IN THE HIGH COURT OF KERALA AT ERNAKULAM
AS.No. 738 of 1995(C)
1. M.ABDUL JALEEL
... Petitioner
Vs
1. INDUSTRIAL CREDIT & DEVT.SYNDICATE LTD.
... Respondent
For Petitioner :SRI.P.K.ABOOBACKER(EDATHALA),
For Respondent :SRI N.NANDAKUMARA MENON FOR R1
The Hon'ble MR. Justice K.SURENDRA MOHAN
Dated :25/06/2009
O R D E R
K.SURENDRA MOHAN, J.
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A.S.No.738 of 1995
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Dated this the 25th day of June, 2009
JUDGMENT
The judgment and decree of the Principal Sub Judge,
Thiruvananthapuram in O.S.No.995 of 1989 is under challenge in
the above appeal. The appellants are the first and third defendants
in the suit. As per the decree, the plaintiff has been allowed to
recover an amount of Rs.32,202/- with interest thereon at the rate of
6% per annum and costs. The first respondent is the plaintiff in the
suit, while the second respondent is the second defendant. The suit
was filed by the first respondent/plaintiff against the appellants and
the second respondent for the realisation of an amount of
Rs.30,000/- with future interest at 18% per annum. According to the
plaint, the plaintiff was incorporated under the Companies Act and is
represented by its Regional Manager. It has a Regional Office at
Thiruvananthapuram. The company is engaged in the business of
financing and hire purchase of various consumer and domestic
products including motor vehicles, under hire purchase agreements.
The first defendant had approached the plaintiff for purchasing a
1986 model car under the guarantee of defendants 2 and 3. They
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submitted a proposal form on 11.7.1986. The car was to be
supplied by M/s T.V.Sundram Iyengar and Sons Ltd. Thereafter on
17.7.1986, a hire purchase agreement was executed between the
plaintiff, first defendant and defendants 2 and 3 as guarantors. The
hire charges of the vehicle had to be paid in 47 monthly instalments
commencing from 17.8.1986. The right of option for purchase of the
vehicle under that agreement is exercisable only after the
remittance of the entire hire charges. Till payment of the entire hire
charges, the first defendant is only a hirer and defendants 2 and 3
are the guarantors and the plaintiff is the owner.
2. The first defendant was not regular in remitting the hire
charges and therefore, payment of hire charges was defaulted. The
last remittance was on 18.3.1988. Though notices were issued by
the plaintiff calling upon the defendants to clear the defaulted
instalments, they did not do so. The agreement provides for the levy
of over due interest and other charges on the defaulting hirer. The
agreement also makes provision for repossessing the vehicle in the
event of default in payment of the hire charges. Accordingly, the
plaintiff re-possessed the vehicle on 23.9.1988, invoking the said
provision. Thereafter, as per letter dated 27.9.1988, the first
defendant was called upon to clear the amounts that were due. He
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was also informed that the car would be sold, if the arrears were not
paid. Since there was no response, the car was sold for an amount
of Rs.55,000/- and that fact was intimated to the first defendant by
letter dated 14.6.1989. The deterioration in condition and the value
of the car was due to default on the part of the first defendant in
maintaining the car in good condition. Consequently, a loss of
Rs.30,000/= was caused to the plaintiff, which now they sought to
recover from the defendants, by filing the suit.
3. The defendants filed a common written statement and
contested the suit. It was contended that the suit was not
maintainable either in law or on facts, but, was barred by limitation.
They admitted the hire purchase transaction with the plaintiff, but
denied that they were defaulters. They contended that an amount of
Rs.2,050/- was being paid per month without fail. But, their vehicle
was illegally and arbitrarily seized by the plaintiff on 29.3.1988 and
was sold on 29.6.1989 without any notice or intimation to the
defendants. Consequently, the defendants sustained huge loss.
The plaintiff sold the vehicle after keeping the same in bad and
unsafe condition for more than one year. No opportunity was given
to the defendants to pay the over due instalments. Therefore, they
prayed for dismissal of the suit with costs.
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4. The court below framed seven issues on the above
pleadings and tried the suit. The evidence in the case consists of
the oral testimonies of PW1 and DW1 and Exts.A1 to A15
documents. The court below, after an elaborate consideration of the
evidence on record and the contentions of the rival parties, came to
the conclusion that the plaint claim was established. Therefore, the
suit was decreed and the plaintiff is allowed to recover an amount of
Rs.32,202/- from the defendants with future interest at the rate of 6%
per annum and costs of the suit. Defendants 1 and 3 have filed this
appeal challenging the said judgment and decree.
5. I have heard the learned counsel for the appellants as well
as the learned counsel for the first respondent. The second
respondent remained ex-parte.
