IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA. RSA No. 298 of 2007 with RSA No. 550 of 2006 Date of Decision : November 25, 2011 RSA No. 298 of 2007 Dharam Singh Vaid …..Appellant Versus: M.A. Bharti (since deceased) through his LRs Ibrahim Bharti & Ors. …Respondents RSA No. 550 of 2006 M.A. Bharti (since deceased) through his LRs Ibrahim Bharti & Ors. … Appellants Versus: Dharam Singh Vaid …Respondent Coram: The Hon’ble Mr. Justice Sanjay Karol, Judge. Whether approved for reporting? No For the appellants: Mr. Vivek Singh Thakur, Advocate, for the appellant in RSA No.298/2007 Mr. Ajay Sharma, Advocate for the appellants in RSA No.550/2006 For the respondents : Mr. Ajay Sharma, Advocate for respondent No.1 in RSA No. 298/2007 Mr. Vivek Singh Thakur, Advocate, for respondent No.1 in RSA No.550/2006 Mr. Adarsh K. Vashishta Advocate for respondent No.2 in both the appeals. Sanjay Karol, J. (Oral) These are regular second appeals, filed both by the plaintiff and the defendants, under Section 100 of the Code of Civil Procedure, 1908. 2 2. Plaintiff Dharam Singh Vaid filed a suit against Sh. M.A. Bharti (defendant No.1) and The Kangra Central Cooperative Bank Ltd., (defendant No.2). The same stands dismissed with costs in terms of judgment and decree dated 19.4.2006 passed by Civil Judge (Jr. Div.), Manali, Camp at Kullu in Civil Suit No. 8 of 2003/9 of 2004. Aggrieved thereof, plaintiff filed an appeal which stands partly allowed by the lower Appellate Court in terms of judgment and decree dated 2.11.2006 passed by District Judge, Kullu in Civil Appeal No.33 of 2006 to the following effect: “19. In view of my findings on point No.1 above, this appeal partly succeeds and the same is accordingly allowed. Consequently, while decreeing the suit partly for the relief of mandatory injunction, the defendant No.1 is directed to transfer the Registration certificate of the bus bearing registration No. HP-34-1240 in favour of the plaintiff and also hand over the documents such as route permit to him alongwith cost, which is quantified at Rs.2500/-. Decree sheet be drawn accordingly. The file of the trial court be sent back with a copy of this judgment andz the appeal file be consigned to record room, after due completion.” 3. Appeal filed by defendant No.1 now being pursued by his successor-in-interest, being RSA No.550/2006, is admitted on the following substantial question of law: “2. Whether the District Judge below misread and misappreciated the terms of agreement Ext.P-1 3 thereby vitiating the impugned judgment and decree?” 4. Appeal filed by plaintiff being RSA No.298 of 2007 is admitted on the following substantial question of law:- “2. Whether the relief for rendition of account can be granted in the light of Ex.P1 to P9 in the impugned judgments and decrees?” 5. I have heard learned counsel for the parties and perused the record. 6. It is not in dispute that passenger bus bearing No. HP- 34-1240 was registered in the name of defendant No.1, who also had a route permit in his own name for plying the bus on Kullu- Manali via Naggar route. Bus was financed by defendant No.2. It is also not in dispute that vide agreement dated 25.5.2000 (Ext.P-1), defendant No.1 sold the bus to the plaintiff. It is also not in dispute that as against the contracted price of Rs.4 lacs, defendant No.1 received a sum of Rs. 2 lacs from the plaintiff. 7. At this stage, reproduction of relevant clauses of the agreement would be beneficial:- “3. That the above said bus is subject to hire purchase agreement with The Kangra Central Co- operative Bank Ltd. Kullu Branch and the same is hypothecated with the bank and at present about Rs. Two lacs is outstanding in the loan account of the bank and the vendee of the second part has agreed to clear this outstanding bank loan of Rs. Two lacs, by making the deposit in the loan account of the 4 vendor of the first part by way of regularly monthly installments plus interest and all other charges and expenses and after clearance of this bank loan, the balance sale consideration of Rs. Two lacs, shall stand paid to the vendor of the first part, and immediately thereafter the vendor of the first part is bound to execute the transfer affidavit and forms for the transfer of the R.C. of the above said vehicle in the name of the vendee of the second part. However, the vendee of the second part is bound to clear this bank loan upto the extent of Rs.Two lacs alongwith interest and all other charges and expenses levied thereon by the bank within a period of one year from today positively. In case if the bank loan as on today is found to be more than Rs. Two lacs, then the vendor of the first part is liable to pay the amount over and above the amount of Rs. Two lacs and the interest accrued thereon. 4. That in case of the vendee of the second part is making default in payment of two monthly installments of the bank or clearing the aforesaid loan upto the extent of Rs Two lacs within one year from today, then in that event this agreement shall stand revoked and cancelled and the amount paid today or deposited in the loan account subsequently, shall stand forfeited, and in such event the vendor of the first part is entitled to take back the possession of the bus alongwith its documents without any objection on the part of the vendee of the second part and for exercising such option, the vendor of the first part is entitled to exercise reasonable force. 5 5. That the vendee of the second part is authorized to ply this bus on Manali via Naggar route sanctioned in favour of the vendor of the first part till one year from today in case if no breach of this agreement is committed and after payment of full sale consideration, the vendee of the second part shall obtain other route from the competent authority. 