IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA. RSA No. 30 of 1996 Date of Decision : 11.7.2008 Varinder Kumar …Appellant. Versus: Onkar Singh & another …Respondents. Coram: The Hon’ble Mr. Justice Sanjay Karol, Judge. Whether approved for reporting?1 Yes For the appellant: Mr. Suneet Goel, Advocate. For respondent No.1:. Mr. N. K. Thakur, Advocate. Sanjay Karol, J (Oral). The present appeal arises out of the concurrent finding of facts recorded by the Courts below. Appellant Varinder Kumar, as plaintiff filed a suit against Shri Onkar Singh, present respondent No.1 as defendant No.1 and Shri Rajinder Singh, present respondent No.2 as defendant No.2. A declaration was sought in the suit to the effect that vehicle bearing No.HPG-1546 is owned by the plaintiff and that the defendants have no right, title or interest in the same. It was the case of the plaintiff that the original owner Shri Jagdish Singh had entered into certain agreements 1 Whether reporters of Local Papers may be allowed to see the judgment? 2 with one Shri Rasail Singh and his two sons S/Shri Vijay Kumar and Vinod Kumar in terms of agreement dated 31.8.1981 (Ext.PW-9/A). It was also pleaded that the subsequent agreement between S/Shri Vijay Kumar and Vinod Kumar, sons of Shri Rasil Singh, selling the vehicle to defendant No.1 Shri Onkar Singh in terms of agreement dated 13.4.1983 (Ext.PW- 9/A/1), was bad in law. It is the further case of the plaintiff that the subsequent agreement dated 20.7.1983 (Ext.PW-5/A) entered into between defendant No.1 & defendant No.2, transferring the vehicle is also bad in law. It is the plaintiff’s own case that Shri Rasil Singh sold the vehicle to him on 23.9.1983 for a consideration of Rs.32,000/-. The plaintiff has admitted that defendant No.1 was the temporary owner of the vehicle in question. As a sequence of events, on 4.6.1986 the original owner Shri Jagdish Singh is stated to have transferred the vehicle in the name of the plaintiff, which is evident from the registration certificates Ext.PW-1/A/ Ext.PW-5/B. The plaintiff’s suit was resisted by the defendants, inter alia on the grounds and more particularly the fact that the plaintiff himself had witnessed the agreement Ext.PW-5/A and, therefore, any agreement of sale/transfer in favour of the plaintiff is bad in law. Based on the pleadings of the parties, the trial Court famed the following issues:- 3 1. Whether the suit is not maintainable in the present form? 2. Whether the suit is not properly valued for the purpose of court fee and jurisdiction? OPD 3. Whether the plaintiff is the owner of the vehicle Matador No. HPG-1546? OPP. 4. Whether the defendant No.1 has sold the vehicle in question to defendant No.2 vide agreement dated 20.7.1983 for a consideration of Rs.45,000/-? 5. Relief. Appreciating the evidence, oral and documentary, the trial Court came to the conclusion that the plaintiff was the owner of the vehicle and that the vehicle having been sold by defendant No.1 in favour of defendant No.2 vide agreement Ext.PW-5/B was valid and binding between the parties. The plaintiff’s Civil Suit No. 352 of 1985 titled as Varinder Kumar vs. Onkar Singh and another was dismissed by the Sub Judge Ist Class, Court No.II, Amb, Distt. Una in terms of judgment and decree dated 28.12.1990. Aggrieved by the same, the plaintiff filed Civil Appeal No. 4/1991, which also stood dismissed in terms of judgment and decree dated 16.9.1995 passed by the District Judge, Una, Distt. Una, H.P. The first Appellate Court, after appreciating the material on record in its entirety came to the conclusion that the plaintiff himself had admitted in the plaint that the transaction had been entered into between the parties and that defendant No.1 had temporarily become owner, therefore, it could not be said that the registration of the vehicle in the name of the 4 plaintiff was proof enough to show that the plaintiff was exclusive owner of the vehicle in question. The present appeal arises out of the said judgment and was admitted on the following substantial question of law:- 1. Whether both the learned Courts below erred in appreciating the provisions of law applicable pleadings of the parties, evidence adduced by both the parties and thereby the impugned judgments stand vitiated? 2. Whether the documents Ext.PW-5/A and Ext.PW- 9/A/1 are governed by Higher and Purchase Agreement or are under the Sales of Goods Act? 3. Whether the learned Courts below erred in appreciating the evidence of PWs. 3, 8 and registration certificate of the vehicle Ext.PW-1/A thereby vitiating the impugned judgments and decrees? 4. Whether the findings returned by the learned Courts below are based on no evidence on the record and thus, are un-sustainable in the eyes of law? During the course of the hearing, it was fairly submitted by the learned counsel for the appellant that question No.3 needs to be recasted. Accordingly, with the consent of the parties, the following substantial question of law is further framed:- 1. Whether the impugned judgments are sustainable in view of the registration certificate of the vehicle Ext.PW-1/A ? Mr. Suneet Goel, learned counsel for the appellant has made the following submissions; “Registration of the vehicle in the name of the plaintiff is proof of ownership; the Courts below ought 5 to have decreed the plaintiff’s suit in view of the registration certificate; agreement dated 31.8.1981, Ext.PW-9/A, agreement dated 13.4.1983, Ext.PW- 9/A/1, agreement dated 20.7.1983, Ext. PW-5/A are in the nature of hirer purchase agreement and do