Karam Chand vs Punjab National Bank and Others

R.L. Khurana, J.—The plaintiff has filed the present suit against the seven defendants claiming the following reliefs :

(a) delivery of truck No. HIH-2046 plus Rs. 1,00,000 as compensation for restoring the truck to its original position or in the alternative for recovery of Rs. 3,50,000 being the price of the truck ;

(b) mesne profits at the rate of Rs. 10,000 per month from July 13, 1991, till the date of the suit besides future mesne profits at the rate of Rs. 10,000 per annum till the truck is restored back ;

(c) costs of the suit ; and

(d) any other or further order which the court may deem fit and proper on the facts and in the circumstances of the case.

Briefly, the facts leading to the present suit may be thus stated. The plaintiff Karam Chand, obtained a loan of Rs. 1,60,000 from New Bank of India which subsequently came to be merged with the Punjab National Bank, for the purchase of a truck. The truck was purchased by him on February 17, 1987, for a sum of Rs. 2,38,200.60 from Messrs Metro Motors Ambala Cantt. A further sum of Rs. 30,000 was spent by the plaintiff towards the building of the body of the truck and fitting of other accessories, which work was got carried out from Messrs Indian Truck Body Builders, Railway Road, Sirhind on March 20, 1987. Another sum of Rs. 4,000 was paid towards excise duty. For the purpose of running the truck, the plaintiff got the route permit of his brother the late Kishan Chand Sharma, the predecessor in interest of defendants Nos. 3 to 7, in his favour. The truck was registered at No. HIH-2046 in the name of the plaintiff on March 27, 1987. The vehicle was also got insured by the plaintiff for the years 1987-88, 1988-89, 1989-90, 1990-91 and 1991-92.

In all the documents pertaining to the loan, the name of the plaintiff was mentioned as K. C. Sharma and he had signed all such documents as K. C. Sharma. However, the driving licence furnished by the plaintiff to the bank at the time of applying for loan, contained the full name of the plaintiff as Karam Chand Sharma. The plaintiff had pledged his fixed deposit receipt for a sum of Rs. 68,100 in favour of the bank as security for the repayment of loan. In this fixed deposit receipt full name of the plaintiff was mentioned. Defendant No. 3 Smt. Nirmala Devi was the guarantor for the plaintiff. The entire loan amount along with interest was duly paid by the plaintiff to the bank.

Shri Kishan Chand Sharma, the brother of the plaintiff and predeces-sor-in-interest of defendants Nos. 3 to 7 died on July 16, 1988. Defendants Nos. 3 to 7 taking advantage of the name K. C. Sharma as mentioned in various documents pertaining to the loan and the truck connived with defendant No. 2, the then branch manager of defendant No. 1-bank and applied for the transfer of the truck in their favour by averring that the original registered owner "K. C. Sharma" (Kishan Chand Sharma) had died. Along with the application made to the Registering Authority, Hamirpur, defendants Nos. 3 to 7 had annexed a copy of the death certificate in respect of Shri Kishan Chand Sharma and a "no objection certificate" issued by defendant No. 2 in favour of Shri Kishan Chand Sharma. On the basis of such certificates, the Registering Authority, Hamirpur, transferred the truck HIH-2046 in the name of defendants Nos. 3 to 7. On the basis of such change of registration in their favour, defendants Nos. 3 to 7 on July 13, 1991, forcibly seized and took possession of the truck from Shri Ashok Kumar, the driver employed by the plaintiff. A report in this regard was duly made to the police on the basis of which a case was registered. In order to stall the investigation of the case, defendants Nos. 3 to 7 filed a suit before the Senior Sub-judge, Mandi, for per manent injunction for restraining the plaintiff from interfering in any manner with the use of the truck by them as owners thereof. In such suit, being Civil Suit No. 50 of 1991 an interim order was passed on September 9, 1991, in the following terms :

(a) Defendants Nos. 3 to 7 were directed to maintain the truck HIH-2046 in its proper working condition and they shall take care while maintaining the truck as is required from the prudent man ;

(b) Defendants Nos. 3 to 7 shall not dispose of the truck, any part thereof, mortgage, sell or hypothecate the same during the pendency of the suit ;

(c) Defendants shall maintain log-book regularly ;

(d) a joint account in the name of both the parties shall be opened in the nationalised bank at Mandi, wherein on every first week of the month the benefits received from the truck shall be deposited and no party shall be entitled to withdraw the amount from the bank without the prior permission of the court ;

(e) Defendants Nos. 3 to 7 shall furnish surety bond to the tune of Rs. 1,00,000 for producing the vehicle in court as and when called upon to do so ; and

(f) Defendants Nos. 3 to 7 shall allow and permit the plaintiff to inspect the log book, the accounts and the truck two times in a month.

