1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL JURISDICTION FIRST APPEAL NO.1147 OF 2008 Shri Subhash B. Gavasane Age about 43 years, Occ: Certified Auditor, R/o. Shivba Bungalow, Near S.T.Stand, Solapur Road, Madha, Dist.Solapur ...Appellant. v. Shri Rajesh S. Kudale Age: 39 years, Occ:Trader, R/o. Vasmat nagar in fron of Old S.T., Stand, Near Maruti Temple, Tirupati Finance, Vasmat, Tal: Vasmat, Dist. Hingoli ...Respondent. Mr. Dilip Bodake, adv. For the Appellants. Mr. J.G.Reddy, adv. For the Respondent. CORAM : J.H. BHATIA, J. DATED : 25th September , 2009 ORAL JUDGMENT: 1 With consent of the learned counsel, the appeal is taken up for final hearing at the admission stage. Heard the learned counsel for the Parties. 2 To state in brief, it is the case of the plaintiff/appellant that he was the owner of tempo bearing no.MH 13 / G 0997. On 15.3.2003, defendant /respondent entered into an agreement with the 2 plaintiff/appellant to purchase the said tempo for consideration of Rs. 1,61,000/-. On that day, amount of Rs.91,000/- was paid by him to the plaintiff and the possession of the vehicle was given to him. It was agreed that balance amount of Rs.70,000/- would be paid by the defendant to the plaintiff on or before 22.3.03 and after receipt of the said amount, the plaintiff was to repay loan taken from the bank and to secure the documents from the bank and hand over the same to the defendant for transfer of the vehicle. Accordingly, an agreement was reduced to writing in duplicate. However, the defendant failed to make the payment as per the agreement and he continued to use the vehicle. Suit was filed by the plaintiff on 8.3.2004 claiming the total amount of Rs.1,75,000/- including the balance amount of dues and the compensation at the rate of Rs.500/- per day for the illegal use of the vehicle. 3 Defendant contested the suit by filing written statement, Exhibit 29. He admitted the terms of the contract as pleaded by the plaintiff. However, according to him, he was never informed that the plaintiff had taken loan on the vehicle from the Solapur Janata Sahakari Bank and that there was charge of the bank on the said vehicle. It is contended that plaintiff had failed to hand over NOC from the Bank and 3 therefore, vehicle could not be transferred in his name. On 2.5.03, defendant had asked the plaintiff to give NOC to him and accept the balance amount but NOC was not given and, therefore, the defendant was not in a position to pay the balance amount. He contended that in such circumstances, he had not committed any breach of the contract and the suit is liable to be dismissed. 4 The trial Court after hearing the parties came to conclusion that there was no agreement to pay the balance amount of Rs.70,000/- till 22nd March, 2003 and thereafter, the plaintiff was to pay back the loan of the bank. The trial Court also came to conclusion that there was no breach of the agreement committed by the defendant. It also held that defendant was not in unauthorised occupation of the tempo. In the result, suit came to be dismissed. Hence, the appeal. Following points arise for my consideration: “1 Whether the plaintiff/appellant is entitled to recover the balance amount of price ? 2 Whether he is entitled to recover damages or interest on the unpaid price ? “ 5 On perusal of the record, it appears that during the pendency of the suit before the trial Court, the plaintiff had repaid entire bank loan and he had also received R/C book, transfer certificate book as well as 4 NOC. Admittedly, the defendant has purchased the vehicle from the plaintiff under a agreement for consideration of Rs.1,61,000/- out of which he had paid amount of Rs.91,000/-. Therefore, balance amount of Rs.70,000/- was to be paid by the defendant to the plaintiff towards the unpaid price of the vehicle. It is possible that at the time of agreement, plaintiff had not disclosed that there was loan of the bank on the vehicle and that the vehicle could not be transferred in the name of the defendant unless that loan amount was repaid and NOC from the bank was obtained. It could be believed that the defendant would not pay the balance amount of the price unless the vehicle was transferred to him and it would be reasonable also. Therefore, neither the possession of the defendant could be treated as unauthorised nor it could be stated that he had committed any breach of the agreement by not paying balance amount till that time. He would be justified in retaining the balance amount of consideration as long as the plaintiff was not in a position to obtain NOC from the bank. In such circumstances, the claim of the plaintiff for damages at the rate of Rs.500/- per day could not be granted. However, the fact remains that the defendant was using the vehicle from 15.3.2003 when the agreement for sale had taken place and possession of the vehicle was transferred to him, therefore, there was liability on him 5 to pay the balance amount of consideration. Question is when that liability would occur. It appears that during the trial, certificate Exhibit 53 was obtained from Solapur Janata Sahakari Bank Ltd. by the plaintiff . That letter dated 31.8.2007 disclosed that loan obtained by the plaintiff from the bank was repaid on 29.3.2006. However, there is nothing to show that prior to 31.8.2007 or strictly speaking before this document was produced before the trial Court, defendant was informed about the repayment of the loan amount and that the plaintiff had offered to produce all the relevant documents including NOC so that the vehicle could be transferred in the name of the defendant. In view of such circumstances, the defendant could not be held liable even to pay interest on the amount till 31.8.07, when the Letter, Exhibit 53 was issued by the bank. At the same time, it must be held that the trial Court committed error in dismissing the suit in its entirety. During the trial documents were produced before the Court to show that the plaintiff had already repayed the loan amount of the bank and, therefore, there was no obstacle in the transfer of the vehicle, in such circumstances, the trial Court should have directed the plaintiff to hand over those documents to the defendant and the defendant should have been directed to pay the balance amount of consideration. 6 6 Taking into consideration all the circumstances, I find that even though plaintiff was not entitled to get any damages because the use of the vehicle by the defendant could not be treated as unauthorised, still he was entitled to receive balance amount of consideration. As the defendant is using the vehicle without payment of that amount, he is liable to pay interest on the amount, atleast from the date when the bank had issued letter that all the dues had been cleared. Therefore, in my considered opinion, decree for payment of balance amount of Rs. 70,000/- with interest from 1st September, 2007 could have been passed against the defendant. 7 For the aforesaid reasons, appeal is partly allowed and the impugned judgment and decree passed by the trial court dismissing the suit are hereby set aside. Suit is partly decreed. The defendant/respondent shall pay balance amount of consideration of Rs.70,000/- to the plaintiff with interest at the rate of 10% p.a. from 1.9.07 till the realisation of the amount. Plaintiff shall deposit all the documents including R/C book, NOC from the bank and all the necessary forms duly signed so that vehicle may be transferred in the name of the defendant in the R.T.O. Record. Documents shall be submitted within three weeks from this date before the trial Court and the defendant shall deposit the decretal amount 7 before the trial Court within 6 weeks from this date. Failing which the plaintiff may execute the decree. There shall be no order as to costs. Decree be drawn accordingly. (J.H. BHATIA,J.)