I.A. Ansari, J. :- 1. The petitioner is a company, incorporated under the Companies Act 1956, and is engaged in the business of manufacturing and financing of commercial as well as private ve­hicles. By virtue of two separate Loancum-Hypothecation-cum-Guarantee agreements, one entered into on 07.02.2005 and the other on 16.09.2006, the petitioner company fi­nanced purchase of two Tata trucks by the opposite party No. 1 in her own name. Pur­suant to the agreement, dated 07.02.2005, aforementioned, the loan amount given to the opposite party No. 1 by the petitioner com­pany was Rs. 4,56,000.00 payable by the opposite party No. 1 in 46 monthly installments; whereas the loan amount, bor­rowed by the opposite party No. 1 from the petitioner company, pursuant to the agree­ment, dated 16.09.2006, was Rs. 4,67,000.00, the loan being payable in 45 monthly installments. While the first agreement aforementioned led to purchase of the truck, which came to be registered as AS-01-W-7755, the second agreement aforementioned led to purchase of the truck, which came to be registered as AS-01-AA-9162. For the loan amounts so advanced, both the trucks stood hypothecated to the petitioner company as securities for the loans taken by the oppo­site party No. 1 and the opposite party No. 2 stood as a guarantor thereto. On 16.02.2007, the opposite party No. 2, namely, the guar­antor, made a telephonic call to Basistha Po­lice Station alleging to the effect that some people had stolen away the said two trucks. Based on this telephonic message, GD Entry No. 474, dated 16.02.2007, was made at the said police station. The police, vide GD Entry No, 475, dated 16.02.2007, seized 'the said two vehicles. On 22.02.2007, the op­posite party No. 1 filed a petition, in the Court of the Sub-Divisional Judicial Magistrate (Sadar), Kamrup, Guwahati, praying for cus­tody of the vehicles, in question. The learned SDJM called for a report from the police and also a copy of the seizure list fixing 26.02.2007 for necessary order. On the date so fixed, i.e., 26.02.2007, the petitioner company filed an application, under Section 451 CrPC, seek­ing custody of the said two vehicles. How­ever, the learned Court below passed an or­der, on 26.02.2007, directing the police to release the vehicles, in question, in favour of the opposite party No. 1, by taking a bond of Rs. On the date so fixed, i.e., 26.02.2007, the petitioner company filed an application, under Section 451 CrPC, seek­ing custody of the said two vehicles. How­ever, the learned Court below passed an or­der, on 26.02.2007, directing the police to release the vehicles, in question, in favour of the opposite party No. 1, by taking a bond of Rs. 10,00,000.00 for each of the vehicles subject to the condition that the opposite par No. 1 shall produce the said vehicles before the Court as and wher required. Aggrieved by the order, dated 26.02.2007, aforemen­tioned, the petitioner company has impugned the same in the present revision. 2. I have heard Mr. J. Roy, learned coun­sel for the petitioner company, and Mr. J. Barman, learned counsel for the opposite party Nos. 1 and 2. I have also heard Mr K Munir, learned Additional Public Prosecutor, Assam, appearing on behalf of the opposite party Nos. 3 and 4. 3. Considering the fact that repossession of vehicles by financers has become a sub­ject of great controversy in recent times, this Court appointed Mr. D Barua, learned coun­sel, as Amicus Curiae and he has been heard accordingly. 4. It is the submission of Mr. J. Roy, learned counsel for the petitioner company, that un­der the agreements, which the parties had entered into, the petitioner company is enti­tled to repossess the vehicles in the event of failure to repay the loan with interest within the stipulated period, hi the case at hand, ac­cording to Mr. J Roy, the opposite party No. 1 defaulted in making payments of the installments with interest, which had fallen due, and as a guarantor, the opposite party No. 2 did nothing to help the petitioner com­pany in realizing the unpaid dues of the peti­tioner company; hence, submits Mr. Roy, the petitioner company, acting upon the agree­ments aforementioned, repossessed the ve­hicles. It is also submitted by Mr. Roy, learned counsel, without letting the police know that the vehicles had been repossessed by the petitioner company due to default in making payment of the petitioner company's dues, the opposite party No. 2 falsely informed the police that the vehicles had been stolen away by some one. In such circumstances, con­tends Mr. It is also submitted by Mr. Roy, learned counsel, without letting the police know that the vehicles had been repossessed by the petitioner company due to default in making payment of the petitioner company's dues, the opposite party No. 2 falsely informed the police that the vehicles had been stolen away by some one. In such circumstances, con­tends Mr. Roy, the petitioner company was entitled to repossess the vehicles, but the learned Court below, ignoring entirely the case of the petitioner company, directed release of the said two vehicles in favour of the op­posite party No. 1. The impugned order is, thus, contends Mr. Roy, wholly against the law. In support of his submissions, Mr. Roy has referred to the cases of Manipal Finance Corp. Ltd. Vs. T. Bangarappa &Anr., re­ported in 1994 Supp. (1) SCC 507, and The Managing Director, Orix Auto Finance (In­dia) Ltd Vs. Shri Jagmander Singh & Anr. reported in (2006) 2 SCC 598 . 5. Controverting the submissions made, on behalf of the petitioner company, Mr. J Barman, learned counsel appearing on behalf of the opposite party Nos. 1 and 2, has submit­ted that the removal of the vehicles, in ques­tion, without consent of the opposite party No. 1, who was the possessor thereof, amounted to commission of the offence of theft; hence, in these circumstances, the op­posite party No. 1, being the registered owner of the vehicles, was, according to Mr. Bar­man, entited to obtain possession of the said vehicles and the learned Court below has committed no error in acceding to the prayer so made by the opposite party No. 1. The impugned order is, thus, contends Mr. Bar­man, wholly consistent with law. This apart, submits Mr. Barman, the loan amounts had been financed to the opposite party No. 1 by the petitioner company not on the basis of any hire-purchase agreement, but on the ba­sis of a loan agreement with clauses of hypothecation and, hence, in a case of present nature, no right to repossess the vehicles can be exercised or could have been lawfully ex­ercised by the petitioner company. Support for his submissions is sought to be derived by Mr. Barman from the cases of ICICI Bank Limited Vs. Prakash Kaur & Ors. reported in (2007) 2 SCC 711 , and Tarun Bhargava Vs. State of Haryana & Anr. ( AIR 2003 P&H 98 ). 6. Appearing as Amicus Curiae, Mr. Support for his submissions is sought to be derived by Mr. Barman from the cases of ICICI Bank Limited Vs. Prakash Kaur & Ors. reported in (2007) 2 SCC 711 , and Tarun Bhargava Vs. State of Haryana & Anr. ( AIR 2003 P&H 98 ). 6. Appearing as Amicus Curiae, Mr. Barua, learned counsel, has submitted that as regards the taking of repossession of goods under hire- purchase agreement, the English law is slightly different from the Indian law inasmuch as the English law recognizes the creditor's right to seize or retake possession of goods bailed under a bona fide hire-purchase agreement provided that the creditor does not enter into the property of the debtor in order to seize or retake possession of such goods including vehicles, However, accord­ing to the Indian law, points out Mr. Barua, repossession of goods, including vehicles, covered by a hire-purchase agreement is pos­sible even by entering into the land of the debtor or the hirer or of a third party. In sup­port of his submissions, Mr. Barua refers to Halsbury 's Laws of England and Chitty of Contracts, Specific Contracts. 7. Referring to the case of Charanjit Singh Chadha & Ors. Vs. Sudhir Mehra, reported in (2001) 7 SCC 417 , Mr. Barua submits that the Apex Court has made it clear that the hirer does not commit any offence if he repossesses the goods as per the terms of a hire purchase agreement. Even in the case of Auto Finance India Limited Vs. Jagmander Singh &Anr., reported in (2006) 2 SCC 598 , points out Mr. Barua, the Apex Court recognizes the financer 's right, in a hire purchase agreement, to take possession of the financed vehicle without intervention of the Court. In ICICI Bank Limited (supra), sub­mits Mr. Barua, the Apex Court has, how­ever, deprecated the practice of strong arm tactics of recovery by the agents of the financer and has further observed that recov­ery of loan and seizure can only be done by legal means. Thus, the position of law, ac­cording to Mr. In ICICI Bank Limited (supra), sub­mits Mr. Barua, the Apex Court has, how­ever, deprecated the practice of strong arm tactics of recovery by the agents of the financer and has further observed that recov­ery of loan and seizure can only be done by legal means. Thus, the position of law, ac­cording to Mr. Barua, is that pursuant to a hire-purchase agreement a financer can re­possess a vehicle in the case of default in making re-payment of loan by the borrower, but the financer or his agents cannot, for the purpose of repossessing vehicle, apply force and if any offence is committed by the financer or its agent in the process of retaking of a vehicle, which is subject matter of a hire pur­chase agreement, the financer or the agents, as the case may be, would remain liable for prosecution for such offence or offences, which they may have committed under the law. 8. Drawing attention of this Court to the case of Arindam Basu & Ors. Vs. Amal Kumar Base & Ors. AIR 2006 Cal 295 , Mr. Barua submits that the Calcutta High Court has held that the financer does not commit offence of theft, when he repossesses the ve­hicle without consent of the hirer if the hirer, under a hire-purchase agreement, was a de­faulter in repaying the loan, but the Calcutta High Court has, at the same time, also pointed out, in Arindam Basu (supra), that if the agent of the financer commits, in the process of re­possession of a vehicle, any offence, such as, murder, grievous hurt, hurt, etc, the agent of the financer cannot be absolved of the liabil­ity for having violated the law. 9. It is further pointed out by Mr. Baruah that as regards the question as to whether the right of repossession, under an agreement of hypothecation, is available to a financer, there is some divergence of opinion inasmuch as the Punjab and Haryana High Court has held, in Tarun Bhargava Vs. State of Haryana & Ors, AIR 2003 Punjab & Haryana 98, that the hypothecatee cannot take the security (i.e., the hypothecated vehicle) without intervention of the Court, though he may have the right to do so as per the terms of the such an agreement of hypothecation; whereas the Andhra Pradesh, in State Bank of India Vs. State of Haryana & Ors, AIR 2003 Punjab & Haryana 98, that the hypothecatee cannot take the security (i.e., the hypothecated vehicle) without intervention of the Court, though he may have the right to do so as per the terms of the such an agreement of hypothecation; whereas the Andhra Pradesh, in State Bank of India Vs. S.B. Shah AH, (dead): AIR 1995 AP 134 , has held that the hypothecatee has the right to repossess the hypothecated goods with­out intervention of the Court if such repos­session is in terms of the loan agreement or hypothecation agreement. 