Allowed

Augusty Cherian v. B.G.Girija

Kerala HC19 Jan 2017RSA/945/2010

Case brief

AI extract

What is this about?

In a second appeal regarding a vehicle sale with hypothecated bank dues, the High Court held that the plaintiff was estopped from claiming relief. It allowed the appeal, set aside the lower appellate order, and maintained the trial court's dismissal of the suit.

What did the court decide?

Second appeal allowed; impugned judgment and decree set aside; trial court judgment and decree of dismissal of suit maintained; costs awarded to respondents.

Augusty Cherian Vs B.G.Girija — Contract and Commercial Disputes | Kerala HC (2017)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR. JUSTICE B.KEMAL PASHA

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THURSDAY, THE 19TH DAY OF JANUARY 2017/29TH POUSHA, 1938

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RSA.No. 945 of 2010 (D)

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AGAINST THE JUDGMENT AND DECREE DATED 22-06-2010 IN AS 16/2010 of ADDITIONAL DISTRICT COURT, PALA

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AGAINST THE JUDGMENT AND DECREE DATED 18-10-2007 IN OS 142/2006 of MUNSIFF COURT, PALA

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APPELLANT/1ST RESPONDENT/1ST DEFENDANT:

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*** AUGUSTY CHERIAN, KURISUMMOTTIL HOUSE, CHAKKAMPUZHA KARA, CHAKKAMPUZHA P.O. (DIED, LRS IMPLEADED)**

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ADDL. APPELLANT 2:

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K.C.CHARLY, (LR’S OF THE APPELLANT), S/O. LATE AUGUSTHY CHERIAN, RESIDING AT KURISUMMOOTTIL, CHAKKAMPOUZHA P.O., CHAKKAMPOUZHA KARA, VELLILAPPALLY VILLAGE, MEENACHIL TALUK, KOTTAYAM DISTRICT.

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ADDL. APPELLANT 3:

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K.C.VINCENT (LR’S OF APPELLANT), S/O.LATE AUGUSTHY CHERIAN, NOW RESIDING AT KURISUMMOOTTIL HOUSE, FLAT NO.703, PARADISE TOWERS, SOUTH CHITTOOR, ERNAKULAM-PIN 682 027.

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THE LRS OF THE DECEASED SOLE APPELLANT ARE IMPLEADED AS ADDITIONAL APPELLANTS 2 AND 3 AS PER ORDER DATED 10.07.2014 IN I.A.NO.1674 OF 2014.

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BY ADV. SRI.ROY CHACKO

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RESPONDENTS/APPELLANT & 2ND RESPONDENT/PLAINTIFF & 2ND DEFENDANT:

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1. B.G.GIRIJA, W/O.T.R.SANTHOSH, VELLAPPALLIL HOUSE, PALA P.O., PALA KARA,, MEENACHIL VILLAGE, MEENACHIL TALUK 686 589.

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RSA.No. 945 of 2010 ( )

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2. THE FEDERAL BANK LTD., PALA BRANCH, REPRESENTED BY ITS BRANCH MANAGER, PALA P.O., PIN- 686575.

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R1 BY ADVS. SMT.S.CHITHRA SRI.T.M.SUNIL R2 BY ADVS. SRI.GEORGE VARGHESE (MANACHIRACKEL) SRI.P.R.MILTON

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THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 19-01-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

DSV/30/1/17

B. KEMAL PASHA, J

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R.S.A.No.945 of 2010

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Dated this the 19^th day of January, 2017

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J U D G M E N T

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The 1^st defendant in O.S.No.142 of 2006 of the

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Munsiff's Court, Pala, who is dissatisfied with the judgment and decree passed by the Additional Sessions Court, Pala in A.S.No.16 of 2010, has come up with this second appeal.

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The suit is one for declaration that no

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amount can be recovered from the plaintiff, based on Exhibit-A1 agreement entered into between the plaintiff and the 1^st defendant, for the sale of Maruti Omni Van bearing registration No.KL-5-K-7753 and for directing the 2^nd defendant to issue a No Objection Certificate, thereby enabling the plaintiff to transfer the aforesaid Maruti Omni Van. Through amendment, a further relief has been incorporated

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as follows:

“In case, no direction can be issued to the 2^nd defendant to issue the No Objection Certificate, the 1^st defendant shall be directed to issue a No Objection Certificate, and in case the 1^st defendant fails to issue such a certificate, it shall be deemed that the plaintiff has obtained such a No Objection Certificate.”

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Through Exhibit-A1 agreement, the

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appellant/1^st defendant, who is the registered owner of Maruti Omni Van bearing registration No.KL-5-K7753, had agreed to sell the said vehicle to the plaintiff for a total consideration of 2,33,500/-. There was a hypothecation agreement entered into between the 1st defendant and the 2nd defendant Federal Bank Ltd., Pala Branch, in respect of the said vehicle, whereby a balance amount of 1,93,356/was the subsisting liability in respect of the vehicle,

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as on date of execution of Exhibit-A1. Through Exhibit-A1 agreement, the plaintiff undertook the liability to repay the entire balance instalments including interest towards the hypothecation transaction due to the 2^nd defendant from the 1^st defendant. A provision was made in Exhibit-A1 by enabling the 1^st defendant to recover all such amounts with interest from the plaintiff as well as all her movable and immovable properties, in case of default from the part of the plaintiff to clear the dues or any part thereof.

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According to the plaintiff, she had entrusted the amounts to be paid as instalments towards the loan amount to the 1^st defendant and she continued to do it. The 1^st defendant misappropriated the said amounts and did not care to remit the amounts to the 2^nd defendant Bank. It is averred in the plaint that on the date of agreement itself, an amount of

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`10,000/- was handed over by the plaintiff to the 1^st

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defendant for making the said payment to the 2^nd defendant as part of the subsisting liability.

