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1996 DIGILAW 316 (RAJ)

UCO Bank, Chhoti Khatu Distt. Nagaur v. Lala Ram son of Kesa Ram

1996-03-26

P.C.JAIN

body1996
JUDGMENT 1. 1. Both these petitions arise out of the order passed by learned Judicial Magistrate, First Class, Deedwana on 11.11.1994, by which he ordered for delivery of the tractor, trolley and other implements of agriculture to UCO Bank, Chhoti Khatu, District Nagaur (hereinafter referred to as 'the petitioner') relating to a Cr. Case initiated on FIR No. 95/1992 registered at Police Station-Khunkhuna. 2. Material facts relevant for the disposal of these petitions are - Badri Lal and Hanuman obtained a term-loan of Rs. 1,23,800/- from the petitioner on 30.12.1988. According to scheme of re-payment Badri and Hanuman were to pay 18 instalments commencing from the month of June, 1989. After obtaining the above loan, Badri and Hanuman purchased the above tractor (Diesel Engine No. 3S-20644, Chassis No. STF 22613) from M/s. Auto Union, Jodhpur vide bill No. TE 1887 dated 6.2.1989. The above two borrowers executed certain documents in favour of the petitioner including a hypothecation-deed thereby creating the first charge of the above loan on the above vehicle. The relevant conditions regarding alienation of the above vehicle are conditions No. 5 and 6. The hypothecation-deed inter alia provided that the borrowers shall not sell or deal with nor part with the hypothecated goods nor charge or encumber or nor remove nor permit removal of hypothecated goods contrary and/or in violation of any of the instructions given and issued by the petitioner-Bank. This fact of hypothecation was also mentioned in the invoice issued to the borrowers by the M/s. Auto Union, Jodhpur. 3. It is alleged that in pursuance of the above agreement made with the petitioner-Bank, the borrowers did not get the vehicle registered. It is further alleged that above two borrowers sold the above vehicle to Lala Ram (hereinafter referred to as `the non-petitioner') for a sum of Rs. 2,50,000/- on 29.12.1990 and delivered its possession to the latter. When the petitioner came to know about this transaction, it filed a complaint under Section 406, Indian Penal Code against the non-petitioner and others before learned Magistrate, who forwarded the same for investigation Under Section 156(3), Criminal Procedure Code to the Police Station Khunkhuna. 4. The Police registered a case and during investigation seized the above vehicle. After its seizure by the Police, Lal Ram, Badri Lal Hanuman and UCO Bank moved applications before learned Magistrate, praying for delivery of the above vehicle. 5. 4. The Police registered a case and during investigation seized the above vehicle. After its seizure by the Police, Lal Ram, Badri Lal Hanuman and UCO Bank moved applications before learned Magistrate, praying for delivery of the above vehicle. 5. Learned Magistrate, by the impugned order, considered the rival claims of the above applicants and found the petitioner entitled to possession of the vehicle. He, therefore, ordered that the above vehicle may be delivered to the petitioner-Bank on his executing `superdaginama' in the sum of Rs. 1,50,000/- and surety in the like amount to the satisfaction of the court. The court further ordered that the petitioner shall not alienate by sell, mortgage or transfer the vehicle to any person during the pendency of the case and shall also not make any change, addition, alteration in the body, colour or shape of the vehicle in question and also produce the same before the court as and when so ordered. 6. The non-petitioner Lala Ram has filed petition No. 800/94 challenging order of delivery of the vehicle to the petitioner. The petitioner has also filed petition No. 94/1995 making a serious grievance against imposition of above conditions.It may be stated that Badri Lal and Hanuman - the borrowers, have not filed any petition against the order impugned. 7. I have heard learned counsel for either side in both these petitions. Learned counsel for the non-petitioner - Lala Ram has challenged the impugned order on the ground that Lala Ram purchased the vehicle in question from Badri Lal and Hanuman on payment of a consideration of Rs. 2,50,000/-. He had no knowledge that the sellers had executed any hypothecation-deed in favour of the petitioner. The non-petitioner Lal Ram was, therefore, a bonafide purchaser who obtained possession of the vehicle also on payment of full and lawful consideration and he is, therefore, legally entitled to possession of the above vehicle. Learned counsel for the non-petitioner submitted that learned Magistrate, therefore, committed an error in denying his claim and ordering delivery of possession of the above vehicle in favour of the petitioner-Bank. It was also urged by him that at the time of seizure the non-petitioner Lala Ram was in possession of the above vehicle on the basis of a bonafide purchase. It was also urged by him that at the time of seizure the non-petitioner Lala Ram was in possession of the above vehicle on the basis of a bonafide purchase. If there was any outstanding liability against the sellers, the proper recourse for the petitioner-Bank was to pursue a civil remedy on the basis of alleged hypothecation-deed. Learned counsel for the non-petitioner relied upon decisions in Heera Lal v. State of Raj. & Ors., 1988 CrLR (Raj.) 294 and Panney Singh v. State of Raj., 1985 RCC 297 . 