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Himachal Pradesh High Court · body

2021 DIGILAW 728 (HP)

KAMLA DEVI W/O SH. SHER SINGH v. BALDEV SINGH S/O SH. SEWAK RAM

2021-09-21

CHANDER BHUSAN BAROWALIA

body2021
JUDGMENT : The instant regular second appeal has been maintained by appellant, Smt. Kamla Devi, who was defendant before the learned Trial Court (hereinafter referred to as “the defendant”), under Section 100 CPC laying challenge to judgment and decree, passed by learned Presiding Officer Fast Track Court, Mandi, District Mandi, in Civil Appeal No. 53 of 2004 and 121 of 2005, dated 01.08.2006, whereby, by allowing the appeals, the judgment and decree passed by the learned Civil Judge (Senior Division) Mandi, in Civil Suit No. 48 of 2001, dated 01.04.2004, was set aside. 2. The key facts of the case can tersely be summarized as under: 2(a). The plaintiff, Shri Baldev Singh, by maintaining a suit for recovery of Rs. 1,60,000/- (rupees one lac sixty thousand) alleged that on 17.10.1999 proforma respondent, Sh. Naresh Kumar, sold a bus, having registration No. HPK 8782, to him and after receipt of entire consideration, the possession of the aforesaid bus was handed over to the plaintiff. The plaintiff could not change the route permit of the bus, as it was in the name of the proforma defendant and valid till 21.08.2001, so he continued plying the bus. In the interregnum, defendant No. 1, Smt. Kamla Devi, intended to buy the aforesaid bus and the plaintiff also agreed to sell the same with the consent of proforma defendant for a consideration of Rs. 1,45,000/-, out of which Rs. 30,000/- was paid by defendant No. 1, and she agreed to pay the balance amount on or before 15.10.2001. Resultantly, the bus, alongwith its documents, was handed over to defendant No. 1 and a written agreement was executed, whereby it was agreed inter se the parties that in case defendant No. 1 fails to pay balance amount, the plaintiff will be entitled to recover the amount from him through the Court. It is further alleged that upto 01.08.2000 tax was already paid by the plaintiff and upto 17.09.2000 insurance was valid. The defendant not only defaulted in payment of the tax, but she did not pay balance amount of Rs. 1,15,000/- to the plaintiff. 2(b). The defendant, by filing a written statement, contested the suit by raising preliminary objection of maintainability. On merits, it is submitted that proforma defendant did not sell the bus to the plaintiff and the affidavit is wrong and illegal. 1,15,000/- to the plaintiff. 2(b). The defendant, by filing a written statement, contested the suit by raising preliminary objection of maintainability. On merits, it is submitted that proforma defendant did not sell the bus to the plaintiff and the affidavit is wrong and illegal. As per the defendant, the plaintiff portrayed himself to be owner of the bus and also told him that he is holder of route permit of the bus. The plaintiff with an intent to sell the bus, executed an agreement with defendant No. 1 on 29.07.2000 for a sale consideration of Rs. 1,45,000/- and defendant No. 1 paid Rs. 30,000/- as earnest money to the plaintiff and the remaining amount was agreed to be paid on or before 15.10.2000. It is further averred that the plaintiff assured defendant No. 1 to bring ‘no objection certificate’ and agreed to transfer the registration of the vehicle in the name of defendant No. 1 before 15.10.2000. So, the plaintiff remained the owner of the vehicle and the possession was handed over to defendant No. 1. The plaintiff also agreed to transfer the route permit of the aforesaid bus within a week. It is contended that the bus was not in running condition, so defendant No. 1 had to spent Rs. 40,000/- on repairs. Defendant No. 1 engaged driver and conductor for the bus. Defendant No. 1 further contended that the plaintiff failed to transfer the registration certificate and route permit of the bus in her name, yet she is ready to pay the balance amount in case the registration certificate and the route permit is transferred in her name by the plaintiff. It is contended that defendant No. 1 subsequently came to know the plaintiff is not the owner of the vehicle, registration certificate is not in his name and he defrauded her, so the plaintiff is not entitled to recover any amount from her (defendant No. 1). Lastly, the dismissal of the suit was prayed. 3. The learned Trial Court on 10.06.2002 framed the following issues for determination and adjudication: “1. Whether the plaintiff is entitled to the suit amount if so to what extent and at what rate of interest? OPP 2. Whether the suit of plaintiff is not maintainable in the present form? OPD 3. Whether the plaintiff has no cause of action? OPD 4. Relief.” 