IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.N.KRISHNAN THURSDAY, THE 14TH OCTOBER 2010 / 22ND ASWINA 1932 AS.No. 613 of 1996() ----------------------------- OS.25/1994 of SUB COURT, HOSDRUG .................... APPELLANT(S): 3RD DEFENDANT ------------------------------------------------ KERALA FINANCIAL CORPORATION, DISTRICT OFFICE, KANNOOR, REP.BY THE ASSISTANT MANAGER (LEGAL) BY ADV. SRI.R.S.KALKURA,SC FOR KFC. RESPONDENT(S): PLAINTIFFS/DEFENDANTS/ 1 & 2. ------------------------------------------------------------------------- 1. P.K.MURALIKRISHNAN, S/O. LATE C.NARAYANAN NAIR, RESIDING AT KUNDAM KUZHI IN BEDADKA VILLAGE OF KASARAGOD TALUK, P.O. KUNDAMKUZHI. 2. M.PADMANABHAN, S/O. K.T. KOMAN NAMBIAR, RESIDING AT KANDAMGALI, PAYYANNUR AMSOM, TALIPARAMBA TALUK, P.O. PAYYANNUR. 3. M.T.RAMAN, S/O. THOTTEN CHINDAN, RESIDING AT PAYYANNUR AMSOM, KUNHIMANGALM DESHAM, TALIPARAMBA TALUK, P.O. KUNHIMANGALAM. ADV. SRI S.V.BALAKRISHNA IYER SRI.M.SASINDRAN SRI.K/LAKSHMINARAYANAN THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 14/10/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: tss M.N. KRISHNAN, J. ........................................... A.S.NO.613 OF 1996 ............................................. Dated this the 14th day of October, 2010. J U D G M E N T This is an appeal preferred against the judgment and decree of the Subordinate Judge's Court, Hosdurg in O.S.No.25/1994. The suit is one for realisation of the amount to the plaintiff from the third defendant. The brief facts necessary for the disposal of the appeal are stated as follows: 2. The first defendant was the owner of a bus bearing Reg.No.KRN.3828. He had availed a loan facility of Rs.2,65,000/= from the Kerala Financial Corporation. It is contended that the 1st defendant had sold the vehicle to the second defendant for a consideration of Rs.4 lakhs on 3.9.1990 with the stipulation of receipt of consideration of Rs.1,35,000/= and the balance Rs.2,65,000/= reserved with the second defendant to discharge the liability of the Kerala Financial Corporation. Thereafter there has been an agreement between the plaintiff and the second defendant on 14.3.1991 whereby the second defendant had sold the bus : 2 : A.S.NO.613 OF 1996 to the plaintiff for a consideration of Rs.3,45,000/= out of which Rs.2,70,000/= was reserved with the plaintiff for the discharge of the liability and a cheque for Rs.35,000/= was given and liquid cash of Rs.40,000/= was also provided to the second defendant by the plaintiff. At the time of the agreement dated 14.3.1991 the vehicle was in the custody of the Kerala Financial Corporation and, therefore, a writ petition was moved before this Court by the plaintiff and the second defendant against the Kerala Financial Corporation and the first defendant as O.P.No.3107/1991. A learned Judge of this Court disposed of the writ petition with the direction that “if the petitioners and the second respondent make a joint application before the Managing Director of the 1st respondent Corporation for release of the vehicle and pay a sum of Rs.50,000/= and furnish security for the balance amount due, the vehicle may be released to the person to be agreed on between the petitioners and the second respondent”. So the condition imposed by this Court was to deposit a sum of Rs.50,000/= and also a joint application to be made by the plaintiff and the 1st defendant in the suit : 3 : A.S.NO.613 OF 1996 and also furnishing of security for the balance amount. The plaintiff deposited a sum of Rs.50,000/= and also submitted an application for release of the vehicle but the second respondent in the original petition namely the first defendant herein did not join and retracted and thereby the vehicle could not be released and it is contended by the Kerala Financial Corporation that the amount so deposited had been adjusted towards the loan transaction. It is further contended that since nobody deposited the amount after individual notice and publication of notice, the bus was sold in public auction and also taking into consideration the adjustment of Rs.50,000 + the sale value, the account was closed wherein it was found that there is a balance of Rs.29,000/= and odd to be given to the person who owned the bus. 3. Now the present suit is filed by the plaintiff for return of Rs.50,000/= which he had deposited in pursuance to the direction given by this Court in O.P.No.3107/1991. The following facts have to be understood. The first plaintiff who obtained the bus by virtue of the sale : 4 : A.S.NO.613 OF 1996 agreement dated 14.3.1991 had only been a loser for the reason that he had parted with liquid cash of Rs.40,000/= and a cheque for Rs.35,000/= at a point of time, the vehicle could not be delivered to him for the reason that it was in the custody of the third defendant Kerala Financial Corporation. Registration of the vehicle stood in the name of the first defendant and the case is that the 1st defendant had sold the vehicle to the 2nd defendant for a consideration of Rs.4 lakhs. So far as the contract of loan is concerned, it was in between the Kerala Financial Corporation and the 1st defendant. 