10. In the light of the submissions noted above, it becomes clear that while there is no unanimity in the judicial opinion with regard to the question as to whether a financer, pur­suant to an agreement of hypothecation, can repossess the hypothecated vehicle, the au­thoritative pronouncements of the Supreme Court as regards hire-purchase agreements leave no room for doubt that pursuant to a hire-purchase agreement, a financer can re­possess the vehicle, which may have been given to the hirer by virtue of such an agree­ment. However, the extent of such power has remained a slightly debatabe question. In view, however, of the fact that in a hire purchase agreement, the financer's right to repossess the vehicle has not been in dispute in this re­vision, it is necessary, in order to effectively dispose of the present revision, that one clearly understands as to what a hire purchase agreement is, why the financer can repossess the vehicle in a hire purchase agreement and why such exercise of power is not unlimited, for, unless these aspects of law are properly understood, one would not be able to cor­rectly determine if pursuant to an agreement of hypothecation, repossession of hypothe­cated vehicle by a financer is legally possible or not. 11. A hire-purchase agreement is, ordinarily, one, whereunder an owner gives, on hire, a movable property to another party, called the hirer, and farther agrees that the hirer shall have an option to purchase the property, when he has paid a certain sum, or when the hire rental payments have reached the hire-purchase price stipulated in the agreement. (See Sundaram Finance Ltd. Vs. State of Kerala & Anr. reported in AIR 1966 SC 1178 ). (See Sundaram Finance Ltd. Vs. State of Kerala & Anr. reported in AIR 1966 SC 1178 ). Hire-purchase agreements are, thus, executory contracts, whereunder the goods are let on hire and the hirer, has an option to purchase the goods in accordance with the terms of the hire-purchase agreement. (See Charanjit Singh Chadha & Ors. Vs. Sudhir Mehra, reported in (2001) 7SCC 417). The hire purchase agreements were, originally, entered into between the dealer and, the cus­tomer, because the dealer used to extend the credit to the customer in the form of hire-pur­chase agreement. However when the Hire-purchase schemes gained popularity and the market for hire-purchase agreements ex­panded, the dealers, who did not have suffident working capital, found it difficult to extend the scheme of hire-purchase liberally to potential customers. It is, in these circum­stances, that individuals and financial institu­tions came into picture. The finance company, in such cases, would, pursuant to a hire-pur­chase agreement, buy the goods from the dealer and let the same to the customer un­der the hire-purchase agreement. The dealer would deliver the goods to the customer and, then, drop out of the transaction leaving the financerto collect the installments directly from the customer. Thus, under a hire-purchase agreement, the hirer simply pays for the use of the goods with option to purchase the same. The finance charged, representing the difference between 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 hire purchase price of the goods by instalments. 12. In Damodar Valley Corporation Vs. State of Bihar: AIR 1961 SC 440 , the Su­preme Court took the view that a mere con­tract of hiring without anything more is a spe­cies of the contract of bailment, which does not create any title in the bailee, This view, as pointed out in Charanjit Singh Chadha (su­pra), has undergone considerable change. Ordinarily, a contract of hire-purchase con­fers no title on the hirer, but a mere option to purchase the hired goods on fulfillment of cer­tain conditions. But a contract of hire-pur­chase may also provide for the agreement to purchase the thing hired by deferred payments subject to the condition that title to the thing shall not pass until all the installments have been paid. But a contract of hire-pur­chase may also provide for the agreement to purchase the thing hired by deferred payments subject to the condition that title to the thing shall not pass until all the installments have been paid. There may be other variations in a contract of hire-purchase depending, of course,, upon the terms agreed between the parties. 13. In K.L. Johar & Co. Vs. CTO ( AIR 1962 SC 53 ) and Installment Suppy (P) Ltd. Vs. Union of India: AIR 1966 SCI 178, the Apex Court has pointed out that a hire-purchase agreement has two elements, namely, (i) an element of bailment, and (ii) an element of sale, for, such an agreement con­templates an eventual sale inasmuch as the goods (which remains till then hired) stands sold, when all the terms of the agreements are satisfied and the option to purchase the hired goods is exercised. 14. Now, turning to the facts of Charanjit Singh Chadha's case (supra), what needs to be pointed out is that in Charnjit Singh Chadha's case (supra), a complaint was lodged with the Judicial Magistrate alleging to the effect that the motor vehicle, in ques­tion, had been lying for some repairing work with a mechanic and it was from there that the financer had forcibly taken away the ve­hicle. The financer had, thus, it was alleged, committed offences under Sections 406/420/120BIPC. Having taken cognizance of the offences aforementioned, where summons were issued to the financer, the financer filed a petition, under Section 482 CrPC, seeking quashing of the complaint proceeding, the case of the financer being that it was, on the strength of a hire-purchase agreement, that the vehicle had been purchased by the financer and as the complainant had failed to repay the loan in terms of the agreemen between the parties, the frnnancer had terminated the agreement and was the complainant, who had surrendered the motor vehicle to the financer. The Punjab High Court declined to quash the proceedings by holding that the allegations, made in the complaint, did make out com­mission of offence of theft under Section 379 IPC. The Punjab High Court declined to quash the proceedings by holding that the allegations, made in the complaint, did make out com­mission of offence of theft under Section 379 IPC. It was against this order that the financer carried an appeal to the Supreme Court, wherein it, was contended, on behalf of the financer-appellant, that even if it was proved that the vehicle had been forcibly taken away from the custody of the respondent, this may not amount to an offence under the law as the hire-purchase agreement, in question, pro­vided for repossession of the vehicle by the owner, namely, financer-appellant, in the event of default by the hirer-respondent. The Su­preme Court points out, in Charanjt Chadha (supra), that Clause 8(viii) of the agreement between the parties gives a right to the owner to repossess the vehicle in case of default by the hirer and despite this clause, a plea was taken, in the High Court, that since the vehi­cle was in the possession of the hirer and the same was taken away from his custody with­out his consent, the acts of the financer amounted to an offence of theft. This plea, according to what Charanjit Singh Chadha (supra) lays down, is wholly without any ba­sis, for, the financer had repossessed the ve­hicle in exercise of its right under the agree­ment of hire-purchase. 15. In Charnjit Singh Chadha (supra), the Supreme Court has also pointed out that though, in certain circumstances, as given in illustration (k) of Section 378 IPC, even the owner of a property may be liable for com­mitting theft of his own property, the fact re­mains that in order to make out a case of theft, the ingredient of dishonest intention must be shown to be present and in the case of hire purchase agreement, since the element of dis­honest ingredient is lacking, taking away of the vehicle by the financer in exercise of his rights under the hire purchase agreement, does not amount to an offence of theft. The Supreme Court, in this regard, has referred to the observations made in Hire Purchase Law and Practice (Second Edition), at page 846, which read as under: "14. The Supreme Court, in this regard, has referred to the observations made in Hire Purchase Law and Practice (Second Edition), at page 846, which read as under: "14. 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 the owner has an enforceable right to possession then he will not be guilty of theft in seizing 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. short, thus, in Charanjit Singh Chadha (supra), the Supreme Court has pointed out that when a financer, as owner, repossesses a vehide from the hirer, pursuant to the hire-purchase agreement, the element of dishonest intention, which is the ingredient of the offence of theft, is lacking and such tak­ing away of the vehicle by the financer, as owner, would not constitute the offence of theft, for, the financer, as owner, takes away such a vehicle in exercise of its right under an agreement entered into between the parties. 17. Coupled with the above, it is, perhaps, necessary to clarify that commission of theft, as defined under Section 378 IPC, consists of two parts-(i) moving of a movable prop­erty of a person out of his possession without his consent, and (ii) such moving of the prop­erty being in order to take the property with dishonest intention. Thus, (1) the absence of the person's consent at the time of moving, and (2) the presence of dishonest intention in so taking away the property are the essential ingredients of the offence of theft. If both the elements of dishonest intention and absence of consent, as indicated hereinbefore, are not present in a given case, the act or omission of moving of a property would not amount to offence of theft. Hence, the mere taking away of property by a person without the consent of the owner or possessor of the property would not amount to an offence of theft un­less such taking away is with dishonest inten­tion. 18. Hence, the mere taking away of property by a person without the consent of the owner or possessor of the property would not amount to an offence of theft un­less such taking away is with dishonest inten­tion. 18. 