The above-referred to suit was ultimately dismissed in default under Order 9 Rule 8 of the Code of Civil Procedure, 1908, on August 24, 1992.

The plaintiff thereafter on November 30, 1992, filed the present suit claiming the reliefs as aforesaid.

Defendant No. 1-bank while resisting the suit admitted that loan for the truck was applied for by and the same was sanctioned in favour of the plaintiff, who had signed various documents as K. C. Sharma. It was also admitted that the entire loan was repaid by the plaintiff. Connivance of defendant No. 2 with defendants Nos. 3 to 7 was denied and it was pleaded that the "no objection certificate" in favour of Shri Kishan Chand Sharma, might have been issued by defendant No. 2 under a bona fide mistake, Objection was raised as to misjoinder of defendants Nos. 1 and 2 and it was pleaded that the plaintiff did not have any enforceable cause of action against them. It was also pleaded that the suit was barred by time and that the plaintiff was estopped from filing the suit.

Defendant No. 2, the then branch manager of defendant No. 1-bank, also admitted that the loan was sanctioned in favour of one Shri K. C. Sharma for the purchase of truck HIH-2046. The route permit was in favour of Kishan Chand Sharma, son of Daya Ram Sharma. The entire loan amount stood repaid by the loanee and a "no dues certificate" was issued by him in favour of Shri Kishan Chand Sharma on the basis of the name entered in the route permit under a bona fide belief that the truck was owned by Kishan Chand Sharma. He denied having connived with defendants Nos. 3 to 7.

Defendants Nos. 3 to 7 while resisting the suit, pleaded that the loan was applied for by and sanctioned in favour of their predecessor-in-interest Shri Kishan Chand Sharma. The truck was purchased by him and registered in his name. It was further pleaded that the plaintiff after the death of Kishan Chand Sharma, in order to grab the truck connived with S. C. Kapoor, the then branch manger of the bank and got the original loan documents replaced. The entire loan amount was repaid by Kishan Chand Sharma and the truck after his death was rightly transferred and registered in their favour after due enquiry by the Registering Authority.

On the pleadings of the parties, the following issues were framed on July 13, 1996 :

Whether the suit is bad for misjoinder and non-joinder of parties ? OPD (1 and 2).

2 Whether the suit is within time ? OPP

Whether the plaintiff is estopped from filing the present suit on account of his own acts, conduct and acquiescence ? OPD (1 and 2)

Whether the plaintiff has no cause of action ? OPD

Whether the truck was purchased after obtaining loan from defendant No. 1 by the plaintiff ? OP parties.

Whether the plaintiff is entitled to the delivery of truck No. HIH 2046 as claimed ? OPP

Whether the plaintiff is entitled to compensation as claimed ? If so, from whom and to what extent ? OPP

In the alternative, whether the plaintiff is entitled to the price of the truck ? OPP

Whether the plaintiff is entitled to the mesne profits, if so, at what rate ? OPP

Whether the plaintiff has paid the loan amount due to defendant No. 1 ? OPP

Whether the plaintiff has no legal and enforceable claim against defendants No. 1 and 2 ? OPD (1 and 2).

Relief.

I have heard the learned counsel for the parties and have also gone through the record of the case. My findings on the above issues are as under :

Issues Nos. 1 and 11 :

Defendants Nos. 1 and 2 have been impleaded in the present case by the plaintiff on the averments that defendant No. 2, the then branch manager of defendant No. 1 at Mandi, had connived with defendants Nos. 3 to 7 in issuing the "no dues certificate" in favour of Shri Kishan Chand Sharma in order to deprive the plaintiff of the truck.

No evidence is forthcoming on behalf of the plaintiff to show connivance between defendant No. 2 and defendants Nos. 3 to 7. So much so that even the plaintiff while appearing as PW-1 is silent on this aspect of the case and has not stated even a single word about defendant No. 2 having connived with defendants Nos. 3 to 7.

