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2015 DIGILAW 400 (ORI)

Jayanarayan Mohanta v. Ratnakar Mohanty

2015-07-10

B.K.NAYAK

body2015
JUDGMENT : B.K.NAYAK, J. 1. In this appeal the appellant has challenged the judgment and decree respectively dated 17.08.1993 and 31.08.1993 passed by the learned Sub-ordinate Judge, Baripada in Money Suit No.23 of 1988. 2. The appellant-plaintiff filed the aforesaid suit for realization Rs.1,75,085.41 with pendentlite and future interest from defendant no.1. The case of the plaintiff-appellant is that defendant no.1-respondent no.1 purchased a bus bearing Registration No.O.R.M-6448 with financial assistance from OSFC (defendant no.2) and the vehicle had been hypothecated to the OSFC. Defendant no.1 having defaulted in repayment of some instalements agreed for transfer of the said vehicle to the plaintiff subject to approval by the OSFC. On 26.5.1987 he had sworn an affidavit to that effect and received a sum of Rs.1,25,000/-from the plaintiff towards consideration for the proposed sale and also on the same day delivered possession of the bus to the plaintiff for plying the same. Since the vehicle was not in running condition, the plaintiff spent about Rs.20,000/-for repair and making the vehicle road worthy. The plaintiff also deposited Rs.10,288/-and Rs.5,000/-with the D.T.M., Baripada on two occasions towards royalties of the vehicle on behalf of defendant no.1. He also deposited Rs.10,000/-towards the outstanding loan amount with the OSFC, Baripada Branch towards the loan amount outstanding against defendant no.1. It is further alleged that defendant no.1 colluded with the OSFC authority (defendant no.2), who took away the vehicle from the plaintiff and sold it to defendant no.3. Thereafter, the plaintiff demanded refund of the money paid by him to defendant no.1 together with the money spent by him towards royalty to the Government and towards loan to the O.S.F.C. authorities and also money spent in repair of the vehicle, but defendant no.1 did not pay any heed to the same. Therefore, the plaintiff filed the suit for realization of the amount. 3. Defendant no.1 filed a written statement and also an additional written statement stating that the bus in question was under hypothecation to the OSFC and he had no exclusive ownership over the same and no power to enter into any contract for sale of the same. Therefore, the plaintiff filed the suit for realization of the amount. 3. Defendant no.1 filed a written statement and also an additional written statement stating that the bus in question was under hypothecation to the OSFC and he had no exclusive ownership over the same and no power to enter into any contract for sale of the same. It was stated that the plaintiff’s father happens to be a friend of the brother of defendant no.1 and he having learnt about the inability of defendant no.1 to run the bus and pay the instalment dues of the OSFC, prevailed upon him to enter into an agreement for transfer of the OSFC loan and the bus in the name of the plaintiff. Since defendant no.1 was facing problem in running the bus and was not able to pay the instalments to the OSFC, agreed to the proposal. It was stipulated between defendant no.1 and the plaintiff that the latter would pay Rs.1,25,000/-to the plaintiff and would clear the outstanding loan amount to the OSFC and transfer shall be made with the consent and approval of the OSFC. Defendant no.1, admitted that he has sworn an affidavit on 26.05.1987 on the request of the plaintiff and his father to facilitate the transfer of the vehicle and the loan account to the name of the plaintiff and in good faith he signed the affidavit not understanding or knowing the contents thereof. But he denied to have received Rs.1,25,000/-from the plaintiff as alleged. It was denied that the plaintiff spent Rs.20,000/-to bring the bus to running condition. It is further stated that on the very day of the swearing of the affidavit, i.e., on 26.05.1987, he sent the letter to the OSFC to transfer his loan account in favour of the plaintiff. It is also stated that the plaintiff began to run the bus and out of the income derived therefrom deposited Rs.10,000/-with OSFC. It is further stated that the OSFC agreed to the transfer proposal with some terms and conditions. The plaintiff made the initial deposit of Rs.10,000/-with the OSFC but failed to fulfill the terms and conditions and to make the balance deposit, for which defendant no.1 cannot be penalized. Defendant no.1 never colluded with the OSFC authorities nor is responsible for transfer of the bus in favour of defendant no.3. The plaintiff made the initial deposit of Rs.10,000/-with the OSFC but failed to fulfill the terms and conditions and to make the balance deposit, for which defendant no.1 cannot be penalized. Defendant no.1 never colluded with the OSFC authorities nor is responsible for transfer of the bus in favour of defendant no.3. For plaintiff’s failure to pay the balance out of Rs.60,000/-as demanded by the OSFC and because of various threats given by the OSFC defendant no.1 signed some papers at the behest of the OSFC. It is further stated that after the sale of the bus to defendant no.3, the plaintiff filed OJC No.3054 of 1997 before the High Court, but subsequently withdrew the said writ petition. Therefore, defendant no.1 is not liable to pay any amount to the plaintiff. 