6. That with effect from today the vendee of the second part is responsible and liable for all kind of liability of this vehicle including the challan, claim, accidents etc. and also liable to pay the token tax, passengers tax, SRT regularly or any other tax levied by the Govt. or local authority in time and to renew the fitness certificate, insurance policy etc. in time, while the previous liability, if any, will be that of the vendor of the first part. The vendor of the first part is entitled to inspect the documents and other papers at all reasonable time. In case if the documents are not made in order and the taxes are not paid in time, then the vendor of the first part is entitled to keep the vehicle in his possession by taking the possession thereof till all the taxes are not paid and the documents are not made in order and upto date by the vendee of the second part.” 8. Plaintiff committed material breach of terms of the conditions of the agreement inasmuch as he failed to pay the monthly installments, due and admissible under the agreement, to defendant No.2. As against a sum of Rs.2 lacs, he could only pay a sum of Rs.1,20,000/-upto 4.1.2001. Though, he paid statutory dues i.e. tax etc. However on the night intervening 6 15th/16th June, 2001, the bus caught fire, the amount of compensation awarded by the Insurance Company was also received by defendant No.1. Plaintiff tried to get possession of the bus through the Court where criminal proceedings in relation to the accident were pending, which action was also opposed by defendant No.1. Consequently plaintiff filed a suit for the following prayer: “17. It is, therefore, prayed that the suit of the plaintiff against the defendants may be decreed to the following effect:- i) for mandatory injunction directing the defendant No.1, to perform his part of the contract dated 25th May,2000, and to do all acts, deeds and things which are required for the purpose of transferring the R.C. and route permit of the bus No. HP 34-1240, in favour of the plaintiff and to hand over the R.C. route permit and other documents of this bus in favour of the plaintiff, as absolute owner therefor, free from all encumbrances and the defendant no.,2 may be directed to sign the form no.35, and the defendant no.1 may be directed to delete the hire purchase agreement from the R.C. of the aforesaid bus. ii) for rendition of accounts, directing the defendants to render the accounts regarding the loan of bus no. HP 34-1240, showing therein that how much amount was outstanding as on 25th May, 2000, in the loan account of bus no. HP 34-1240, and how much interest etc. was charged on amount of Rs.2,00000-00 from 25th May, 2000, till the aforesaid cheque of C.D. claim of Rs.1,88,000/- was 7 deposited with the defendant no.2 and after the account is rendered, the same may be settled, that how much amount of interest was payable by the plaintiff on the amount of Rs.2,00000-00 and how much excess amount was realized by the defendants from the plaintiff and after the settlement of the account, a decree for recovery of the amount which was received by the defendants in excess from the plaintiff alongwith interest at the bank rate which was charged by the defendant no.2 in aforesaid loan account, from the date when the aforesaid liability stands discharged by the plaintiff till the payment may be passed in favour of the plaintiff and against the defendants, “ 9. Defendants resisted the suit, inter alia on various grounds and based on the pleadings of the parties, trial court framed the following issues: 1. Whether the plaintiff is entitled for mandatory injunction as prayed for? ……OPP. 2. Whether plaintiff is entitled for rendition of account as alleged? ……OPP. 3. Whether suit of plaintiff is within time? ……OPP. 4. Whether suit of plaintiff is not maintainable as alleged? ……OPD. 5. Whether plaintiff has no locus-standi to file the present suit? ……OPD. 6. Whether this court has no jurisdiction to try the present suit? ……OPD. 7. Whether notice under Section 76 of the H.P. Co-operative Societies Act is required to be served upon the defendant No.2 as alleged? …OPD-2 8 8. Relief. 10. The trial Court decided issues No.3 & 4 in favour of the plaintiff but the other issues were decided against him. However the lower Appellate Court partly reversed the findings with regard to issues No.1 & 2. 11. In terms of clause 3 of the agreement, plaintiff was duty bound to pay a sum of Rs.2 lacs to the bank within a period of one year commencing from 25.5.2000. Undisputedly there is material breach of this clause. Consequences breach thereof is stipulated in clause 4 of the agreement, and in terms thereof agreement stood revoked and cancelled and the amount paid by the plaintiff to defendant No.1 forfeited. It further entitled defendant No.1 to take back possession of the bus along with the documents. In this view of the matter, lower Appellate Court, in my considered view, erred in coming to the conclusion that plaintiff had received amount in excess of the contractual amount. Material breach of conditions of contract rendered forfeiture of all payments. It is not the plaintiff’s case that agreement is void, unconscionable or contrary to law. It is also not his case that the same is lopsided or was entered into without understanding the terms thereof or by exercising fraud or misrepresentation. 12. In my considered view, Courts below erred in correctly applying and interpreting the provisions of the Sales of Goods Act. There is a distinction between the sale of bus and transfer of route permit, which is statutorily issued under the provisions of 9 the Motor Vehicles Act. There cannot be any sale of a route permit. Transfer of route permit can take place on a joint application filed by the parties before the competent authority, permission for which was admittedly neither sought nor meant to be taken. This is evidently clear from clause 5 of the agreement. In any event, bus was allowed to be plied under the route permit, in my considered view in derogation of the mandatory provisions of the Motor Vehicles Act, only for a period of one year, thereafter plaintiff was to obtain a separate route permit from the competent authority. Thus findings returned by the lower Appellate court and the decree passed against defendant No.1 are unsustainable in law. The Court bellow has seriously erred in correctly reading terms of the agreement, thereby rendering the findings to be grossly perverse warranting interference by this Court. As such, RSA No. 550/2006 filed by defendant No.1 is allowed, judgment and decree dated 2.11.2006 passed by District Judge, Kullu in Civil Appeal No.33 of 2006 is set aside and that of trial court upheld and RSA No. 298/2007 filed by the plaintiff stands dismissed. Questions of law are answered accordingly. ( Sanjay Karol ), Judge. 25th November, 2011 (rana)