?

Scheme of the Act is such where rights of prior user are recognized superior than that of the registration and even the registered proprietor cannot disturb interfere with the rights of prior user. The overall effect of collective reading of the provisions of the Act is that the action for passing off which is premised on the rights of prior user generating a goodwill shall be unaffected by any registration provided under the Act. This proposition has been discussed in extenso in the case of N.R. Dongre and Ors. v. Whirlpool Corporation and Anr. MANU/DE/0700/1995 : AIR (1995) Delhi 300 wherein Division Bench of Delhi High Court recognized that the registration is not an indefeasible right and the same is subject to rights of prior user. The said decision of Whirlpool [supra] was further affirmed by Supreme Court of India in the case of N.R. Dongre and Ors v. Whirlpool Corporation and Anr. MANU/SC/1223/1996 : 1996 (3) R.C.R. (Civil) 697 : (1996) 5 SCC 714.

B. The above were the reasonings from the provisions arising from the plain reading of the Act which gives clear indication that the rights of prior user are superior than that of registration and are unaffected by the registration rights under the Act. Secondly, there are other additional reasonings as to why the passing off rights are considered to be superior than that of registration rights.

Traditionally, passing off in common law is considered to be a right for protection of goodwill in the business against misrepresentation caused in the course of trade and for prevention of resultant damage on account of the said misrepresentation. The three ingredients of passing off are goodwill, misrepresentation and damage. These ingredients are considered to be classical trinity under the law of passing off as per the speech of Lord Oliver laid down in the case of Reckitt & Colman Products Ltd. v. Borden Inc MANU/UKHL/0012/1990 : (1990) 1 AllE.R. 873 which is more popularly known as "Jif Lemon" case wherein the Lord Oliver reduced the five guidelines laid out by Lord Diplock in Erven Warnink v. Townend & Sons Ltd. [1979) AC 731, 742 (HL)] (the "Advocate Case") to three elements: (1) Goodwill owned by a trader, (2) Misrepresentation and (3) Damage to goodwill. Thus, the passing off action is essentially an action in deceit where the common law rule is that no person is entitled to carry on his or her business on pretext that the said business is of that of another. This Court has given its imprimatur to the above principle in the case of Laxmikant V. Patel v. Chetanbhat Shah and Anr. MANU/SC/0763/2001 : 2002 (2) R.C.R. (Civil) 357 : (2002) 3 SCC 65.

The applicability of the said principle can be seen as to which proprietor has generated the goodwill by way of use of the mark name in the business. The use of the mark/carrying on business under the name confers the rights in favour of the person and generates goodwill in the market. Accordingly, the latter user of the mark/name or in the business cannot misrepresent his business as that of business of the prior right holder. That is the reason why essentially the prior user is considered to be superior than that of any other rights. Consequently, the examination of rights in common law which are based on goodwill, misrepresentation and damage are independent to that of registered rights. The mere fact that both prior user and subsequent user are registered proprietors are irrelevant for the purposes of examining who generated the goodwill first in the market and whether the latter user is causing misrepresentation in the course of trade and damaging the goodwill and reputation of the prior right holder/former user. That is the additional reasoning that the statutory rights must pave the way for common law rights of passing off.

C. Thirdly, it is also recognized principle in common law jurisdiction that passing off right is broader remedy than that of infringement. This is due to the reason that the passing off doctrine operates on the general principle that no person is entitled to represent his or her business as business of other person. The said action in deceit is maintainable for diverse reasons other than that of registered rights which are allocated rights under Recent Civil Reports the Act. The authorities of other common law jurisdictions like England more specifically Kerry's Law of Trademarks and Trade Names, Fourteenth Edition, Thomson, Sweet & Maxwell South Asian Edition recognizes the principle that where trademark action fails, passing off action may still succeed on the same evidence. This has been explained by the learned Author by observing the following:--

15-033 "A claimant may fail to make out a case of infringement of a trade mark for various reasons and may yet show that by imitating the mark claimed as a trademark, or otherwise, the Defendant has done what is calculated to pass off his goods as those of the claimant. A claim in "passing off' has generally been added as a second string to actions for infringement, and has on occasion succeeded where the claim for infringement has failed"

