1979 Supreme(Bom) 241

Bombay High Court
R.L.AGGARWAL
Tata Engineering and Locomotive - Appellant
Versus
Bharat Mining Corporation Ltd. - Respondent
Decided On : 11/20/1979

Headnote:

The plaintiffs, Tata Engineering and Locomotive Company Limited, the manufacturers of Tata diesel vehicles, have filed the present suit for the recovery of a sum of Rs. 1,67,835/- being the arrears of monthly hire instalments in respect of three vehicles given under hire purchase agreements to the 1st defendants-Bharat Mining Corporation Limited with interest on the arrears of monthly hire charges at the rate of 1 per cent per mensem from 1st May 1974, till payment.

Fact of the Case:

The plaintiffs had entered into three separate and identical hire purchase agreements in writing all dated 30th March 1972, executed at Bombay and made between the plaintiffs on the one part and defendant No. 1 on the second part and defendant No. 2 as the guarantor on the third part, for the plaintiffs as owners of three vehicles, more particularly described in the Schedules to the said agreements, agreed to let and defendant No. 1 agreed to hire the said three vehicles from the date of the said agreements subject to the terms and conditions mentioned therein. Each of the said agreements also recited that defendant No. 1 had signed a proposal form which was to be regarded as the basis of each of the said agreements. Under each of the said agreements, defendant No. 1 agreed to pay to the plaintiffs in Bombay w1 the execution of each of the said agreements a sum of Rs. 19,685/-as an initial payment by way of hire and to punctually pay to the plaintiffs at its address in Bombay and without previous demand the sums mentioned in the margin under each of the said three agreements by way of rent for the hire of each of the said three vehicles, namely, one instalment of Rs. 3451/- and 22 monthly instalments of Rs. 3457/- each. The first instalment was to be paid on 30th May 1972 and the subsequent instalments on or before the 30th day of every succeeding calendar month unless defendant No. 1 had terminated each of the said agreements as therein provided. The plaintiffs have referred to several clauses and conditions of the said agreements in paragraph 3 of the Plaint in order to show the nature of the agreements between the plaintiffs and defendant No. 1 and also defendant No. 2.

Finding of the Court:

The suit vehicles had not vested in the Central Government on the appointed day, i.e. 1st May, 1973, and that the same belonged to the plaintiffs and continued to be their property The 4th defendants had wrongfully detained the suit vehicles from 1st May, 1973, or in any event from and after 27th August, 1973 when they conveyed their decision that the agreements Ex. B (collectively), could not be ratified by Government under Section 29 of the said Act.

Issues: 1. Whether three agreements in writing dated 30th March 1972, were executed between the plaintiffs and defendants Nos. 1 and 2 as stated in paragraph 3 of the Plaint ? 2. Whether the plaintiffs handed over the vehicles specified in paragraph 3 of the Plaint to defendant No. 1 as alleged in the said para ? 3. Whether defendant No. 1 paid only eight instalments or failed and neglected to pay the remaining instalments as alleged in paragraph 4 of the Plaint ? 4. Whether defendant No. 3 wrongfully refused to return the vehicles or wrongfully detained the same ? 5. Whether the trucks in suit were in the said Mines and used for the purpose of the said Mines as alleged in paragraph 7(d) of the Written-Statement of Defendant No. 4 ? 6. Whether the vehicles in suit have vested in defendant No. 4 as alleged in paragraph 7(f) of the Written-Statement ? 7. Whether the plaintiffs are entitled to recover the said vehicles from defendant No. 4 ? 8. Whether the plaintiffs are entitled to recover from defendant No. 4 a sum of Rs. 1,67,835/- or any other sum as arrears of instalments with interest as alleged in paragraph 7 of the Plaint ? 9. Whether the said agreements of hire purchase were in the nature of finance agreements as alleged in paragraph 7(h) of the written-statement ? 10. Whether the provisions in the agreements set out in paragraph 7(h) of the written-statement of defendant No. 4 are in the nature of penalty as alleged in para 7(h) of the written-statement ? 11. Whether the plaintiffs are entitled to any relief and, if so, what ?

Ratio Decidendi: The property in the suit vehicles did not pass at the time when the agreements were made but remained with the plaintiffs and property could pass on the option being exercised after compliance with all the obligations under the agreement. It is not in dispute that defendant No. 1 has not complied with all the terms and that it had not exercised the option. It is clear from the uncontroverted evidence before me that defendant No. 1 had committed default in payment of the agreed instalments. Under the circumstances, the property had remained in the plaintiffs and they continue to be the owners.

Final Decision: There shall be a decree in favour of the Plaintiffs and against Defendants Nos. 1 and 2 in terms of prayer (a). There shall also be a decree in favour of the plaintiffs and against defendants No. 4 in terms of prayer (b) Defendants No. 4 are ordered to return to the plaintiffs the suit vehicles bearing Chassis Nos. 342 038 27 02950, 342 038 27 05673 and 342 038 27 05711, together with the body fitted thereon within twelve weeks from today, and in default, defendants No. 4 would pay to the plaintiffs the agreed value of each vehicle fixed at Rs. 52,000/-. There shall be a decree in favour of the plaintiffs and against defendants No. 4 in the sum of Rs. 1,53,525/-being the aggregate amount of damages worked out at the rate of Rs. 25/- per day per vehicle from 12th April 1974, till judgement. The suit as against defendant No. 3 is dismissed with no order as to costs.