The court established that denial of ownership by the defendant constituted conversion, marking the beginning of the limitation period for recovery of property.

JUDGMENT

C.S. Sudha, J.

This is an appeal against the judgment and decree dated

05.01.2013 in O.S.No.159 of 2009 on the file of the Subordinate Judge's Court, Perumbavoor. The suit for specific movable property and realisation of rent for its usage, has been decreed by the court below. Aggrieved, the defendant has filed this appeal. The plaintiff is the respondent herein. The parties in this appeal will be referred to as described in the suit.

2. The brief facts of the case - the plaintiff, a Private Company, is carrying on the business of contract works of the PWD. The Company was floated by C.V.Jayadas, as the Managing Director and Vineetha Ashok as Director. The plaintiff had availed a loan of ₹40 lakhs for the purchase of a machine used for tarring/asphalting roads. The machine was hypothecated to the bank from which the loan was availed. Contrary to expectations, the plaintiff Company was unable to make sufficient profits and so repayment of the loan came to be defaulted. When the plaintiff Company fell into difficulty, Vineetha Ashok and her husband vanished from the scene. The defendant, a friend of Vineetha Ashok, is a registered Government Contractor doing tarring works of the National Highway. He did not have the necessary machinery for asphalting the roads. Hence, on the request of the defendant, in May 2001 the machine was given by the plaintiff to the former to be returned on demand for a daily rent of ₹25,000/-. When the plaintiff demanded the rent from the defendant during May 2001, the latter informed him that Vineetha Ashok had sold the machinery to him and that she had absconded after accepting the sale consideration. The machine belongs to the company and hence Vineetha Ashok, a Director, had no authority to sell it to the defendant. As Vineetha Ashok was not available in station till July 2006, the plaintiff was unable to ascertain the truth from her relating to the claim made by the defendant that he had purchased the machinery from her. Later on, in July 2006 when Vineetha Ashok and her husband returned, the plaintiff made enquires and then came to know that the machinery had never been sold the to the defendant. Vineetha Ashok, thereafter lodged a complaint before the police for the return of the machinery and also for arrears of hire charges. The defendant then claiming to have purchased the machine, produced a sale agreement alleged to have been executed by the plaintiff in his favour. Neither the plaintiff Company nor its Managing Director had ever sold the machinery which had been hypothecated to the bank from where the loan had been availed. No sale agreement as claimed by the defendant was ever executed and the document relied on by the defendant is a forged and fabricated one. Hence, the suit for return of the machinery or in the alternative for ₹40 lakhs, the price of the machinery. The plaintiff also claimed rent at the rate of ₹25,000/- per day from May 2001 with interest at the rate of 18.5% per annum, which claim he limited to ₹50 lakhs.

3. The defendant filed written statement admitting the fact that the plaintiff was initially the owner of the machinery. According to the defendant, the plaintiff as per sale agreement dated 31.07.2000 sold the machinery to him. The defendant denied the allegation in the plaint that the machinery had been rented out to him. He also contended that on 06.01.2007 he had sold the machinery to one C.K. Rajan and hence the original documents relating to the machinery are in the possession of the said person and that the defendant is only in possession of copies of the same. After the sale of the machinery to the aforesaid C.K.Rajan, the defendant has ceased to be the owner of the machinery and he has no right over the same. As the plaintiff has no right over the property, he is not entitled to the reliefs prayed for, contended the defendant.

4. On completion of pleadings, necessary issues were raised by the court below. PWs1 and 2 were examined and Exts.A1 to A11 wer