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P. Mohammed Ali Vs. A.P.R. Marudappan and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial;Contract
CourtChennai High Court
Decided On
Case NumberCivil Revision Petition No. 1695 of 1968
Judge
Reported inAIR1972Mad152
AppellantP. Mohammed Ali
RespondentA.P.R. Marudappan and ors.
Cases ReferredNational Cash Register Co. Ltd. v. Stanley
Excerpt:
.....in respect of breaches of contract which occurred before the date of determination. and if the only breach is failure to pay instalments the owner can only recover the instalments due and unpaid at interest.order1. the first defendant is the petitioner. the suit is to recover a sum of rs. 735/- due on a hire purchase agreement executed by the first defendant in favour of the plaintiff in which defendants 2 and 3 have also joined as guarantors, undertaking liability jointly and severally along with the first defendant. hence defendants 2 and 3 were impleaded as parties to the suit. the plaintiff's case is that the first defendant purchased five bicycles on hire purchase agreement from the plaintiff and executed an agreement ex. a. 1 dated 22-1-1965. the price was fixed at rs. 1465/-, a sum of rs. 265/- was paid immediately and the balance was agreed to be paid in 12 instalments of rs. 100/- each. the first defendant paid rs. 465/- in two instalments of rs. 285/- and rs. 180/- respectively and.....
Judgment:
ORDER

1. The first defendant is the petitioner. The suit is to recover a sum of Rs. 735/- due on a hire purchase agreement executed by the first defendant in favour of the plaintiff in which defendants 2 and 3 have also joined as guarantors, undertaking liability jointly and severally along with the first defendant. Hence defendants 2 and 3 were impleaded as parties to the suit. The plaintiff's case is that the first defendant purchased five bicycles on hire purchase agreement from the plaintiff and executed an agreement Ex. A. 1 dated 22-1-1965. The price was fixed at Rs. 1465/-, A sum of Rs. 265/- was paid immediately and the balance was agreed to be paid in 12 instalments of Rs. 100/- each. The first defendant paid Rs. 465/- in two instalments of Rs. 285/- and Rs. 180/- respectively and failed to pay the balance. Hence the suit. The defence of the first defendant is that the suit is not maintainable as the plaintiff is an unregistered corporation, that no agreement was entered into with the plaintiff and that the plaintiff is not entitled to any relief. The defence of the second defendant is that he is not a guarantor, and that he is not liable to pay anything. The trial court held that the suit agreement is true and signed by the first defendant and that defendants 2 and 3 are the guarantors. In the result the suit was decreed as prayed for. Hence the first defendant has filed this revision petition.

2. The contention raised on behalf of the petitioner is that the suit for the unpaid purchase price is not maintainable, and that only a suit for damages will lie. The essential terms of a hire purchase agreement are (1) a clause by which the owners agree to let and the hirer agrees to hire the goods; (2) a clause giving to the hirer a right to determine the hiring or return the goods; & (3) a clause giving the hirer the right or option to purchase the goods for a nominal sum at the end of the hiring. In the present case what has happened is that, after the agreement was entered into, two instalments of payments have been made and the hirer failed to pay the balance. The question, therefore, is whether the suit for recovery of the value of the bicycles will lie. The learned counsel for the petitioner cited the decision in National Cash Register Co. Ltd. v. Stanley, 1921 3 KB 292, in support of his contention. That was a case where the hire was for a fixed period and the clause therein provided that the hirer was liable to pay the rent for the full period even if he returned the chattel before the end of the period. That case gives no assistance in deciding the present question. In Wild's Law of Hire Purchase, 2nd Edn. at p. 185, the following passage occurs:--

'A distinction is made between cases where the hirer's failure to pay the instalments amounts to, or is the result of a repudiation of the contract by him and cases where there is not repudiation by the hirer. If a hirer wrongfully repudiates a hire purchase agreement the basic measure of damages to which the owner is entitled is the total hire purchase price from which must be deducted the total of the instalments already paid, any arrears of instalment due and unpaid at the date of repudiation, the proceeds of sale of the goods, any sum payable on the exercise of the option to purchase, and a sum representing a rebate of charges in respect of the proceeds of sale. On the other hand, where the hirer has failed to pay instalments when due but has failed to pay instalments when due but has not repudiated the contract and the owner exercises a right to determine the hiring the owner is only entitled to damages in respect of breaches of contract which occurred before the date of determination. And if the only breach is failure to pay instalments the owner can only recover the instalments due and unpaid at interest.'

3. In the present case the defence to the suit is a repudiation of the agreement altogether retaining with them the bicycles which are the subject of the hire purchase agreement and the measure of damages in such a case is the total hire agreement amount less the amounts already paid, according to the passages above cited. In this view, the view of the trial court decreeing the suit for the price of the bicycles less the amounts already paid is correct. The civil revision petition therefore fails and is dismissed. There will be no order as to costs.

4. Revision dismissed.


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