Delhi High Court

Krishan Lal vs M/S. Meet Finance Company on 21 April, 2009

Author: Manmohan

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+                      CM(M) 822/2007 & CM 8204/2007

                                         Reserved on : 8th April, 2009

%                                         Date of Decision : 21st April, 2009


KRISHAN LAL                                         ..... Petitioner
                                       Through:     Mr. V.K. Tandon,
                                                    Advocate

                                       Versus

M/S. MEET FINANCE
COMPANY                                             ..... Respondent
                                       Through:     Mr. R.S. Sahni,
                                                    Advocate


CORAM:
HON'BLE MR. JUSTICE MANMOHAN

1. Whether the Reporters of local papers may be allowed to see the judgment?No
2. To be referred to the Reporter or not?Yes
3. Whether the judgment should be reported in the Digest?Yes




                                JUDGMENT

MANMOHAN, J

1. Present petition has been filed under Article 227 of

Constitution of India challenging the order dated 30th November,

2005 passed by ADJ by virtue of which petitioner‟s appeal under

Order 41 CPC against judgment dated 23rd October, 2004 passed

by Civil Judge was dismissed. It is pertinent to mention that Civil

Judge vide said order had dismissed petitioner‟s suit being No. M-

49/2002.

2. Briefly stated the relevant facts of this case are that on 10th

August, 1983 petitioner/plaintiff purchased a three wheeler

scooter (hereinafter referred to as "vehicle") bearing registration

No. DHR-6761 for a total consideration of Rs. 15,000/-. While

petitioner/plaintiff himself paid a sum of Rs. 5,000/-, balance

amount of Rs. 10,000/- was given as loan by

respondent/defendant finance company. The said loan of

Rs. 10,000/- was to be repaid in twenty-four equal monthly

installments of Rs. 616/-.

3. In July, 1985 petitioner met with an accident and according

to Mr. Tandon, learned counsel for petitioner, petitioner was bed

ridden till October 1985.

4. According to petitioner, on 26th November, 1985,

respondent/defendant without giving any prior notice, forcibly

took possession from petitioner/plaintiff of said vehicle near

about Satyam Cinema, Near Patel Nagar Police Station.

Petitioner/plaintiff on 26th November, 1985 itself filed a complaint

with the police. By that time, petitioner/plaintiff had repaid

eighteen installments, totalling Rs. 10,251/-.

5. On 20th May, 1987, petitioner/plaintiff filed a suit for

damages and mandatory injunction i.e. for restoration of said

vehicle as well as damages @ Rs. 30/- per day amounting to Rs.

16,170/- and for further damages till the vehicle was restored.

6. Petitioner/plaintiff also filed a petition under Section 20 of

Arbitration Act, 1940 on the basis of agreement for hire

purchase. The matter was referred to Arbitrator and petitioner/

plaintiff‟s suit was adjourned sine die with liberty to revive the

same. Though Arbitrator rendered an Award against the

petitioner but for technical reasons, Award was not made Rule of

the Court. Consequently, petitioner/plaintiff revived his suit.

However, trial court dismissed petitioner/plaintiff‟s application

under Order XXXIII CPC to sue as an indigent person. The trial

court directed petitioner/plaintiff to pay court fees. Even

petitioner/plaintiff‟s appeal against the said order was dismissed.

Subsequently, petitioner/plaintiff paid court fees only on the relief

for recovery of damages that means for Rs. 16,170/- but did not

pay court fees for prayer B i.e. for mandatory injunction seeking

restoration of vehicle. On 13th July, 1998, petitioner/plaintiff

withdrew the relief of mandatory injunction that means prayer

seeking restoration of vehicle.

7. On pleading of the parties, the trial court framed the

following issues :-

             i)     Whether suit is barred by time? OPD.

             ii)    Whether plaintiff is entitled to damages, if so, at
                    what rate ?OPP

             iii)   Relief.

8. Though trial court held petitioner/plaintiff‟s suit to be

within limitation, it did not grant any damages on the ground that

petitioner/plaintiff had failed to prove the same. The relevant

reasoning of trial court on all issues is reproduced hereinbelow

for ready reference :-

.....since no specific article has been provided in the Limitation Act, therefore, the same is covered by article 113 of the Limitation Act which provides the limitation of three years. Hence, the present suit is within limitation and has been filed within three years from accrual of cause of action which arose on 26/11/1985 and the suit has been filed on 20/05/1987. Hence, this issue is decided against the defendant and in favour of plaintiff.

