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Madhya Pradesh High Court · body

2008 DIGILAW 1381 (MP)

Rampal Singh v. State of M. P.

2008-11-26

INDRANI DATTA

body2008
ORDER 1. Petitioner has filed this petition under section 482 of CrPC for relaxation of condition No.1 imposed in the order dated 20.8.2008 passed by V Special Session Judge, Gwalior in Case No. l5 of 2008 by which, the petitioner is directed to deposit the amount of entire arrear within a period of one month. 2. Subject-matter of this petition is that the petitioner is registered owner of the truck No.MP07/HB-0816. The truck was financed by respondent No.1 Tata Motors. Loan amount was to be paid by the petitioner by way of insta1ments. Notice viz EX.P-3 was issued by the respondent No.1 then last instalment of Rs.20,000/- was deposited by the petitioner on 24.12.2008 viz. Annexure P-4 and only Rs.46,570/- remained to be deposited. Thereafter, the truck was seized when it was in transit by some agents of respondent No.2. Petitioner then filed a complaint in the Court of Y Special Session Court who directed for investigation under section 156(3) of CrPC Police Bahodapur, registered Crime No.77 of 2008 for offenses punishable under section 392, 323, 406, 420, 468 and 471 of IPC and u/s 11, 13 of MPDYPK Act viz. Annexure P-2 against Yatish Tripathi Collection Manager of Tata Finance and another. The truck was seized by the police then petitioner and respondent No.2 both filed an application in the Court of Special Sessions Judge for delivery of possession of the truck. Special Sessions Judge, Gwalior repelled the claim of the respondent No.2 and directed release of truck in favour of the petitioner imposing certain conditions as under: (i) Petitioner Rampal Singh should deposit all remaining arrears of instalments due upto 20.8.2008 and in future, he will regularly deposit due instalments; (ii) He will not make any change or variation in vehicle. Nor transfer or hand over it's possession to anyone else; (iii) Whenever required, he will produce vehicle with relevant documents; (iv) All the conditions shall be fulfilled by the petitioner within one month in default of which, respondent No.2 Tata Motors Ltd. will be entitled to file application for delivery of possession. 3. Learned counsel for the petitioner contended that procedure adopted by the bank for removing truck from possession of the petitioner is deprecated. The bank should have resorted to the procedure recognized in law to take possession of the vehicle in case, the petitioner may have committed default in payment of instalments. 4. 3. Learned counsel for the petitioner contended that procedure adopted by the bank for removing truck from possession of the petitioner is deprecated. The bank should have resorted to the procedure recognized in law to take possession of the vehicle in case, the petitioner may have committed default in payment of instalments. 4. Learned counsel for the petitioner drew my attention to the decision in case of ICICI Bank Ltd. v. Prakash Kaur and others [ (2007)2 SCC 711 ], in that case, it is held that for recovery of loan/credit card dues/security, etc. existing system of engaging thugs/hooligans/gangsters on contract, for such recovery by banks strongly deprecated. Practice of hiring recovery agents, who are muscle man, is deprecated and needs to be discouraged. Banks should resort to procedure recognized by law to take possession of vehicles in cases where borrower has committed default instead of resorting to strong arm tactics. 5. Relying on above citation, it is further contended by learned counsel for the petitioner that the truck was seized by police on his report when respondent NO.2's hired agents robbed his truck. Then he has to follow the long legal procedure to get the possession of truck from Court. After furnishing necessary surety and bond as directed by the Court, possession of the truck was delivered to him. At that time, truck was in worst condition. Petitioner has spent near about Rs.l,80,000/- towards maintenance, battery and tyre, etc., therefore, he is not liable to pay instalments due and interest for the period commencing from 28.1.2008 to 2.9.2008 during which, he was not in possession of the truck. So necessary direction in this respect be issued because, the respondent No.2 is wholly responsible for all this because of respondent NO.l' s hired agent, the truck was forcibly taken from lawful possession of the petitioner and therefore, criminal proceedings were to be initiated and he was dispossessed from the possession of the truck. 