Patna High Court
Case Details
IN THE HIGH COURT OF JUDICATURE AT PATNA Criminal Miscellaneous No.37594 of 2011 ====================================================== 1. Nawal Kishore Sinha @ Nawal Kishore, S/O Late Kedar Nath Prasad, Manager, Tata Motors Finance Limited, Work Shop and Show Room, Banshi Sadan, Chandchaura, P.S.- Civil Line, District- Gaya 2. Sanjay Kumar, S/O Brij Nandan Prasad, Registered Agent, Tata Motors Finance Limited, Work Shop and Show Room, Banshi Sadan, Chandchaura, P.S.- Civil Line, District- Gaya 3. Kaushal Mishra @ Kaushal Kumar Mishra, S/O Ganga Prasad Dubey, Resident Of Village - Jalalpur, P.S.- Mau (Tekari), District- Gaya, Presently Posted as Registered Agent, Ramnandi Automobiles Private Limited, Banshi Sadan, Chandchaura, P.S.- Civil Line, District- Gaya Versus .... .... Petitioner/s 1. The State Of Bihar 2. Nirbhay Kumar, S/O Shyam Bihari Singh, Resident of Village- Bara, Police Station- Kurtha, District- Arwal .... .... Opposite Party/s ====================================================== Appearance : For the Petitioner/s : Mr. Manish Kumar No.2, Advocate. For the State : Mr. Rajesh Kuamr, A.P.P. ====================================================== CORAM: HONOURABLE MR. JUSTICE SHIVAJI PANDEY ORAL ORDER 5 09-01-2013 Heard learned counsel for the petitioners and learned counsel for the State. 2. This application has been filed for quashing the order dated 9.6.2010 passed in Complaint Case No.1084 of 2009, Tr. No.1917 of 2011 by the Judicial Magistrate, Ist Class, Jehanabad by which he has taken cognizance against the petitioners for the offence under Sections 379/34 of the Indian Penal Code. 3. From the complaint petition it appears that the
Legal Reasoning
Patna High Court Cr.Misc. No.37594 of 2011 (5) dt.09-01-2013 2 complainant wanted to purchase four wheeler contacted accused nos. 1 and 2. The same was financed and agreed to pay Rs. 3, 55,000/- at the rate of 10% interest and in total Rs.4,83,033/- in 35 instalmetns and it was required to pay additional amount of Rs.22,000/-. Accordingly finance was made under hypothecation, accordingly the complainant purchased a D-Van vehicle vide registration no. BR-259922. It has been stated that while he was going to Obra from Aurangabad at Aganpur accused nos. 2, 3 and 4 along with unknown persons intercepted the vehicle, evicted the complainant and went away from that place. When the complainant approached the local police station, the Officer In-charge of the police station asked the complainant to contact the Finance Company which had granted loan whereupon the complainant established contact and they on one pretext or other did not return the vehicle in question. Ultimately the complainant gave legal notice to the Company but it did not give any result.
