IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN THURSDAY, THE 25TH JUNE 2009 / 4TH ASHADHA 1931 AS.No. 738 of 1995(C) ------------------------------- OS.995/1989 of PRL.SUB COURT,TRIVANDRUM .................... APPELLANT(S): DEFENDANTS 1 & 3 ----------------------- 1. M.ABDUL JALEEL, S/O. MOHAMMED ISMAIL, AGED 41, FEROZ MANZIL, PULLAMPARA P.O., VENJARAMMOODU, THIRUVANANTHAPURAM. 2. LAILA BEEVI, S/O. ABDUL JALEEL, AGED 38 , RESIDING AT FIROZ MANZIL, PULLAMPARA, VENJARAMMOODU, THIRUVANANTHAPURAM. BY ADV. MR.P.K.ABOOBACKER(EDATHALA), MR.P.CHANDRASEKHAR RESPONDENT(S): PLAINTIFF/RESPONDENT/2ND DEFENDANT ------------------------- 1. INDUSTRIAL CREDIT & DEVELOPMENT, SYNDICATE LTD., REP.BY ITS REGIONAL MANAGER, INDUSTRIAL CREDIT & DEVELOPMENT SYNDICATE LTD., IST FLOOR, CHANDY'S PATTOM, THIRUVANANTHAPURAM, 2. NASEEMA BEEVI, D/O. HANEEFA, AGED 37, FAROOKA MANZIL, PULLAMPARA, VENJARAMMOODU, THIRUVANANTHAPURAM. ADV. MR. N.NANDAKUMARA MENON FOR R1 THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 29/05/2009, THE COURT ON 25/06/2009 DELIVERED THE FOLLOWING: ORDER ON CMP. NO.5563/1995 IN AS. NO.738/1995 DISMISSED 25/06/2009 SD/- K.SURENDRA MOHAN, JUDGE TRUE COPY P.S. TO JUDGE TSS K.SURENDRA MOHAN, J. ------------------------------------------- A.S.No.738 of 1995 ------------------------------------------- Dated this the 25th day of June, 2009 JUDGMENT The judgment and decree of the Principal Sub Judge, Thiruvananthapuram in O.S.No.995 of 1989 is under challenge in the above appeal. The appellants are the first and third defendants in the suit. As per the decree, the plaintiff has been allowed to recover an amount of Rs.32,202/- with interest thereon at the rate of 6% per annum and costs. The first respondent is the plaintiff in the suit, while the second respondent is the second defendant. The suit was filed by the first respondent/plaintiff against the appellants and the second respondent for the realisation of an amount of Rs.30,000/- with future interest at 18% per annum. According to the plaint, the plaintiff was incorporated under the Companies Act and is represented by its Regional Manager. It has a Regional Office at Thiruvananthapuram. The company is engaged in the business of financing and hire purchase of various consumer and domestic products including motor vehicles, under hire purchase agreements. The first defendant had approached the plaintiff for purchasing a 1986 model car under the guarantee of defendants 2 and 3. They A.S.No.738/1995 2 submitted a proposal form on 11.7.1986. The car was to be supplied by M/s T.V.Sundram Iyengar and Sons Ltd. Thereafter on 17.7.1986, a hire purchase agreement was executed between the plaintiff, first defendant and defendants 2 and 3 as guarantors. The hire charges of the vehicle had to be paid in 47 monthly instalments commencing from 17.8.1986. The right of option for purchase of the vehicle under that agreement is exercisable only after the remittance of the entire hire charges. Till payment of the entire hire charges, the first defendant is only a hirer and defendants 2 and 3 are the guarantors and the plaintiff is the owner. 2. The first defendant was not regular in remitting the hire charges and therefore, payment of hire charges was defaulted. The last remittance was on 18.3.1988. Though notices were issued by the plaintiff calling upon the defendants to clear the defaulted instalments, they did not do so. The agreement provides for the levy of over due interest and other charges on the defaulting hirer. The agreement also makes provision for repossessing the vehicle in the event of default in payment of the hire charges. Accordingly, the plaintiff re-possessed the vehicle on 23.9.1988, invoking the said provision. Thereafter, as per letter dated 27.9.1988, the first defendant was called upon to clear the amounts that were due. He A.S.No.738/1995 3 was also informed that the car would be sold, if the arrears were not paid. Since there was no response, the car was sold for an amount of Rs.55,000/- and that fact was intimated to the first defendant by letter dated 14.6.1989. The deterioration in condition and the value of the car was due to default on the part of the first defendant in maintaining the car in good condition. Consequently, a loss of Rs.30,000/= was caused to the plaintiff, which now they sought to recover from the defendants, by filing the suit. 3. The defendants filed a common written statement and contested the suit. It was contended that the suit was not maintainable either in law or on facts, but, was barred by limitation. They admitted the hire purchase transaction with the plaintiff, but denied that they were defaulters. They contended that an amount of Rs.2,050/- was being paid per month without fail. But, their vehicle was illegally and arbitrarily seized by the plaintiff on 29.3.1988 and was sold on 29.6.1989 without any notice or intimation to the defendants. Consequently, the defendants sustained huge loss. The plaintiff sold the vehicle after keeping the same in bad and unsafe condition for more than one year. No opportunity was given to the defendants to pay the over due instalments. Therefore, they prayed for dismissal of the suit with costs. A.S.No.738/1995 4 4. The court below framed seven issues on the above pleadings and tried the suit. The evidence in the case consists of the oral testimonies of PW1 and DW1 and Exts.A1 to A15 documents. The court below, after an elaborate consideration of the evidence on record and the contentions of the rival parties, came to the conclusion that the plaint claim was established. Therefore, the suit was decreed and the plaintiff is allowed to recover an amount of Rs.32,202/- from the defendants with future interest at the rate of 6% per annum and costs of the suit. Defendants 1 and 3 have filed this appeal challenging the said judgment and decree. 