4. Defendant no.2, the Branch Manager, OSFC filed a written statement stating that defendant no.1 purchased the bus availing loan from the OSFC and hypothecated the bus in its favour and as such the vehicle in question was kept as first charge with the OSFC, for which the agreement between the plaintiff and defendant no.1 without the consent of the OSFC is not enforceable in law. Therefore, the OSFC rightly got the vehicle transferred to defendant no.3, who agreed to liquidate its dues. Defendant no.3 has again hypothecated the vehicle in favour of OSFC on 24.09.1987 as security for repayment of the loan with interest. 5. Defendant no.3 did not file any written statement and was set ex-parte. 6. On the basis of the pleadings, the trial court framed five issues and disbelieved the plaintiff’s case of payment of Rs.1,25,000/-to defendant no.1 on the ground that the plaintiff’s father, who, according to the plaintiff provided money for payment to defendant no.1 has not been examined and that the plaintiff has not obtained any money receipt regarding payment of the alleged amount to defendant no.1. It is further held that there was a transfer of ownership of the vehicle in favour of the plaintiff and that there being no allegation regarding breach of contract by defendant no.1, inasmuch as OSFC took away the vehicle for non-payment of the outstanding loan dues by the plaintiff, the plaintiff is not entitled to any compensation from the defendant. 7. 7. Learned counsel for the appellant in assailing the impugned judgment submits that in the affidavit sworn by him, defendant no.1 has admitted receipt of Rs.1,25,000/-towards consideration for the proposed transfer and, therefore, the trial court has gone wrong in holding that no money receipt has been obtained from defendant no.1 with regard to payment of the said amount. It is his further submission that non-examination of the father of the plaintiff is not fatal to the plaintiff’s case, particularly when the notary and another advocate, who had prepared the affidavit of defendant no.1 have testified about receipt of the consideration amount by defendant no.1 from the plaintiff. Learned Senior Counsel for respondent no.1, on the other hand, submitted that instead of OSFC its Branch Manager of Baripada Branch was only impleaded as a defendant to the suit and that the Corporation which was a necessary party to the suit having not been impleaded, the suit was liable to be dismissed for non-joinder of necessary party. It was his further submission that the appellant filed OJC No.3054 of 1987 against the OSFC for transfer of the vehicle in his favour which was withdrawn without obtaining leave of the Court to file the suit and, therefore, the suit was barred by res-judicata and further that in the writ application, the plaintiff having not raised about payment of Rs.1,25,000/-to defendant no.1, he is precluded from raising the same in the present suit as per provision of Order 2, Rule-2 of the C.P.C. 8. The affidavit sworn by defendant no.1 has been proved as Ext.1. Execution of Ext.1 has been admitted by defendant no.1 in his written statement. The only plea raised by him with regard to the affidavit is that he signed the same without reading the contents thereof. In Ext.1 it is clearly acknowledged that on the date it was sworn defendant no.1 received Rs.1,25,000/-from the plaintiff at the house of the notary public. The notary public having been examined as P.W.3 testified about the swearing of the affidavit by defendant no.1 and receipt of the money by him from the plaintiff. His evidence has not been shattered in any manner during cross-examination. P.W.2 is the advocate, who prepared the affidavit of defendant no.1. He also supports the plaintiff’s case with regard to payment of Rs.1,25,000/-by the plaintiff to defendant no.1 in the house of P.W.3. His evidence has not been shattered in any manner during cross-examination. P.W.2 is the advocate, who prepared the affidavit of defendant no.1. He also supports the plaintiff’s case with regard to payment of Rs.1,25,000/-by the plaintiff to defendant no.1 in the house of P.W.3. He has specifically stated that defendant no.1 signed the affidavit after receipt of the said amount. His evidence remained unshaken during cross-examination. The plaintiff also being examined as P.W.1 stated about payment of the said amount to defendant no.1. Defendant no.1 has examined himself as D.W.1 and no other witness was examined by him. He has simply denied in his evidence to have received the money from the plaintiff. On the face of the evidence of P.Ws.1,2 and 3 and acknowledgement by defendant no.1 in Ext.1 about receipt of the money, his bare denial cannot be believed. The acknowledgment by defendant no.1 in the affidavit about receipt of the money must be treated as a money receipt and the trial court fell into error in disbelieving the plaintiff’s evidence and the Ext.1 on the ground that no separate money receipt was obtained by the plaintiff from defendant no.1, particularly when the swearing of the affidavit has been admitted by defendant no.1. Merely because the plaintiff’s case was that his father arranged the money, the non-examination of his father cannot be said to be fatal to the plaintiff’s case. Defendant no.1 is a businessman and not an illiterate person. Therefore, his bare assertion that he received no money from the plaintiff is wholly unbelievable. There is adequate evidence on record in proof of payment of Rs.1,25,000/-by the plaintiff to defendant no.1. 