4. Whether the plaintiff is entitled to the suit amount if so to what extent and at what rate of interest? OPP 2. Whether the suit of plaintiff is not maintainable in the present form? OPD 3. Whether the plaintiff has no cause of action? OPD 4. Relief.” 4. After deciding issue No. 1 against the plaintiff and issues No. 2 and 3 against defendant No. 1, the suit of the plaintiff was dismissed. Subsequently, the plaintiff preferred an appeal before the learned First Appellate Court, which was allowed, vide impugned judgment dated 01.08.2006, hence the present regular second appeal preferred by the appellant (defendant Smt. Kamla Devi), which was admitted for hearing on the following substantial questions of law: “1. Whether the plaintiff/respondent without transfer of ownership duly registered under Section 50 of Motor Vehicle Act, could enter an agreement for sale of Vehicle Ex. PC with defendant/appellant, if so its effect? 2. Whether decree/judgment for suit amount could be passed by the Court below in favour of respondent/plaintiff in defiance to clause 5 of the agreement Ex. PC which provides, that failure to pay the balance amount, by the specified date, by the appellant, the possession of the vehicle can be taken by the plaintiff/respondent, if so its effect? 3. Whether the provision of Section 55 of the Sales of Goods Act is not attracted as there was no neglect or refusal on the part of the defendant/appellant for offering the balance sale price by serving notice Ex. DA, if so its effect? 4. Whether decree for the amount could be passed, as the respondent/defendant being not the registered owner of vehicle in question could not have entered into agreement for the sale with the appellant/defendant and is a result of practicing fraud, if so its effect?” 5. I have heard the learned Counsel for the appellant, learned counsel for respondent No. 1 and carefully gone through the records. 6. Learned counsel for the appellant has argued that as per agreement Ex. PC, the bus was delivered to respondent No. 1 and Rs. 30,000/- was paid to the appellant, as earnest money. The bus was accidental before the said agreement, so respondent No. 1 had to spend an amount of Rs. 40,000/- for the repairs of the bus. 6. Learned counsel for the appellant has argued that as per agreement Ex. PC, the bus was delivered to respondent No. 1 and Rs. 30,000/- was paid to the appellant, as earnest money. The bus was accidental before the said agreement, so respondent No. 1 had to spend an amount of Rs. 40,000/- for the repairs of the bus. He has further argued that when the bus was not transferred in the name of the appellant, she issued a notice (Ex. DA) to the plaintiff for transferring the same, but despite accepting the notice, the suit was filed. To support his arguments, he has referred to Section 4 of the Sale of Goods Act, 1930, and Section 50 of the Motor Vehicles Act, 1988. Conversely, learned counsel for respondent No. 1 has vehemently argued that after the transfer, bus was plied by the appellant and it generated good amount, but the bus met with an accident and that was the reason the bus was not taken back by respondent No. 1. As per the agreement and as the bus became defective, it was not in a state to be taken back and thus the suit was filed and the learned First Appellate Court decreed the suit as per the law and facts, which came on record, and no interference is required. He has argued that the suit was instituted as the balance amount, as required under the law, was not paid by respondent No. 1. 7. In rebuttal, the learned counsel for the appellant has argued that there was no averment in the plaint that the bus was not taken back, as per agreement, Ex. PC, because it met with an accident after entering into agreement, Ex. PC. He has argued that notice, Ex. DA, was issued during the persistence of agreement, Ex. PC. 8. In order to appreciate the rival contentions of the parties I have gone through the record carefully. 9. Sh. Baldev Singh, plaintiff, while appearing in the witness-box stated that on 12.10.1999 he bought bus, having registration No. HPK 8782, from Shri Naresh Kumar, profoma defendant, through affidavit Ex. PA, and the plaintiff also executed affidavit, Ex. PB. The plaintiff further stated that the route permit was in the name of Shri Naresh Kumar so the same could not be transferred and on 29.07.2000, with the prior consent of Sh. Naresh Kumar, an agreement (Ex. PA, and the plaintiff also executed affidavit, Ex. PB. The plaintiff further stated that the route permit was in the name of Shri Naresh Kumar so the same could not be transferred and on 29.07.2000, with the prior consent of Sh. Naresh Kumar, an agreement (Ex. PC) was executed with the defendant qua the bus and the defendant agreed to buy the bus for Rs. 1,45,000/- and Rs. 30,000/- was