Exhibit DW-3/A is the copy of the "no dues certificate" issued by defendant No. 2. Assuming that such certificate was wrongly issued in the name of Shri Kishan Chand Sharma, in the absence of evidence it cannot be said that there was connivance between defendant No. 2 and defendants Nos. 3 to 7. Therefore, defendant No. 2 cannot be held liable. Similarly, no vicarious liability can be fastened on defendant No. 1. The plaintiff does not have any enforceable and legal cause of action against defendants Nos. 1 and 2. The suit as such is bad for misjoinder of defendants Nos. 1 and 2. The two issues are decided in favour of defendants Nos. 1 and 2.

Issue No. 2 :

According to the plaintiff defendants Nos. 3 to 7 took forcible possession of the truck on July 13, 1991. The present suit has been filed on November 30, 1992. The present suit is for recovery of movable property, namely, the truck and for recovery of compensation and mesne profits. The same having been filed within three years from the accrual of cause of action is within time. The issue is decided in favour of the plaintiff.

Issue No. 3 :

This issue was not pressed by learned counsel for defendants Nos. 1 and 2 during the course of hearing. The same is as such decided against defendants Nos. 1 and 2.

Issues Nos. 5 and 10 :

Both these issues being interconnected and co-related are being taken up and discussed together.

It is the admitted case of defendant No. 1 the bank, which granted the loan, that the loan was applied for by and that the same was sanctioned and disbursed to the plaintiff under the name of Shri K. C. Sharma. Evidence coming on record also shows that the truck was purchased from Messrs. Metro Motors, Ambala Cantt. in the name of Shri K. C. Sharma.

Exhibit D-2/31 is the photostat copy of the application form whereby loan was applied for. The photograph of the plaintiff is affixed thereon. This application is also signed by the plaintiff as K. C. Sharma.

PW-3 Shri S. C. Kapoor, who was the branch manager of the bank at the time when the loan was applied for and sanctioned, has categorically stated that the loan was applied for by the plaintiff and that all the necessary loan documents were executed by the plaintiff. He has further gone to state that the plaintiff and his brother Kishan Chand Sharma were known to him.

The witness has not been cross-examined on the question that the loan was applied for by and sanctioned in favour of Kishan Chand Sharma or that the signatures on the application form exhibit D-2/31 are that of Kishan Chand Sharma and not of the plaintiff.

Though defendants Nos. 3 to 7 have averred in their written statement that after the death of Kishan Chand Sharma, the plaintiff in connivance with PW-3 had replaced the original loan documents, no evidence in this regard has been adduced by them. Defendant No. 3, while appearing as her own witness as D3W1 has not stated anything in this regard.

Admittedly, there has been previous litigation between the parties with regard to such truck before the learned senior Sub-Judge, Mandi. Defendants Nos. 3 to 7 had filed a suit for permanent injunction against the plaintiff claiming themselves to be the owner of the truck in question. It was averred that the truck was purchased by Kishan Chand Sharma by taking loan from the bank. Exhibit P-18 is the copy of plaint of such suit. Admittedly, this suit was dismissed in default on August 24, 1992, under Order 9 Rule 8 of the Code of Civil Procedure.

In the said suit, an attempt was made by defendants Nos. 3 to 7 to amend their suit by raising the plea that the truck was purchased benami in the name of the plaintiff by the deceased Kishan Chand Sharma. Such amendment was not allowed simply on the ground that Section 4 of the Benami Transactions (Prohibition) Act, 1988, prohibits the challenge to benarni transactions.

It appears that having failed in their attempt to get their pleadings amended, defendants Nos. 3 to 7 allowed the suit to be dismissed in default. The fact remains that defendants Nos. 3 to 7 have admitted that the truck was purchased in the name of the plaintiff.

Exhibit P-26 is the copy of entry of the register maintained in the office of the Registering Authority. A perusal of the same also shows that the truck in question was registered in the name of the plaintiff as "Karam Chand Sharma, son of Daya Ram". However, while issuing the requisite registration certificate, copy exhibit P-25, the name of the registered owner has been mentioned as "K. C. Sharma son of Daya Ram". A combined reading of exhibits P-25 and P-26 would show that "K. C. Sharma" mentioned in exhibit P-25 stands for "Karam Chand Sharma", that is, the plaintiff. Exhibits P-13 and P-14 are the copies of notices issued by the Assistant Excise and Taxation Commissioner, Hamirpur, to the plaintiff in respect of the truck in question. In these notices also plaintiff has been mentioned as owner of the truck in question.

Nothing has come on record by defendants Nos. 3 to 7 in rebuttal to the evidence led by the plaintiff.

From the evidence coming on record coupled with the admissions made by defendant No. 1, it is held that the truck in question was purchased by the plaintiff by raising loan from defendant No. 1 and that the entire loan stands repaid by the plaintiff. The two issues are as such decided in favour of the plaintiff.

