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1998 DIGILAW 815 (PAT)

Bihar State Financial Corporation Ltd. v. Suresh Kumar Das

1998-11-24

M.Y.EQBAL

body1998
ORDER This Civil Revision application is directed against the order dated 10.2.1998 passed by the 1st Additional District Judge, Ara, in Misc. Appeal No. 54 of 1997, whereby he granted mandatory injunction directing the petitioners to restore possession of the vehicle bearing Registration No. BEC 2089 to Opposite party no. 1. By the aforesaid order the learned Additional District Judge, Ara, reversed the order dated 22.9.1997 passed by the 2nd Munsif, Bhojpur at Ara, refusing to grant injunction in T.S. No. 81 of 1997. 2. The petitioners' case, inter alia, is that plaintiff opposite party no. 1 was sanctioned a loan of Rs. 1.83 lakhs for purchasing a vehicle, namely, Tata Maxi-407 in the year 1988. The plaintiff failed and neglected to pay the installments to the petitioner-Corporation and the balance outstanding reached to the level of Rs. 4.26 lakhs. It is stated that several notices were given to the plaintiff to liquidate the dues. Ultimately the Corporation decided to auction sale the vehicle and the price was fixed at Rs. 1.05 lakhs. Opposite party no.2 Ram Prasad Ram, being the auction purchaser agreed to purchase the said vehicle. However, the petitioner-Corporation gave option to the plaintiff to retain the vehicle on the terms and conditions stipulated in the auction sale, according to which the plaintiff was to pay 50% of the total price of the vehicle as an initial cash down payment after 21 days from the date of issuance of order. The balance amount of Rs. 52,500/- was to be converted into loan and was repayable in the period of three years in 36 installments. First installment was fixed at Rs. 1750/- and the remaining 35 installments would be of 1450/-. It appears that plaintiff-Opp. party No. 1 exercised this option and deposited a sum of Rs. 52,500/- i.e. 50% of the consideration amount on 9.1.1997. The petitioners' further case is that the plaintiff-Opp. party No.1 subsequently failed to pay the installment and also Rs. 15,000/- in addition to the cash down payment so agreed by him. On the other hand, the plaintiff's case is that after payment of Rs. 52.500/- the plaintiff tendered first installment on 17.2.1997 but the same was refused. It is alleged that subsequent installments were also tendered on different dates but not accepted by the petitioner-Corporation, rather the petitioner started taking coercive action for taking possession of the vehicle. The plaintiff-Opposite party no. 52.500/- the plaintiff tendered first installment on 17.2.1997 but the same was refused. It is alleged that subsequent installments were also tendered on different dates but not accepted by the petitioner-Corporation, rather the petitioner started taking coercive action for taking possession of the vehicle. The plaintiff-Opposite party no. 1 then filed Title Suit no. 81 of 1997. In the said suit a separate application for grant of temporary injunction was filed praying therein to restrain the petitioner-Corporation from selling the said vehicle. The injunction petition was finally heard by the Munsif who refused to grant temporary injunction and rejected the application. Aggrieved by the said order, Opp. party no. 1 filed Misc. Appeal No. 54 of 1997. In the meantime the petitioner-Corporation forcibly took possession of the vehicle from the custody of the plaintiff-opp party no.1. The Misc. appeal was finally heard by the 1st Addl. District Judge who allowed the appeal and reversed the order of the Munsif and further issued mandatory injunction directing the Corporation to restore possession of the vehicle to Opp. party no. 1 and hence this civil revision application. 3. Mr. Shravan Kumar, learned senior counsel appearing on behalf of the petitioners assailed the impugned order as being illegal and wholly without jurisdiction. Learned counsel submitted that the appellate court has committed serious illegality in granting mandatory injunction in a case where it was not even desirable to grant temporary injunction. Learned counsel submitted that the appellate court failed to appreciate that the plaintiff was not absolved of its primary liability as per the initial contract and even as per the offer to retain the vehicle on being sold to the purchaser. According to the learned counsel, the petitioner Corporation was within its right to ensure payment of the balance consideration money by demanding collateral security or additional cash down payment of Rs. 15,000/- of the total consideration of Rs. 1.05 lakhs. Learned counsel then submitted that in any view of the matter the plaintiff has no prima facie case or balance of convenience and further the plaintiff would not have suffered irreparable injury if temporary injunction had been refused. On the other hand Mr. Rajendra Narain, learned counsel for opp. party no. 1 submitted that the action of the petitioner-Corporation in forcibly taking possession of the vehicle was illegal, arbitrary and capricious and also against the terms of the auction sale. On the other hand Mr. Rajendra Narain, learned counsel for opp. party no. 1 submitted that the action of the petitioner-Corporation in forcibly taking possession of the vehicle was illegal, arbitrary and capricious and also against the terms of the auction sale. According to the learned counsel, the petitioner-Corporation has no right to demand additional cash down payment of Rs. 15,000/- when such condition was not stipulated in the auction sale. According to the learned counsel the impugned order passed by the appellate court is, therefore, perfectly legal and justified. 