2nd defendant and the plaintiff are the persons who had been subsequent purchasers. At no point of time the Kerala Financial Corporation had recognized them as the owners of the vehicle. In other words, it can be safely held that there was no privity of contract between the plaintiff and the Kerala Financial Corporation. When it is so, can the amount deposited by the plaintiff in pursuance of the order of this Court be appropriated towards the loan account is the question. The court was really conscious of the fact that owner of the vehicle is the 1st defendant namely : 5 : A.S.NO.613 OF 1996 the second respondent in the original petition. So while directing the parties to deposit Rs.50,000/=, the court made a condition that the plaintiff and the first defendant herein to jointly file a statement and they should undertake and furnish security for the balance amount. If the amount alone has been paid by virtue of the order, nobody could release the vehicle for the reason that other conditions are not satisfied. The very purpose and purport of filing the writ petition was to get the vehicle released and as a condition precedent one of the reasons stated was to deposit Rs.50,000/=. When that does not go through and the vehicle could not be released, it cannot be stated that the amount of Rs.50,000/= has been paid by the plaintiff towards loan account. It has been paid by him only as a satisfaction of the condition imposed by this Court for the purpose of getting the vehicle released. Since there is no privity of contract between the plaintiff and the 3rd defendant, the 3rd defendant was not justified in appropriating the said amount received from the plaintiff towards the loan account for the reason that the plaintiff was never : 6 : A.S.NO.613 OF 1996 recognized as a party to the contract by the Kerala Financial Corporation. Therefore, the said appropriation cannot be upheld and the poor plaintiff, who had substantial loss already, should not be made to suffer further. 4. Therefore I agree with the trial court when it granted a decree for realisation of the amount. But, I make it clear that there is some amount lying in deposit in excess of the amount from the first defendant. Since the third defendant had appropriated this amount, it is now directed to pay back that amount. The question of that amount being reimbursed to the 1st defendant or 2nd defendant does not arise. So far as interest is concerned, I feel that interest at the rate of 12% till the date of decree can be upheld and subsequent to the decree it shall be at 9% obviously for the reason that the plaintiff should also have been more careful when entering into such transactions. 5. In the result, a revised decree is passed as follows: The plaintiff is given a decree for realisation of a sum of Rs.67,475/= with costs and 12% interest on a sum of Rs.50,000/= from the date of suit till realisation from the 3rd : 7 : A.S.NO.613 OF 1996 defendant and shall continue to receive at the rate of 9% on the principal sum of Rs.50,000/= from the date of decree namely 29.1.1996 till realisation from the 3rd defendant with costs in the suit. Parties are directed to bear their respective costs in the appeal. M.N. KRISHNAN, JUDGE. cl Paragraph 5 of the judgment dated 14.10.2010 in A.S.No.613/96 is substituted as follows: “In the result, a revised decree is passed as follows: The plaintiff is given a decree for realisation of a sum of ` 67,475/= with 12% interest on a sum of ` 50,000/= from the date of suit till the date of decree from the third defendant and interest at the rate of 9% on the above amount of ` 50,000/= from the date of decree namely 29.01.1996 till realisation from the third defendant with costs incurred in the suit. Parties are directed to bear their respective costs : 8 : A.S.NO.613 OF 1996 in the appeal”. Vide order dated 22.10.10 in I.A.No.4148/10. Sd/= Registrar (Judicial) : 9 : A.S.NO.613 OF 1996 M.N. KRISHNAN, J. ........................................... A.S.NO.613 OF 1996 ............................................. 14th day of October, 2010. J U D G M E N T