'Dishonestly' is defined by Section 24 IPC, which states that whosoever does any­thing with the intenton of causing 'wrongful gain'to one person or 'wrongful loss' to an­other person, is said to do that thing dishon­estly, Section 23 of the Indian Penal Code explains what 'wrongful gain' is and what is 'wrongful loss'. A 'wrongful gain'is gain by unlawful means of property to which the per­son gaining is not legally entitled. 'Wrongful loss' is the loss by unlawful means of prop­erty to which the person posing it is legally entitled. This section further clarifies that a 'wrongful gain' means both wrongful acquisi­tion as well as wrongful retention and 'wrong­ful loss' includes wrongful deprivation of prop­erty as well as being wrongfully kept out of any property. Section 24 IPC, thus, shows that the intention to cause either 'wrongful gain'or 'wrongful loss' must be present in an act or omission in order to make-such an act or omission a 'dishonest'act. What is, how­ever, important to note is that in the case of wrongful gain, the person gaining is not le­gally entitled to the property and, in wrongful loss, the person losing is legally entitled to the property. Viewed thus, it is clear that be it the case of wrongful gain or wrongful loss, the person taking the property is not to be the person legally entitled to acquire the prop­erty or retain the property and, further, that the means, adopted by him to obtain the prop­erty, is unlawful too. 19. In the case of wrongful gain as well as wrongful loss, two essential elements are (a) use of unlawful means and (b) unlawful ac­quisition. The existence of one without the other is not sufficient. It is necessary to bear in mind that the word "unlawful"can be con­strued differently to give two different mean­ings. When an act is merely prohibited, but is not made punishable, it is not 'unlawful'within the meaning of Section 23. In order to be­come unlawful an act must not only be pro­hibited, but must also be punishable. A per­son is said to gain wrongfully, when such per­son retains wrongfully as well as when such person acquires wrongfully. When an act is merely prohibited, but is not made punishable, it is not 'unlawful'within the meaning of Section 23. In order to be­come unlawful an act must not only be pro­hibited, but must also be punishable. A per­son is said to gain wrongfully, when such per­son retains wrongfully as well as when such person acquires wrongfully. A person is said to lose wrongfully, when such person is wrongfully kept out of any property and also when such a person is wrongfully deprived of property. Hence, when a person is in pos­session of a property to which he is not legaily entitled, he cannot suffer wrongful loss, if the property is taken away by the person, who is legally entitled thereto. When, in terms of hire-purchase agreement, the fmancer ac­quires the right to repossess the property, there is a corresponding loss of the right to retain the property by the hirer. In such an event, when the fmancer repossesses the property, he cannot be said to have deprived the hirer of the property which the hirer is, otherwise, legally entitled. In a given case, therefore, when the offence of theft is alleged to have been committed by the person, who has pro­vided finance under a hire-purchase agree­ment; the complainant must make out that (i) -the accused, as financer, was not entitled to repossess the vehicle, (ii) the means employed by the financer to take possession of the ve­hicle were unlawful, and (iii) the taking away of the vehicle was without the complainant's consent. 20. No wonder, therefore, that Salmond, in his Treatise on Torts (1961), 13th Ed. Page 804, Article 22, says: "Any person entitled to the possession of goods may retake the goods either peacefully or by the use of reasonable force from any per­son who has wrongfully taken or detained from him. Such a retaking, even though forcible, is neither a civil injury nor a criminal offence" 21. There is, as on today, no specific stat­ute governing the rights and liabilities of the parties to a transaction of hire-purchase. The law, in fact, as it stands now, leave the parties to their own arrangement in respect of vari­ous incidents of the hire-purchase agreement. Unless, as already, indicated above, any of the terms arrived at in a hire-purchase agree­ment contravenes the law or is against the public policy, such an agreement would be binding on the parties. The law, in fact, as it stands now, leave the parties to their own arrangement in respect of vari­ous incidents of the hire-purchase agreement. Unless, as already, indicated above, any of the terms arrived at in a hire-purchase agree­ment contravenes the law or is against the public policy, such an agreement would be binding on the parties. When the parties spe­cifically provide, in their agreement of hire-purchase, for certain situations, prescribe a particular procedure, which they are to adopt, and specify the means, which they may use to resolve those situations, they are bound by those terms of the agreement. If the terms and conditions agreed to by the parties do not contravene any provisions of the law, such provisions would be lawful and if any of the parties exercises a right given to him under such an agreement, the other party cannot cry foul or complain. 22. If one considers the act of taking of possession by the financer in accordance with the terms of a hire-purchase agreement, the hirer cannot complain that the financer has committed an offence of theft merely because the removal was without his formal consent. A hire-purchase agreement, by mutual agree­ment of the parties, vests in the financer the right to re-seize the property and when the financer exercises his right, he cannot be said to have acted dishonestly, for, his act cannot be said to be an act done with the intention of causing wrongful gain or wrongful loss, for, the act, i.e., taking away of the property by the financer in exercise of his rights, under the hire-purchase agreement, does not make the financer gain something, which he is not enti­tled to nor does such act of the financer de­prives the hirer of the property, which he is entitled to. When, as a result of the default in making payment of the installments stipulated, when the financer repossesses a vehicle, such an act of repossession would not amount to an offence of theft. It is, in this light, that the decision in Chiranjit Singh Ghadha (supra), needs to be read. 23. In Sarda Trilok Singh Vs. Satyadeo Tripati, reported in (1979) 4 5CC 396, the complainant had alleged that during his ab­sence, the accused, in a high handed manner, came to the house of the complainant and forcibly removed the truck and thereby com­mitted the offence of dacoity. 23. In Sarda Trilok Singh Vs. Satyadeo Tripati, reported in (1979) 4 5CC 396, the complainant had alleged that during his ab­sence, the accused, in a high handed manner, came to the house of the complainant and forcibly removed the truck and thereby com­mitted the offence of dacoity. The police in­vestigated the case and filed a final report. The accused filed his objection before the Magistrate, but the objection was not con­sidered. The accused filed a revision before the Sessions Court but the revision was dis­missed. Thereafter, the accused filed a peti­tion under Section 482 CrPC to quash the proceedings. That was summarily dismissed by the High Court and the matter, then, reached the Supreme Court at the instance of the accused financer. hi para 5 of the judg­ment, the Apex Court observed that such a dispute was essentially a dispute of civil nature, for, the financer had acted bona fide in seizing the truck in exercise of the rights given to him under the hire-purchase agreement. The relevant observations made in Sardar Trilok Singh (supra), read: "5. We are clearly of the view that it was not a case where any processes ought to have been directed to be issued against any of the ac­cused. On the well-settled principles law it was a very suitable case where the criminal proceed­ing ought to have been quashed by the High Court in exercise of its inherent power. The dis­pute raised by the respondent was purely of a civil nature even assuming the facts stated by him to be substantially correct. Money must have been advanced to him and his partner by the financier on the basis of some terms settled between the parties. Even assuming that the appellants either by themselves or in the com­pany of some others went and, seized the truck on 30.7.1973 from the house of the respondent they could and did claim to have done so in exercise of their bona fide right of seizing the truck on respondent's failure to pay the third monthly instalment in time. It was, therefore, a bona fide civil dispute which led to the seizure of the truck." 24. In Manipal Finance Corpn Ltd. Vs. It was, therefore, a bona fide civil dispute which led to the seizure of the truck." 24. In Manipal Finance Corpn Ltd. Vs. T Bangarappa & Anr, reported in 1994 Supp(1) SCC 507, the vehicle, which had been financed, on the basis of a hire-purchase agreement, was taken possession of by the financer due to default in repaying the installments by the hirer. The hirer lodged a complaint to the effect that two of the em­ployees of the financer had committed offence of theft, when they had taken away the vehi­cle, Reacting to the facts, so indicated, the Apex Court held, in Manipal Finance Corpn. Ltd (supra) thus: "The appellant had, under the terms of the hire-purchase agreement, taken possession of the vehicle. While observing that prima facie this action could be supported by the contract, the learned Magistrate directed the vehicle to be returned to the hirer on a mere indemnity bond. It is indeed surprising that without mak­ing good the charge of theft the hirer by using the State instrumentality, namely, the police, obtained possession of the vehicle and there­after obtained its custody through the order of the learned Magistrate without making good his allegation that he was deprived of the pos­session of the vehicle by theft. We are indeed surprised at the approach of the Courts below which is totally unsustainable. We, therefore, set aside the order passed by the learned Mag­istrate and affirmed by the learned Sessions Judge as well as the High Court and direct that the vehicle in question be restored to the pos­session of the appellant, if necessary, by police help. The police if approached by the appellant will ensure restoration of the vehicle to the ap­pellant. The appeal is allowed accordingly. This order will not prejudice the civil rights of the parties, if any." 25. From the above observations, what is most relevant to note is that when a person alleges commission of offence of theft in re­spect of a vehicle by claiming that his vehicle has been taken away, it is the duty of the Court to be satisfied that the charge of theft is prima facie made out before any direction for cus­tody of the vehicle is passed. In the present case, the complainant-opposite party has to make out a case of theft having been com­mitted by the petitioner in respect of the vehi­cles, in question, and until the time the com­mission of offence of theft is prima facie made out, the question of directing the vehicle to be handed over to the complainant cannot arise and could not have arisen. 