The same author also recognizes the principle that Trade Marks Act affords no bar to the passing off action. This has been explained by the learned Author as under:--

15-034 "Subject to possibly one qualification, nothing in the Trade Marks Act 1994 affects a trader's right against another in an action for passing off. It is, therefore, no bar to an action for passing off that the trade name, get up or any other of the badges identified with the claimant's business, which are alleged to have been copies or imitated by the Defendant, might have been, but are not registered as, trade marks, even though the evidence is wholly addressed to what may be a mark capable of registration. Again, it is no defense to passing off that the Defendant's mark is registered. The Act offers advantages to those who register their trade marks, but imposes no penalty upon those who do not. It is equally no bar to an action for passing off that the false representation relied upon is an imitation of a trade mark that is incapable of registration. A passing off action can even lie against a registered proprietor of the mark sued upon. The fact that a claimant is using a mark registered by another party (or even the Defendant) does not of itself prevent goodwill being generated by the use of the mark, or prevent such a claimant from relying on such goodwill in an action against the registered proprietor. Such unregistered marks are frequently referred to as "common law trade marks"

From the reading of aforementioned excerpts from Kerly's Law of Trademarks and Trade Names, it can be said that not merely it is recognized in India but in other jurisdictions also including England/UK (Provisions of UK Trade Marks Act, 1994 are analogous to Indian Trade Marks Act, 1999) that the registration is no defense to a passing off action and nor the Trade Marks Act, 1999 affords any bar to a passing off action. 

Equivalent Citation: 2016(66)PTC1(SC), 2015(2)RCR(Civil)810, 2015(7)SCALE136, (2016)2SCC683

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 2758 of 2015 (Arising Out of SLP (C) No. 12671 of 2014)

Decided On: 17.03.2015

Appellants: S. Syed Mohideen 
Vs.
Respondent: P. Sulochana Bai

Hon'ble Judges/Coram:H.L. Dattu, C.J.I. and A.K. Sikri, J.

Print Page

Whether earnest amount can be forfeited when there is no loss or damage to seller?

If damage or loss is not suffered, the law does not provide for a windfall.

 On a conspectus of the above authorities, the law on compensation for breach of contract under Section 74 can be stated to be as follows:- Where a sum is named in a contract as a liquidated amount payable by way of damages, the party complaining of a breach can receive as reasonable compensation such liquidated amount only if it is a genuine pre-estimate of damages fixed by both parties and found to be such by the Court. In other cases, where a sum is named in a contract as a liquidated amount payable by way of damages, only reasonable compensation can be awarded not exceeding the amount so stated. Similarly, in cases where the amount fixed is in the nature of penalty, only reasonable compensation can be awarded not exceeding the penalty so stated. In both cases, the liquidated amount or penalty is the upper limit beyond which the Court cannot grant reasonable compensation.

Reasonable compensation will be fixed on well known principles that are applicable to the law of contract, which are to be found inter alia in Section 73 of the Contract Act.

Since Section 74 awards reasonable compensation for damage or loss caused by a breach of contract, damage or loss caused is a sine qua non for the applicability of the Section.

The Section applies whether a person is a plaintiff or a defendant in a suit.

The sum spoken of may already be paid or be payable in future.

The expression "whether or not actual damage or loss is proved to have been caused thereby" means that where it is possible to prove actual damage or loss, such proof is not dispensed with. It is only in cases where damage or loss is difficult or impossible to prove that the liquidated amount named in the contract, if a genuine pre-estimate of damage or loss, can be awarded.

Section 74 will apply to cases of forfeiture of earnest money under a contract. Where, however, forfeiture takes place under the terms and conditions of a public auction before agreement is reached, Section 74 would have no application.

Supreme Court of India

M/S. Kailash Nath Associates vs Delhi Development Authority & Anr on 9 January, 2015

Bench: Ranjan Gogoi, Rohinton Fali Nariman

Print Page