M M PATEL AND CO Vs. UNITED HIRE PURCHASE PVT LIMITED
LAWS(GJH)-1966-10-10
HIGH COURT OF GUJARAT
Decided on October 19,1966

M.M.PATEL AND COMPANY Appellant
VERSUS
UNITED HIRE PURCHASE PRIVATE LIMITED Respondents

JUDGEMENT

A.S.SARELA, A.R.BAKSHI - (1.) This is an appeal by the defendants from the judgment and decree dated 9-8-1966 of the Joint Civil Judge Senior Division Baroda. The appellant No. 1 is a firm in the name of M/s M. M. Patel and Company and was the original defendant No. 1. The appellants Nos. 2 and 3 are the partners of that firm and of these appellant No. 2 Mahijibhai Motibhai who was the original defendant No. 2 was the Managing Partner. It is he who has acted on behalf of the firm appellant No. 1 and on behalf of his other partner and has been referred to in the evidence as the defendent and therefore for the sake of convenience we shall refer to him as the appellant. The respondent plaintiff is a Private Limited Company named United Hire Purchase Private Limited Company Baroda. The Managing Director of that Company is one Jashbhai Marghabhai Patel who has been referred to in the evidence as the plaintiff and will be referred to in this judgment as the respondent for the sake of convenience. The suit by the respondent was for possession of a motor truck bearing No. GTB 3771. The respondent alleged that this motor truck was given to the appellants on hire purchase and as there was a breach of the terms of the agreement of hire purchase committed by them the respondent became entitled to obtain possession. The principal contention on behalf of the appellants was that the transaction was in reality a loan. The trial Court found in respondents favour and passed a decree for possession of the motor truck. Against that decree this appeal has been filed.
(2.) Some broad material facts may first be stated. The appellant Mahijibhai Motibhai is a resident of Baras Taluka Borsad district Kaira. He appears to be an agriculturist by occupation and has lands at Baras but he has a secondary occupation of transport business. He carries on that occupation along with a partner in the name of original defendant No. 1 namely M/s. M. M. Patel and Company. For that business he needed two trucks in December 1962. He therefore approached the Baroda Automobiles Sales and Services a firm dealing in motor vehicles at Baroda (hereinafter referred to as the dealers). A partner of that firm namely one Sureshbhai has been examined in the case at Exh. 109. According to the appellant he approached the said firm on or about 9th of December 1962 According to the witness Sureshbhai he approached the firm on 1st of January 1963. We shall consider this difference in version later but we may state here that the probabilities are more in favour of the appellants version. It is undisputed that the price agreed upon was Rs. 30701.00 per truck. Therefore the price of the two trucks came to Rs. 61402.00 out of which Rs. 402.00 appears to have been deducted for discount and the net price payable for the two trucks was Rs. 61000.00. Now towards this price the appellant admittedly paid Rs. 21000.00 to the dealers. This payment of Rs. 21000.00 was made up of two sums of Rs. 2000.00 and Rs. 19000.00. The fact of payment of these two sums making up Rs. 21000.00 towards the two vehicles is not in dispute There is however a slight dispute as to the date of the payments. According to the appellant be paid Rs. 2000.00 on 9-12-1962 and Rs. 19000.00 on 1-1-1963. Witness Sureshbhai admits the date so far as Rs. 19000.00 are concerned but as regards Rs. 2000.00 his version is that it was in fact paid on 9-1-1963. We shall examine that version later but we may indicate here that in respect of that version also the probabilities are more in favour of the appellants version. At any rate the payment of Rs. 21000.00to the dealers being admitted the balance payable for the price for the trucks was Rs. 40000.00. The appellant did not have that much money and that sum was agreed to be provided by the respondent. Upto this point there is no difficulty. The terms of the agreements on the basis of which this sum was provided for by the respondent form the basis of this suit. Two agreements were passed both on 2-1-1963 one for each truck. The appellant had obtained delivery of one truck from the dealers on 1-1-1963 and obtained delivery of the other truck from them on 2-1-1963. The truck of which delivery was obtained on 1-1-1963 was later numbered as GTB 3771 and the other truck was later numbered as GTB 3770. The agreements between the appellant and the respondent were as we just stated entered into on 2-1-1963 and these are referred to in the evidence as the Hire Purchase Agreements. We shall come to the terms of those agreements later but to continue the narration it appears that the respondent paid the dealers Rs. 40000.00 in two sums of Rs. 25000/- and 15000/- on 7-1-1963 and 10-1-1963 respectively. The appellant got the trucks registered in his name under the Motor Vehicles Act built a body on each chassis and began to use them for his business. One of the trucks namely GTB 3770 was later sold by the appellant to one Raijibhai Patel on 10-12-1963. The said Raijibhai has been examined as the appellants witness at Exh. 185. There is a slight difference to the amount for which the truck was sold. According to the respondent it was sold for Rs. 27000.00and according to the appellant for Rs. 28000.00. Nothing material turns on that difference. It is not in dispute that Raijibhai has paid to the respondent the price for which the truck was sold to him. The truck which remained with the appellant was seized by the respondent on 18-5-1965 in enforcement of the terms of the hire purchase agreement a breach of which according to the respondent was committed by non-payment of the instalments due. On 19-5-1965 the appellant filed a complaint before the Judicial Magistrate First Class Anand against the respondent for theft of the vehicle. As a result of that complaint the truck No. GTB 3771 was attached from the possession of the respondent. On 20-7-1965 the appellant filed a suit for accounts in the Court of the Civil Judge Junior Division Borsad against the respondent asking for accounts in respect of the transaction relating to the trucks entered into between them on 11-10-1965 the respondent filed this suit. ... ... ... ... ... ...
(3.) The lower Court substantially accepted the respondents version and rejected that of the appellant. The lower Court rejected the pleas of fraud misrepresentation waiver estoppel and acquiescence pleaded by the appellant on the ground that there was no evidence to support any of these pleas. The lower Court found against the case that the transaction was a loan on the ground that the hire purchase agreements produced in the case and admittedly signed by the appellant fully answer the legal requirements of a hire purchase. It appears that the learned Judge missed the real point underlying the contention urged on behalf of the appellant. The lower Court held that forfeiture clauses were not a penalty because according to the lower Court the hire purchase agreement in this case was as it stood enforceable in law against the appellant. The lower Court took the view that under the agreement the respondent had a right to obtain and seize the truck and also to forfeit payments already made and the appellant cannot urge that these rights of the respondent operated as a penalty. This is the short answer the lower Court has given to the plea that the forfeiture clauses should not be strictly enforced against the appellant. Here again the lower Court appears to have missed the substance of the contention. The lower Court found that the appellant had committed a breach by failure to pay the amount due which according to the lower Court was Rs. 13568.76 as claimed by the respondent. Accordingly the lower Court passed an order of possession as earlier stated.;


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