Legal Reasoning
4. Learned counsel for the petitioners submits that the petitioners are employees of the Tata Motor Finance Company, Gaya and at the time of giving loan the complainant had entered into loan agreement under Patna High Court Cr.Misc. No.37594 of 2011 (5) dt.09-01-2013 3 hypothecation. According to the terns of the agreement in case of default the Tata Finance Company was authorized to take possession, seize, recover, appoint a receiver/manager, remove the asset from its place of standing. He further submits that as the complainant was defaulter in payment of the loan amount in pursuance of the agreement the petitioners on the instruction of the Company took possession of the same. He has further submitted that in view of the terms of the agreement it cannot be said to be a criminal offence at best the complainant can recover the vehicle by invoking the civil jurisdiction not by way of filing of the criminal case. In support of his contention he has relied on the judgments in the case Sardar Trilok Singh and others Vs. Satya Deo Tripathi, reported in (1979) 4 SCC 396=A.I.R. 1979 SC 850 A.I.R. 1979 SC 850, Charanjit Singh Chadha and others Vs. Sudhir Mehra, reported in (2001) 7 SCC 417 and Orix Auto Finance (India) Ltd. Vs. Jagmander Singh and another, reported in (2006) 2 SCC 598 and submitted that in view of the aforesaid judgments of the Hon’ble Supreme Court and as per terms of the agreement the financer has every right to take possession of the property which has been hypothecated. It will be relevant to quote paragraph 18(a) of the agreement: Patna High Court Cr.Misc. No.37594 of 2011 (5) dt.09-01-2013 4 “ 18.(a) If one or more of the events specified in Clause 17 above occurs (“Event of Default”), the Lender by notice in writing to the Obligors, declare the Loan to the immediately due and payable (whereupon the same shall become due and payable together) and forthwith recall the Loan together with all interest and other moneys payable by the Obligors pursuant to this Loan Agreement, and in default of such payment enforce the charge created in terms of this Loan Agreement. Further, the lender shall be entitled at all times, take possession, seize, recover, appoint a receiver/manager, remove the Asset from its place of standing, and also be entitled , on such terms as may be deemed fit by the Lender, without the intervention of court or authority, to sell the Asset by public auction or by private contract at the best available prices according to the prevailing market condition including as regards repossessed vehicles/assets realize its claims in respect of the Loan, without being bound or being liable for any loss/losses that the Obligors may suffer due to such action and without prejudice to the Lender’s other rights and remedies as stated herein or otherwise in law entitled to.” 5. The Hon’ble Supreme Court in the case of Sardar Trilok Singh (supra) has held that it was not a case where any processes ought to have been directed to be issued against any of the accused. On the contrary it is well settled principles of law it was a very suitable case where the criminal proceeding ought to have been quashed by the High Court in exercise of inherent power. The dispute raised by the respondent was purely of a civil nature even assuming the Patna High Court Cr.Misc. No.37594 of 2011 (5) dt.09-01-2013 5 facts stated by him to be substantially correct. Money must have been advanced to him and his partner by the financer on the basis of some terms settled between the parties. Even assuming that the agreement entered on March 29, 1973 was duly filled up and the signature of the complainant was obtained on a blank form, it is to be noticed that the amount of the two monthly installments admittedly paid by him was to the tune of Rs.3566 exactly at Rs. 1783 per month. It has further been held that even signature obtained of a person on blank sheet of papers by itself will not an offence of forgery. It becomes an offence when the paper is fabricated into a document of the kind which attracts the relevant provisions of the Penal Code making it an offence or when such a document is used as a genuine document and the court considering the case is also related to taking possession of the vehicle was quashed. 6. Similar is the situation in the case of Charanjit Singh Chadha (supra) where the Hon’ble Supreme Court was considering the relationship of financer and borrower in a hire purchase agreement the Hon’ble Supreme Court held, in case of default, Financer can recover the goods in hypothecation. It will be relevant to quote paragraph nos. 8, Patna High Court Cr.Misc. No.37594 of 2011 (5) dt.09-01-2013 6 9, 10, 12, 14 and 16 of the aforesaid judgment. the terms of “ 8. In K.L. Johar & Co. v. CTO this Court took the view that a hire-purchase agreement has two elements: (1) element of bailment; and (2) element of sale, in the sense that it contemplates an eventual sale. The element of sale fructifies when the option is exercised by the intending purchaser after fulfilling the agreement. When all the terms of the agreement are satisfied and the option is exercised a sale takes place of the goods which till then had been hired. 9. Similar views were expressed earlier in Instalment Supply (P) Ltd. v. Union of India and reiterated in Sundaram Finance Ltd. v. State of Kerala. 