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2019 Supreme(Del) 1885
IN THE HIGH COURT OF DELHI AT NEW DELHI
V. Kameswar Rao, J.
National Small Industries Corp. Ltd. – Appellant
Versus
M/s Super Packers and Another – Respondents
Regular First Appeal No. 1029 of 2016
Decided On : 05-11-2019
Advocate Appeared:
Manvi Gola.
The claim for compensation for use and retention costs under the hire purchase agreements could still be pursued despite the time-barred nature of the suit.
Headnote:
Limitation - Hire Purchase Agreements - [FACT OF THE CASE] The appellant, a government enterprise, filed a suit for recovery of dues under three hire purchase agreements. The trial court held the suit to be time-barred based on the limitation period for each agreement. The appellant also sought compensation for use and retention costs. [FINDING OF THE COURT] The trial court rejected the suit on the grounds of limitation and insufficiency of stamp duty on the hire purchase agreements. [ISSUES] The issues included the time-barred nature of the suit, insufficiency of stamp duty on the agreements, and the entitlement of the appellant to recover the suit amount. [RATIO DECIDENDI] The trial court erred in rejecting the suit solely on the grounds of limitation, as the claim for compensation for use and retention costs could still be pursued. The hire purchase agreements were erroneously rejected as insufficiently stamped without following the proper procedure. [FINAL DECISION] The judgment is set aside, and the matter is remanded to the trial court to reconsider the claim for compensation for use and retention costs and address the issue of insufficiency of stamp duty on the agreements. The appeal is disposed of, and the parties are directed to appear before the District Judge for further proceedings.
JUDGMENT :
V. Kameswar Rao, J.
1. This Regular First Appeal under Section 96 of the Code of Civil Procedure, 1908 has been filed by the appellant challenging the Judgment/Order dated September 1, 2016 passed by Mr. Shailender Malik, ADJ-16 (Central), Tis Hazari Courts, New Delhi in CS No. 572/16/06 titled National Small Industries Corporation Ltd. vs. Super Packers and Another. Suffice it would be to state that the Suit filed by the appellant has been dismissed.
2. Some of the facts, relevant for decision of this appeal are, the appellant, a company registered under the Companies Act, 1956 (a Government of India enterprise) filed a Suit for Recovery of Rs. 15,67,802.45 with pendente lite and future interest, relief of injunction and compensation for use and retention costs. The prayers made in the plaint are as under the facts and circumstances stated hereinabove and in the interest of justice, this Hon'ble Court may be pleased to:
(i) Call for the records of the case being CS No. 572/16/06 titled National Small Industries Corporation Ltd. vs. M/s Super Packers and Another, decided by the court of Sh. Shailender Malik, ADJ-16 (Central), THC Delhi vide judgment and decree dated 01.09.2016.
(ii) Set-aside judgment and decree dated 01.09.2016 passed by Sh. Shailender Malik, ADJ-16 (Central), THC Delhi in CS No. 572/16/06 titled National Small Industries Corporation Ltd. vs. M/s Super Packers and Another and decree the suit of the Appellant.
(iii) Pass such other and further orders as are deemed fit and proper in the facts and circumstances of the case."
Respondent no. 1 is a proprietorship concern and the respondent no. 2 is the husband of the proprietor of respondent No. 1.
3. The case of the appellant was that respondent no. 1 through its proprietor had approached the appellant for supply of paper corrugating and slitting attachment machines on three different occasions. The appellant considered the request of the respondent no. 1 and agreed to supply those machinery/equipment under hire purchase agreement scheme after completing necessary formalities. It was the case of the appellant that three hire purchase agreements dated October 21, 1987, December 21, 1990 and April 01, 1991 were executed. The appellant supplied the machinery/equipment to respondent no. 1. As per the first hire purchase agreement dated October 21, 1987, heavy duty oblique type high speed single face paper corrugating machine along with fitting attachments were supplied. As per the second hire purchase agreement dated December 21, 1990, Everest heavy duty cutting and creasing platen press was supplied and under the third agreement dated April 1, 1991, sheet pasting box M/S 72" stitching M36 board cutter machines were supplied.
4. According to the appellant, under the above three hire purchase agreements, the cost of the contract inclusive of insurance charge was for a total sum of Rs. 15,66,848/-. As per the first hire purchase agreement, first installment amount of Rs. 26,886/- were payable on half yearly basis until the payment of entire hire purchase value. Under the second hire purchase agreement, the installment of Rs. 57,061/- was to be paid on or before July 1, 1992 and subsequent 12 installments of Rs. 35,693/- each were payable on half yearly basis until the hire purchase value was paid. The last instalment was payable on or before July 1, 1998. Under the third hire purchase agreement, the first installment of Rs. 1,00,62/- was payable by October 1, 1991 and rest of the amount in 12 installments of Rs. 6,298/- each was payable on or before October 1, 1998.
5. It was the case of the appellant that the respondents had agreed to pay normal interest @ 15% per annum under the aforesaid hire purchase agreements. As per clause 6 of the hire purchase agreements, the respondent agreed to pay interest @ 2% more than the normal rate, i.e. @ 17% per annum. It was the case of the appellant that under Clause 2 (X) of hire purchase agreement, if the respondent No. 1 failed
