The Supreme Court has brought an end to a nearly three-decade-old commercial dispute involving vehicle hire charges and compensation claims arising from a 1992 agreement between a transport company and the Madhya Pradesh Electricity Board.
The bench of Justice J.K. Maheshwari and Justice Atul S. Chandurkar observed that instead of engaging in an extensive re-evaluation of the rival claims and findings of the courts below, the Court exercised a practical approach and fixed a consolidated amount of ₹62 lakh in full and final settlement of the dispute.
The dispute originated from a contract executed on 22 April 1992 under which the Electricity Board had provided two tractor-trailers on hire to the transport company. One trailer had a capacity of 100 metric tonnes while the second had a capacity of 50 metric tonnes. Monthly hire charges under the arrangement were fixed at ₹55,000 and ₹35,000 respectively. Initially, the payments were being made regularly; however, the transport company later sought waiver of the hire charges from June 1994, claiming that services were being rendered to the Board. The disagreement over payment obligations eventually led to litigation.
Following non-payment of the outstanding hire charges, the Electricity Board instituted a recovery suit in August 1998. In response, the transport company denied liability and also filed a substantial counter-claim of over ₹73 lakh alleging dues relating to transportation bills.
During the trial proceedings, evidence disclosed several significant facts relating to the condition and age of the vehicles. The tractors had been manufactured in America in 1982, while the trailers had been manufactured in India in 1979. Their purchase value was approximately ₹50 lakh. It also emerged that the fitness certificates of both vehicles had expired in 1991 and 1992 respectively and no steps had been taken for their renewal because the vehicles were proposed to be sold on an “as is where is basis.” The agreement itself had been executed for a period of three years.
The Trial Court, by judgment dated 30 July 2011, decreed the Electricity Board’s suit and directed payment of the depreciated value of the vehicles amounting to approximately ₹23.02 lakh. It also directed payment of outstanding rent amounting to approximately ₹23.56 lakh along with interest at 6% per annum and compensation of ₹90,000 per month till return of the vehicles. The transport company’s counter-claim was dismissed as being barred by limitation.
The High Court subsequently upheld the Trial Court’s decision and dismissed the appeal filed by the transport company. Thereafter, the matter reached the Supreme Court through a Special Leave Petition. During the pendency of proceedings before the apex court, mediation efforts were undertaken to resolve the dispute; however, the exercise did not succeed. The Supreme Court had also directed deposits as a condition for staying execution of the decree.
While deciding the matter, the Supreme Court took note of several practical considerations, including the age and condition of the vehicles, expiry of fitness certificates decades earlier, and the long pendency of litigation. The Court noted that the Trial Court had assessed the depreciated value of the vehicles at around ₹23 lakh in 2011. It also considered the amounts already deposited during the proceedings—₹12 lakh before the High Court and ₹50 lakh before the Supreme Court.
Rather than entering into a detailed examination of the rival legal contentions, the Bench observed that the ends of justice would be better served by putting a quietus to the litigation. Accordingly, it held that the Electricity Board would be entitled to receive ₹62 lakh towards full satisfaction of the decree and directed release of the deposited amounts along with accrued interest.
Case Details
Case Title: M/S Shivhare Roadlines Pvt. Ltd. And Anr. Versus Madhya Pradesh Electricity Board
Citation: JURISHOUR-1421-SC-2026
Case No.: Special Leave Petition (C) No.5432 Of 2026
Date: 26/05/2026