.......DW-1 has stated that their sales agent namely Sh. Kulwant Singh who is their guarantor has repossessed the vehicle in question and thereafter, handed it over to them. It is pertinent to mention here that in the plaint it is mentioned that after the vehicle in question was repossessed by the defendant, the plaintiff hired another three wheeler scooter from one Sh. Satpal, to whom he was paying Rs. 30/- per day. The plaintiff has failed to examine the said person namely Sh. Satpal to prove the quantum of damages claimed in the present suit, and Sh. Satpal was necessary to be examined to prove that the plaintiff was incurring the damages of Rs. 30/- per day as he was paying the same to him. Moreover, the plaintiff himself was at default and the vehicle was repossessed in terms of the agreement and also the plaintiff has stated in his evidence that he was unable to earn anything after the vehicle was repossessed till the date of filing the suit and he was not plying any other vehicle. The evidence and the pleadings are contrary inasmuch as at least para 11 of the plaint is concerned. Hence, the aspect of damages remains not proved. Accordingly, this issue is decided against the plaintiff and in favour of the defendant.

ISSUE NO. 3 RELIEF - In view of the findings given on issue no. 2 above, the plaintiff has failed to prove his case and accordingly he is not entitled to any relief and, hence, the present suit is hereby dismissed with no order as to cost."

9. Petitioner/plaintiff‟s appeal was also dismissed by Appellate

Court for the following reasons :-

"10. I have gone through the material available on the record and the findings of the Trial Court. The perusal of the record shows that the plaintiff had executed the hire purchase documents and the receipt also and under the agreement the defendant/ respondent had right to take away the vehicle. So the such act of the respondent / defendant

does not give any right and entitlement of the plaintiff to have the damages. I do not find any infirmity in the judgment of the Trial Court. Consequently, the findings of the Trial Court on all the issues, the judgment and the decree of the Trial Court is upheld. The appeal is dismissed as devoid of merit....."

10. Petitioner/plaintiff thereafter filed a Regular Second Appeal

but a learned Single Judge of this Court was pleased to dismiss

the appeal as not maintainable on the ground that subject matter

of suit was for a recovery of an amount not exceeding Rs. 25,000/.

The order of learned Single Judge dated 2nd May, 2007 is

reproduced hereinbelow for ready reference :-

"Heard counsel for the parties.

Since the original suit was filed before the trial court for recovery of Rs. 16,170/-, this case is clearly barred under Section 102 CPC, wherein it is mentioned that no second appeal shall lie from any decree, when the subject matter of the original suit is for recovery of money not exceeding twenty-five thousand rupees. It was also pointed out that relief of mandatory injunction was given up subsequently.

In view of this position, counsel for the appellant submits that he will seek remedy somewhere else.

                   RSA    No.172/2006         is      accordingly
             dismissed.



11.   Subsequently,    petitioner/plaintiff   filed    present   petition

under Article 227 of the Constitution.

12. Mr. V.K. Tandon, learned counsel for petitioner/plaintiff

submitted that as respondent/defendant had forcibly taken

possession of said vehicle despite petitioner/plaintiff having paid

a sum of Rs. 10,251/- against a loan of Rs. 10,000/- and despite

having paid 18 out of 24 installments, petitioner/plaintiff was

entitled to compensation. In this context, Mr. Tandon relied

upon a judgment of National Consumer Disputes Redressal

Commission in case of CITICORP MARUTI FINANCE LTD. VS.

S. VIJAYALAXMI reported in III (2007) CPJ 161, wherein it

has been held as under:-

"A 1........

3. Legal or judicial process may be slow but it is no excuse for employing musclemen to repossess the vehicle for which loan is given. Such type of „instant justice‟ cannot be permitted in a civilized society where there is effective rule of law. Otherwise, it would result in anarchy that too when the borrower retorts and uses the force......

xxxxxxx xxxxxxxx xxxxxxxx

32.......But, if the agreement is executed under the premises that the financier is the owner of the vehicle, such agreement is totally on the basis of misrepresentation/misunderstanding of facts and law and such contract would be void as provided under Section 20 of the Indian Contract Act, 1872. The said Section specifically provides that where both the parties to an agreement are under a mistake as to a matter of fact essential to the contract, the agreement is void.