paid as earnest money on 29.07.2000. Balance amount was agreed to be paid on or before 15.10.2000. The plaintiff has further deposed that documents, viz., Registration Certificate, Route Permit, Insurance Certificate and Time Table were handed over to the defendant on 29.07.2000. The taxes of the bus were also paid upto 01.08.2002 and the defendant agreed to pay the tax after 29.07.2000. The plaintiff admitted his signatures on Ex. PC and as per the plaintiff, defendant signed in presence of the witnesses and witnesses also signed the same and virtually Ex. PC was attested by the Notory. After receipt of the full payment, the vehicle was to be transferred in the name of the defendant and proforma defendant, Shri Naresh Kumar, agreed to transfer the Registration Certificate in the name of Smt. Kamla Devi, defendant, but Smt. Kamla Devi failed to pay the balance amount of Rs. 1,15,000/-. Subsequently, defendant served a legal notice, so the plaintiff visited her house and the defendant agreed to pay the amount in near future, but no amount was paid. Sh. Naresh Kumar, proforma defendant, received notice, Ex. PB, from R.T.O. for depositing tax w.e.f. 01.08.2000 to 31.12.2000, so the plaintiff, alongwith proforma defendant visited the house of the defendant. However, the defendant again issued a legal notice, Ex. PE, to the plaintiff. The plaintiff deposed that the defendant plied the bus on the route and neither deposited the tax nor insured the bus. In turn, the defendant issued legal notice, Ex. PF. The defendant removed the vital parts of the bus and parked it at Ner Chowk and later on, the plaintiff came to know that the defendant sold the bus to a Junk Dealer. The plaintiff denied that firstly the ownership was to be transferred in his name, as Sh. In turn, the defendant issued legal notice, Ex. PF. The defendant removed the vital parts of the bus and parked it at Ner Chowk and later on, the plaintiff came to know that the defendant sold the bus to a Junk Dealer. The plaintiff denied that firstly the ownership was to be transferred in his name, as Sh. Naresh Kumar, proforma defendant, agreed to directly transfer the registration in the name of the defendant, but to this effect neither any agreement was executed inter se the defendant and proforma defendant, nor proforma defendant executed any affidavit admitting to transfer the registration of the bus directly in favour of the defendant. The plaintiff admitted that he and the proforma defendant did not obtain No Due Certificate from the Tax Department. 10. Sh. Tara Chand (PW-2) and Shri Avtar Singh (PW-4) are formal witnesses. PW-2 deposed that the tax qua the bus in question was deposited up to 31.07.2000 and after 01.08.2000 no tax was deposited, so the department issued a notice, Ex. PB, to Shri Naresh Kumar, proforma defendant. PW-4 deposed that defendant parked the bus in front of their shop and later on the bus was sold to some junk dealer by her. Sh. Naresh Kumar (PW-3), proforma defendant, while appearing in the witness-box, deposed that on 12.10.1999 he sold the bus to the plaintiff and the Registration Certificate could not be transferred, as the Route permit was in his name. The plaintiff told him that he intends to sell the bus to the defendant, so he agreed to directly transfer the Registration Certificate in favour of the defendant. As per this witness, agreement is Ex. PC, which was executed inter se the plaintiff and the defendant, whereupon PW-3 admits his signatures. Lastly, PW-3 admitted that no agreement was executed inter se him and the defendant. 11. On the other hand, in order to rebut the stand of the plaintiff, the defendant stepped into the witness-box as DW1 and deposed that on 29.07.2000 she entered into an agreement (Ex. PC) with the plaintiff for sale of a bus for Rs.1,45,000/-, she paid Rs.30,000/- and rest of the amount was agreed to be paid on or before 15.10.2000. On the other hand, in order to rebut the stand of the plaintiff, the defendant stepped into the witness-box as DW1 and deposed that on 29.07.2000 she entered into an agreement (Ex. PC) with the plaintiff for sale of a bus for Rs.1,45,000/-, she paid Rs.30,000/- and rest of the amount was agreed to be paid on or before 15.10.2000. As per this witness, the plaintiff promised to transfer the documents in her favour and on 15.10.2002 she tried to hand over the balance amount to the plaintiff, but the plaintiff did not accept the same. She has further deposed that Sh. Naresh Kumar, proforma defendant, did not sign agreement, Ex. PC, in her presence. She had to spend Rs. 40,000/- on repairs of the bus. This witness, has further deposed that she issued notice, Ex. PA, to the plaintiff, but the same was not replied. Sh. Devi Das (DW-2) admitted his signatures on agreement, Ex. PC, and deposed that on 29.07.2000 a sum of Rs. 30,000/- was paid to the plaintiff and on 15.10.2000 the defendant tried to hand over Rs.1,15,000/- to the plaintiff, but he did not accept the money. 