26. K.A. Mathai Vs. Kara Bibbikutti, reported in (1996) 7 SCC 212 (Para 16), is one of the cases, same in nature, as Manipal Finance Corp. Ltd.. (supra) inasmuch as in this case too, a bus was obtained by the com­plainant on the basis of a hire-purchase agree­ment. For the default in making payment of the installments, when the financer took pos­session of the vehicle, the financer was pros­ecuted for offences under Section 379 read with Section 114IPC. The Apex Court, in such circumstances, observed: "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 installments 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 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 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." 27. From the observations made in K. A. Mathai (supra) too, what clearly transpires is that in the case of a hire-purchase agreement, when a financer takes possession of a vehicle from the owner due to default in payment of installments he does not commit the offence of theft. 28. The Managing Director, Orix Auto Finance (India) Ltd. Vs. From the observations made in K. A. Mathai (supra) too, what clearly transpires is that in the case of a hire-purchase agreement, when a financer takes possession of a vehicle from the owner due to default in payment of installments he does not commit the offence of theft. 28. The Managing Director, Orix Auto Finance (India) Ltd. Vs. Shri Jagmander Singh &Anr., reported in (2006) 2 SCC 598 , is yet another case, where the financers, who had financed a truck on the basis of a hire-purchase agreement, took over the posses­sion of the truck from the hirer due to default in payment of installments and the hirer lodged a complaint with the RBI and also instituted a suit for, inter alia, mandatory injunction, the Apex Court observed as under: "9. Before we part with the case, it is rel­evant to take note of submission of learned counsel for the hirer that in several cases differ­ent High Courts have passed orders regarding the right to repossess where the High Court have entertained writ petitions including writ petitions styled as PIL on the question of right of financiers to take possession of the vehicle in terms of the agreement. It is stated that direc­tions have been given to RBI for framing guide­lines in this regard. If it is really so, the orders prima facie have no legal foundation, as virtu­ally while dealing with writ petitions subsisting contracts are being rewritten. It is still more sur­prising that petitions styled as PIL are being entertained in this regard. Essentially these are matters of contract and unless the party suc­ceeds in showing that the contract is uncon­scionable or opposed to public policy the scope of interference in writ petitions in such contrac­tual matters is practically non-existent. If agree­ments permit the financier to take possession of the financed vehicles, there is no legal im­pediment on such' possession being taken. Of course, the hirer can avail such statutory rem­edy as may be available. But, mere fact posses­sion has been taken, cannot be a ground to content that the hirer is prejudiced." 29. From the observations made above, it is abundantly clear that if a hire purchase agreement permits the financer to take pos­session of the vehicle, then, there is no impediment, on the part of the financer, to take possession of the vehicle. 30. From the observations made above, it is abundantly clear that if a hire purchase agreement permits the financer to take pos­session of the vehicle, then, there is no impediment, on the part of the financer, to take possession of the vehicle. 30. What emerges from the various au­thorities discussed above is that when a financer, pursuant to the agreement of hire purchase, repossesses the hired goods, he commits no offence of theft. 31. What is, now, of utmost importance to note is that in Charanjit Singh Chadha (su­pra), the Apex Court, having taking into ac­count its earlier decisions, held thus, "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 agreement may not amount to any criminal offence. The agreement (Annexure P-I) 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 vehide and even if the entire allegations againct them are taken as true, no offence was made out against them." 32. The above observations, made in Charanjit Singh Chadha (supra), show that under a hire-purchase agreement, when the financer repossesses goods as per the terms of the contract, he commits no offence. The case of Charanjit Singh Chadha (supra) fur­ther shows that if the agreement permits the financer to repossess the hired goods by en­tering into the property of the hirer or wher­ever the hired goods are kept, the financer still commits no offence if the financer or his agents enter into any such property or the building, wherein such hired goods were likely to be kept. 33. The decision, in Charanjit Singh Chadha (supra), involves, thus, another in­teresting aspect of law, for, it needs to be pointed out, as correctly contended by Mr. 33. The decision, in Charanjit Singh Chadha (supra), involves, thus, another in­teresting aspect of law, for, it needs to be pointed out, as correctly contended by Mr. D. Baruah, that while English Law recognizes the creditor's right to repossess the goods, which form the subject-matter of hire purchase agreement, it does not permit the credi­tor to enter into the premises of the debtor or anyone else except under an order of the Court, for, such entry is against the public policy and would amount to an offence. In fact, even if the agreement of hire-purchase or otherwise contains such a clause allowing entry of the creditor into the premises of the debtor, such a clause would be void, for, such a clause would be treated as violation of the public policy. Thus, in short, Charanjit Singh Chadha (supra) shows deviation, in the In­dian law, from what the English Law, on this aspect, is, for, under the Indian law, the financer has, contrary to the English law, the right, pursuant to a hire-purchase agreement, to take over possession of the financed goods by entering, if necessary, into the premises of the hirer or wherever the goods may be kept. This aspect of law clearly surfaces if one takes note of the observations made in Halsbury 's Law of England (4th Volume 22, Para­graphs- 136, 139, 140, 142 & 144). The relevant portions thereof are reproduced be­low: "139. Right to resume possession: Although the general Rule is that The creditor's right to seize or retake possession of goods bailed un­der a bona fide hire purchase agreement, or agreed to be sold under a bona fide conditional sale agreement, does not convert the agreement into a bill of sale as, in such a case, the debtor not being the owner of the chattels, the licence to seize only empowers the creditor to take pos­session of his own goods. If the creditor exer­cises his right to resume possession on default in payment, equity will not release the debtor from the consequences of his default, even if nearly all the installments have been paid and the arrears were tendered before action brought, the provision not being in the nature of a pen­alty. The acceptance by the creditor of payment of all arrears before the resumption of posses­sion may amount to a waiver of his rights to terminate the bailment. The acceptance by the creditor of payment of all arrears before the resumption of posses­sion may amount to a waiver of his rights to terminate the bailment. On retaking possession of the goods the creditor or owner has the right, subject to the same exceptions as exist in the case of a volun­tary return of the goods by the debtor, to find them in as good a condition as when they were delivered, fair wear and tear excepted." "140. Mode of seizure: Although the credi­tor or owner may have the right under a hire, hire purchase or conditional sale agreement to enter on the premises where the chattel may be and retake possession of it, he must do so in a peaceable and orderly manner, and not with force, as it is an offence, both at common law and by statute, to enter forcibly upon any land or tenement without due warrant of law. In the case of regulated agreements, entry without a court order is actionable as a breach of statu­tory duty. Where a third person is in posses­sion of the chattel under a colourable title only, having acquired it from a debtor or hirer who could give no title, the creditor or owner may render himself lible in an action of trespass if he forcibly removes the chattel instead of demand­ing it, and, on refusal to deliver, proceeding by way of an action of conversion." "141. Effect of seizure: Apart from any spe­cial stipulation to the contrary, if the creditor or owner under a hire, hire purchase or conditional sale agreement retakes possession of chattels under powers conferred by the agreement for non-payment of hire, rent or installments, he is not disentitled from recovering arrears which have accrued at the date of resuming posses­sion, nor, conversely, if he recovers by action the amount of installments due is he precluded from recovering possession of the chattel af­terwards. However, if the agreement is really an agreement to buy by installments, the creditor or owner, by resuming possession,, determines the original contract and, in the absence of ex­press stipulation afterwards, may not sue for part of the purchase price his proper remedy being to sue for damages for breach contract." "142. However, if the agreement is really an agreement to buy by installments, the creditor or owner, by resuming possession,, determines the original contract and, in the absence of ex­press stipulation afterwards, may not sue for part of the purchase price his proper remedy being to sue for damages for breach contract." "142. Action to recover goods: Upon the determination of a hire, hire purchase or condi­tional sale agreement otherwise than by per­formance, the creditor or owner under it has certain rights to repossess goods which formed the subject matter of the agreement, and in the event of the debtor or hirer refusing to give possession of them, to bring an action for wrongful interference with goods against him. Sums which are due under the terms of the agree­ment but which are outstanding may also be recovered. In the case of regulated agreements, certain statutory requirements must be fulfilled before this right arises if the alleged' termina­tion of the agreement is based upon default. Once the agreement has been determined or repudiated..............." "144. Entry in order to repossess goods: A creditor or owner may not enter any premises to take possession of goods which are subject to a regulated hire purchase, conditional sale or consumer hire agreement, except under a court order. This restriction is very wide, but does not prevent any such entry with the debtor's consent given at the time, although any clause in the agreement purporting to confer the right to enter and seize is void. However, if the goods were not on the debtor's premises, the consent of the owner of the premises upon which they were might be sufficient. And entry in contravention of this require­ment is actionable as a breach of statutory duty." 34. What surfaces from the above discus­sion is that under a hire-purchase agreement, when the financer re-possesses the vehicle as per terms of the contract, he commits no of­fence if he applies reasonable force in order to take away such a vehicle. The right to re­possess the vehicle, covered by a hire-pur­chase agreement, extends to entering into such property, where the vehicle, in question, is likely to be kept. The right to re­possess the vehicle, covered by a hire-pur­chase agreement, extends to entering into such property, where the vehicle, in question, is likely to be kept. In the present revision, since we are concerned with the right of re-pos­session of a motor vehicle, which is covered by a hire-purchase agreement, the observa­tions, made hereinabove, shall be construed only in respect of vehicles, for, in a given case, even the vehicle or other hired goods may be in the possession of someone other than the hirer. In such circumstances, whether the financer would have the right to re-possess the vehicle or goods by entering into the prop­erty of another person is a question, which would largely depend on the facts of a given case and cannot be treated as a pure ques­tion of law. I, therefore, leave the question open as to whether, in every case of hire-pur­chase agreement, a financer can, in order to re-possess the hired goods, enter into the property or building of a person other than the hirer. 35. In view of the fact that this criminal revision has also been resisted on the ground that the agreement between the parties con­cerned was not a hire-purchase agreement, but an agreement of hypothecation and that an agreement of hypothecation does not give any right to the hypothecatee to take posses­sion of the hypothecated goods without intervention of the Court, it is necessary, at this stage, to draw a distinction between hire-pur­chase agreement and an agreement of hypothecation. However, drawing of distinc­tion between an agreement of hypothecation and hire-purchase agreement is not possible unless one clearly understands the concepts of mortgage and pledge and the distinction between the two. 36. While considering the concepts of mortgage, pledge, hypothecation and hire-purchase agreement, what is exceedingly im­portant to point out is that while the mortgage and pledge are concepts rooted in statutes in India, hypothecation and hire-purchase agree­ments are concepts rooted not in statute, but in mercantile practices and traditions, which have been given their shapes by various judi­cial pronouncements. 36. While considering the concepts of mortgage, pledge, hypothecation and hire-purchase agreement, what is exceedingly im­portant to point out is that while the mortgage and pledge are concepts rooted in statutes in India, hypothecation and hire-purchase agree­ments are concepts rooted not in statute, but in mercantile practices and traditions, which have been given their shapes by various judi­cial pronouncements. In this regard, it is worth pointing out that though the Parliament, in In­dia, had enacted the Hire Purchase Act, 1972, and a notification was, initially, issued by the Central Government bringing into force the said Act, this notification was, later on, with­drawn and, thereafter, no notification, in this regard, has been published in the official Gazette by the Central Government. Hence, the principles governing both hypothecation as well as 'hire-purchase agreements are derived from judicial pronouncements, over a long period of time. 37. Turning to the concept of mortgage, it may be noted that it is Section 58 of the Transfer of Property Act, 1882, which defines mortgage. According to this Section, a mort­gage is transfer of interest in secified immov­able property (and not movable property) for the purpose o securing the payment of money advanced or to be advanced by way of loan, which may have already been in existence or may be created in future. 38. Pledge, on the other hand, is a con­cept of contract and relates to movable prop­erty. It is Section 172 of the Contract Act, 1872, which describes pledge. Section 172 of the Contract Act defines pledge to mean bailment of goods as security for payment of a debt or performance of a promise. In the case of pledge, possession of the pledged goods transferred by the pawnor to the pawnee. Thus, parting of the possessior by the pawnor to the pawnee of the movable property, which is offered by the pawnor as a security for the loan already advanced or to be advanced, is an essential ingredient of pledge. In short, thus, pledge is delivery of goods by the pledger to the pledgee by way of security upon a contract that pledged goods shall, when the debt is paid or the promise is performed, be returned or other­wise disposed of according to the agreement between the pledger and the pledgee. In pledge, the pledgee is offered only a special property in the pledge, while the general prop­erty remains with the pledger. In pledge, the pledgee is offered only a special property in the pledge, while the general prop­erty remains with the pledger. The special property reverts to the pledger on discharge of the debt. 39. While considering the scope of pledge, one has to be also conscious of the fact that pledge differs from a mere lien. The chief dif­ference between a lien and a pledge lies in the fact that in a lien, there is no power of sale or disposal of the pledged goods; whereas in a pledge, there is power to seu the pledged goods on default. A lien is merely a personal right of retention and has no right of sale; whereas a pledge empowers the pledgee to sell the pledged goods on default in making payment of the debts by the pledger. Thus, a pledge or pawn, as contemplated in Section 172 Contract Act, lies, somewhere, between loan and mortgage inasmuch as mortgage denotes transfer of interest in a property in favour of the mortgagee; whereas in a pledge, there is no, transfer of interest in the prop­erty, though there is a right to sell the pledged goods in the case of default in making pay­ment of the debt secured by the pledged goods by the pledger in favour of the pledgee. A pledgee holds possession of movable prop­erty for the purpose of securing to himself the loan, which he has advanced to the pledger, but the pledgee has no right of foreclosure, because he never had the actual ownership in law of the pledged goods. A pledgee has no property in the pawn, but has merely a right to sell. 40. Hypothecation, in the mercantile word, is considered as a creation of charge of movable property in favour of the hypothecatee by 'the hypothecator as security for the loan advanced or to be advanced. In the case of hypothecation, possession of the movable property remains in the actual possession of the hypothecator, though the constructive possession may or may not remain with him depending upon the terms of the agreement entered into by the parties concerned. In the case of hypothecation, possession of the movable property remains in the actual possession of the hypothecator, though the constructive possession may or may not remain with him depending upon the terms of the agreement entered into by the parties concerned. In a given case, a hypothecator may even be in possession of the hypothecated goods only as a trustee of the hypothecatee, though, or­dinarily, a hypothecator does remain, as indi­cated herinbefore, in possession of the hypothecated goods and can enjoy the same without causing any damage to the rights of the hypothecatee. In short, thus, the distinc­tion between pledge and hypothecation lies in the fact that in the case of hlypothecation, the hypothecator can be in possession of the goods hypothecated and enjoy the same with­out causing any damage to the rights of the hypothecatee, but in the case of pledge, the possession of the pledged goods stands trans­ferred to the pledgee by the pledger and as long as the pledgee remains in the possession of the pledged goods, the pledger will not be able to enjoy the same as he has already parted possession with the property. Since the law recognizes hypothecation as a secu­rity for the loar advanced, equity enforces rights of the hypothecatee. 