BALAJI AUTO FINANCING SYNDICATE Vs. SHAIK MOULA SAHEB

JUDGEMENT

(1.) The first respondent laid the suit in OS.No. 312 of 1980 under Order 34, Rule 1 C.P.C. against the second respondent. K. Ramayogi to recover the suit amount, seeking preliminary and a final decree against the hypotheca mentioned in B Schedule property and also a personal decree for the residue. Pending the suit, he got attached under Order 38 Rule 5, the lorry bearing AAG 5666. The appellant third party filed I.A. 3083/81 under Order 3 8 rule 8 C.P.C. to raise the attachment, but was unsuccessful as against which this appeal has been filed.

(2.) The appellant claimed that it is the owner of the said lorry and the second respondent is the purchaser under the hire purchase contract dated July 31, 1979. The title in the lorry, in terms thereof, vests in the appellant. It continues to be its owner till all the instalments due thereunder are paid over. Under the contract, Mr. Ramayogi has no right to assign, sell, pledge, charge, under-let or otherwise part with posession, custody or beneficial interest in the said vehicle, without any written consent of the appellant. The appellant as owner, has the right to "determine at any time the agreement by delivering up the said vehicle at the cost of the second respondent. It also reserved its right to seize, etc. of the said vehicle. The second respondent is only a purchaser without any ownership rights and the lorry thereby is not liable to attachment. It was resisted by the first respondent contending that the second respondent purchased the tourist bus under a hire purchase agreement with the Ramachandra Finance Corporation, Ponnur and borrowed the suit amount to effect repairs to the bus as well as to discharge the debt under the contract and has executed a promissory note. He also hypothecated the plaint 'B' schedule property which is not sufficient to meet the debt. Subsequently the second respondent converted the bus into a lorry. The contract with the appellant is only a fraudulent action to deprive his legitimate claims. The second respondent intended to keep the lorry out of his reach and beyond the jurisdiction of the Court and with great difficulty, after chase, the lorry could be caught and brought before the Court.

(3.) The Court below relying upon Section 2(c) of the Hire purchase Act, 1972, held that the contract with the appellant is in violation thereof and that the second respondent continued to be the owner. Therefore, the application was dismissed.