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2005 DIGILAW 234 (UTT)

ESCORTS FINANCE LTD. v. SANDIP GOEL

2005-07-07

J.C.S.RAWAT, RAJESH TANDON

body2005
RAJESH TANDON, J. ( 1 ) THIS is an appeal against the judgment and order dated 17-11-2004 passed by the Civiljudge (S. D.), pauri in O. S. No. 27 of 2004, Sandeep Goel and another v. Escorts Finance Ltd. and another, thereby allowing the application of the plaintiff for ad interim injunction. ( 2 ) BRIEFLY stated, the plaintiff-respondents filed a civil suit for permanent injunction along with an application for ad interim injunction. The plaintiffs alleged that the defendants have purchased machines from the plaintiffs under hire-purchase agreement for Rs. 19,12,039/- on 4-6-2001. The plaintiffs alleged that defendants at the time of purchase of machines got his signatures obtained on so many papers and despite of the full payment made to the defendants, they have neither issued no-dues certificate nor refunded Rs. 78,000/- to the plaintiffs as bonus. The plaintiffs submitted that on 17-6-2004 some employees of the defendants came to Bharsar Engineering College, pauri and illegally took possession over the machines. On 18-8-2004, the plaintiff No. 1 reported the matter to the Collector, Pauri garhwal, who directed S. H. O. Pauri to take the machines back from the defendants and hand over the same to the plaintiff No. 1. In compliance of the order of District Magistrate, machines were given in the custody of the plaintiffs. Against the order of the collector, the defendants filed a Writ Petition No. 935 of 2004 before this Court and vide order dated 4-10-2004 this Court has directed the Collector, Pauri Garhwal to take back the machines immediately from the plaintiffs. The Collector, Pauri Garhwal vide order dated 5-10-2004 directed restoration of possession of the machines to the defendants. As the Collector has already withdrawn his order dated 18-8-2004 vide order dated 5-10-2004, the writ petition had become infructuous and it was dismissed vide order dated 24-3-2005. ( 3 ) THE main contention of the appellants is that no ad interim injunction can be granted in view of Order 39, Rule 2 (a) of the code of Civil Procedure. Further contention of the appellants is that the dispute may be referred to the arbitrator as per hire-purchase agreement. The efficacious remedy available to the plaintiffs is suit for specific performance and suit for perpetual injunction is barred by Section 41 (h)of the Specific Relief Act. Further contention of the appellants is that the dispute may be referred to the arbitrator as per hire-purchase agreement. The efficacious remedy available to the plaintiffs is suit for specific performance and suit for perpetual injunction is barred by Section 41 (h)of the Specific Relief Act. Another contention of the appellants is that as the property in dispute is a movable property, therefore, in view of section 38 (3) (b) and (c) of the Specific Relief act, no permanent injunction can be granted to the plaintiff. ( 4 ) THE machine was taken under hire-purchase agreement and, therefore, according to the appellants they are entitled to take back possession of the machine from the respondents, if they have made default of the terms and conditions of the hire-purchase agreement. On the other hand the learned counsel for the plaintiffs/respondents has submitted that appellant/defendant cannot take back the possession of JCB machine without adopting the procedure prescribed under the law and further when they have paid the entire amount payable under the hire-purchase agreement. ( 5 ) THE plaintiffs filed paper regarding purchase of JCB machine and its temporary registration certificate. These papers make it clear that the plaintiffs were in rightful possession of the JCB machine. The plaintiffs have alleged in the plaint, copy of which has been filed along with the counter-affidavit, that they had purchased JCB 3d excavator Machine for Rs. 19,12. 039/ -. The appellants/defendants provided finance for purchase of the said machine to the tune of rs. 13,00,000/ -. The defendants have charged a sum of Rs. 3,90,000/- as interest on hire-purchase and thus the plaintiffs have to pay a sum of Rs. 16,90,000/- to the defendants. ( 6 ) IN paragraph 3 of the plaint the plaintiffs have contended that they had to return the amount of loan and interest in 35 instalments. The plaintiffs have paid 31 instalments by Bank drafts, two instalments were paid by cheques and two instalments were paid in cash. The plaintiffs have further alleged that the last instalment of Rs. 18,0436/- was paid by Bank Draft No. 62369 dated 25-5-2004 drawn by Bank of baroda, Hardwar and the plaintiffs demanded 'no dues certificate' and refund of rs. 78,000/- as bonus but the defendants neither issued 'no dues certificate' nor paid bonus to the plaintiffs. The plaintiffs have further alleged that the last instalment of Rs. 18,0436/- was paid by Bank Draft No. 62369 dated 25-5-2004 drawn by Bank of baroda, Hardwar and the plaintiffs demanded 'no dues certificate' and refund of rs. 78,000/- as bonus but the defendants neither issued 'no dues certificate' nor paid bonus to the plaintiffs. The plaintiffs made several requests to the defendants-appellants but instead of making payment of bonus and issuing 'no dues certificate' the defendants sent a notice of demand to the plaintiffs on fictitious grounds. ( 7 ) PLAINTIFFS have filed paper No. 9c copy of delivery letter issued by Escorts Finance limited in favour of plaintiff-Goel Motors. They also filed papers No. IOC and 11c challan Outward and hire-purchase disbursement advise-sum-sale bill. It has been endorsed in the name of Goel Motors. Paper