12. After carefully examining the entire evidence, it is safe to hold that the defendant had admitted the execution of agreement, Ex. PC, and she also admitted that she paid Rs.30,000/- to the plaintiff and agreed to pay balance amount of Rs.1,15,000/-. The defendant could not pay the balance amount to the plaintiff, so the plaintiff did not transfer the Registration Certificate and Route Permit in the name of the defendant. A comprehensive analysis of the evidence led by the parties revolves around agreement, Ex. PC, so its terms and conditions become important. In agreement, Ex. PC, it has been specifically mentioned that documents have been handed over to the defendant and the bus has been sold to the defendant alongwith its route. Moreover, the plaintiff has also pleaded in his plaint that all the documents, viz., Registration Certificate, Insurance Policy, Route Permit and Time Table have been handed over to the defendant. It is an admitted fact that the registered owner of the bus was Sh. Naresh Kumar, proforma defendant, and when agreement, Ex. PC, was entered into, all the documents, which were handed over to the defendant by the plaintiff, were in the name of Sh. It is an admitted fact that the registered owner of the bus was Sh. Naresh Kumar, proforma defendant, and when agreement, Ex. PC, was entered into, all the documents, which were handed over to the defendant by the plaintiff, were in the name of Sh. Naresh Kumar, so it cannot be presumed that the defendant was not aware that the documents of the vehicles are in the name of Sh. Naresh Kumar, proforma defendant. So, it is discernible that the plaintiff possessed the bus and the same was not transferred in his name when the agreement, Ex. PC, was executed. 13. Section 50 of the Motor Vehicles Act, 1988, deals with “Transfer of ownership”. For the sake of ready reference, Section 50 of the Motor Vehicles Act, 1988, is extracted hereunder: “50. So, it is discernible that the plaintiff possessed the bus and the same was not transferred in his name when the agreement, Ex. PC, was executed. 13. Section 50 of the Motor Vehicles Act, 1988, deals with “Transfer of ownership”. For the sake of ready reference, Section 50 of the Motor Vehicles Act, 1988, is extracted hereunder: “50. Transfer of ownership.—(1) Where the ownership of any motor vehicle registered under this Chapter is transferred,— (a) the transferor shall,— (i) in the case of a vehicle registered within the same State, within fourteen days of the transfer, report the fact of transfer, in such form with such documents and in such manner, as may be prescribed by the Central Government to the registering authority within whose jurisdiction the transfer is to be effected and shall simultaneously send a copy of the said report to the transferee; and (ii) in the case of a vehicle registered outside the State, within forty-five days of the transfer, forward to the registering authority referred to in sub-clause (i)— (A) the no objection certificate obtained under section 48; or (B) in a case where no such certificate has been obtained,— (I) the receipt obtained under sub-section (2) of section 48; or (II) the postal acknowledgment received by the transferee if he has sent an application in this behalf by registered post acknowledgment due to the registering authority referred to in section 48, together with a declaration that he has not received any communication from such authority refusing to grant such certificate or requiring him to comply with any direction subject to which such certificate may be granted; (b) the transferee shall, within thirty days of the transfer, report the transfer to the registering authority within whose jurisdiction he has the residence or place of business where the vehicle is normally kept, as the case may be, and shall forward the certificate of registration to that registering authority together with the prescribed fee and a copy of the report received by him from the transferor in order that particulars of the transfer of ownership may be entered in the certificate of registration. (2) Where— (a) the person in whose name a motor vehicle stands registered dies, or (b) a motor vehicle has been purchased or acquired at a public auction conducted by, or on behalf of, Government, the person succeeding to the possession of the vehicle or, as the case may be, who has purchased or acquired the motor vehicle, shall make an application for the purpose of transferring the ownership of the vehicle in his name, to the registering authority in whose jurisdiction he has the residence or place of business