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It has been further alleged that, through cheque dated 17.09.2003, the plaintiff had entrusted an amount of 35,000/- to the 1st defendant. As per Exhibit-A1 agreement, by way of security, the plaintiff had allegedly handed over a blank signed cheque leaf to the 1st defendant. According to the plaintiff, the 1st defendant, without the knowledge and consent of the plaintiff, filled in the said cheque leaf by incorporating an amount of 82,983/-, presented it at the Bank and got it dishonoured. Thereafter, the 1^st defendant proceeded with a complaint against the plaintiff alleging an offence punishable under Section 138 of the Negotiable Instruments Act. On getting the notice prior to the complaint, the plaintiff had approached the 1^st

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defendant and expressed her readiness and willingness to make the payments of the balance amounts to the Bank and demanded the 1^st defendant to make available the No Objection Certificate from the Bank. The 1^st defendant has not heeded to the said request.

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The 1^st defendant contended that as per Exhibit-A1 agreement, the plaintiff was duty bound to clear all the dues towards the said transaction with the Bank and at the same time, the plaintiff failed to make payments of the amounts due to the Bank. According to the 1^st defendant, it is false to state that an amount of `10,000/- was entrusted to him by the plaintiff on the date of Exhibit-A1 agreement. When the plaintiff had deliberately defaulted the instalments, the 1^st defendant had to pay such amounts to the Bank in order to avoid the proceedings against the 1^st defendant as well as the

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plaintiff from the Bank. The plaintiff paid an amount of 35,000/- through a cheque to the 1st defendant, in discharge of some of the amounts paid by the 1st defendant to the 2nd defendant, towards the loan transaction, subsequent to Exhibit-A1 agreement. The payment of an amount of 10,000/- by the plaintiff to the 2^nd defendant, after the execution of Exhibit-A1 agreement, is also admitted. The said payment was not on the date of execution of ExhibitA1, whereas it was paid on 15.10.2001. Exhibit-A1 was executed on 11.10.2001. After verifying the then existing liability to the 2^nd defendant, the 1^st defendant filled in the cheque leaf, as agreed to by the plaintiff and presented it. In the meantime, the plaintiff closed the said account deliberately, whereby the cheque happened to be dishonoured

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with the dictum “Account Closed”. A notice, as contemplated under Section 138(b) of the Negotiable

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Instruments Act, was issued and subsequently, the complaint was also filed within the statutory period. According to the 1^st defendant, the said cheque alone will not clear the liability of the plaintiff towards the

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1^st defendant since the 1^st defendant had made more payments. Over and above it, the 1^st defendant is entitled to recover the interest also on the amounts paid by the 1^st defendant towards the liability of the plaintiff.

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The trial court dismissed the suit. The matter was taken up in appeal through A.S.No.16 of 2010. The lower appellate court allowed the appeal by setting aside the judgment and decree of the trial court. The lower appellate court, through the impugned judgment, directed the 1^st defendant to issue a No Objection Certificate of the vehicle to the plaintiff within 30 days.

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Heard the learned counsel for the appellant

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and the learned counsel for the 2^nd respondent. There is no representation for the 1^st respondent. On the previous posting dates also, there was no representation for the 1^st respondent.

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It is evident that the claims of the plaintiff are not tenable. It seems that through the plaint averments, the plaintiff has given a go by to the terms of Exhibit-A1 agreement. At the same time, the plaintiff has admitted the execution of Exhibit-

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A1. When execution of Exhibit-A1 is admitted and when the plaintiff is not disputing the contents of Exhibit-A1, the parties to Exhibit-A1 are duty bound to perform the terms and contentions contained in the agreement. When Exhibit-A1 specifically says that it was the duty of the plaintiff to pay the balance amount towards the hypothecation transaction to the 2^nd defendant, it cannot be believed that the plaintiff had made such payments to the 1^st defendant. The

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plaintiff is estopped from raising such pleas. Apart from that, the same is hit by Section 92 of the Indian Evidence Act. The plaintiff has no case that there was novation. When Exhibit-A1 agreement was reduced to writing, the parties cannot be permitted to adduce oral evidence, in order to vary the terms and contentions contained in Exhibit-A1.

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The lower appellate court has taken the view that after closing the loan account, the 1^st defendant had issued a notice to the plaintiff, thereby demanding an amount of `82,983 only as the amount due to him, and therefore, the further contentions of the 1^st defendant in the written statement are not correct. The lower appellate court is clearly erred in making such an observation. The notice allegedly issued is Exhibit-A6, which is in fact the notice issued under Section 138(b) of the Negotiable Instruments Act for filing the complaint

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alleging the offence under Section 138 of the Negotiable Instruments Act. The lower appellate court has totally misread the evidence and directed the 1^st defendant to issue the No Objection Certificate to the plaintiff. The lower appellate court has not given any cogent reason to interfere with the judgment and decree passed by the trial court. Such an exercise was not expected from the court below. The lower appellate court has gone wrong in setting aside the judgment and decree passed by the trial court.

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It has clearly come out that the plaintiff is not entitled any of the reliefs sought for in the plaint. The suit is liable to be dismissed. The judgment and decree passed by the lower appellate court are liable to be set aside.

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In the result, this second appeal is allowed with costs and the judgment and decree passed by the

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lower appellant court are set aside. The judgment and decree passed by the trial court are maintained.

Sd/-

B. KEMAL PASHA,

JUDGE.

DSV/19/1/17

// True Copy //

P.A. To Judge

Augusty Cherian v. B.G.Girija

Case brief

What is this about?

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Augusty Cherian v. B.G.Girija

Case brief

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