no. 12c is temporary registration certificate issued by Escorts JCB Ltd. These papers make it clear that the plaintiffs were in rightful possession over the machine in question. The plaintiffs have further filed paper No. 13c i. e. the details of Bank Drafts and other documents of remittance paper No. 15c to 43c. These papers prima facie show that the plaintiff has paid the entire amount of hire-purchase of JCB machine in question along with interest. The appellants have neither controverted nor rebutted these documents, therefore, it may be presumed that the respondents/plaintiffs have made payment of all instalments to the appellants. Prima facie, therefore, we are of the opinion that the appellants without showing any reason had interfered in the affairs of JCB machines which was in rightful possession of the plaintiffs. The appellants have not shown any reason for taking back the machine from the plaintiffs in its application. ( 8 ) HOWEVER, the appellants/defendants moved an application under Order 39, Rule 4, C. P. C. before the trial Court for vacating the ad interim injunction order dated 13-9-2004. Even in the said application he has not denied that the plaintiffs have made payment of the entire instalments to the appellants. ( 9 ) THE machine which was purchased by the plaintiffs from the appellants under hire-purchase agreement prima facie was in rightful possession of the plaintiffs. Even in the said application he has not denied that the plaintiffs have made payment of the entire instalments to the appellants. ( 9 ) THE machine which was purchased by the plaintiffs from the appellants under hire-purchase agreement prima facie was in rightful possession of the plaintiffs. One employee of the defendant-Finance Company namely Sri Aman Kumar tried to take possession of the Machine from its operator on 17-6-2004 but the plaintiffs have taken back its possession at Highway Petrol Pump, pauri. Sri Aman Kumar submitted an application to the Police Station, pauri and informed the incident to the Police on 18-6-2004. The District Magistrate, Pauri Garhwal also instructed the police to give the machine in the 'superdagi' of the plaintiff vide order dated 18-8-2004. ( 10 ) THEREAFTER the defendant-Escort Fi nance Ltd. filed a Writ Petition No. 935 of 2004 before this Court. High Court in the said writ petition passed order on 4-10-2004, directing the District Magistrate, Pauri to take the machine in his possession. Thereafter on 6-10-2004, the machine was taken by the police of P. S. Pauri in its custody. The writ petition was further came up for hearing before the Division Bench of the high Court and the Court passed the following order on 12-10-2004 : "heard Mr. Alok Singh learned senior counsel on behalf of the petitioner and Mr. Ramji Srivastava, learned counsel on behalf of respondent No. 3. In view of the fact that the District Magistrate has withdrawn his order, this writ petition has become infructuous and is disposed of as such. " ( 11 ) AFTER dismissal of the writ petition, the interim order passed by the High Court has also become ineffective and the plaintiffs remained in possession of the machine as before passing of the order by the District Magistrate on 18-8-2004, he was in possession of the machine. Thus the trial court was right in holding the possession of the plaintiffs over the JCB machine on the date of filing of the suit. ( 12 ) AT the time of filing of the appeal on 13-12-2004, this Court has passed the following order : "heard Sh. Alok Singh, Senior Advocate for the appellants and Sri Arvind Vashisth learned counsel for the respondents. Appellant also filed supplementary affidavit, which is taken on record. Counter to be filed by 22-12-2004, put up on the date for final hearing. Alok Singh, Senior Advocate for the appellants and Sri Arvind Vashisth learned counsel for the respondents. Appellant also filed supplementary affidavit, which is taken on record. Counter to be filed by 22-12-2004, put up on the date for final hearing. Meanwhile, the parties are directed to maintain status quo in regard to the possession of the machine. Parties shall try to reconcile their accounts and bring the matter to the notice of the Court on the date fixed. " ( 13 ) THE Apex Court in the case Maharwal khewjit Trust v. Baldev Dass, (2004) 8 SCC 488 : (AIR 2005 SC 104), has held that unless and until a case of irreparable loss or damage is made out by a party to the suit, the Court should not permit a change of the said status quo, which may lead to loss or damage being caused to the party who may ultimately succeed, and may further lead to multiplicity of proceedings. The Apex Court observed as under : "be that as it may, Mr. Sachar is right in contending that unless and until a case of irreparable loss or damage is made out by a party to the suit, the Court should not permit the nature of the property being changed which also includes alienation or transfer of the property which may lead to loss or damage being caused to the party who may ultimately succeed and further lead to multiplicity of proceedings. In the instant case no such case of irreparable loss is made out except contending that the legal proceedings are likely to take a long time, therefore, the respondent should be permitted to put the scheduled property to better use. We do not think in the facts and circumstances of this case, the lower appellate Court and the High court were justified in permitting the respondent to change the nature of the property by putting up construction as also by permitting the alienation of the property, whatever may be the conditions on which the same is done. In the event of the appellant's claim being found baseless