RSA No.2065 of 2009 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA No.2065 of 2009 (O&M) Date of Decision: 2.12.2009 Satish Kumar Saini ..Appellant. Vs. Canara Bank and another ..Respondents. CORAM : HON'BLE MR.JUSTICE RAKESH KUMAR JAIN Present: Mr.Rahul Chhatwal, Advocate for the appellant. RAKESH KUMAR JAIN, J. Defendant No.1 is in appeal. The plaintiff/respondent No.1 filed a suit for recovery of Rs.72,501/- including interest up to 14.12.2003 besides future interest and costs against the appellant and proforma respondent No.2. Defendant No.1/appellant secured a loan of Rs.One lac from respondent No.1 for buying Fiat Uno Car by way of hypothecation. Proforma respondent No.2 stood as guarantor. A guarantee/covering letter (Ex.P3), hypothecation deed dated 3.10.1998 (Ex.P4), letter of undertaking dated 3.10.1998 (Ex.P5), particulars of assets owned by guarantor (Ex.P6), particulars of vehicle dated 19.1.1999 (Ex.P7), acknowledgment of debt dated 29.12.2000 (Ex.P8) were executed and the loan was availed by the appellant which was repayable in 24 monthly installments of Rs.4500/- each along with interest @ 17.34% p.a. over and above the agreed rate of interest in case of breach of terms and conditions of the loan. The appellant became irregular in making the payment of installments, therefore, legal notice dated 13.2.2003 (Ex.P9) was sent to the appellant by respondent No.1, which was not replied, therefore, the vehicle hypothecated with the bank RSA No.2065 of 2009 -2- was seized and after obtaining three competitive quotations, it was sold for Rs.65,000/- and recovered amount was adjusted in the loan account but still amount due to the Bank towards debt was Rs.59,318/- and interest of Rs.13,183/- which has been sought to be recovered in the present suit. Defendant No.1 contested the suit whereas defendant No.2 was proceeded against ex parte on 15.3.2004. The main thrust of the defendant in the written statement filed by defendant/appellant that he has been making regular payments till 3.10.2003 but due to financial crisis, he could not deposit 2-3 instalments but respondent No.1/plaintiff bank had seized the vehicle and sold it at a lower price though it was insured with the National Insurance Co.Ltd. for Rs.1,90,000/- for which defendants had paid an amount of Rs.5507/- towards comprehensive insurance. The basic issue was as to whether the plaintiff is entitled to recover the amount as prayed for? Respondent No.1/plaintiff examined R.K.Verma as PW1, who tendered his affidavit Ex.PW1/A and closed his evidence whereas appellant/defendant No.1 himself appeared as DW1, who tendered his affidavit Ex.DW1/A and closed the evidence. No evidence in rebuttal was led. Both the learned Courts below have found that due procedure has been adopted by the bank as it is provided in Clause 20(d) of the deed of hypothecation (Ex.P4) that in the event of borrower failing or neglecting to comply with the payment and to pay the amount due to the Bank, the Bank would be entitled to enter upon the premises in which the hypothecated vehicle is kept or believed to be kept and seize and take possession thereof or otherwise it will be sold in public auction. No sale proceeds shall be appropriated by the Bank towards protanto satisfaction of the debt due to it RSA No.2065 of 2009 -3- and any other debt owing by the borrower to the Bank and in case the sale proceeds are insufficient to satisfy the whole of the amount due to the bank, the bank shall be entitled to recover such balance from the borrower personally. Learned Courts below relied upon a decision in Managing Director Vs. Joginder Singh 2006(1) RCR (Civil) 756 to hold that where a vehicle is purchased under hire purchase agreement and there is a default in payment of instalment, the financier can repossess the vehicle if the agreement permits for repossession for which there is no legal impediment. After having failed before the Courts below, counsel for the appellant has argued that due procedure has not been followed at the time of sale of hypothecated car. He has referred to the provision of Rule 4 of the Security Interest (Enforcement) Rules, 2002 to contend that the possession should have been taken in the presence of all witnesses. He has also submitted that no inventory was prepared. After hearing the counsel for the appellant, I have found that no question of law much less substantial is present in the present case because the deed of hypothecation (Ex.P4) provides Clause 20(d) to the effect that in case of failure on the part of the borrower to make the payment of the instalment, the Bank had the power to repossess the vehicle and sell in order to adjust the amount advanced as loan and the shortage could be recovered personally from the debtor. Thus, I do not find any legal error in the concurrent finding of fact recorded in the judgment and decree passed by both the Courts below, therefore, the present appeal is hereby dismissed without order as to costs. (Rakesh Kumar Jain) 2.12.2009 Judge Meenu