Muthoot Leasing And Finance Ltd. vs Vasudeva Publicity Service And ...
2003 Latest Caselaw 592 Del

JUDGMENT

Dalveer Bhandari, J.

1. This appeal is directed against the judgment and a decree dated 5.12.2002 passed by the learned Additional District Judge in Suit No. 280 of 2001. The appellant has filed this appeal Along with the pleadings and the relevant documents.

2. Brief facts which are necessary to dispose of this appeal are as under. Respondent No. 1 Vasudeva Publicity Service had purchased a Contessa Classic car on hire purchase basis from the appellant for an amount of Rs. 2,80,000. the amount was to be paid in 12 equal monthly Installments of Rs. 26,370 each. The case of the respondents (plaintiffs before the trial court) was that upon payment of the entire amount under the said agreement the respondents had become entitled to the issuance of no dues clearance certificate and for removal of the hypothecation endorsement from the registration book of the car which the appellant failed to do so. It may be pertinent to mention that the appellant had also issued a statement of account showing the balance amount payable by the respondents to the appellant as nil.

3. It may be pertinent to mention that the respondents had issued post dated cheques to the appellant. All the cheques were honoured but the appellant did not encash cheques for the months November and December, 1995. The appellant did not raise any demand in respect of the Installment amounts for the months of November and December, 1995.

4. It is alleged in the plaint that on 23.4.1999 the appellant repossessed the car forcibly. In the written statement it is mentioned that the appellant has not taken forcible repossession from the respondents but the respondents had voluntarily surrendered the car to the Recovery Officer of the appellant company. It is also mentioned in the written statement that the respondent and Vasudeva Advertising Private Ltd are sister concerns and the amount due from Vasudeva Advertising Private Ltd is the liability of the respondent and the respondent voluntarily gave the car to the Recovery Officer. After hearing the learned counsel for the parties the trial court framed the following Issues:-

1. Whether the plaintiff is entitled to a decree for mandatory and permanent injunction as claimed against the defendant co.? OPP

2. Whether the plaintiff is entitled to a decree for damages by way of compensation from the defendant, if so, for what period and at what rate? OPP

3. Whether the plaintiff is entitled to any interest if so, at what rate ? OPP

4. Relief.

5. After examining the evidence on record, the Court came to the conclusion that nothing was due and payable by the respondents to the appellant and despite that no dues certificate was not given to the respondents. The trial court arrived at a specific finding that the contention of the appellant that the respondent had voluntarily surrendered the car to the appellant's representative does not inspire any confidence for the reason that the appellant's witnesses themselves admitted the case of the respondents. The trial court observed that non issuance of no objection certificate despite the discharge of liability of the plaintiff amounts to a deficiency in service or breach of contract giving rise to the claim for damages.

6. The trial court placed reliance on a Division Bench judgment of this Court in Dr. Amitabh Varma vs. The Commissioner of Police and Others 2003 1 Apex Decisions (Delhi) 329 wherein this Court gave the following guidelines:-

(1) The finance companies must inform the hirers regarding the details of Installments due and payable by a written communication.

(2) Even before repossession another written notice must be sent to the hirers and only thereafter the vehicles be repossessed.

(3) Finance companies are restrained from stopping the running vehicles on the roads and forcibly pulling out the driver and take possession of the vehicle against all provisions of law.

7. Admittedly in pursuance of the directions of this Court the respondent was not given any notice or written communication regarding the details of the Installments due and payable. As a matter of fact, nothing was due and payable by the respondents because in this case post dated cheques were given by the respondents at the time of signing the agreement itself and the appellant was all along in possession of the same. The trial court came to the clear finding "There is no amount due and payable by the plaintiff to the defendant under the Agreement Ex DW-1/L".

8. The trial court gave a specific finding that despite the fact that the entire amount was already paid, the vehicle was repossessed and the same was returned during the pendency of the suit. The Court also gave the finding that no notice before repossession was sent to the hirer. Therefore, the Court arrived at the conclusion that the respondent has suffered great mental agony, tremendous harassment and humiliation at the hands of the appellant, which rendered the appellant liable for damages. The Court awarded damages of Rs. 50,000 to the respondents with 9% interest from the date of the order till its realisation. The appellant aggrieved by the said judgment has preferred this appeal on various grounds.

9. It was argued by the learned counsel for the appellant that the trial court has failed to appreciate that factually it was respondent No. 2 who had surrendered the vehicle in favor of the appellant by way of a collateral security so as to ensure the due payment of the Installments with respect to the second vehicle being a Maruti car taken by the sister concern. It was submitted by the learned counsel for the appellant that the trial court did not attach importance to the fact that no police complaint was lodged by the respondents after the vehicle was forcibly repossessed. The learned counsel for the appellant also submitted that there was no justification for awarding damages amounting to Rs. 50,000.

10. We have carefully gone through the impugned judgment and perused the pleadings of the parties and other documents on record. The trial court rightly held that Contessa Classic car was financed to Satish Vasudeva in his personal name and, therefore, the Managing Director of the company cannot be personally held liable for the debts/liabilities of the company sister concern company.

11. In the facts and circumstances, the finding of the trial court that possession of the car has been taken forcibly seems to be correct. One fails to comprehend as to why the respondents should voluntarily surrender his car even if some amount towards another car of a sister concern was outstanding. The trial court was also correct that in view of the judgment of the Division Bench of this Court the finance company was under an obligation to inform the hirer regarding the details of the Installments due and payable. Admittedly, in this case nothing was due and payable by the respondents to the appellant. The finance company was also under an obligation to send a written notice before taking repossession to the hirer and only thereafter the car could be repossessed. In the instant case, admittedly, no notice was sent before repossessing the vehicle. The finance companies cannot take law unto themselves and take forcible possession of the leased out vehicles by employing Goondas (anti-social elements) particularly in cases where all Installments of hire purchase agreement have been paid.

12. PW-1 Satish Vasudeva in his statement has clearly stated that on 23.4.1999 the appellant company through its Goondas forcibly repossessed the said vehicle and dispossessed him from the custody and possession of the same. In a country which is governed by the rule of law, no one can be permitted to take law in his own hands and function in such an illegal and arbitrary manner leading to tremendous humiliation, harassment and great mental agony to the other party(respondents in this case).

13. In the facts and circumstances, the trial court was justified in awarding damages to the respondents. The appeal being devoid of any merit is accordingly dismissed. CM 728/2003 is also accordingly disposed of.

14. Since the appellant has filed the pleadings and the records of this case and we have disposed of the appeal at the admission stage, we are not burdening the appellant with costs.