xxxxxxx xxxxxxxx xxxxxxxx

49. Considering the fact that the District Forum had already directed payment of Rs. 1,50,000/- with interest at the rate of 9% p.a. from the date of filing of the complaint and Rs. 5,000/- as compensation, in our view, it is not necessary to impose punitive damages. Hence, the order passed by the State Commission directing the petitioner to pay Rs. 50,000/- as punitive damages to the Complainant, is set aside. However, we make it clear that Petitioner shall not be entitled to recover any amount from the Complainant on the basis that some amount remains unpaid in their books of accounts. If any ante-dated cheques are remaining with the Petitioner, the same shall be treated as null and void and no action

on that basis shall be taken by the Petitioner against the Complainant."

13. Mr. R.S. Sahni, learned counsel for respondent/defendant

firstly submitted that petitioner/plaintiff‟s suit was barred by

limitation. According to Mr. Sahni, in accordance with Articles

28 and 29 of Limitation Act, a suit for recovery of damages on

account of illegal seizure had to be filed within a period of one

year -- which had not been done in the present case. He further

contended that as the admitted position was that said vehicle had

not been seized by respondent/defendant company but the same

had been repossessed by one Mr. Kulwant Singh, who was not a

party to the suit, petitioner/plaintiff was not entitled to recover

any damages from respondent/defendant company. He also

contended that as petitioner/plaintiff had abandoned his claim for

restoration of vehicle vide order dated 13th July, 1998, relief for

recovery of damages till the vehicle was restored and/or for grant

of future damages could not be granted. He lastly submitted that

petitioner/plaintiff had failed to lead any evidence to prove his

claim for damages and further as respondent/defendant company

was the owner of said vehicle, it could not be asked to pay

damages for taking possession of its own vehicle.

14. As far as the first defence of limitation is concerned, I am of

the view that trial court has rightly observed that the present suit

for recovery of damages and mandatory injunction, would be

governed by Article 113 of the Limitation Act, which provides

limitation of three years. Consequently, petitioner/plaintiff‟s suit

was certainly within limitation.

15. As far as said vehicle having been repossessed by one

Mr. Kulwant Singh is concerned, I am of the view that since he is

admittedly a sales agent of respondent/defendant company, the

Court will have to proceed on the basis that said vehicle was

repossessed by respondent/defendant itself. However, the fact

that petitioner/plaintiff did not lead any evidence with regard to

damages and further gave up his mandatory injunction relief for

restoration of vehicle would clearly show that petitioner/plaintiff

is not entitled to either repossession of its vehicle or for future

damages/compensation.

16. But the admitted position that emerges is that

petitioner/plaintiff was dispossessed by force of the said vehicle

by respondent/defendant company and that too, without any prior

notice. This action of respondent/defendant is clearly

impermissible and amounts to taking law in its own hand. In fact,

Hon‟ble Supreme Court in case of ICICI Bank Ltd. Vs. Prakash

Kaur and Ors. reported in (2007) 2 SCC 711 has deprecated

the practice adopted by banks of taking forcible possession of

vehicles by hiring recovery agents. The relevant observations of

the Apex Court in above case are reproduced below:-

"16. Before we part with this matter, we wish to make it clear that we do not appreciate the procedure adopted by the Bank in removing the vehicle from the possession of the writ petitioner. The practice of hiring recovery agents, who are musclemen, is deprecated and needs to be discouraged. The Bank should resort to procedure recognized by law to take possession of vehicles in cases where the borrower may have committed default in payment of the instalments instead of taking resort to strong arm tactics.

xxxxxxxx xxxxxxxxx xxxxxxx

28. In conclusion, we say that we are governed by a rule of law in the country. The recovery of loans or seizure of vehicles could be done only through legal means. The Banks cannot employ goondas to take possession by force."

17. Moreover, in my opinion, the judgment of CITICORP

(supra) referred to by Mr. Tandon is clearly applicable to facts of

the present case.

18. Consequently, in my view as respondent/defendant

company has unlawfully and by way of an unethical procedure

taken forcible possession of petitioner/plaintiff‟s vehicle, they are

liable to pay him a compensation of Rs. 16,000/- with simple

interest at the rate of 6% per annum from the date of

repossession of said vehicle i.e. from 26th November, 1985 till the

date of payment. Respondent/defendant is directed to make

payment of aforesaid amount within a period of six weeks from

today. With the aforesaid directions, present petition and pending