6. According to the learned counsel for the appellants, the total
amount that was borrowed was Rs.60,000/- which was to be repaid
in 47 instalments. 46 instalments were to be of Rs.2,050/- each
while the 47th instalment was to be of Rs.1,700/-. Ext.A1 is the hire
purchase agreement. According to the appellants, upto the 20th
instalment, payment was made by the defaulter. Thereupon the car
was re-possessed and was sold for an amount of Rs.55,000/- in
1989. According to the counsel for the appellant, the hire purchase
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agreement came to an end with the re-possession of the car and on
sale of the car, the transaction became concluded. According to
him, no interest could be charged after the date of re-possession
and no hire charges are liable to be paid after the car was sold. The
road tax and insurance which are debited to the account of the
appellants after repossession was unsustainable, since the vehicle
was owned by the plaintiff. It is further pointed out that the monthly
instalments stipulated as hire charges already carries interest.
Therefore, no further interest is liable to be levied or recovered by
the plaintiff. Since the plaintiff continued to be the owner of the
vehicle, and since the ownership of the vehicle was not transferred
to the first defendant at any time, the amounts claimed are not liable
to be recovered from them.
7. The counsel for the first respondent on the other hand
points out that the total value of the vehicle that was purchased was
Rs.92,500/- which amount was paid by the plaintiff to the dealer of
the car. As per condition No.6 of Ext.A1 agreement, the plaintiff is
entitled to recover the amount of hire charges defaulted by the first
defendant together with penal interest and all other charges, as
claimed by them. Therefore, according to him, the first defendant
was liable to pay the said amount. Further, it is pointed out that in
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the written statement filed, the defendants had not disputed the
statement of accounts of the plaintiff.
8. The point that arises for consideration is:
Whether the decree for Rs.32,202/-
granted by the court below is justified
in the facts and circumstances of the
case?
9. The hire purchase transaction between the plaintiff and the
defendants is admitted. It is also admitted that Ext.A1 is the hire
purchase agreement. Condition No.6 of the said agreement arms
the plaintiff with the power to terminate the contract, if default in
payment of hire charges is committed or if there is breach of any of
the terms of contract, it is contended by the first respondent. Upon
such termination, it is provided that the hirer shall pay arrears of hire
charges accrued up to date of termination and the cost of all repairs
required to be done. Compensation for the owner’s loss of profit and
all taxes due and payable in respect of the motor vehicle shall also
be recovered from the hirer. It has further been agreed that such
termination shall be without prejudice to any claim the owners may
have in respect of the terms and conditions of the agreement to
recover all charges due under the agreement together with
damages for breach of the agreement. The owner in the present
case is the plaintiff and the hirer is the first defendant. Therefore, it
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can be seen that the claim of the plaintiff is sustainable under
Condition No.6 of Ext.A1 agreement. The above position appears to
have been accepted by the defendants also. The claim of the
plaintiff is contained in paragraph-7 of the plaint. The plaint also
contains a statement of accounts showing the break up of the
amounts claimed. Paragraphs-6 and 7 of the plaint are denied in
paragraph-8 of the written statement. It is significant to note that the
defendants have not disputed the correctness of the amount
claimed by the plaintiff. The only dispute contained in paragraph-8
is with regard to the manner in which the car was sold. It is alleged
that the car was sold without any notice or intimation to the
defendants causing heavy loss. They claimed that the vehicle
would have fetched a higher price if the vehicle had been sold after
due publication and notice. It is trite that any averment in the plaint
that is not specifically denied in the written statement has to be
treated as admitted. A perusal of the evidence of PW1 and DW1
also does not show any serious challenge regarding the amount
claimed in the plaint. Therefore, it is not open to the appellants to
challenge the quantum of the amount claimed, in this appeal.
10. As noted above, Ext.A1 agreement entitles the plaintiff to
claim all amounts due under the defaulted hire purchase agreement
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from the defendants including all losses suffered. Since the
defendants have no case in their written statement that the amounts
mentioned in the plaint do not form part of the amount that the
plaintiff is entitled to claim under Ext.A1 agreement, they are not
entitled to dispute the accounts in the above appeal. It is therefore,
unnecessary to deal with the other oral and documentary evidence
in the case, all of which have been elaborately considered by the
court below. Since no other contention has been raised before me,
by the counsel for the appellant, it has to be held that the judgment
and decree under appeal are perfectly justified in the facts and
circumstances of the case.
In view of the above, the appeal fails and is accordingly
dismissed confirming the judgment and decree in A.S.No.995 of
1989 of the Principal Sub Court, Thiruvananthapuram.
K.SURENDRA MOHAN
Judge
css/
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K.SURENDRA MOHAN
JUDGE
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AS.NO.738 OF 1995
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JUDGMENT
25.06.2009
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