not confer any right on the purchaser; there is nothing on record to show that the liability of the bank, with whom the vehicle had been hypothecated stood discharged. The plaintiff’s suit ought to have been decreed.” Per contra, learned counsel for the respondents has argued that the agreements in question cannot be termed as a hire purchase agreement. In any case this was not an issue before the trial Court. The plaintiff himself having witnessed the transaction (Ext.PW-5/A) entered into between defendant No.1 and defendant No.2 and having admitted that the vehicle was sold by Shri Rajinder Singh to him. The plea that the vehicle was sold by Jagdish Singh to him was contradictory; the liability of the bank stood cleared which is evident from the fact that the original registered owner Jagdish Singh had not initiated any recovery proceedings. I have heard learned counsel for the parties and also perused the record. Agreement dated 31.8.1991, Ext.PW-9/A clearly stipulates that the vehicle was sold by Shri Jagdish Singh to Shri Rasil Singh and his two sons S/Shri Vijay Kumar and Vinod Kumar for a consideration of Rs.46,000/-. Rs.5000/- was taken by the seller and the balance amount was to be paid by the 6 purchaser towards the installments to the bank with whom the vehicle was hypothecated. The possession of the vehicle was transferred to Shri Rasil Singh. After a gap of approximately two years the vehicle was transferred by the two sons of Shri Rasil Singh, namely, S/Shri Vijay Kumar and Vinod Kumar for a consideration of Rs.46,000/- (Agreement dated 13.4.1983 Ext.PW-9/A/1). As per this agreement, Rs.3000/- was taken as advance and Rs.7000/- was agreed to be paid on or before 3.5.1983 and Rs.36,000/- was to be paid to the bank towards the outstanding installments. The possession of the vehicle was handed over to the purchaser Shri Onkar Singh (defendant No.1). Neither Shri Rasil Singh nor Vijay Kumar and Vinod Kumar have challenged this transaction. There is nothing on record to show that the parties had not acted upon the terms of the agreement or that they were violated. Shri Onkar Singh, defendant No.1 further sold the vehicle to Shri Rajinder Singh vide agreement dated 20.7.1983 Ext.PW-5/A for a consideration of Rs.45,000/- and Rs.12000/- was paid as advance and the balance amount of Rs.33000/- was agreed to be paid on 20.9.1983 out of which Rs.10000/- was to be paid on 20.8.1983. Importantly, this agreement has been witnessed by the plaintiff himself. It is not in dispute that the terms of even this agreement stood complied with by the parties. The defendants through their witnesses have proved that the parties to the agreement adhered to and complied with all the terms and conditions. 7 Therefore, in my view, the Courts below rightly came to the conclusion that in view of the fact that all the terms and conditions inter se agreed upon between the contracting parties to the agreement having been complied with and the vehicle having been sold to defendant No.2, the vehicle could not have been registered in the name of the plaintiff, particularly when the plaintiff himself being a witness to such an agreement had deliberately suppressed and concealed all these facts prior to the registration of the vehicle in his name. The plaintiff as witness to the agreement was duty bound to have brought this fact to the notice of the registration authority. The registration of a vehicle is compulsory under the Motor Vehicles Act, 1939. No doubt, a person in whose favour the certificate of ownership is issued is entitled to retain possession of the vehicle but however registration by itself would not be conclusive proof of ownership. The presumption is rebuttable. In the criminal proceedings arising out of an accident in which the vehicle was involved, when an application for release of the vehicle was moved by defendant No.1, the same was allowed by the SDJM, Amb on 17.8.1985. This order was also affirmed by this High Court in Criminal Revision No.118/85 decided on 10.1.1986. The vehicle in question had been hypothecated with the bank which is evident from the agreements Ext.PW9/A and Ext.PW9/A/1. The terms of the said agreements, in my view, are clear and the agreements are not in the nature of hire purchase but an outright sale of the vehicle in favour of the purchaser. In the 8 present case, an offer made by the seller was accepted by the purchaser. The consideration was paid and the possession was handed over. The Apex Court in The Instalment Supply Ltd. v. S.T.O. Ahmedabad & Others (AIR 1974 SC 1105) has clearly drawn out the distinction between the contract of sale and contract of hire purchase. The Court has held that under the hire purchase agreement, there is an option to purchase and there is no sale till that option is exercised. The hirer can take possession in good faith without notice of the true owner, whereas in the case of contract, there is a binding obligation on the hirer to buy. In the present case, it is evident from the agreement that the vehicle stands sold to the purchaser and all obligations and liabilities arising subsequent to the date of agreement are that of the purchaser. In my considered view, it cannot be said that the agreements in question are in the nature of hire purchase. It is pertinent to note that none of the seller has come forward to show that any terms of the agreement stood breached by any the parties. For the aforesaid discussion, I find no merit in the present appeal and the same is accordingly dismissed. July 11, 2008. (Sanjay Karol) (rana) Judge.