Supreme Court Settles Three-Decade Vehicle Hire Dispute at ₹62 Lakh, Overriding Trial Decree

A bench of Justices J.K. Maheshwari and Atul S. Chandurkar capped a 30-year-old hire dispute at ₹62 lakh, directing release of deposited amounts to the Electricity Board.

A contract signed in April 1992 for the hire of two ageing tractor trailers has finally been put to rest by the Supreme Court, more than three decades after the vehicles changed hands. On 26 May 2026, a Division Bench comprising Justice J.K. Maheshwari and Justice Atul S. Chandurkar disposed of Special Leave Petition (C) No. 5432 of 2026 filed by M/s Shivhare Roadlines Pvt. Ltd. against the Madhya Pradesh Electricity Board. Rather than adjudicating the rival claims in detail, the Court fixed ₹62 lakh as full and final satisfaction of the decree passed by the Trial Court and directed that amounts already deposited by the petitioners — ₹12 lakh with the High Court and ₹50 lakh with the Supreme Court Registry — be released to the respondent with accrued interest.

The 1992 Hire Contract and How the Dispute Arose

On 22 April 1992, the Madhya Pradesh Electricity Board entered into a contract with M/s Shivhare Roadlines Pvt. Ltd. under which two tractor trailers owned by the Board were given on hire to the transport company. One trailer had a capacity of 100 metric tonnes, attracting a monthly hire charge of ₹55,000; the other had a capacity of 50 metric tonnes at ₹35,000 per month.

The contract was for a duration of three years. Initially, hire charges were paid regularly. From June 1994, however, the defendants sought a waiver of those charges on the ground that they were providing transportation services to the Board. When outstanding hire charges remained unpaid, the Board filed a civil suit on 1 August 1998 for recovery.

The defendants denied the claim and filed a counter-claim of ₹73,19,372 — representing amounts they said were owed to them as transportation bills. The Board opposed the counter-claim.

What the Trial Court and High Court Decided

Evidence before the Trial Court revealed that the tractors were manufactured in America in 1982 and the trailers in India in 1979. Both sets of vehicles had been registered in 1982. Their fitness certificates had expired — one on 25 March 1992 and the other on 25 March 1991 — and no steps were taken to renew them, as the vehicles were intended to be sold on an “as is where is basis.”

By its judgment dated 30 July 2011, the Trial Court decreed the suit. It directed the defendants to pay:

• ₹23,02,932.28 as the depreciated value of the vehicles;
• ₹23,56,752 as outstanding rent with interest at 6% per annum; and
• ₹90,000 per month as compensation until the vehicles were returned, also with interest at 6% per annum from the date of filing of the suit.

The counter-claim filed by the defendants was held to be barred by limitation and was rejected.

The defendants appealed under Section 96 of the Code of Civil Procedure, 1908. The learned Single Judge of the High Court of Madhya Pradesh reconsidered the entire matter and confirmed the Trial Court's decree, dismissing the first appeal.

Proceedings Before the Supreme Court

When the Supreme Court issued notice in the special leave petition, it directed the parties to attempt mediation. As a condition for staying execution of the decree, the defendants were directed to deposit ₹20 lakh with the Registry. That mediation attempt did not succeed.

The defendants had already deposited ₹12 lakh before the High Court during the pendency of the first appeal. A further ₹20 lakh was deposited with the Supreme Court Registry on 27 February 2026 as a condition for the stay. By an order dated 30 April 2026, the Court directed a further deposit of ₹30 lakh, which was duly made. In total, ₹50 lakh stood deposited with the Supreme Court Registry and ₹12 lakh with the High Court.

Senior Advocate Mr. Gagan Gupta appeared for the defendants and Senior Advocate Mr. Ravishankar Jaiswal appeared for the Board. Both counsel made brief submissions and then, as the Court recorded, submitted to its orders, accepting the suggestion that the dispute — arising from a contract of 1992 — needed to be put to quietus.

The Court's Reasoning for Fixing ₹62 Lakh

The Court did not enter into a detailed appreciation of the rival submissions. Instead, it took an overall view of the facts on record. It noted that the vehicles hired out by the Board were of 1982 and 1979 vintage, and that their fitness certificates had expired by March 1992 — before the contract itself was signed in April 1992. No steps had been taken to renew those certificates.

The Trial Court had found the depreciated value of the vehicles in 2011 to be approximately ₹23 lakh. Against a decree that, with outstanding rent, compensation, and interest running from 1998, would have grown substantially, the Court considered the amounts already deposited and concluded that awarding ₹62 lakh in total would meet the ends of justice and bring finality to litigation that had continued for almost three decades.

The Court held the plaintiff entitled to ₹62 lakh “towards full satisfaction of the decree” passed in Civil Suit No. 6-B/2006.

Order

The Special Leave Petition was disposed of on 26 May 2026. The Court directed:

• The Madhya Pradesh Electricity Board is entitled to withdraw ₹12 lakh with accrued interest lying in deposit with the High Court in First Appeal No. 893 of 2011.
• The amount of ₹50 lakh with accrued interest deposited with the Supreme Court Registry shall be released in favour of the Board.
• These amounts together constitute full satisfaction of the decree passed by the Trial Court on 30 July 2011.