IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA RSA No._230 of 2005. Judgement reserved on: 15.7.2008. Date of decision: July 17, 2008. Hussan Chand ….. Appellant. Vs. Gurnam Singh anr. …. Respondents. Coram The Hon’ble Mr. Justice Kuldip Singh, Judge. Whether approved for reporting?1 For the Appellant : Mr. G.D.Verma, Sr. Advocate with Mr. B.C. Verma, Advocate. For the Respondents : Ms. Devyani Sharma, Advocate, for respondent No.1. Kuldip Singh, Judge. The defendant No.1 has filed the present appeal against the judgement, decree dated 16.2.2005 passed by the learned Additional District Judge, Solan camp at Nalagarh in Civil Appeal No. 24-NL/13 of 2004, setting aside judgement and decree dated 7.6.2004 passed by learned Civil Judge (Junior Division), Nalagarh in Civil Suit No. 180/1 of 2001 and decreeing the suit of respondent No.1- plaintiff for recovery of Rs.1,40,000/- alongwith interest at the rate of 6% per annum from the date of filing the suit till realization. Whether the reporters of the local papers may be allowed to see the Judgment? …2… 2. The facts, as per pleaded case of respondent No.1- plaintiff in the plaint, are that respondent No.1 filed a suit for recovery and mandatory injunction against the appellant and respondent No. 2 regarding truck bearing registration No. HP-12-2722 (for short, truck) on the grounds that respondent No.1 was owner in possession of the said truck and he sold the truck to appellant and respondent No. 2 for a sum of Rs.2,10,000/- vide agreement dated 7.6.2000 at Nalagarh. The respondent No.1 was paid Rs.70,000/- at the time of agreement, the appellant and respondent No. 2 were put in possession of the truck alongwith documents. The appellant and respondent No.2 undertook to pay the balance amount of sale consideration amounting to Rs.1,40,000/- on or before 31.7.2000 and agreed to get the vehicle transferred in their favour. The only formality, which was required to be done by respondent No. 1, was to obtain no objection certificate (NOC) from the Registering and Licencing Authority Nalagarh. The respondent No. 1 applied for NOC for effecting transfer of vehicle in favour of appellant and respondent No.2, but appellant and respondent No.2 did not pay the balance sale consideration nor they took NOC which was lying in the office of Registering and Licencing Authority. The appellant and respondent No. 2 are running the truck. On these facts, the suit was filed. 3. The appellant and respondent No. 2 contested the suit by filing joint written statement, in which they took preliminary objections of maintainability, locus standi and estoppel. On merits, it was pleaded that suit for recovery was not maintainable. The agreement dated 7.6.2000, payment of Rs.70,000/- by appellant and …3… respondent No. 2 to respondent No.1, delivery of truck to appellant and respondent No. 2 pursuant to agreement were admitted. The NOC of the truck was never given to appellant and respondent No. 2, as a result of which they suffered huge loss. It was admitted that an amount of Rs.1,40,000/- was to be given to respondent No. 1 on or before 31.7.2000, but NOC of the truck was to be given simultaneously to appellant and respondent No. 2 by respondent No.1 and not after the receipt of balance sale consideration. The NOC of the truck was never given by respondent No. 1 to appellant and respondent No.2. It was agreed that in case respondent No.1 would fail to transfer the truck in favour of appellant and respondent No.2, then the appellant and respondent No.2 would be entitled to get the same transferred through the process of the court. It was also agreed that in case appellant and respondent No. 2 would fail to pay the balance sale consideration, then earnest money of Rs.70,000/- shall stand forfeited and respondent No. 1 would be entitled to take back the truck from appellant and respondent No.2. There was no condition that in case appellant and respondent No.2 would fail to make the payment then respondent No.1 shall be entitled to recover the remaining amount through the court. It has been pleaded that an amount of Rs.1,40,000/- has otherwise been paid and respondent No. 1 is not entitled to suit amount. The appellant and respondent No.2 prayed for dismissal of the suit. 4. The respondent No.1 filed the replication to the written statement of appellant and respondent No.2. In the replication, the respondent No.1 denied the case of appellant and respondent No. 2 …4… while reiterating his case as set up in the plaint. The learned Civil Judge decreed the suit of respondent No.1 for mandatory injunction but dismissed the suit for recovery of Rs.1,40,000/- vide judgement and decree dated 7.6.2004. The respondent No.1 filed an appeal against the decision dated 7.6.2004, which was allowed by the learned Additional District Judge, vide impugned judgement and decree, therefore, defendant No.1 has come in appeal, which has been admitted on the following substantial question of law:- Whether the first Appellate Court erred in decreeing the suit for Rs.1,40,000/- against the appellant without respondents having obtained No Objection from Registering and Licencing Authority and without ownership of the vehicle in question having been transferred to the appellant? 5. I have heard Mr. G.D. Verma, learned Senior counsel assisted by Mr. B.C.Verma, Advocate, for the appellant and Ms. Devyani Sharma, learned counsel for respondent No.1 and gone through the record. The learned Senior counsel on behalf of the appellant has submitted that respondent No. 1 has failed to supply no objection certificate from the concerned Registering and Licencing Authority to appellant and respondent No.2. The ownership of the truck was not transferred to the appellant, therefore, learned Additional District Judge has erred in decreeing the suit of respondent No. 1 for recovery of Rs.1,40,000/-. The learned counsel for respondent No. 1 has supported the impugned judgement and decree and has submitted that the sale was complete on 7.6.2000 when part …5… payment Rs.70,000/- of sale consideration was paid to respondent No. 1 as per sale agreement Ex. P 1 and possession of truck was handed over to appellant and respondent No. 2 alongwith documents. The appellant and respondent No.2 plied the truck and they cannot be