KAUSHIK HIMMATSINGKA v. THE STATE OF BIHAR & ANR

first withdraw the earlier complaint bearing Complaint Case No. 376 of 1998 filed by him levelling similar allegations. An application filed by accused in this court for quashing the prosecution case was dismissed. The Magistrate after examining complainant on S.A. and - 2 - witnesses in enquiry under Section 202 of the Cr.P.C. took cognizance of offence under Section 406 and 420 of the Indian Penal Code on 9.08.2004, which is impugned. The petitioner submits that earlier also a vehicle was financed to the complainant’s sister-in-law and it was repossessed as the complainant and his sister-in-law miserably defaulted in payment of instalments, as stipulated in hire purchase agreement. The complainant filed Complaint Case No. 376 of 1998 as a retaliation. It is true that the company moved this court for quashing of the proceeding, which was dismissed. However, the company moved the Hon’ble Supreme Court and after notice to the complainant, by order dated 3.12.2004, passed in special leave to appeal (criminal) No. 2390/03, leave was granted and appeal was admitted and appellant was ordered not to be arrested during pendency of the appeal. The complainant has admitted that petitioner is one of the Directors of the company which financed the vehicle. The sister-in-law of the complainant defaulted in payment of instalment, as stipulated in the agreement, as such the vehicle was repossessed. Subsequently, the vehicle was released in favour of sister of the complainant on assurance that the arrears would be paid. However, the complainant’s sister-in-law defaulted and failed in paying instalments. Consequently, the vehicle was repossessed. The petitioner submits that it is well settled by judgments of this court as well as Apex Court that in matters related to hire purchase agreement, the financier has a right to repossess the vehicle - 3 - in a case of default, and such action will not constitute a criminal offence. It is also submitted that the dispute, if any, would be a civil one as well as one of accounting and would not entail any criminal liability. There seems no dispute to the fact that the complainant’s sister-in-law purchased the vehicle on basis of finance made available by Chandramohan Private Limited, a Finance Company, incorporated under the Companies Act. A hire purchase agreement was entered between the parties. It is an admitted position that petitioner was one of the Directors of the aforesaid company. Furthermore, even as per the complainant a sum of Rs.1,25,000/- had remained to be paid. However according to the petitioner the amount due was bigger. The complainant himself admits in the complaint case that another vehicle was financed to his sister-in-law by the same company. It is the case of petitioner that as there was default in making payment of installment the vehicle was seized. The complainant do not dispute that the Supreme Court has admitted criminal appeal against order of this Court dismissing the quashing application and stayed the arrest of the petitioner. A copy of the order of the Hon’ble Apex Court dated

3.12.2004 has been annexed as Annexure 6 The issue whether re-possession of vehicles by a financier would constitute a criminal offence has been considered by the Apex Court in the case of Trilok Singh & Ors. Vs Satya Deo Tripathi reported in 1979 S.C.C. 850. In the aforesaid case the truck was financed on hire purchase agreement. The agreement permitted re- - 4 - possession of vehicle in the case of default in payment of instalment. The purchaser Satya Deo Tripathi defaulted in making the instalment and consequently the vehicle was repossessed by the financier Trilok Singh and others, which led to institution of a criminal case against them under Sections 395, 468, 465, 471, 412, 120B/34 of the Indian Penal Code. After enquiry summons were issued. The accused financiers moved an application under Section 482 of the Cr.P.C before Allahabad High Court, which was dismissed. Thereafter they moved the Apex Court. Their case in nutshell was that they had committed no offence and the allegation was palpably false. The Hon’ble Apex Court held as follows:- “Even assuming that the appellants either by themselves or in the company of some others went and seized truck on

30.07.1973 the house of respondent they could and did claim to have done so in exercise of their bona fide right of seizing the truck on the respondent’s failure to pay the third monthly instalment in time. It was, therefore, a bondfide civil dispute which led to the seizure of the truck. On the face of the complaint petition itself, the highly exaggerated version given by the respondent that the appellants went to his house with a mob armed with deadly - 5 - weapons and committed the offence of dacoity in taking away the truck was so very unnatural and untrustworthy that it could not take the matter out of the realm of civil dispute”. Similarly in case of Charan Singh Chhada Vs. Sudhir Mehara reported in (2001) 7 S.C.C 417, the Hon’ble Apex Court held that recovery of possession of goods by financier as per terms of hire purchase agreement does not amount to a criminal offence. Such an agreement is an executory contract of sale conferring no right in rem on the hirer until the condition for transfer of the property have been fulfilled. The respondent hirer had defaulted in payment of installment of vehicle specifically provided in the agreement. The financiers were authorized to enter any premises and repossess the vehicle. The Apex Court observed that the High Court has thus erred in dismissing the application under Section 482 of the Cr.P.C. and observed that the dispute ought to be resolved on the basis of terms incorporated in the agreement. In view of the such settled principles of law, this court is of the view the action of the respondent repossessing the vehicles pursuant to hire purchase agreement would not constitue a criminal offence under Section 420 and 406 of the Indian Penal Code. The claim and counter claims in respect of payments made or default, could be best resolved in a civil suit. The dispute is essentially of ascertaining whether parties have adhered to terms of agreement - 6 - itself. The dispute is primarily of a civil nature. A criminal prosecution in backdrop of such facts would be an abuse of process of court. The instant prosecution as such is quashed. Kundan (S. P. Singh, J.)