Issue No. 4 :

In view of my findings on issues Nos, 5 and 10 above, the plaintiff has the cause of action. The issue is accordingly decided against the defendants.

Issue No. 6 :

In view of my findings on issue No. 5 above that the truck was purchased by the plaintiff after raising loan from defendant No. 1 and in view of the fact that such truck is in the possession of defendants Nos. 3 to 7, the plaintiff is held entitled to the restoration of the truck HIH-2046. The issue is decided in favour of the plaintiff.

Issue No. 7 :

In the absence of any evidence as to the present condition of the truck and the extent of amount required for restoring the truck to its original condition as on the date it was seized by defendants Nos. 3 to 7, the plaintiff is held not entitled to any compensation. The issue is, therefore, decided against the plaintiff.

Issue No. 8 :

The present issue has become redundant since the plaintiff has been entitled to the truck.

Issue No. 9 :

The plaintiff has claimed mesne profits at the rate of Rs. 10,000 per month with effect from September 13, 1991.

"Mesne profits" have been described and defined u/s 2(12), of the Code of Civil Procedure, as under :

''"mesne profits'' of property means those profits which the person in wrongful possession of such property actually received or might with ordinary diligence have received therefrom, together with interest on such profits, but shall not include profits due to improvements made by the person in wrongful possession."

Order 20, Rule 12 of the CPC deals with the decree for possession and mesne profits. A combined reading of the two provisions that is, Section 2(12) and Order 20, Rule 12 of the Code of Civil Procedure, shows that mesne profits can be claimed only in respect of use and occupation of immovable property and not in the case of movable property.

Mesne profits have been defined in Wharton''s Law Lexicon 14th edition, as under :

"Mesne profits are the rents and profits which a trespasser has, or might have, received or made during his occupation of the premises, and which, therefore, he must pay over to the true owner as compensation for the tort which he has committed ."

In Kangabam Bira Singh v. Manipur Drivers'' Union Co-operative Association Ltd. AIR 1957 Man 9 a suit was filed, inter alia, for recovery of mesne profits in respect of a lorry. Relying on the definition of mesne profits as given in Wharton''s Law Lexicon, it was held (page 13) :

"In Section 2(12), Civil Procedure Code, ''mesne profits'' appear to have been given the same meaning, but it has been provided that this word shall not include profits due to improvement made by the person in wrongful possession. These definitions make it clear that the mesne profits can be claimed regarding immovable property and not with regard to a motor lorry.

As a motor lorry cannot be deemed to be immovable property, and as it has been proved in this case that defendants Nos. 1 and 2 became the full owners of this lorry after the execution of the sale deed exhibit A-1 and they remained in possession and the relevant documents were handed over to them and the plaintiff had no interest left in the lorry, he could not be allowed any decree for recovery of mesne profits or any profits in the present case."

The Supreme Court in Lucy Kochuvareed v. P. Mariappa Gounder AIR 1979 SC 1214 has also held :

"Mesne profits being in the nature of damages, no invariable rule governing their award and assessment in every case, can be laid down and ''the court may mould it according to the justice of the case''. Even so, one broad basic principle governing the liability for mesne profits is discernible from Section 2(12) of the Code of Civil Procedure, which defines ''mesne profits'' to mean ''those profits which the person in wrongful possession of property actually received or might with ordinary diligence have received therefrom, together with interest on such profits, but shall not include profits due to improvements made by the person in wrongful possession''. From a plain reading of this definition, it is clear that wrongful possession of the defendant is the very essence of a claim for mesne profits and the very foundation of the defendant''s liability therefor. As a rule, therefore, liability to pay mesne profits goes with actual possession of the land. That is to say, generally, the person in wrongful possession and enjoyment of the immovable property is liable for mesne profits."

Following the above principle, it is held that the plaintiff is not entitled to any mesne profits since the property involved in the present case is movable. The issue is decided against the plaintiff.

Relief:

As a result of the above findings, the suit of the plaintiff partly succeeds and a decree is passed in his favour and against defendants Nos. 3 to 7 directing the latter to hand over and deliver the truck HIH 2046 to the former forthwith. The suit of the plaintiff as against defendants Nos. 1 and 2 shall stand dismissed as a whole. Similarly, the suit for recovery of compensation and mesne profits against defendants Nos. 3 to 7 also shall stand dismissed. The plaintiff shall be entitled to proportionate costs of the suit.