heard to say that the ownership of the truck was not transferred to them. 6. The substantial question of law has very narrow compass. The agreement dated 7.6.2000 Ex. P 1 has not been denied by appellant. He has also not denied the payment of Rs.70,000/- to respondent No.1 on the basis of sale agreement Ex. P 1 and handing over of possession of truck alongwith other documents to appellant and respondent No.2 on the basis of Ex. P 1. The substantial question of law is to the effect whether the ownership of the truck was transferred to appellant and respondent No. 2 on the basis of sale agreement Ex. P 1 and whether without supplying no objection certificate to appellant after obtaining from concerned Registering and Licencing Authority, the respondent No. 1 is entitled to recovery of Rs.1,40,000/-. The perusal of agreement Ex. P 1 would show that supply of no objection certificate after obtaining it from the concerned Registering and Licencing Authority to appellant and respondent No. 2 was not essential and fundamental condition of Ex. P 1 for transferring the ownership of the truck to appellant and respondent No.2. The truck being movable property and sale of movable property is governed by Sale of Goods Act. The Motor Vehicles Act regulates the other aspects of the motor vehicle. The learned counsel for the appellant has failed to point out any provision …6… from the Motor Vehicles Act, which regulates the transfer of ownership of the motor vehicle. 7. In Panna Lal vs. Shri Chand Mal and others 1980 ACJ 233, the facts were that one Manak Chand sold the vehicle to Lal Chand and Tara Chand, subsequently Lal Chand and Tara Chand sold the vehicle to plaintiff Panna Lal. Panna Lal filed a suit for recovery of Rs.5000/- which was paid by him for the purchase of vehicle to Lal Chand and Tara Chand and also claimed Rs.1800/- as interest on that amount by way of damages. In the Hon’ble Supreme Court, a point was raised on behalf of the appellant that neither Manak Chand nor Lal Chand and Tara Chand took any steps to transfer the registration in the name of plaintiff before the Registering Authority, the sale was ineffective and it really amounted to an agreement to sell. On those facts, the Hon’ble Supreme Court has held that Motor Vehicles Act, 1939 as it stood in 1956, there was no provision which prohibited a sale of a vehicle. After noticing section 31 of the said Act, the Hon’ble Supreme Court has further held that under the provisions of Section 31 of the Motor Vehicle Act, the transfer of ownership is permitted but the statute casts an obligation on the transferee to report to the registering authority concerned regarding the transfer of the vehicle alongwith a certificate of registration and then get the registration transferred in his name. It was, therefore, the duty of the plaintiff to have applied to the Registering Authority under Section 31 of the Motor Vehicles Act and get the registration of the vehicle transferred in his name. …7… 8. In New India Assurance Co. Ltd. Vs. Amar Chand and others 2005 ACJ 1233, a learned Single Judge of this court has held as follows:- “In Alavi vs. Velayudhan, 1989 ACJ 967 (Kerala), it was held by a Division Bench of Kerala High Court that transfer of registration is not at all necessary for passing of the title under Motor Vehicles Act. Therefore, although the registration still stood in the name of original owner but the vehicle has been transferred to the present owner and possession thereof handed over before the accident, the purchaser would be considered as owner of the vehicle for the purpose of liability of payment of compensation. On somewhat similar facts a Division Bench of this court in Oriental Insurance Co. Ltd. v. Maheshwari, 1998 ACJ 1268 (HP), has held the transferee to have become the owner of the vehicle on the same having been delivered and handed over to him by the transferor.” 9. The learned counsel for the appellant has cited Vasantha Viswanathan and others vs. V.K. Elayalwar and others 2001 (8) SCC 133. In this case the Hon’ble Supreme Court has held that transfer of the vehicle is governed by the provision of Section 19 of the Sale of Goods Act. The property in the vehicle would pass at such time as parties to the contract intend it to be transferred. Section 31 of the Motor Vehicles Act, 1939 does not effect transfer but the same simply prescribes procedure for entering the factum of transfer in the registration certificate, which is an act posterior to the transfer. …8… 10. In the present case, it has come on record that truck was handed over to appellant and respondent No. 2 at the time of execution of Ex. P 1 dated 7.6.2000 alongwith all documents of the truck except NOC. The respondent No. 1 was also paid part sale consideration Rs.70,000/- and the balance sale consideration Rs.1,40,000/- was agreed to be paid on or before 31.7.2000. It has been established on record that parties to Ex. P 1 intended to transfer the ownership of the truck at the time of execution of agreement Ex. P 1 and in fact the ownership of the truck was transferred by respondent No. 1 in favour of purchasers namely appellant and respondent No. 2 at the time of execution of Ex. P 1, therefore, Vasantha Viswanathan’s case (supra) is of no help to the appellant. The appellant and respondent No.2 could have taken steps for transferring the ownership of the truck registered in their names under Section 48 read with Section 50 of the Motor Vehicles Act, 1988, but they opted not to take any step for registering the truck in their favour. This apart, the ownership of the truck stood transferred in favour of appellant and respondent No. 2 on 7.6.2000 at the time of execution of agreement of sale Ex. P 1. Therefore, in view of Ex. P 1 the appellant and respondent No. 2 are bound to pay the balance sale consideration of Rs.1,40,000/- of the truck to respondent No.1. The learned Additional District Judge has rightly considered the factual and legal aspects of the case. No case for interference has been made out. The substantial question of law referred to above is answered against the appellant. 11. No other point was urged. …9… 12. As a result of the above discussion the appeal fails and the same is accordingly dismissed. July 17, 2008. ( Kuldip Singh ) (Hem) Judge.