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2005 Supreme(UK) 232
HIGH COURT OF UTTARANCHAL
RAJESH TANDON AND J. C. S. RAWAT, JJ.
ESCORTS FINANCE LTD. - Appellant
Versus
SANDIP GOEL - Respondents
A. O. 478 Of 2004
Decided On : JULY 7, 2005
Alok Singh, Arvind Vashistha, D.BARUAH, LALIT TIWARI, Ramji Srivastava
Prima facie rightful possession and full payment under a hire-purchase agreement can establish a case for granting ad interim injunction.
Headnote:
HIRE-PURCHASE AGREEMENT - Possession of JCB machine - Section 38(3)(b) and (c) of the Specific Relief Act - Section 41(h) of the Specific Relief Act - Order 39, Rule 2(a) of the Code of Civil Procedure
Fact of the Case:
Plaintiffs filed a civil suit for permanent injunction and ad interim injunction, alleging that defendants illegally took possession of machines purchased under hire-purchase agreement. Defendants contended that no ad interim injunction can be granted, and the dispute should be referred to arbitration. They also argued that suit for perpetual injunction is barred by Section 41(h) of the Specific Relief Act and no permanent injunction can be granted for movable property under Section 38(3)(b) and (c) of the Specific Relief Act.
Finding of the Court:
The court found that the plaintiffs were in rightful possession of the JCB machine and had paid the entire amount under the hire-purchase agreement. The court upheld the ad interim injunction, dismissing the appeal and finding no illegality or material irregularity in the trial court's order.
Issues: Ad interim injunction, enforceability of hire-purchase agreement, applicability of Specific Relief Act, and arbitration clause
Ratio Decidendi: The court held that the plaintiffs' rightful possession and full payment under the hire-purchase agreement established a prima facie case for granting the ad interim injunction. The court also noted that the defendants' arguments regarding arbitration and the Specific Relief Act could be addressed before the trial court.
Final Decision: The appeal was dismissed, and the order granting ad interim injunction was upheld.
( 1 ) THIS is an appeal against the judgment and order dated 17-11-2004 passed by the Civiljudge (S. D.), pauri in O. S. No. 27 of 2004, Sandeep Goel and another v. Escorts Finance Ltd. and another, thereby allowing the application of the plaintiff for ad interim injunction.
( 2 ) BRIEFLY stated, the plaintiff-respondents filed a civil suit for permanent injunction along with an application for ad interim injunction. The plaintiffs alleged that the defendants have purchased machines from the plaintiffs under hire-purchase agreement for Rs. 19,12,039/- on 4-6-2001. The plaintiffs alleged that defendants at the time of purchase of machines got his signatures obtained on so many papers and despite of the full payment made to the defendants, they have neither issued no-dues certificate nor refunded Rs. 78,000/- to the plaintiffs as bonus. The plaintiffs submitted that on 17-6-2004 some employees of the defendants came to Bharsar Engineering College, pauri and illegally took possession over the machines. On 18-8-2004, the plaintiff No. 1 reported the matter to the Collector, Pauri garhwal, who directed S. H. O. Pauri to take the machines back from the defendants and hand over the same to the plaintiff No. 1. In compliance of the order of District Magistrate, machines were given in the custody of the plaintiffs. Against the order of the collector, the defendants filed a Writ Petition No. 935 of 2004 before this Court and vide order dated 4-10-2004 this Court has directed the Collector, Pauri Garhwal to take back the machines immediately from the plaintiffs. The Collector, Pauri Garhwal vide order dated 5-10-2004 directed restoration of possession of the machines to the defendants. As the Collector has already withdrawn his order dated 18-8-2004 vide order dated 5-10-2004, the writ petition had become infructuous and it was dismissed vide order dated 24-3-2005.
( 3 ) THE main contention of the appellants is that no ad interim injunction can be granted in view of Order 39, Rule 2 (a) of the code of Civil Procedure. Further contention of the appellants is that the dispute may be referred to the arbitrator as per hire-purchase agreement. The efficacious remedy available to the plaintiffs is suit for specific performance and suit for perpetual injunction is barred by Section 41 (h)of the Specific Relief Act. Another contention of the appellants is that as the property in dispute is a movable property, therefore, in view of section 38 (3) (b) and (c) of the Specific Relief act, no permanent injunction can be granted to the plaintiff.
( 4 ) THE machine was taken under hire-purchase agreement and, therefore, according to the appellants they are entitled to take back possession of the machine from the respondents, if they have made default of the terms and conditions of the hire-purchase agreement. On the other hand the learned counsel for the plaintiffs/respondents has submitted that appellant/defendant cannot take back the possession of JCB machine without adopting the procedure prescribed under the law and further when they have paid the entire amount payable under the hire-purchase agreement.
( 5 ) THE plaintiffs filed paper regarding purchase of JCB machine and its temporary registration certificate. These papers make it clear that the plaintiffs were in rightful possession of the JCB machine. The plaintiffs have alleged in the plaint, copy of which has been filed along with the counter-affidavit, that they had purchased JCB 3d excavator Machine for Rs. 19,12. 039/ -. The appellants/defendants provided finance for purchase of the said machine to the tune of rs. 13,00,000/ -. The defendants have charged a sum of Rs. 3,90,000/- as interest on hire-purchase and thus the plaintiffs have to pay a sum of Rs. 16,90,000/- to the defendants.
( 6 ) IN paragraph 3 of the plaint the plaintiffs have contended that they had to return the amount of loan and interest in 35 instalments. The plaintiffs have paid 31 instalments by Bank d