41. We may, at this stage, pause and look into some of the noticeable judicial pro­nouncements, which helped in rooting and developing the concept of hypothecation in Indian law. In Haripada Vs. Anatha Nath (AIR 1918 Cal 165), a Division Bench of the Calcutta High Court observed: "The method provided by Section 172, by the hypothecation of loose chattels is not only the method for creating security thereon. They may be hypothecated without transferring their possession. In such cases the only question that arises is whether there was an intention to create a security and if there was an intention to create a security, equity gives effect to it." 42. From the decision in Haripada's case (supra), what distinctly emerges is that hypothecation of goods is possible without transferring possession thereof to the hypothecatee and that in a case of hypothe­cation, the only question to be determined is as to whether there was an intention to create security and if such an intention was found to exist, equity gives effect to it. 43. In fact, in Najhuji Vs. 43. In fact, in Najhuji Vs. Chimna, re­ported in 1911 (10) Ind Cas 869, the Judi­cial Commissioner's Court, at Nagpur, had the occasion to consider the legality of non-possessory hypothecation of movables and observed as follows: "Neither the Transfer of Property Act nor the Indian Contract Act recognize the non -possessory hypothecation of moveables. The rights and remedies of the parties to such a trans­action must be regulated by the Courts accord­ing to general law of contract, subject to those principles of justice, equity and good con­science, governing Courts in this country un­der the authority of the highest tribunal. A non -possessory hypothecation of moveables is a valid contract and should be recognized and enforced by the Courts. The rights of the hypothecatee are entirely regulated by the terms of the contract between the parties. On default in payment of the debt, he can compel delivery of the property or obtain a decree for sale of the property, if so stipulated in the contract. If the property is simply hypothecated without any stipulation as to the manner which it is to be dealt with, the only remedy open to the creditor is to obtain a money-decree declaring his lien on the property and his right to sell." 44. From the decisions cited above, what become transparent is that pledge and hypothecation are two different forms, of transaction for securing a creditor loan. While in pledge, the owner or the debtor parts with the possession of the goods in favour of the creditor, the debtor retains, in hypothecation, possession of the hypothe­cated goods. However, even in the case of hypothecation, a hypothecatormay, depend­ing upon the terms and conditions of the agreement of hypothecation, become an agent of the hypothecatee in respect of the goods, which have been offered as a secu­rity for the loan obtained. A hypothecation does not amount to transfer of interest in the property. Hence, when there is a mere charge on the hypothecated goods, whether the hypothecatee has to approach the Court and seek its intervention for granting him a decree and for bringing the hypothecated goods to sell through the court or whether the hypothecatee has the right to put to sale the hypothecated goods without intervention of the Court, is the question, which this revi­sion seeks answer. 45. 45. Thus, the question, now, is this: when there is a specific provision in a hypothecation agreement empowering the hypothecatee to take possession of the hypothecated goods and sell the same if there is a default in repay­ment of the loan by the borrower, can the creditor take possession of the hypothecated goods and/or sell the same without interven­tion of the Court 46. From the decision in Najhuji (supra), what becomes transparent is that though, in India, neither the Transfer of Property Act nor the Contract Act recognizes non-possessory hypothecation of movables, such hypoth­ecation is a valid contract and the rights and obligations of the parties are governed by the terms of the agreement. The decision, Najhuji (supra), needs to be read with a rider that when any of the terms of the agreement of hypothecation contravenes the law, the agreement to the extent to which it contra­venes the law would not be enforceable. This, constraint applies, we may bear in mind, in all contractual agreements, be such obligation arising out of mortgage, pledge or hypothe­cation. However, the fact remains that the decision, in Najhuji (supra), recognizes enforcement of the agreements of hypothecation subject to the prindples of equity, justice and good conscience. If such an agreement of hypothecation is silent as to the manner in which the right or obligations, arising there­under, would be enforced, the remedy of the. creditor lies, in the light of Najhuji (supra), in obtaining a money decree declaring his lien on the hypothecated property and his right to l sell th same. 47. Even the Calcutta High Court, in Co­operative Hindusthan Bank Vs. Surendra Nath : AIR 1932 Cal 524, declared that hypothecation of movables, even if not ac­companied by delivery of possession, is still a valid contract. 48. A Division Bench of Punjab High Court, while drawing distinction between pledge and hypothecation, pointed out, in Simla Banking Etc. Vs. M/s. Pritams: AIR 1960 Punj 42 that the civil, law recognizes two kinds of pledge. In one form of pledge, which is known as pignus (pawn), posses­sion of the movable property is actually de­livered to the person for whose benefit the pledge was made; whereas the hypotheca (hypothecation) is a case, wherein posses­sion of the property remains with the debtor. It was also pointed out, in Simla Banking Etc. In one form of pledge, which is known as pignus (pawn), posses­sion of the movable property is actually de­livered to the person for whose benefit the pledge was made; whereas the hypotheca (hypothecation) is a case, wherein posses­sion of the property remains with the debtor. It was also pointed out, in Simla Banking Etc. (supra), that in hypothecation, the creditor has the right to get the hypothecated property sold for realizing his debts, because hypothecation is an act of pledging a thing as a security for debts or demand without parting with the pos­session and, hence, despite the fact that the debtor remains in the possession of the hypothecated property, he cannot transfer it to a third party without express consent or permission of the creditor. The relevant ob­servations made in Simla Banking Etc. (su­pra) read as under: "The civil law recognies two kinds of pledges, viz., the 'pignus' (pawn) in which the possession of the thing is actually delivered to the person for whose benefit the pledge was made and 'hypotheca' (hypothecation) in which the possession of the thing pledged remained with the debtor, the obligation resting in mere contract without delivery. In one case posses­sion was actually delivered to the creditor or pawnee, the other it remained with the debtor. Hypothecation has been defined as a right which a creditor has over a thing belonging to an­other, and which consists in the power to cause it to be sold in order to be paid his claims out of the proceeds. It is an act of pledging a thing as security for a debt or demand without parting with the possession. It follows as a conse­quence that although the property remains in the possession of the debtor, it cannot be trans­ferred to a third party without the express con­sent or permission of the creditor." 49. A Division Bench of Madras High Court in Nadar Bank Ltd. Vs. It follows as a conse­quence that although the property remains in the possession of the debtor, it cannot be trans­ferred to a third party without the express con­sent or permission of the creditor." 49. A Division Bench of Madras High Court in Nadar Bank Ltd. Vs. CanaraBank Ltd. : AIR 1961 Mad 326 , while dealing with the scope of hypothecation and the remedy of the hypothecatee, laid down that in order to constitute a valid pledge, delivery, either actual or constructive, of the pawned articles to the pawnee is essential; but since posses­sion is not an unequivocal term and includes both actual possession as well as construc­tive possession, even constructive delivery is adequate to constitute a pledge and it applies, to all those cases, where the pledger remains in the possession of the goods under the spe­cific authority of the pledgee. 50. In State Vs. Andhra Bank Ltd.: AIR 1988 A. P. 18, a Division Bench of the Andhra Pradesh High Court held that the hypothe-cation of movable property is also a form of mortgage, which have been rec­ognized and treated valid in law and, in the absence specific rules, every Court should decide the cases of hypothecation accord­ing to justice, equity and good conscience. The Division Bench also pointed out that though not provided in any statute, hypothecation recognized as a valid contract conferring rights and imposing obligations on the parties concerned. In India, points out the Court in Andhra Bank Ltd. (supra), rules of common law relating to substantive right have been recognized, adopted and enforced by judicial decisions and should be treated as 'law in force' in the country within the meaning of Article 372 (1) of the Constitu­tion of India. Support for the conclusion, so reached was derived by the Court, in Andhra Bank Ltd. (supra), from the decision of the Supreme Court in Builders Supply Corpo­ration Vs. Union of India: AIR 1965 SC 1061 . 51. In M/s. Gopal Singh Vs. Punjab National Bank: AIR 1976 Delhi 115, Delhi High Court had the occasion to deal with an agreement of hypothecation, wherein the goods had been pledged by the borrower to the bank as security for the loan advanced by the bank from time to time. Union of India: AIR 1965 SC 1061 . 51. In M/s. Gopal Singh Vs. Punjab National Bank: AIR 1976 Delhi 115, Delhi High Court had the occasion to deal with an agreement of hypothecation, wherein the goods had been pledged by the borrower to the bank as security for the loan advanced by the bank from time to time. The terms and conditions of the agreement stipulated the margin, which was to be maintained between the value of the goods and the amount of drawing, the nanner, in which the goods must remain under lock and key of the bank through the godown keeper and the liability of the borrower to submit report to the bank with regard to the additions and withdrawals from the stock pledged with the bank. While construing the terms and agreements of such a deed, the Court, in M/s Gopal Singh (su­pra), held that though the borrower was in actual possession of the hypothecated goods, his possession of the hypothecated goods was as an agent of the bank. The relevant obser­vations, made in M/s. Gopal Singh (supra), read as follows: " A reference to Ex. D1/7 leaves no manner of doubt as to the terms and conditions incorporated in it. This agreement partakes the char­acter of the usual document drawn between the bank and the borrower during the material pe­riod and, inter alia, provides for the pledge of goods by way of security for the amount to be advanced by the bank from time to time, the margin that must be maintained between the value of the goods and the amount of drawing, the manner in which the goods must remain under the lock and key of the bank through the godown-keeper, the liability of the borrower to submit reports with regard to the additions and withdrawals from the stocks pledged with the bank to enable the bank to verify through its godown-keeper, the liability of the borrower to submit reports with regard to the additions and withdrawals from the stocks pledged with the bank the stocks pledged with the bank to en­able the bank to verify through its godown-keeper. It must, however, be pointed out that in case of pledged goods, the goods are stored in the godown under the lock and key of the bank under the supervision of the bank's godown keeper and the goods are undoubtedly in the possession, physical and otherwise, of the bank and no withdrawals or additions of the stocks are permissible without their permission. The position with regard to hypothecated goods is, however, different because these goods are strictly speaking not under the lock and key of. the bank but are allowed to be kept at the fac­tory or the premises of the borrower without any lock and key of the bank as such, but are supposed to be under the constructive possession of the bank by virtue of the deed of hypothecation which obliges the borrower to submit a regular return to the bank indicating the increase and decrease in the value of the said goods to enable the bank from time to time to determine the drawing of the borrower with regard to it. In law, however, there is no difference with regard to the legal possession of the bank. In both the cases, the goods are under the constructive possession of the bank while in the case of pledge they are also in the actual physical possession of the bank but in the case of hypothecated goods, they are in the actual physical possession of the borrower but subject to trie restriction mentioned above. In a sense, the borrower in the case of hypothecated goods has actual physical possession of the goods as an agent; as it were, of the bank and are also not only constructive but actually in the possession of the bank." 52. The above observations, made in M/s. Gopal Singh (supra); indicate that even in the case of hypothecation, an agreement may be so couched that lender/creditor assumes the constructive possession of the hypothecated goods and the borrower/debtor becomes, the trustee of the creditor and that in such a case of hypothecation, the creditor may not have actual physical possession of the hypothecated goods, yet the debtor's actual physical pos­session of the hypothecated goods would be as an agent of the creditor and in such a lim­ited sense, the hypothecated goods may not only, be under the constructive possession of the creditor, but also in his actual possession. 53. 53. I may, at this stage, refer to the deci­sion of the Mysore High Court, in Re. S.Y.C.W. and S. Mills :AIR 1969 Mys 280, wherein, while dealing with the question: whether a creditor, under and agreement of hypothe­cation, is entitled to retain possession of the hypothecated goods and can exercise right of private sale without intervention of Court, the Mysore High Court held as follows: "In the case of hypothecation or pledge of moveable goods, there is no doubt about the creditor's right to take possession, to retain pos­session and to sell the goods directly without the intervention of Court for the purpose of re­covering his dues. Hypothecation is only ex­tended idea of a pledge, the creditor permitting the debtor to retain possession either on behalf of or in trust for himself (the creditor). Hence, so far as the moveables actually covered by the hypothecation deeds are concerned, there can be no doubt that the Bank is entitled to retain possession and also to exercise the right of pri­vate sale." 54. The decision, rendered in Re, SYCW and S Mills (supra), clearly takes the view that a hypothecatee is not only entitled to take possession, of the hypothecated goods, but also put to direct sale the hypothecated goods without intervention of the Court. 55. While taking note of the decision ren­dered in Re, SYCW and S.Mills (supra), the Andhra Pradesh High Court, in Jayant T. Shah Vs. Andhra Bank Ltd., reported in (1977) 2 Andh WR (HC) 129), observed as under. "There is a distinction between 'Hypothe­cation" and pledge ' In the Indian contract Act (9th edition) by Pollock and Mulla at page 688, the difference between hypothecation 'and pledge' is neatly stated: In hypothecation the possession of the property is restrained by the owner and certain rights in that moveable prop­erty are transferred to the person in whose fa­vour the property is hypothecated. But in a pledge the possession of goods also passes to the pledgee by way of security though the pos­session may be constructive. But in a pledge the possession of goods also passes to the pledgee by way of security though the pos­session may be constructive. The true distinc­tion from hypothecation is that the construc­tive possession of the goods in the case of pledge is specifically secured by the terms of the contract and is continued unabated throughout, It is not disputed that in the case of hypothecation, the creditor has the right to take possession of the goods and to sell it without the intervention of the Court. But the question is whether it is a security within the meaning of Section 141 of the Contract Act so that if the creditor were to lose or part with the goods given in security, to that extent the surety is dis­charged." 56. Thus, even the Andhra High Court recognizes, in tune with the decision rendered in Re, SYCW and S Mills (supra), that in hypothecation, the hypothecatee has the right to take possession of hypothecated goods and to sell the same without intervention of the Court. 57. While taking the view that in the case of hypothecation, although possession of the hypothecated goods remains with the hypothecator, the hypothecatee has a right to take possession of the hypothecated goods and to sell, either on its own or through Court, such hypothecated goods, for realization of the debts secured by it, the Delhi High Court, in Syndicate Bank Vs. Official Liquidator :AIR 1985 Delhi 256, held as follows: "Unlike, a mortgage, a pledge or hypothe­cation does not have the effect of transferring any interest in the property in favour of the pledgee or the hypothecated. The pledge and hypothecation, however, create a special prop­erty in the goods in favour of the pledgee or the hypothecatee. In the case of pledge, the spe­cial property is to keep possession of the pledged goods and to dispose them of for the realization of the debts for which it/s held as security. In the case of hypothecation, posses­sion remains with the hypothecator but the hypothecatee has the right to take possession of the hypothecated property and o sell it for the realization of the debt secured by hypothecation. It was open to the Bank to take possession of the hypothecated property on its own or through the Court, but it failed to do so. It was open to the Bank to take possession of the hypothecated property on its own or through the Court, but it failed to do so. It was also open to the Bank to enforce the security by the suit that it filed but there again the Bank chose to seek a simple money decree. Mere mention of hypothecation in the suit was not sufficient. The Bank would, therefore, be deemed to have waived its right as hypothe­catee and was satisfied with a simple money decree. The Bank having fled a suit for the re­covery of money and having failed to make a claim on the security, any claim on the security or the sale proceeds thereof would now be barred under Order 2, Rule 2 of the Code with the result that the Bank has no subsisting claim on the machinery or any part of the sale pro­ceeds thereof and must rank as an unsecured creditor along with the other creditors of the Company, and prove its claim before the official liquidator at the appropriate time. The Bank is itself to blame for the course that it chose to adopt.' 58. What, thus, emerges from the cases cited above that there do exist judicial pronouncements holding that a hypothecate can take possession of the hypothecated goods and sell the same without going to the court for enforcement of his rights under the hypothecation agreement. 59. Let me, now, pause and refer to Un­ion of India Vs. CT, Shentilanathan, re­ported in (1978) 48 Com Cas 64, wherein a Division Bench of the Madras High Court, while explaining lucidly the concept of hypothecation of goods, noted that the hypothecation of goods is a concept, which is not expressly provided for in the law of contracts but is accepted in the mercantile law by long usage and practice and that hypoth­ecation is not a pledge and there is no trans­fer of interest or property in the goods by the hypothecator to the hypothecatee the Court, in CT Shentilanathan (supra), also pointed out that hypothecation only creates a notional and an equitable charge in favour of- the hypothecatee and the right of the hypothe­catee is only to sue on the debt and proceed in execution against the hypothecated goods, if they are available. In CT Shentilanathan (supra), the Court further points out that since delivery of possession is not a sine qua non for creation of a notional charge under a deed of hypothecation and as possession of the hypothecated goods is always with the hypothecator, a wide door is open to the hypothecator to deal with the hypothecated goods without reference to the hypothecatee. The right of the hypothecatee, according to the decision in CT Shentilanathan (supra), is that of a bare private money-creditor with the ancillary right to proceed against the goods hypothecated after otaining a decree in a Court of law. The relevant observations made, in this regard, by the Court, in CT Shentilanathan (supra), read under: "Hypothecation of goods is a concept which is not expressly provided for in the law of contracts, but is accepted in the law mer­chant by long usage and practice. Hypothe­cation is not pledge and there is no transfer of interest or property in the goods by the hypothecator to the hypothecatee. It only cre­ates a notional and an equitable charge in favour of the hypothecatee and the right of the hypothecatee, as alfeady stated, is only to sue on the debt and proceed in execution against the hypothecated goods if, they are available. As delivery of possession is not a sine qua non for the creation of a notional charge under a deed of hypothecation and as 'possession of the hypothecated goods is always with the hypothecator, a wide door is open to the owner to deal with the goods without reference to the hypothecatee. If however, the hypothecator, contrary to the stipulation under the hypot­hecation bond, deals with the property, the breach on his part would certainly be noticed by the hypothecate and he would be dealt with independently by him. It is in this context that the rights of a bona fide transferee for value of such goods are protected in law, for, the hypothecate who fails to bequester the goods and reduced them into his custody, takes the risk of such clandestine dealings of the hypothecator. If the hypothecatee expressly or constructively notifies the equitable charge, matters would be different; even so, when the hypothecatee has constructive possession of the same. If the hypothecatee expressly or constructively notifies the equitable charge, matters would be different; even so, when the hypothecatee has constructive possession of the same. In the absence of such a constructive notice or express notice to the public at large, the right of the hypothecatee is that of a bare private money-creditor with the ancillary right to proceed against the goods hypothecated after obtaining a decree in a Court of law. Thus, a hypothecation is a right in creditor over a thing belonging to another and which consists in the power in him to cause the goods to be sold in order that his debt might be paid to him from the sale proceeds and this right is distinguish­able from a mortgage of chattels." 