9. The trial court has also fallen into error in holding that the plaintiff was claiming compensation from defendant no.1 for breach of contract of sale. It is clear from the pleadings and evidence of the plaintiff and defendant no.1 that the agreement between them was only with regard to the proposed sale of bus and the loan account, which would have been completed, if the OSFC would have accepted the proposal and the plaintiff would have fulfilled the conditions. It is clear from the pleadings and evidence of the plaintiff and defendant no.1 that the agreement between them was only with regard to the proposed sale of bus and the loan account, which would have been completed, if the OSFC would have accepted the proposal and the plaintiff would have fulfilled the conditions. It is admitted by the plaintiff as well as defendant no.1 that on the date of the affidavit defendant no.1 wrote a letter to the OSFC for the proposed transfer of the bus to the plaintiff along with the loan liability and that the OSFC directed the plaintiff to pay Rs.60,000/-immediately out of which Rs.10,000/-was paid by the plaintiff as per receipt under Ext.2/b. It is in plaintiff’s evidence that he requested for some time to pay the balance Rs.50,000/-and that the letter issued by the OSFC to the plaintiff stipulating the time for payment was received late by him, and therefore, he could not pay the money, for which the OSFC took over possession of the bus from the plaintiff and sold it to defendant no.3 along with the loan liabilities to him. The finding of the trial court that there was a concluded contract for sale of the vehicle between the plaintiff and defendant no.1 is not correct inasmuch as defendant no.1 was not the absolute owner of the hypothecated bus and had no right to transfer the same to a third party until the loan liability was transferred by the OSFC. The suit is not one for damages for breach of contract but for realization of the money taken by defendant no.1 towards consideration and the money spent by the plaintiff in repairing the vehicle and towards payment of government dues and part of outstanding dues of the OSFC. 10. The contention of the learned Senior Counsel for respondent no.1 that the suit is barred for non-joinder of OSFC has no force inasmuch as the suit is essentially one claiming refund of money paid to defendant no.1 and some amount spent by the plaintiff for other purposes as noted above. Besides, the Branch Manager, Baripada Branch of OSFC wherefrom defendant no.1 had taken the loan for the vehicle has been impleaded as a party to the suit. Therefore, it cannot be said that the suit is barred for nonjoinder of necessary party. Besides, the Branch Manager, Baripada Branch of OSFC wherefrom defendant no.1 had taken the loan for the vehicle has been impleaded as a party to the suit. Therefore, it cannot be said that the suit is barred for nonjoinder of necessary party. The other contention raised on behalf of respondent no.1 that the suit is hit under Order 2 Rule 2 of the C.P.C. and by resjudicata is equally untenable. The writ application which the plaintiff filed earlier was against the OSFC and the subsequent transferee (defendant no.3) with prayer to direct the OSFC authorities to receive Rs.50,000/-from the plaintiff and to transfer the vehicle in his favour. The writ application was not for refund of money from defendant no.1. Therefore, withdrawal of the writ application cannot be a bar under Order 2 Rule 2 of the C.P.C. for filing the suit, nor question of resjudicata arises. 11. It is clear from the evidence on record that having been delivered with the possession of the bus, the plaintiff ran the same for about a month before it was seized and taken over by the OSFC authorities. Money receipts have been proved by the plaintiff with regard to payment of some amount to the State Transport Authority towards royalty for plying the bus and payment of Rs.10,000/-to the OSFC. There is however no documentary evidence with regard to expenditure incurred by the plaintiff towards repair of the vehicle. Since the plaintiff ran the bus for about a month, he is not entitled to refund of the amount paid by him to the Transport Authority and the OSFC authority and for incurring the expenditure for the repair of the bus. However, since it is established that defendant no.1 received a consideration of Rs.1,25,000/-from the plaintiff for the purpose of transfer of the vehicle and that the proposed transfer in favour of the plaintiff did not materialize, defendant no.1 cannot be allowed to retain the said amount for which he is not entitled. Allowing him to retain the same would amount to unjust enrichment. He has to repay the said amount to the plaintiff with interest. 12. Allowing him to retain the same would amount to unjust enrichment. He has to repay the said amount to the plaintiff with interest. 12. In the light of the discussions made above, this appeal is allowed, the trial court judgment and decree are set aside and the suit is decreed in part and the plaintiff is entitled to receive Rs.1,25,000/-from defendant no.1 with interest @ 9% per annum from the date of filing of the suit. Defendant no.1 is directed to pay the same to the plaintiff within three months, failing which the principal amount shall carry interest at the rate of 12% per annum after expiry of three months.