8. Learned counsel for the petitioner-Bank has supported the impugned order to the extent delivery of possession was given to it by the court but he objects to conditions imposed by the learned Magistrate on the ground that trial of the case may take long time and if the vehicle is not allowed to be alienated its condition may substantially deteriorate and, when the case is decided the vehicle even if sold would not fetch reasonable price. As a result of above conditions, the vehicle will lie idle and all the parties would consequently suffer on account of deterioration to the vehicle. Learned counsel has, therefore, prayed that the conditions imposed by the learned Magistrate may be waived and the petitioner may be allowed to dispose of the vehicle so that it can fetch reasonable price which may be applied to liquidate the loan obtained by Badri Lal and Hanuman. Learned counsel has supported his arguments by relying upon decisions in Yausuff Maraka v. State of Mysore, AIR 1969 Mysore 203 , Bank of Bihar v. State of Bihar, AIR 1979 SC 1210 and Radhey Shyam v. Laxmi Narain, 1988 (2) RLW 611 . 9. It may be stated that Section 457 does not call for determination of the right of the claimants finally. A seizure of an article is only an act for the benefit of rightful claimant, hence, the court is not concerned to decide title over the seized article(s) but has only to consider as to who was in lawful possession of the article (tractor, in the instant case) at the time of seizure and who is entitled to its custody. 10. In the instant case, there is no dispute as regard the facts. 10. In the instant case, there is no dispute as regard the facts. Badri Lal and Hanuman obtained a term-loan from the petitioner-Bank and executed certain documents in favour of the petitioner-Bank, including a hypothecation-deed whereby the above borrowers undertook not to alienate the property in any way without consent of the petitioner-Bank. They also agreed that re-payment of loan will the first charge and the vehicle. It is further not disputed that above two borrowers sold the above vehicle to Lala Ram on payment of a consideration of Rs. 2,50,000/- and possession was delivered to the latter. 11. It is very important to take note of two very important facts. Firstly, the vehicle was not got registered by any of the parties though the above two borrowers promised to get it registered immediately and, secondly-Lala Ram was aware that the sellers namely-Badri Lal and Hanuman owed a loan to the petitioner-Bank. This fact was mentioned in the agreement which the above two sellers executed in favour of Lala Ram on 29.12.1990. Hence, the non-petitioner Lala Ram cannot plead that he was a bona fide purchaser having no notice of the Bank loan in respect of the above vehicle. Since Lala Ram was aware of the loan which the sellers owed to the petitioner, it can safely be inferred that he must also be aware of the fact that sellers must have executed a hypothecation-deed in favour of the petitioner-Bank. If it is held that Lala Ram was aware of the loan due from the sellers to the petitioner-Bank, he must also presumed to know that the sellers were not entitled to sell the same to the former. I am, therefore, not inclined to accept the contention that since Lala Ram was a bona fide purchaser for lawful consideration, he was best entitled to the custody of the vehicle. Since the loan was due to the petitioner-Bank and the vehicle was not got registered the learned Magistrate did not commit any jurisdictional error in ordering the custody of the vehicle to the petitioner-Bank. 12. Regarding the conditions the learned Magistrate imposed while ordering delivery of the vehicle in favour of the petitioner-Bank, it may be stated that the first impediment will be the lack of registration of the vehicle. It is unfortunate that none of the parties cared to get the vehicle registered. 12. Regarding the conditions the learned Magistrate imposed while ordering delivery of the vehicle in favour of the petitioner-Bank, it may be stated that the first impediment will be the lack of registration of the vehicle. It is unfortunate that none of the parties cared to get the vehicle registered. On account of want of registration none can ply the vehicle in view of provisions of the Motor Vehicles Act. It is also important to mention that disposal of the case may take some time and the vehicle lying idle may deteriorate and when the trial is over it may not fetch any reasonable price. In these circumstances, I deem it proper to instruct the learned Magistrate to explore possibility from the concerned parties after notice to the parties for the disposal of the vehicle and if all the parties agree for the disposal of the vehicle, he may order for the same and chalk out a scheme for auction of the vehicle. The sale proceeds thus received may be got deposited in any nationalised Bank under a Fixed Deposit Scheme so that during the pendency of the case it may earn interest. He should also issue notices to each party and make an appropriate order for getting the vehicle registered. I leave it to his discretion as to in whose name the registration is to be done. It is in the interest of the parties that the vehicle may not lie either in the court premises or in the Police 13. With above observations and directions, the petition filed by UCO Bank (No. 94/1995) stands disposed of and that of Lala Ram (No. 800/1994) stands dismissed.Petition Rejected with directions. *******