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High Court Of Calcutta
Pratibha Bonnerjea
SATYANARAYAN KAMAL KUMAR - Appellant
Versus
BIRENDRA PR.SINGH - Respondent
Suit 1839 Of 1968
Decided On : 01/24/1979
HIRE PURCHASE AGREEMENT - MONEY LENDING - JURISDICTION - BENGAL MONEY LENDERS ACT - GUARANTEE - TERMINATION OF AGREEMENT - FINANCIAL TRANSACTION - VALIDITY OF AGREEMENT - RECOVERY OF LOAN.
Fact of the Case:
Plaintiff filed a suit against the defendants for recovery of arrears of hire, interest, and damages under a hire-purchase agreement dated 24-7-67. The defendant No. 1 was the hirer, and the defendant No. 2 was the guarantor. The plaintiff alleged that the defendants had removed the vehicle to Tarwa, in the District of Varanashi, and failed to pay the agreed hires. The agreement was terminated by the plaintiff by notices dated 4-12-67 and 19-12-67. The defendant No. 2 contested the suit, alleging that the transaction was a loan transaction within the meaning of the Bengal Money-Lenders Act and that the plaintiff was carrying on money-lending business without a license. He also alleged that the plaintiff had allowed the defendant No. 1 to remove the vehicle from Calcutta without his written permission, discharging him from all liabilities under the guarantee agreement.
Finding of the Court:
The court held that the plaintiff had jurisdiction to try the suit as the plaint showed that the court had jurisdiction. The court also held that the plaintiff was not a money-lender within the meaning of the Bengal Money Lenders Act and was not required to obtain a money-lending license. The court further held that the defendant No. 2 had failed to prove the oral agreement of guarantee alleged in the written statement and that the guarantee agreement was not void under Section 40 of the Bengal Money Lenders Act. The court also held that the removal of the vehicle by the defendant No. 1 was not with the plaintiff's consent and that the plaintiff was entitled to terminate the agreement. The court found that the real transaction between the parties was a financial transaction repayable by agreed installments.
Issues: 1. Whether the plaintiff is a registered firm as alleged in the plaint? 2. Did the plaintiff carry on business as money-lender and financier as alleged in paragraph 2 of the written statement of the defendant No. 2? 3. Did the defendant fail and neglect to pay the instalments in terms of the agreement dated 24th July, 1967 in spite of demands as alleged in paragraph 6 of the plaint? 4. (a) Was there any oral agreement between the plaintiff and the defendant No. 1 as alleged in paragraph 3 (d) (i), (ii) and (iii) of the written statement? (b) If so, does it amount to a condition precedent as alleged in paragraph 3 (d) (iv) of the written statement? 5. Did the defendants remove the vehicle from Calcutta without the knowledge and consent of the plaintiff as alleged in paragraph 7 of the plaint? 6. Was the notice of termination invalid or insufficient as alleged in paragraph 7 of the written statement? 7. Has this Hon'ble Court jurisdiction to entertain, try and determine this suit as alleged in paragraph 11 of the written statement? 8. To what relief, if any, is the plaintiff entitled?
Ratio Decidendi: The court held that the plaintiff was entitled to recover the loan amount of Rs. 5,500/- with interim interest at the rate of 6% per annum, interest on Judgment at the rate of 6% per annum until realization, and costs.
Final Decision: Decree for the plaintiff against the defendants for Rs. 5500/- with interim interest at the rate of 6% per annum, interest on Judgment at the rate of 6% per annum until realization, and costs.
( 1 ) THE plaintiffs suit is on a hire-purchase agreement dated 24-7-67 in respect of a 1962 model Willys Jeep bearing registration No. WBB 9796 against the defendant No. 1 as the hirer and against the defendant No. 2 as the guarantor, for recovery of arrears of hire, interest and damages. The plaintiff alleged that the defendants, in breach of the terms of the said agreement had removed the vehicle to Tarwa, in the District of Varanashi and failed to pay the agreed hires. The agreement was terminated by the plaintiff by notices dated 4-12-67 and 19-12-67, In this suit, the plaintiff also claimed possession of the said vehicle or in lien the present market value of Rs. 6498/ -.
( 2 ) ONLY the defendant No. 2 contested the suit. In the written statement he alleged that prior to 24-7-67, there was an oral agreement between the plaintiff and the defendant No. 1 for purchase of this vehicle and the plaintiff had given loan to the defendant No. 1 in that connection. These alleged oral terms were set out in the written statement. The defendant No. 2 was not a party to that agreement. The defendant No. 2, however, admitted having signed the written agreement dated 24-7-67 subsequently as a guarantor but on certain oral terms mentioned in paragraph 3 (d) of the written statement. According to him the real transaction between the plaintiff and the defendant No. 1 was a loan transaction within the meaning of Bengal Money-Lenders Act. The plaintiff is carrying on money lending business without holding any Money-Lending Licence. Hence the hire-purchase agreement in suit is null and void. He further alleged that in breach of the oral terms of guarantee, the plaintiff allowed the defendant No. 1 to remove the vehicle from Calcutta without the guarantor's written permission and as such he was discharged from all liabilities under the guarantee agreement. The last defence was that the real transaction being loan transaction below the pecuniary jurisdiction of this Court, the Court has no jurisdiction to try the suit. It has been alleged that plaintiff is not a registered firm and the notice of termination was invalid and insufficient. Following issues were raised :--ISSUES : 1. Is the plaintiff a registered firm as alleged in the plaint ? 2. Did the plaintiff carry on business as money-lender and financier as alleged in paragraph 2 of the written statement of the defendant No. 2 ? 3. Did the defendant fail and neglect to pay the instalments in tenns of the agreement dated 24th July, 1967 in spite of demands as alleged in paragraph 6 of the plaint ? 4. (a) Was there any oral agreement between the plaintiff and the defendant No. 1 as alleged in paragraph 3 (d) (i), (ii) and (iii) of the written statement ? (b) If so, does it amount to a condition precedent as alleged in paragraph 3 (d) (iv) of the written statement ? 5. Did the defendants remove the vehicle from Calcutta without the knowledge and consent of the plaintiff as alleged in paragraph 7 of the plaint ? 6. Was the notice of termination invalid or insufficient as alleged in paragraph 7 of the written statement ? 7. Has this Hon'ble Court jurisdiction to entertain, try and determine this suit as alleged in paragraph 11 of the written statement? 8. To what relief, if any, is the plaintiff entitled ? Issue No. 7
( 3 ) IT has been submitted on behalf of the defendant, that this Court has no jurisdiction to entertain the present suit because the transaction in suit was not a commercial transaction relating to buying or selling of goods as alleged in the suit. The transaction in suit was a loan of Rs. 5500/- below the pecuniary jurisdiction of this Court and as such the suit should be dismissed on that ground. On behalf of the plaintiff it has been submitted that the suit is on a hire-purchase agreement and the claim in the suit is for Rs. 10671/- consisting of arrears of hire of Rs. 1239/-, market value of the vehicle of Rs. 6498/- and the mesne profit of Rupees 2880
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