PEDURU HEWA DHAMMIKA AND OTHERS

PEDURU HEWA DHAMMIKA AND OTHERS

VS.

SEYLAN MERCHANT LEASING LIMITED

SUPREME COURT
B.P.ALUWIHARE PC J.
ANIL GOONERATNE J.
H.N.J. PERERA, J.
SC APPEAL NO.:- SC CHS 20/2010
COMMERCIAL HIGH COURT CASE
No. :-HC CIVIL 271/2006(1)
23.06.2016

HIRE PURCHASE Instalments Defaulted - Hire Purchase Instalments- Default-Guarantee Bonds-Agreement Terminated- Handing Over Possession-Obligation Terminated- Entire Sum Due- Damaged Vehicle.

Plaintiff Respondent company is a company engaged in Hire Purchase business. Defendant Appellant entered into a Hire Purchase agreement to lease vehicle bearing No. LA8533 owned by Plaintiff Respondent Company. Agreement produced marked P2. 1st Defendant appellant defaulted payments under the agreements. Lease agreement terminated on 28.07.2006. Plaintiff-Respondent filed action on 3 causes of action against the 1st Defendants-Respondents, and 2nd to 4th Defendant respondents (Guarantors) Guarantee Bond admitted After trial the Trial judge entered Judgment in favour of Plaintiff-

Respondent company. Lease marked P2 was admitted at the trial. It was also admitted that the 1st Defendant- Appellant handed over the vehicle to Plaintiff- Respondent on 30.08.2006. Aggrieved by the Judgment of the Trial Court an appeal was preferred to the Supreme Court.

Held:

1. The said Lease agreement had been terminated on 28.07.2006. The Plaintiff- Respondent is entitled to re-possess the said vehicle under the Lease agreement. The 1st Defendant-Appellant had handed over the possession of the said vehicle to the Plaintiff- Respondent on 30.08.2006. On perusal of the terms of the said Lease agreement it is clear that the mere handing over of the vehicle to the Plaintiff-Respondent will not disentitle the Plaintiff- Respondent from recovering the total amount payable under the said lease Agreement from the 1st Defendant- Appellant. Under clause 22 the Plaintiff- Respondent is entitled in law to recover the entire amount of the total rent payable under the lease agreement for the full term of the lease.

2. In the instant case the Plaintiff- Respondent cannot be accused of violating any provisions of the Consumer Credit Act. Further it is clearly seen that the 1st Defendant-Appellant had handed over the possession of the said vehicle, after the Plaintiff- Respondent had taken steps to duly terminate the said Agreement marked P2 on 28.07.2006. The 1st Defendant-Appellant had clearly failed to make the necessary payments regularly under the Agreement and after possessing the said vehicle for seven months in his custody returned the vehicle to the Plaintiff-Respondent on 30.08.2006. It is also not disputed that the 1st Defendant- Appellant had not returned the said vehicle in the same good condition he received it on 04.01.2006. It is an admitted fact that the vehicle had met with an accident and the 1st Defendant- Appellant had to repair the damage caused to the vehicle. The 1st Defendant-Appellant also had claimed from Insurance for the said damage caused to the vehicle. The vehicle had been in possession of the 1st Defendant-Appellant for seven months, and thereafter had been handed over to the Plaintiff- Respondent after the termination of the said Agreement on 28.07.2016.

3. In my view the Plaintiff- Respondent is clearly entitled to recover the entire amount of the total rent payable under the said Lease Agreement marked P2 for the full term of the lease and all other costs and expenses incurred by the Plaintiff- Respondent in this connection together with interest thereon at the rate specified in item (11) of the schedule to this agreement from the date of default less the amount of the rent paid by the 1st Defendant- Appellant under this lease Agreement.

APPEAL from the judgment of the Commercial High Court of Colombo.

Cases referred to:

1. Mercantile Credit Ltd Vs. B.H. Silva and two others 76 NLR 193
2.

Click Here to Read the rest of this document