6. Learned counsel for the respondent No.2 on the other hand submitted that all the amount of arrears due upto 20.8.2008 was to be deposited by the petitioner. The petitioner has committed breach of Court's direction, petitioner has submitted supurdginama in the Court that he will deposit all the due arrears in respondent company and future instalments will be deposited by him regularly. The petitioner has committed breach of Court's direction, petitioner has submitted supurdginama in the Court that he will deposit all the due arrears in respondent company and future instalments will be deposited by him regularly. It is submitted by learned counsel for the respondent No.2 that the petitioner is bound by his undertaking and direction of the Court. This petition is not maintainable unless condition imposed by the Court in order dated 20.8.2008 is complied with. 7. Considered the rival contentions of learned counsel for the parties. Recently, Hon 'ble apex Court made following observations in the case of ICICI Bank v. Shanti Devi Sharma and others [2008(III) MPJR (SC) 346 (Paras 11 to 14)], as under: "The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("SARFAESI") and the Security Interest (Enforcement) Rules, 2002 ("SIER") framed there under provide some of the procedures by which security interests may be recovered. In addition to SARFAESI and SIER, the Reserve Bank of India ("RBI") has promulgated guidelines on the subject. The RBI guidelines on Fair Practices Code for Lenders dated 5.5.2003 provides at (v) (c) that: "In the matter of recovery of loans, the lenders should not resort to undue harassment viz. persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans, etc.". A more comprehending version of these guidelines was recently released on April 24, 2008. The guidelines expressly reference the 5.5.2003 guidelines at (i) (x) with regard to the methods by which recovery agents collect or security interests. In addition, the April 24, 2008 guidelines further referred paragraphs 6 of the "Code of Bank's Commitment to Customers" (BCSBI Code) pertaining to collection of dues. The BCSBI Code at para 6 inter alia provides: "All the members of the staff or any person authorized to represent our bank in collection or/and security repossession would follow the guidelines set out below: (1) You would be contracted ordinarily at the place of your choice and in the absence of any specified place at the place of your residence and if unavailable fit your residence, at the place of business/occupation. (2) Identity and authority to represent would be made known to you at the first instance. (3) Your privacy would be respected. (4) Interaction with you would be in a civil manner. (2) Identity and authority to represent would be made known to you at the first instance. (3) Your privacy would be respected. (4) Interaction with you would be in a civil manner. (5) Normally our representatives will contact you between 0700 hours and 1900 hrs. unless the special circumstances of your business or occupation require otherwise. (6) Your requests to avoid calls at a particular time or at a particular place would be honored as far as possible. (7) Time and number of calls and contents of conversation would be documented. (8) All assistance would be given to resolve disputes or differences regarding dues in mutually acceptable and in an ordering manner. (9) During visits to your place for dues collection, decency and decorum would be maintained. (10) Inappropriate occasions such as bereavement in the family or such other calamitous occasions would be avoided for making calls/ visits to collect dues. As noted above, this Code as well as others has been incorporated into the April 24, 2008 guidelines: "(ix) A reference is invited to (a) Circular DBOD. Leg. No. BC 104/9.7.2007/2002-03 dated May 5, 2003 regarding guidelines on Fair Practices Code for Lenders; (b) Circular DBOD No. BP.40/21.4.158/ 2006-07 dated November 3, 2006 regarding outsourcing of financial services and (c) Master Circular DBOD.FSD.BC.17/24.1.0 11/200708 dated July 2, 2007 on Credit Card Operations. Further, a reference is also invited to paragraph 6 of the 'Code of Bank's Commitment to Customers' (BCSB I Code) pertaining to collection of dues. Banks are advised to strictly adhere to the guidelines/code mentioned above during the loan recovery process". (8) RBI has expressed its concern about the number of litigations filed against the banks in the recent past for engaging recovery agents who have purportedly violated the law. In the letter accompanying its April 24th, 2008 guidelines on Engagement of Recovery Agent, RBI stated: "In view of the rise in the number of disputes and litigations against banks for engaging recovery agents in the recent past, it is felt that adverse publicity would result in serious reputational risk for the banking sector as a whole". RBI has taken this issue seriously, as evidenced by the penalty that bank could face if they fail to comply with the guidelines. The relevant portion of the guidelines formulated by RBI is set out as under: "Banks, as principals, are responsible for the actions of their agents. RBI has taken this issue seriously, as evidenced by the penalty that bank could face if they fail to comply with the guidelines. The relevant portion of the guidelines formulated by RBI is set out as under: "Banks, as principals, are responsible for the actions of their agents. Hence, they should ensure that their agents engaged for recovery of their dues should strictly adhere to the above guidelines and instructions, including the BCSBI Code, while engaged in the process of recovery of dues. Complaints received by Reserve Bank regarding violation of the above guidelines and adoption of abusive practices followed by banks' recovery agents would be viewed seriously. Reserve Bank may consider impositing a ban on "a bank from engaging recovery agents in a particular area, either jurisdictional or functional, for a limited period. In case of persistent breach of above guidelines, Reserve Bank may consider extending the period of ban or the area of ban. Similar supervisory action could be attracted when the High Courts or the Supreme Court pass strictures or impose penalties against any bank or its Directors/Officers/Agents with regard to policy, practice and procedure related to the recovery process. It is expected that bank would, in the normal course ensure that their employees or agents also adhere to the above guidelines during the loan recovery process". We deem it appropriate to remind the banks and other financial institutions that we live in a civilized country and are governed by the rule of law." In the above observation of law, contention of learned counsel for the petitioner cannot be said to be improper and cannot be ignored and that even though in default of instalment so made by the petitioner, it is not appropriate on the part of respondent No.2 to take forcible possession of vehicle. 9. So far as delivery of possession of vehicle is concerned in this regard, reading of section 457 of CrPC would also be relevant which reads as under:"457. Procedure by police upon seizure of property. 9. So far as delivery of possession of vehicle is concerned in this regard, reading of section 457 of CrPC would also be relevant which reads as under:"457. Procedure by police upon seizure of property. -- (I) Whenever the seizure of property by any police office is reported to a Magistrate under the provisions of this Code, and such property is not produced before a criminal Court during an inquiry or trial, the Magistrate may l make such order as he thinks fit respecting the disposal of such property or the delivery of such property to the person entitled to the possession thereof, or if such person cannot be ascertained , respecting the custody and production of such property and production of such property. (2) If the person so entitled is known, the Magistrate may order the property to be delivered to him on such conditions (if any) as the Magistrate thinks fit and if such person is unknown, the Magistrate may detain it and shall, in such case, issue a proclamation specifying the articles of which such property consists, and requiring any person who may have a claim thereto, to appeal before him and establish his claim within six months from the date of such proclamation." In this way, plain reading of section 457 of CrPC it is apparent that while deciding application under section 457 of CrPC with respect to interim custody of vehicle, considering the facts and circumstances of the case, the Court has to pass appropriate orders and custody is to be given to the registered owner of the vehicle on furnishing requisite security or bond/supurdginama. Whether any amount of instalment or interest is due or not, is not to be decided. 10. Considering the observations of Hon'ble apex Court in various citations and also considering the facts and circumstances of the case, so far as condition No.1 imposed by Special Judge in order dated 20.8.2008 in Case No.15 of 2008 is concerned, while dealing with the application under section 457 of CrPC, it was not necessary at all to impose condition No.1 whether any instalments are due from petitioner or not as it is purely a civil matter. If the instalments are due, then the respondent No.2 can take civil recourse for recovery of same. Therefore, imposition of condition No.1 is totally improper and depreciable. 11. If the instalments are due, then the respondent No.2 can take civil recourse for recovery of same. Therefore, imposition of condition No.1 is totally improper and depreciable. 11. For the foregoing reasons, condition No.1 as imposed by learned V Special Session Judge, is improper and it is hereby deleted. In this way, petition of the petitioner is disposed of.