4. It is well settled that there is no bar to the Court granting interlocutory relief in the mandatory form but while granting such relief, the court should act with greatest circumspection and such power can be exercised only in very rare and exceptional cases. Whether or not a case comes in the category of 'rare' and 'exceptional' one is to be judged according to the facts and circumstances of that particular case. In the case of Nandan Pictures Ltd. vs. Art Picture Ltd. (A.I.R. 1956 Cal 428), it was held that injunctions are a form of equitable relief and they have to be adjusted in aid of equity and justice to the facts of each particular case and that no court, therefore, ought to lay down absolute proposition. It was further observed that if a mandatory injunction is granted at all on an interlocutory application, it is granted only to restore at the status quo and not granted to establish a new state of things, differing from the state which existed at the date when the suit was instituted. 5. The only question falls for consideration in the instant case is whether the appellate court was justified in granting mandatory injunction directing the Bihar State Financial Corporation to restore possession of the vehicle to the plaintiff-appellant. The appellate court mainly based his finding on Memo No. 1026 dated 19.12.1996 issued by the Corporation wherein certain conditions were stipulated for the purchase of the vehicle. According to the court below once the plaintiff accepted the offer and deposited 50% of the sale price, then new contract came into existence and the Corporation had no authority to demand additional sum of Rs. 15,000/- by way of collateral security. According to the court below once the plaintiff accepted the offer and deposited 50% of the sale price, then new contract came into existence and the Corporation had no authority to demand additional sum of Rs. 15,000/- by way of collateral security. The learned appellate court, therefore, held that the plaintiff has a strong prime facie case and the balance of convenience also in favour of the plaintiff. Finding a case for grant of temporary injunction, the court below granted relief in mandatory form for the reason that the vehicle was in the meantime seized by the Corporation. 6. Perhaps the court of appeal has not correctly appreciated the facts of the case and has not correctly read the aforesaid memo dated 19.12.1996. It is not disputed that originally the plaintiff was sanctioned a loan of Rs. 1.83 lakhs for the purchase of the vehicle in the year 1988. The plaintiff defaulted in payment of the installment and the loan amount was not liquidated, as a result of which balance outstanding dues reached up to the level of Rs. 4.26 lakhs in August, 1996. The Corporation then in exercise of power conferred under Section 29 of the State Financial Corporation Act put the vehicle in auction and an order for sale of the vehicle was passed in favour of Ram Prasad Ram (Opposite party No.2). The Corporation then took final decision in terms of the aforesaid memo dated 19.12.1996 incorporating terms and conditions for auction purchase so agreed by Opposite party no. 2. Ram Prasad Ram. For better appreciation reference/captioned of the order is quoted herein below :- "Re : Sale of the mortgaged/hypothecated assets of M/s Suresh Kumar Das (Tata 407) Regd. BEC 2089, At & P.O. Jagdishpur, Shojpur in favour of Sri Ram Prasad Ram, Vill- Chota Kalyanpur, P.O. Shelai, Shojpur." 7. From bare reading of the aforesaid quotation it is manifest that the conditions incorporated in the said memo dated 19.12.1996 was for the sale of the vehicle in favour of Opposite party No. 2-Sri Ram Prasad Ram. It is true that a similar offer was given to the plaintiff to retain the vehicle if he fulfils the conditions stipulated therein but while giving option to the plaintiff, the Corporation reserved its right to realize the balance amount of dues from the plaintiff by taking other steps including invoking the personal guarantee. It is true that a similar offer was given to the plaintiff to retain the vehicle if he fulfils the conditions stipulated therein but while giving option to the plaintiff, the Corporation reserved its right to realize the balance amount of dues from the plaintiff by taking other steps including invoking the personal guarantee. It is evident from the copy of the decision dated 19.11.1996 forwarded to the plaintiff. The forwarding portion of the memo dated 19.12.1996 is reproduced herein below:- "Copy forwarded to:- 1. M/s Suresh Kumar Das, .At & P.O. Jagdishpur, Distt. Bhojpur, for information. Your vehicle has been sold to Sri Ram Prasad Ram, village Chhota Kalyanpur, P.O. Bhelai, Distt. Bhojpur, on the terms and conditions mentioned in the sale order. If you are interested to retain the unit on the matching terms and conditions, you may do so by making payment as mentioned above at out Arrah Branch office within 21 days from the date of issue of this letter. Please also note that for the un-recovered amount i.e. difference between the B.O.S. and the consideration money your personal guarantee bond would be invoked for realizing that amount." 8. Perhaps the court of appeal below has overlooked the conditions of offer given to the plaintiff incorporating the conditions in the forwarding memo. As noticed above, out of the total dues of Rs. 4.26 lakhs, the price of the vehicle was fixed at Rs. 1.05 lakh. The petitioner-Corporation, therefore was entitled to realize the balance amount of dues from the plaintiff by invoking personal guarantee and provisions of Public Demands Recovery Act. Additional demand of Rs. 15,000/- by the Corporation from the plaintiff cannot be said to be illegal or capricious, inasmuch as the overall liability of the plaintiff is to pay not only the price of the vehicle in the manner provided under the agreement but also difference of the sale price and the balance of outstanding dues. Admittedly the plaintiff refused to pay Rs. 15,000/- so demanded by the Corporation by way of collateral security for the recovery of the balance amount of the outstanding dues. 9. Be that as it may, admittedly a loan was sanctioned in the year 1988 and vehicle was purchased by the plaintiff. Loan amount together with interest was not repaid within the time and the outstanding balance reached to Rs. 4.26 lacs. 9. Be that as it may, admittedly a loan was sanctioned in the year 1988 and vehicle was purchased by the plaintiff. Loan amount together with interest was not repaid within the time and the outstanding balance reached to Rs. 4.26 lacs. Consequently the vehicle was auction sold by the Corporation but again opportunity was given to the plaintiff to retain vehicle on the conditions stipulated in the auction sale memo subject to the conditions that difference of the amount shall be recovered from the plaintiff by invoking the personal guarantee. For the recovery of difference of the outstanding balance, the Corporation demanded a collateral security of Rs. 15,000/- which the plaintiff refused to pay and moved the court below for grant of temporary injunction restraining the Corporation from taking possession of the vehicle. The trial court refused to grant injunction holding that the plaintiff has no prima facie case nor balance of convenience lies in his favour. After refusal of injunction by the trial court, the petitioner seized the vehicle for non-payment of collateral security by the plaintiff against the balance of outstanding dues. In the facts and circumstances of the case, I am of the opinion that it is not a rare and exceptional case where the court should exercise extraordinary power and grant mandatory injunction on interlocutory application. The Court below has committed error of law as also error of fact in holding the plaintiff has prima facie case and the balance of convenience lies in his favour. The court below has also failed to take into consideration that it is not a case where the plaintiff should suffer substantial loss and injury. When a loanee fails to pay back the loan for about eight years and the principal amount of Rs. 1.83 lacs reached to the level of Rs 4.26 lacs then equity should not come in the rescue with that person in the event legal proceeding has been initiated for recovery of the dues. The court of appeal, therefore, exceeded its jurisdiction in granting interlocutory relief in mandatory form by directing the Corporation to restore back possession of the vehicle. 10. Having regard to the facts and circumstances of the case and discussions made above, I am of the opinion that the impugned order passed by the court below cannot be sustained in law. The court of appeal, therefore, exceeded its jurisdiction in granting interlocutory relief in mandatory form by directing the Corporation to restore back possession of the vehicle. 10. Having regard to the facts and circumstances of the case and discussions made above, I am of the opinion that the impugned order passed by the court below cannot be sustained in law. This application is, therefore, allowed and the impugned order passed by the 1st Addl. District Judge in Misc. Appeal No. 54 of 1997 is set aside and the order passed by the trial court is hereby restored. In the facts and circumstances of the case there shall be no order as to costs.