where the vehicle is normally kept, as the case may be, in such manner, accompanied with such fee, and within such period as may be prescribed by the Central Government. (3) If the transferor or the transferee fails to report to the registering authority the fact of transfer within the period specified in clause (a) or clause (b) of subsection (1), as the case may be, or if the person who is required to make an application under sub-section (2) (hereafter in this section referred to as the other person) fails to make such application within the period prescribed, the registering authority may, having regard to the circumstances of the case, require the transferor or the transferee, or the other person, as the case may be, to pay, in lieu of any action that may be taken against him under section 177 such amount not exceeding one hundred rupees as may be prescribed under sub-section (5): Provided that action under section 177 shall be taken against the transferor or the transferee or the other person, as the case may be, where he fails to pay the said amount. (4) Where a person has paid the amount under subsection (3), no action shall be taken against him under section 177. (5) For the purposes of sub-section (3), a State Government may prescribe different amounts having regard to the period of delay on the part of the transferor or the transferee in reporting the fact of transfer of ownership of the motor vehicle or of the other person in making the application under subsection (2). (6) On receipt of a report under sub-section (1), or an application under sub-section (2), the registering authority may cause the transfer of ownership to be entered in the certificate of registration. (6) On receipt of a report under sub-section (1), or an application under sub-section (2), the registering authority may cause the transfer of ownership to be entered in the certificate of registration. (7) A registering authority making any such entry shall communicate the transfer of ownership to the transferor and to the original registering authority, if it is not the original registering authority.” A perusal of the above Section makes it clear that within 14 days of transfer the transferor has to report to the Registering Authority concerned that such transfer has taken place. The above Section further mandates that within 30 days of transfer, the transferee has to report the transfer to the Registering Authority, within whose jurisdiction he has the residence or place of business and shall forward the certificate of registration to that Registering Authority together with the prescribed fee and a copy of the report received by him from the transferor in order that particulars of the transfer of ownership may be entered in the certificate of registration. Therefore, the date of sale is important and not the date on which the name of the transferee is recorded in the certificate of registration. In view of the mandate of Section 50 of the Motor Vehicles Act, 1988, the plaintiff was under legal duty to report to the Registering Authority qua the sale of the vehicle and got his name substituted in the certificate of registration, but he failed to do so. Admittedly, the certificate of registration, i.e., registration book, is not a document of title, but it is an evidence of title, so absence of registration book, at the time of sale, is dubious. 14. Indisputably, as per agreement, Ex. PC, the plaintiff bought the bus from Sh. Naresh Kumar and sold it to Smt. Kamla Devi. However, agreement, Ex. PC, nowhere reflects that Sh. Naresh Kumar is still the owner of the vehicle. The agreement is also silent qua the fact that Route Permit of the bus is still in the name of Sh. Naresh Kumar, so it is safe to hold that the plaintiff consciously and purposefully concealed some material facts from the defendant and under the shadow of mis-represented facts got executed agreement, Ex. PC, with the defendant. A perusal of agreement, Ex. PC, further shows that three marginal witnesses have signed it. Naresh Kumar, so it is safe to hold that the plaintiff consciously and purposefully concealed some material facts from the defendant and under the shadow of mis-represented facts got executed agreement, Ex. PC, with the defendant. A perusal of agreement, Ex. PC, further shows that three marginal witnesses have signed it. When two witnesses have signed the agreement, there was no need of third marginal witness to sign the same. The plaintiff could not explain as to what was the necessity of getting the agreement signed by third marginal witness. Sh. Naresh Kumar, proforma defendant, while appearing in the witness-box, as PW-3, stated that when he signed agreement, Ex. PC, it was already written and signed by the parties and the witnesses and even attested by the Notory. Thus, the apparent reason for getting the agreement signed by the proforma defendant seems that the plaintiff, without the prior consent of Sh. Naresh Kumar, entered into an agreement with the defendant, and later on, to correct his mistake he got agreement, Ex. PC, signed by Sh. Naresh Kumar. The above reason is further fortified with the statement of DW-2 who specifically deposed that at the time of execution of the agreement, Sh. Naresh Kumar was not present there. 