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2011 Supreme(Bom) 1138
2011(6) ALL MR 738
IN THE HIGH COURT OF JUDICATURE AT BOMBAY (PANAJI BENCH)
A. P. LAVANDE, J.
M/s. Halona Builders & Ors. – Appellant
Vs.
State of Goa & Ors. – Respondent
First Appeal No. 95 of 2002
Decided On: 23rd September, 2011.
Mr. P. S. LOTLIKAR, Advocate for the Appellants.
Mr. GURU SHTRODKAR, Government Advocate for Respondent nos.1 and 2.
Mr. C.A. FERREIRA, Assistant Solicitor General for Respondent nos.3 and 4.
Headnote:Customs Act, 1962 - Section 126-Seizure of vehicle under-Vehicle seized by Customs Authorities-Vehicle Stands vested in Central Government-Right of financier-Vesting of vehicle in Central Government not amounts termination of hypothecation agreement in respect of vehicles entered into with financier-Right of financier, under agreement not caused.-In Court’s considered opinion, the trial Court is absolutely wrong in law in holding that once the vehicle was seized by the Customs Authorities and stood vested in the Central Government in terms of Section 126 of the Customs Act, the financier loses its right under the agreement of hypothecation.
Civil Procedure Code, 1908 - Order XLI, Rule 22 - Appeal. Appellant, in his appeal, cannot be placed in a worse condition than what he is Order XLI, Rule 22 of Civil Procedure Code clearly provides that in an appeal preferred by the appellant, the respondent, without filing appeal may not only support the decree, but the respondent is entitled to urge that the finding against him in the Court below in respect of any issue ought to have been in his favour. Merely because the trial Court has recorded such a finding in favour of the plaintiffs for the purpose of grant of first relief, this fact by itself would not deter the Court from disturbing the said finding, if the finding is contrary to law. This is subject to rider that the appellant in his appeal cannot be placed in a worse condition than what he is. In other words, even if the finding given while granting a relief in favour of the plaintiffs is wrong, in appeal preferred by the appellant against the decree partly refusing another relief the appellant cannot be put in worse condition.
Customs Act, 1962 - Section 126 - Right of financier on seizure of vehicle. Though the vehicle was seized by customs authorities and stood vested in Central Government in terms of Section 126 of Act, even then financier not loses his right under agreement of hypothecation.
When the vehicle is under hire-purchase agreement, the registering authority has to make an entry in the certificate of registration regarding existence of such an agreement and the same has to be cancelled only upon proof of termination of hire- purchase agreement by the parties thereto. Sub-section (4) clearly provides that no entry regarding the transfer of ownership of motor vehicle which is held under a hire-purchase agreement shall be made in the certificate of registration except with the written consent of the person whose name has been specified in the certificate of registration as the person with whom the registered owner has entered into a hire-purchase agreement. This provision clearly mandates the registering authority to obtain NOC from the financier in case the vehicle is held under a hire-purchase agreement. The trial Court is absolute wrong in law in holding that once the vehicle was seized by the Customs Authorities and stood vested in the Central Government in terms of Section 126 of the Customs Act, the financier loses its right under the agreement of hypothecation.
Civil Procedure Code, 1908 - Order XLI, Rule 22-Appeal-Against finding contrary to law-Finding recorded by trial Court, while granting first relief in favour of plaintiff’s, contrary to law-In appeal by plaintiffs against decree partly refusing another relief, plaintiffs cannot be put in worse condition than what he is.
Heard learned Counsel for the parties.
2. By this appeal, the appellants take exception to the judgment and decree dated 3rd May, 2001 passed by the Civil Judge, Senior Division, Panaji in Special Civil Suit No.26/1988/ B in so far as it refuses the relief of compensation to the plaintiffs as against respondent nos. 1 and 2.
3. The appellants are the plaintiffs in the above suit filed against the defendants seeking the following reliefs:
"(1) For an order or mandatory injunction directing the defendants to have the registration of the suit vehicle done in favour of the plaintiff.
(2) For an order directing the defendants, jointly and severally to pay Rs.10,000/- per month to the plaintiff from 1-3-1987 till actual registration along with interest at the rate of 18 % ."
(3) Costs and advocate's fees such other reliefs as this Honourable Court may be pleased to grant in the circumstances of the case.
4. The parties shall be hereinafter referred to as per their status before the trial Court.
5. Briefly, the facts leading to filing of the present appeal are as under:
Plaintiff nos.2 to 5 are the partners of plaintiff no. I Firm registered with the Registrar of Firms at Panaji, Goa. The plaintiffs purchased a Truck bearing No.3386 in public auction held by defendant no.4 on 3rd June, 1986 by paying full amount for which the plaintiffs had bidded. The said truck was registered in the name of Antonio Pereira with Directorate of Transport, Panaji and was under hire purchase agreement with Union Bank of India, Panaji branch. The said truck was seized by Customs Authorities on 30th August, 1982 on the ground that contraband was being carried in the said truck. On 11th June, 1985, the truck was confiscated in favour of Government of India. The truck was handed over to the plaintiffs 'as is where is' basis.
6. By letter dated 5th February, 1987, the Directorate of Transport was requested to register the vehicle in the name of plaintiff no.1. By reply dated 23rd March, 1987, the Directorate of Transport had informed that the Customs Authorities have informed that the vehicle was seized by them on 30th August, 1982 and that transferee is liable to pay the outstanding taxes. It was also stated that the vehicle could not be transferred unless no objection certificate was produced from the Union Bank of India, Panaji since the vehicle was under hire purchase agreement with the bank.
7. Aggrieved by the action of the Directorate of Transport refusing to register the vehicle in the name of plaintiff no. 1, the plaintiffs filed the suit on 23rd February, 1988 and claimed the above reliefs. On behalf of defendant nos. 1, 2 and 4 separate written statements were filed opposing the claim of the plaintiffs.
8. On the basis of the pleadings, the following issues were framed:
(i) Whether the plaintiff proves that it is a partnership firm registered under No.113/87?
(ii) Whether the plaintiff proves that it is entitled to a mandatory injunction directing the defendants to have the registration of the suit vehicle done in favour of the plaintiff?
(iii) Whether the plaintiff prove that the defendants are jointly and severally liable to pay a sum of Rs.10,000/- for a month along with 18% p.a. from 1.3.87 till the vehicle is registered in the name of plaintiff no. 1?
(iv) What relief? What order?
9. In Special Civil Suit No.26/1988/B, the plaintiffs examined plaintiff no.2 as the only witness who produced some documents in support of the plaintiffs' case and the plaintiffs closed the evidence. On behalf of defendant nos. 1 and 2, one Manuel Afonso-D W 1 was examined.
10. Upon appreciation of the evidence led by the parties, the trial Court partly decreed the suit and granted prayer no.1. However, the relief of compensation was rejected. The trial Court held that the financier has lost its right under hypothecation after the vehicle was confiscated by defendant no.4 and stood vested in the Central Government. The trial Court further held that no cogent evidence w