5. I have heard the learned counsel for the appellants as well as the learned counsel for the first respondent. The second respondent remained ex-parte. 6. According to the learned counsel for the appellants, the total amount that was borrowed was Rs.60,000/- which was to be repaid in 47 instalments. 46 instalments were to be of Rs.2,050/- each while the 47th instalment was to be of Rs.1,700/-. Ext.A1 is the hire purchase agreement. According to the appellants, upto the 20th instalment, payment was made by the defaulter. Thereupon the car was re-possessed and was sold for an amount of Rs.55,000/- in 1989. According to the counsel for the appellant, the hire purchase A.S.No.738/1995 5 agreement came to an end with the re-possession of the car and on sale of the car, the transaction became concluded. According to him, no interest could be charged after the date of re-possession and no hire charges are liable to be paid after the car was sold. The road tax and insurance which are debited to the account of the appellants after repossession was unsustainable, since the vehicle was owned by the plaintiff. It is further pointed out that the monthly instalments stipulated as hire charges already carries interest. Therefore, no further interest is liable to be levied or recovered by the plaintiff. Since the plaintiff continued to be the owner of the vehicle, and since the ownership of the vehicle was not transferred to the first defendant at any time, the amounts claimed are not liable to be recovered from them. 7. The counsel for the first respondent on the other hand points out that the total value of the vehicle that was purchased was Rs.92,500/- which amount was paid by the plaintiff to the dealer of the car. As per condition No.6 of Ext.A1 agreement, the plaintiff is entitled to recover the amount of hire charges defaulted by the first defendant together with penal interest and all other charges, as claimed by them. Therefore, according to him, the first defendant was liable to pay the said amount. Further, it is pointed out that in A.S.No.738/1995 6 the written statement filed, the defendants had not disputed the statement of accounts of the plaintiff. 8. The point that arises for consideration is: Whether the decree for Rs.32,202/- granted by the court below is justified in the facts and circumstances of the case? 9. The hire purchase transaction between the plaintiff and the defendants is admitted. It is also admitted that Ext.A1 is the hire purchase agreement. Condition No.6 of the said agreement arms the plaintiff with the power to terminate the contract, if default in payment of hire charges is committed or if there is breach of any of the terms of contract, it is contended by the first respondent. Upon such termination, it is provided that the hirer shall pay arrears of hire charges accrued up to date of termination and the cost of all repairs required to be done. Compensation for the owner's loss of profit and all taxes due and payable in respect of the motor vehicle shall also be recovered from the hirer. It has further been agreed that such termination shall be without prejudice to any claim the owners may have in respect of the terms and conditions of the agreement to recover all charges due under the agreement together with damages for breach of the agreement. The owner in the present case is the plaintiff and the hirer is the first defendant. Therefore, it A.S.No.738/1995 7 can be seen that the claim of the plaintiff is sustainable under Condition No.6 of Ext.A1 agreement. The above position appears to have been accepted by the defendants also. The claim of the plaintiff is contained in paragraph-7 of the plaint. The plaint also contains a statement of accounts showing the break up of the amounts claimed. Paragraphs-6 and 7 of the plaint are denied in paragraph-8 of the written statement. It is significant to note that the defendants have not disputed the correctness of the amount claimed by the plaintiff. The only dispute contained in paragraph-8 is with regard to the manner in which the car was sold. It is alleged that the car was sold without any notice or intimation to the defendants causing heavy loss. They claimed that the vehicle would have fetched a higher price if the vehicle had been sold after due publication and notice. It is trite that any averment in the plaint that is not specifically denied in the written statement has to be treated as admitted. A perusal of the evidence of PW1 and DW1 also does not show any serious challenge regarding the amount claimed in the plaint. Therefore, it is not open to the appellants to challenge the quantum of the amount claimed, in this appeal. 10. As noted above, Ext.A1 agreement entitles the plaintiff to claim all amounts due under the defaulted hire purchase agreement A.S.No.738/1995 8 from the defendants including all losses suffered. Since the defendants have no case in their written statement that the amounts mentioned in the plaint do not form part of the amount that the plaintiff is entitled to claim under Ext.A1 agreement, they are not entitled to dispute the accounts in the above appeal. It is therefore, unnecessary to deal with the other oral and documentary evidence in the case, all of which have been elaborately considered by the court below. Since no other contention has been raised before me, by the counsel for the appellant, it has to be held that the judgment and decree under appeal are perfectly justified in the facts and circumstances of the case. In view of the above, the appeal fails and is accordingly dismissed confirming the judgment and decree in A.S.No.995 of 1989 of the Principal Sub Court, Thiruvananthapuram. K.SURENDRA MOHAN Judge css/ A.S.No.738/1995 9 K.SURENDRA MOHAN JUDGE --------------------------------------- AS.NO.738 OF 1995 --------------------------------------- JUDGMENT 25.06.2009 A.S.No.738/1995 10