10. The agreement executed by the parties in this case also is to the effect that the hirer would not become the owner of the property until he pays the entire instalments. A copy of the agreement is produced as Annexure P-1 wherein the appellants the are referred respondent as is specifically stated that the first party would be the absolute owner of the vehicle and the respondent second party agreed to pay all the the instalments punctually. Clause 7 of agreement says that the hirer may, at any time before the final payment under the hire-purchase agreement falls due and after giving the owners not less than fourteen days' notice in writing of his intention to do so and redelivering the vehicle to the owners at their office, terminate the hire- purchase agreement. Clause 8(viii) gives a right to the owner to repossess the vehicle in case of default by the hirer. Clause 9(ii) gives the owner an irrevocable licence to enter any building, premises or place where the vehicle may be or is supposed to be for the purpose of inspection, repossession or attempt to repossess the vehicle and the owner of the vehicle will not be liable for any civil or criminal action at the instance of the hirer. It is also made clear that the hirer would be the first party and it the second party and to as Patna High Court Cr.Misc. No.37594 of 2011 (5) dt.09-01-2013 7 liable for all the expenses of the owner in obtaining repossession or attempting to obtain repossession of the vehicle. the learned Single Judge, 12. Before the respondent had contended that the vehicle was in the possession of the respondent and it was taken out of his custody without his consent and therefore, the offence of theft is made out. This plea is also without any basis as the appellants have taken repossession of the vehicle in exercise of their right under the agreement. There may be instances where the owner of the goods may commit theft of his own goods. Illustration (k) of Section 378 IPC, which is an instance of such a theft, is to the following effect: “(k) Again, if A, having pawned his watch to Z, takes it out of Z's possession without Z's consent, not having paid what he borrowed on the watch, he commits theft, though the watch is his own property inasmuch as he takes it dishonestly.” 14. It is also to be noticed that learned author R.M. Goode, in his book Hire Purchase Law & Practice (2nd Edn.) has observed as follows at p. 846: “It would seem that so long as the hirer is in possession of the goods they belong to him for the purpose of the Act (the Theft Act, 1968) even though his possession is unlawful e.g. because the hire-purchase agreement has come to an end. If to the owner has an enforceable right possession then he will not be guilty of theft in seizing the goods if he knew of his legal rights since he will not be acting dishonestly but will have taken the goods in the well-founded belief that he has a right to resume possession.” 16. In K.A. Mathai v. Kora Bibbikutty the bus was obtained by the complainant on a hire- purchase agreement. The complainant paid only part of the consideration and defaulted in paying taken the the vehicle was instalments and Patna High Court Cr.Misc. No.37594 of 2011 (5) dt.09-01-2013 8 possession of by the financier and at that time, both the first accused who had driven away the bus from the possession of the complainant and the second accused were present in the bus. They were prosecuted for the offence punishable under Section 379 read with Section 114 IPC. This Court holding that the bus was taken away at the instance of the financier and the accused had not committed any offence observed as under: (SCC pp. 212-13, para 3) “Though we do not have the advantage of reading the hire-purchase agreement, but as normally drawn it would have contained the clause that in the event of the failure to make payment of instalment/s the financier had the right to resume possession of the vehicle. Since the financier's agreement with A-2 contained that clause of resumption of possession, that has to be the read, agreement, as part of the sale agreement between A-2 and these circumstances, the financier took possession of the bus from the complainant with the aid of the appellants. It cannot thus be said that the appellants, in any way, had committed the offence of theft and that too, with the requisite mens rea and requisite dishonest intention.” if not specifically provided the complainant. It is, in in 7. Same principle has been endorsed by the Hon’ble Supreme Court in the case of Orix Auto Finance (India) Ltd. (supra) where similar type of question arose and the court found recovery of the vehicle in the event of default in payment of the loan amount will not push the financer to the criminal offence rather it is a civil wrong can be settled by filing a civil suit. Patna High Court Cr.Misc. No.37594 of 2011 (5) dt.09-01-2013 9 8. In the present case the position is the same as borrower and financer entered in to an loan-cum- hypothecation-cum, guarantee agreement where both parties agreed, in case of default, Financer has right to take possession of good and this case is covered by the aforesaid judgments. The order of cognizance dated 9.6.2010 is set aside and accordingly this application is allowed. Vinay/- (Shivaji Pandey, J)