C R NARASIMHA SETTY Vs. CANARA BANK

JUDGEMENT

(1.) The undisputed facts are that a tempo vehicle bearing Registration No. CAA 3842 was purchased by the plaintiff-appellant under a hire-purchase agreement with respondent-1 Canara Bank having taken a loan of Rs. 56,000/-. The said loan with interest thereon was discharged by the time the suit came to be filed and the plaintiff, according to the Bank, still owed Rs. 3,694-90 towards seizure charges, ground rent charges and other expenses. The said vehicle was seized on 26-11-1988 by respondent-1 Bank towards realisation of the amount due to it under the hirepurcha.se agreement. Plaintiff- appellant filed the suit for declaration that the seizure of the vehicle was withoul jurisdiction, void and for consequential orders for redelivcry of the vehicle and further consequential order under Section 20 of the HirePurchase Act being enforced.

(2.) It is undisputed that during the pen dencyof the suit, the entire loan as aforesaid due under the hire purchase agreement came to be repaid. In the written statement, however, first defendant-Bank contended that after the partnership firm came into existence, the plaintiff as one of the partners and other partners were liable for the O.C.C. limit thai the partnership had obtained from the Bank. It slated that the plaintiff along with other partners had written a letter to the Bank acknowledging the liability of the vehicle loan as well as the O.C.C. limit and further gave an undertaking declaring that the vehicle CAA 3842 could be held as collateral security to the O.C.C. limit of Rs, 50,000/- available to the firm. Having f the suit, the plaintiff-appellant filed I.A. Nos.I and II for a mandatory injunction directing the defendants to deliver the vehicle aforesaid. It may be mentioned here that the second respondent-second defen dant is only a Clearing Agent of the first respondent with whom the vehicle is said to have been left by the first respondent. The Trial Court rejected the applications holding that the partners of Swamy Perfumery Works of which the appellant is also a partner agreed to discharge the liability under the loan and that they further agreed that all security charges, obligations and the conditions in respect of the vehicle loan shall con tinue and bind them and because the plaintiff happens to be one of the partners of the firm, the vehicle cannot be released, it also found that the first defendant company (ought to be Bank) which has advanced the huge amount would sustain loss. While dismissing the applications, the Trial Court has further observed that the partners of the said firm had not repaid the O.C.C. limit amount referred to above and hence, the Banker has every right to retain the vehicle in question under the Contract Act.

(3.) In challenging this order, it is urged onbehalf of the appellanl that the (rial Court, though did not refer expressly to the provisions of Seel ion 171 of the Contract Act, did bear in mind these provisions and thus impliedly held that the Banker's lien is available to the first respondent-Bank in keeping the seized goods with itself till the O.C.C. limit amount was repaid. Section 171 referring to general lien of bankers, factors, etc., reads thus: