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Andhra High Court · body

2006 DIGILAW 411 (AP)

P. v. S. S. R. Anjaneyulu VS State Of A. P.

2006-03-22

G.YETHIRAJULU

body2006
( 1 ) THIS criminal petition is filed by accused no. 2 against the order of the judicial First class Magistrate, Mahboobabad, taking cognizance of the offence in C. C. (SR) no. 7944 of 2003. ( 2 ) THE second respondent filed a complaint under Sections 341, 323, 379 and 506 I. P. C. against the petitionerand others. The learned magistrate forwarded the same to the concerned police for registration of the crime and investigation. The police after investigation, laid charge-sheet against the petitioner and others. The petitioner being aggrieved by the prosecution, preferred this revision petition challenging that taking possession of the vehicle does not amount to an offence. Therefore, the prosecution is liable to be quashed. ( 3 ) THE learned counsel for the petitioner submitted that the petitioner is a Manager in mahindra Financial Services Limited and accordingly, he purchased a vehicle and hired the same to the complainant with an understanding that he shall continue to pay hire charges in instalments and with a further understanding that the said person becomes the owner after completing the payment of all the instalments, but the hirer committed default in payment of instalments. Therefore, as per the terms of the hire purchase agreement, the petitioner seized the vehicle. Therefore, the driver of the vehicle filed a complaint as if the vehicle was committed theft by the petitioner and others. The learned counsel submitted that so long as the ownership of the vehicle is not with the hirer, he is not entitled to continue the possession unless and until he pays the total instalments and get the registration certificate transferred in his name. He further submitted that since the vehicle was given only on hire basis, he cannot in any way claim that he is the owner of the vehicle and as the ownership continues to be with the financier, the petitioner is entitled to seize the vehicle. The learned counsel for the petitioner in support of his contention cited several decisions by contending that the prosecution cannot be maintained. In Sundaram Finance Limited v. The State of Kerala and another the Supreme court observed as follows:"the dealer or the financier continued to be the owner till the terms of the agreement were fully complied with by the customer and the option to purchase the same was exercised by him. In Sundaram Finance Limited v. The State of Kerala and another the Supreme court observed as follows:"the dealer or the financier continued to be the owner till the terms of the agreement were fully complied with by the customer and the option to purchase the same was exercised by him. If the terms were not complied with, the dealer or the financier, as the case may be, could terminate the agreement and take back the goods. In such a transaction, the common intention of the dealer, the financier and the customer was that the transaction should take the form of a hire purchase agreement which would become a sale on the compliance of the terms of that agreement. " ( 4 ) IN K. A. Mathai Alias Babu and another v. Kora Bibbikutty and another the Supreme court held that the complainant defalcating in payment of instalment to the financier under a transaction of bus purchased by A-2 under a hire purchase agreement, the financier taking possession of the bus with the help of A-1 and A-2, the offence of theft is not made out. ( 5 ) IN Trilok Singh v. Satya Deo the supreme Court held that when a vehicle is seized, in exercise of bona fine right, on the respondents failure to pay the third monthly instalment in time, it is a bona fide civil dispute, which led to seizure of the truck and initiate criminal proceedings amounts to abuse of process of the Court and deserved to be quashed. ( 6 ) IN Charanji Singh Chadha andothers v. Sudhir Mehra the Supreme Court held that under hire purchase agreement, the hirer is simply paying forthe use of the goods and for the option to purchase them. The finance charge, representing the difference between the cash price and the hire purchase price, is not interest but represents a sum, which the hirer has to pay for the privilege of being allowed to discharge the purchase price of goods by instalments. The default in payment of instalments by hirer and taking possession of the vehicle by financier as per the terms of the agreement, criminal proceedings against the financier for committing criminal breach of trust under cheating and theft of vehicle are liable to be set aside. The default in payment of instalments by hirer and taking possession of the vehicle by financier as per the terms of the agreement, criminal proceedings against the financier for committing criminal breach of trust under cheating and theft of vehicle are liable to be set aside. ( 7 ) IN T. Srinivasa Rao v. The State of A. P. and another a learned Single Judge of andhra Pradesh High Court held that the motor vehicles taken in a case where the financier seized the vehicle through hirer for default in payment of instalments, it was held that where the criminal proceedings ought to have been quashed by the High Court in exercise of its inherent powers, the dispute raised by the respondent was purely of a civil in nature, the initiation of criminal proceedings for breach of terms of the hire purchase agreement is clearly an abuse of process of the Court. Therefore, the criminal proceedings initiated against the petitioner are not maintainable and are liable to be quashed. ( 8 ) IN the light of the above judgments, the prosecution covered by C. C. S. R. No. 7944 of 2003 on the file of the Judicial First Class magistrate, Mahaboobabad is quashed.