15. The above examination of agreement, Ex. PC, viz-a-viz, statements of the plaintiff, proforma defendant and DW-2, makes it clear that the contention of the plaintiff that Sh. Naresh Kumar agreed to directly transfer the certificate of registration in favour of the defendant is without any force, as no agreement inter se the defendant and proforma defendant was entered into qua the fact that proforma defendant shall transfer certificate of registration directly in the name of the defendant. In fact, the plaintiff was not legally owner of the bus, so one of the terms, as mentioned in agreement, Ex. PC, that the plaintiff shall transfer the registration certificate in favour of the defendant, when the defendant will pay the balance amount to the plaintiff, has no legal basis. The plaintiff was not registered owner of the vehicle, then he was not in a position to transfer the ownership of the vehicle in the name of the defendant. At the most the plaintiff could have repossessed the vehicle when the defendant defaulted in payment. Moreover, the agreement nowhere authorized the plaintiff to get his amount recovered from the defendant through the Court. 16. At the most the plaintiff could have repossessed the vehicle when the defendant defaulted in payment. Moreover, the agreement nowhere authorized the plaintiff to get his amount recovered from the defendant through the Court. 16. It has come nowhere in the plaint that the vehicle in question met with an accident after the alleged agreement (Ex. PC) and that was the reason the vehicle was not taken back by the plaintiff. Therefore, it is an afterthought and cannot be relied upon. At the same point of time, the bus was in the name of third person, i.e. Sh. Naresh Kumar (proforma defendant) and even if it is presumed that the bus was to be transferred in the name of the defendant, then that third person was required to give his consent, through a letter or an affidavit etc., for the transfer of the bus. This Court finds that the learned First Appellate Court mainly relied upon the fact that the bus met with an accident, after alleged agreement, Ex. PC, and for that reason the bus was not taken back. However, no such facts were pleaded by the plaintiff in his plaint, so the findings of the learned First Appellate Court are only based on surmises and conjectures and the same are without any basis, hence perverse. 17. In view of what has been discussed hereinabove, substantial question of law No. 1 is answered holding that the plaintiff without being duly registered owner of the vehicle had no authority to transfer the vehicle in favour of the defendant. Substantial question of law No. 2 answered holding that the right of the plaintiff was to take back the vehicle if the balance amount was not paid, as per agreement, Ex. PC, and the decree could not have been passed by the learned First Appellate Court after reversing the findings of the learned Trial Court. Substantial question of law No. 3 answered holding that as there was specific provision qua transfer of ownership (Section 50 of the Motor Vehicles Act, 1988), the plaintiff was duty bound to transfer the vehicle after receiving the amount or to take back the vehicle, in case he did not receive the balance amount of sale. Lastly, substantial question of law No. 4 answered holding that there was no fraud exercised by the plaintiff on the defendant. Lastly, substantial question of law No. 4 answered holding that there was no fraud exercised by the plaintiff on the defendant. However, the plaintiff was having right to take back the vehicle, in case he did not receive the balance amount of sale and in that eventuality the earnest money would be forfeited by the plaintiff, as per agreement, Ex. PC. 18. After carefully examining the entire gamut of the matter, this Court is of the view that the findings of the learned First Appellate Court are perverse, thus liable to be quashed and set-aside. Accordingly, the appeal is allowed. In aftermath, the impugned judgment and decree passed by the learned First Appellate Court are quashed and set-aside and the judgment and decree of the learned Trial Court are affirmed. 19. In view of the above, the appeal is disposed of with no orders as to costs. Pending application(s), if any, shall also stand(s) disposed of.