ultimately, it is always open to the respondent to claim damages or, in an appropriate case, the Court may itself award damages for the loss suffered, if any, in this regard. In the event of the appellant's claim being found baseless ultimately, it is always open to the respondent to claim damages or, in an appropriate case, the Court may itself award damages for the loss suffered, if any, in this regard. " ( 14 ) IN the instant case the plaintiffs were in possession of JCB machine on 18-8-2004, when the District Magistrate, Pauri Garhwal passed order that the machine be given in possession of the plaintiffs. Thus on the date of filing of the suit i. e. 9-9-2004 the JCB machine was in possession of the plaintiffs. In paragraphs 10 and 11 of the plaint the plaintiffs has stated as under : (Varnacular matter omitted. . . . . . . . . Ed.) ( 15 ) THE appellants in an application under Order 39, Rule 4, C. P. C. moved before the trial Court for vacating the order dated 13-9-2004 have admitted the possession of the plaintiffs over the JCB machine on the date of filing of the suit. In paragraphs 3, 5 and 9 of the application the appellants had stated as under : "3. That it was on 12-10-04, Writ Petition No. 935/04 was listed for hearing in the Hon'ble Court of Uttaranchal at Nainital filed by the defendant-company against the impugned order dated 18-8-04 passed by the DM Pauri whereby the possession of the machine in question in the present suit was handed over to the plaintiff herein from the possession of the defendant-company. Thereby causing undue injustice, hardship and loss to the defendant-company. The plaintiff herein and the respondent No. 3 in the Writ Petition No. 935/04 filed his reply in the writ petition mentioning the present writ and the injunction order dated 13-9-04 passed by the Hon'ble Court restraining the defendant-Company being defendant Nos. 1 and 2 in the present suit, to take possession of the machine in question from the plaintiff herein. 5. That it was on 4-9-04 and to the utter surprise to the defendant-company, it came to known that the plaintiff herein has taken the machine without the consent of the defendant-company and the defendant-company was constrained to give a written complaint against the plaintiff to register an FIR under the relevant provisions of law. 5. That it was on 4-9-04 and to the utter surprise to the defendant-company, it came to known that the plaintiff herein has taken the machine without the consent of the defendant-company and the defendant-company was constrained to give a written complaint against the plaintiff to register an FIR under the relevant provisions of law. The copy of the complaint duly received by the sp office Pauri is annexed herewith as An-nexure-"b", but it came to know afterwards that the DM Pauri has passed an order dated 18-9-04 thereby securing the illegal possession of the machine in question to the plaintiff herein. The copy of the order dated 18-9-04 is annexed herewith as Annexure-"c". Aggrieved by the said order passed by the dm the defendant-company preferred a Writ petition No. 935/04 in the Hon'ble High court of Uttaranchal at Nainital. 9. That from the facts and circumstances as mentioned and explained hereinabove and in view of the observations and directions given and issued by the hon'ble Court of Uttaranchal it is very much evident and crystal clear that the possession of the machine in question with the plaintiffs herein is illegal and unlawful. " ( 16 ) HIRE-PURCHASE agreements are executory contracts under which the goods are let on hire and the hirer has an option to purchase in accordance with the terms of the agreement. A contract of hire-purchase may also provide for the agreement to purchase the thing hired by deferred payments subject to the conditions that title to the thing shall not pass until all the installments have been paid. The agreement executed by the parties in this case is to the effect that hirer would not become owner of the property until he pays the entire installments. Copy of the agreement has been annexed along with the application filed by the appellants under Order 39, rule 4, C. P. C. before the Court below. There is no denial on the part of the appellants regarding payment of the amount of installments under the hire-purchase agreement. Copy of the agreement has been annexed along with the application filed by the appellants under Order 39, rule 4, C. P. C. before the Court below. There is no denial on the part of the appellants regarding payment of the amount of installments under the hire-purchase agreement. As such the entire installments having been paid and no dues have been pointed out by the appellants against the plaintiffs, therefore, we find no infirmity in the impugned order granting injunction in favour of the plaintiff on the basis of prima facie 'title on the vehicle in question so as to grant the injunction under Order 39, Rule 1, C. P. C. ( 17 ) SO far as the other arguments regarding maintainability of the suit and clause of arbitration in the hire-purchase agreement are concerned, the defendants are at liberty to press these points before the trial Court and to get the questions decided after framing preliminary issues. ( 18 ) IN view of above we find prima facie case, balance of convenience and irreparable loss in favour of the plaintiffs. Consequently we find no illegality or material irregularity so as to interfere in the order passed by the learned Civil Judge. The appeal has no force and deserves to be dismissed. ( 19 ) ACCORDINGLY the appeal is dismissed with costs and the order dated 17-11-2004 passed by the Civil Judge (SD), Pauri garhwal is upheld. Appeal dismissed. --- *** --- .