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Madhya Pradesh High Court · body

2004 DIGILAW 1034 (MP)

Lalit Mittal v. Adesh Kumar Gupta

2004-12-17

S.L.JAIN

body2004
ORDER S.L. Jain, J. 1. Invoking extra-ordinary jurisdiction of this Court under section 482 of the Code of Criminal Procedure, petitioners have filed this petition for quashing the proceedings in Criminal Case No. 724/02, pending in the Court of JMFC, Jabalpur instituted on a private complaint filed by the respondent. 2. Facts leading to the registration of the case pithily narrated are as under:- (i) Petitioner No. 1 is the Director of M/s Trackway Securities and Finance Pvt. Ltd. (hereinafter referred to as 'Company') and petitioner No. 2 is the agent of the Company. Respondent entered into the agreement of Hire Purchase with the Company. In the Hire Purchase agreement it was agreed upon by respondent that the creditor Company will have right to terminate the agreement and it will be entitled to retake and recover the possession of the vehicle. The respondent became a habitual defaulter in the payment of the instalment of loan to the petitioner and repeatedly violated the terms and conditions of the agreement. Since the borrower had not paid the amount due to the petitioner under Hire Purchase Scheme, the latter, exercising its right of seizure to retake and repossess the vehicle. Accordingly, applicants seized the vehicle in question. An information regarding seizure of vehicle was given to police Station, (ii) It is also alleged by the petitioners that borrower has maliciously filed a complaint. (iii) It is the case of the petitioners that the dispute is of civil nature and no case is made out against the petitioners, therefore, complaint registered against the petitioners be quashed. 3. I have heard Shri Ashok Anand, learned counsel for the petitioners. None appeared for the respondent. 4. Petitioners have filed copies of Insurance policy, notices issued by the Company to the respondent, copy of bills of Yadav Consultancy and seizure memo etc. 5. A perusal of the above referred documents reveals that the issue between the parties relates to the purchase of the vehicle and the same is purely of civil nature. Money was advanced to the respondent by the Financer. Even assuming that the petitioners have seized the vehicle, it was claimed to have been done in exercise of bona fide right of seizing the vehicle on borrower's failure to pay the instalments in time. 6. Money was advanced to the respondent by the Financer. Even assuming that the petitioners have seized the vehicle, it was claimed to have been done in exercise of bona fide right of seizing the vehicle on borrower's failure to pay the instalments in time. 6. In K. A. Mathai @ Babu and Another v. Kora Bibikutty and Another, 1996 (7) SCC 212 , the Apex Court has observed thus :- Recovery of possession of goods by owner-financer as per terms of the hire-purchase agreement, does not amount to criminal offence because such an agreement is an executor contract of sale, conferring no right in rem on the hirer until the conditions for transfer of the property to him, have been fulfilled. 7. In Charanjit Singh Chadha and others v. Sudhir Mehra, 2001 (7) SCC 417 , the Apex Court has observed thus :- (16) In K.A. Mathai v. Kora Bibbikutty, (supra) the bus was obtained by the complainant on a hire-purchase agreement. The complainant paid only part of the consideration and defaulted in paying the instalments and the vehicle was taken possession of by the financer 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 of the Indian Penal Code. This Court holding that the bus was taken away at the instance of the financer 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 financer had the right to resume possession of the vehicle. Since the financer's agreement with A-2 contained that clause of resumption of possession that has to be read, if not specifically provided in the agreement, as part of the sale agreement between A-2 and the complainant. It is, in these circumstances, the financer 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. It is, in these circumstances, the financer 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. (17) The hire-purchase agreement in law is an executory contract of sale and confers no right in rem on the hirer until the conditions for transfer of the property to him have been fulfilled. Therefore, the repossession of goods as per the term of the agreement may not amount to any criminal offence. The agreement (Annexure P-l) specifically gave authority to the appellants to repossess the vehicle and their agents have been given the right to enter any property or building wherein the motor vehicle was likely to be kept. Under the hire-purchase agreement, the appellants have continued to be the owners of the vehicle and even if the entire allegations against them are taken as true, no offence was made out against them. The learned Single Judge seriously flawed in his decision and failed to exercise jurisdiction vested in him by not quashing the proceedings initiated against the appellants. We therefore, allow this appeal and set aside the impugned judgment. The complaint and any other proceedings initiated pursuant to such complaint are quashed. 8. The cement alleged to have been loaded in the vehicle in question has been handed over to the owner of the cement. Therefore, in the facts and circumstances of the case, I find that the possession of the vehicle was taken by the financer as per terms of the hire-purchase agreement. The act does not amount to a criminal offence and as such, the prosecution against the financer or a person who seized the vehicle in question on the instruction of the financer for the offences punishable under sections 420, 379, 391, 506 and 294/34 of the Indian Penal Code is liable to be quashed in exercise of inherent powers. 9. In the result, the petition is allowed. The proceedings in Criminal Case No. 724/2002, (Lalit Mittal and Another v. Adesk Kumar Gupta), pending in the Court of JMFC, Jabalpur are hereby quashed.