60. What surfaces from the judicial prec­edents discussed above is that while in Re SYCW and S Mills (supra), Jayant Shah (supra) and Syndicate Bank (supra), the Curts have taken the view that even the hypoth­ecatee has the right to repossess the hypoth­ecated goods without intervention of the Court, the Madras High Court, in CT Shentilanathan (supra); seems to have appar­ently taken the view that hypothecatee has no right to repossess the hypothecated goods and his remedy Acs in obtaining a decree and in proceeding with the decree against the hypothecated goods if the hypothecated goods are still available for realizing the debts of the hypothecatee. 61. The decision, rendered in CT Shent­ilanathan (supra), reflects as if the hypoth­ecator can deal with the hypothecated goods absolutely unbound by the terms of the agree­ment, which he may have entered into for borrowing the loan from the hypothecatee. We have already observed above that an agreement of hypothecation is also a valid agreement in law unless any particular term and or condition in a given agreement of hypothecation contravenes the law. We have already observed above that an agreement of hypothecation is also a valid agreement in law unless any particular term and or condition in a given agreement of hypothecation contravenes the law. We have also noted that the law does not prohibit a person from obtaining loan or a person from advancing, loan on the basis of the hypothecation of goods, and, hence, an agree­ment of hypothecation is a valid and enforce­able agreement in law; and if it be so, it logi­cally follows that if such an agreement pro­vides that the hypothecator shall not dispose of the hypothecated property except in, terms of the agreement or if such an agreement pro­vides that the hypothecatee would be entitled to obtain possession the hypothecated prop­erty in the event of failure of the hypothecator to repay his loan in terms of the arrangement, which the parties might have entered into, it cannot be said that the hypothecatee would still not remain entitled to obtain possession of the hypothecated property if such a con­tingency, arises or that the hypothecates would be free to dispose of the hypothecated prop­erty in contravention of the arrangement, which he 'might have entered into with the hypothecatee. Thus,. the view, taken in CT Shentilanathan (supra), does not receive sup­port from the judicial decisions referred to above. 62. Be that as it may, what follows from the above discussion is that there are two views noticeable in the judicial pronouncements of the various High Courts. While one view is that a hypothecatee has no right t take pos­session of the hypothecated goods and his remedy lies in approaching the Court to take possession of the goods or sell the same, the other view is that even a hypothecatee has a right to take possession of the hypothecated goods and sell the same without intervention of the Court. 63. Bearing in mind the above noticeable differences of opinion as regards the right of a the hypothecatee to repossess or take pos­session of the hypothecated goods, let me, now, turn to, and deal with, the case of Thrun Bhrava (supra). 64. 63. Bearing in mind the above noticeable differences of opinion as regards the right of a the hypothecatee to repossess or take pos­session of the hypothecated goods, let me, now, turn to, and deal with, the case of Thrun Bhrava (supra). 64. While considering the case of Tarun Bhargava (supra), it is important to note that in this decision, a Single Bench of Punjab and Haryana High Court has held, inter alia, that the right, if any, given to the fmnancer, under a hypothecation agreement, to obtain posses­sion of the hypothecated goods is void, be­cause such a clause, in an agreement of hypothecation, is unconscionable inasmuch as the borrower, in such a case, does not have equal bargaining power with that of the fmancer and hence, in such cases, the bor­rower is compelled to sign on dotted lines empowering the hypothecatee to repossess or to take possession of the hypothecated property". What is, however, of some rel­evance to note is that in Tarun Bhargava (su­pra), the agreement of hypothecation itself, which the learned Court considered, was un­der challenge. Such is not the position in the present case, for, the agreement of hypothe­cation has not been under challenge in the present case. 65. Be that as it may, having reached the conclusion that a clause, which empowers the hypothecatee to take possession of the hypothecated goods in the event of default in making payment, is void, because such a clause is unconscionable, the learned Court, in Tarun Bhargava (supra), has held that the financer does not have, under an agreement of hypothecation, any right to take posses­sion of the hypothecated goods without in­tervention of the Court. The conclusion, so reached, gives an indication that under no cir­cumstances, a hypothecatee can be given the licence or authority, under an agreement hypothecation, to take possession of the hypotheated goods, even if there is default in making payment of the money advanced in the form of loan and secured by the hypothecated goods. In view of the fact that the conclusion, so reached in Tarun Bhargava (supra), derives its strength, to a great extent, from the decision in Sundaram Finance Ltd. (supra), it is appropriate that the ratio laid down, in Sundaram Finance Ltd. (supra), be examined a little more carefully and a little more elaborately. 66. In Sundaram Finance Ltd, Vs. The State of Kerala & Anr. 66. In Sundaram Finance Ltd, Vs. The State of Kerala & Anr. (AIR 1966 1178\ Shri JC Shah, J, (as his Lordship then was) speaking for the majority, drew the distinc­tion between a hire purchase agreementand an agreement of hypothecation in the follow- "23. A hire-purchase agreement is normally one, under which an owner hires goods to another party called the hirer and further agrees that the hirer shall have an option to purchase the chattel when he has paid a certain sum, or when the hire-rental payments have reached hire-purchase price stipulated in the agreement. But there are variations when a financer is in­terposed between the owner of the goods and the customer. The agreement, ignoring varia­tions of detail, broadly takes one or the other of two forms: (1) when the owner is unwilling to look to the purchaser of goods to recover the balance of the price, and the financer who pays the balance undertakes the recovery. In this form, goods are purchased by the financer from the dealer, and the financer obtains a hire-pur­chase agreement from the customer under which the later becomes the owner of the goods on payment of all the installments of the stipulated hire and exercising his option to purchase the goods on payment of a nominal price. The deci­sion of this Court, in AIR 1965 SC 1082 dealt with a transaction of this character. (2) In the other form of transactions,: goods are purchased by the customer, who in consideration of ex­ecuting a hire-purchase agreement and allied documents remains in possession of the goods, subject to liability to pay the amount paid by the financer on his behalf to the owner or dealer, and the financer obtains a hire-purchase agree­ment .which gives him a licence to seize the goods in the event of failure by the customer to abide by the conditions of the hire-purchase agreement. 24. The true effect of a transaction may be determined from the terms of the agreement considered in the light of the surrounding cir­cumstances. In each case, a court has, unless prohibited by statute, power to go behind the documents and to determine the nature of the transaction whatever may be the form of the documents. 24. The true effect of a transaction may be determined from the terms of the agreement considered in the light of the surrounding cir­cumstances. In each case, a court has, unless prohibited by statute, power to go behind the documents and to determine the nature of the transaction whatever may be the form of the documents. An owner of goods who purports absolutely to convey or acknowledges to have conveyed goods and subsequently purports to hire them under a hire-purchase agreement is not estopped from proving that the real bargain was a loan on the security of the goods. If there is a bona fide and completed sale of goods, evidence by documents, anterior to and independent of a subsequent and distinct hiring to the vendor, the transaction may not be regarded as a loan transaction, even thought the reason of which it was entered into was to raise money. If the real transaction is a loan of money se­cured by a right of seizure of the goods, the property ostensibly passes under the docu­ments embodying the transaction, but subject to the terms of the hiring agreement, which be­come the part of the buyer's title, and confer a licence to sale. When a person desiring to pur­chase not having sufficient money on hand borrows the amount from a third person and pays it over to the vendor, the transaction be­tween the customer and the lender will unques­tionably be a loan transaction. The real charac­ter of the transaction would not be altered if the lender himself is the owner of the goods and the owner accepts the promise of the purchaser to pay the price for the balance remaining due against delivery of goods. But a hire-purchase agreement is a more complex transaction. The owner under the hire purchase agreement, en­ters, into a transaction of hiring out goods on the terms and conditions set out in the agree­ment, and the option to purchase exercisable by the customer on payment of all the installments of hire arises when the installments are paid and not before. In such a hire purchase agreement there is no agreement to buy goods; the hirer being under no legal obligation to buy, has an option to return the goods or to become its owner by payment in full of the stipulated hire and the price for exercising the option. In such a hire purchase agreement there is no agreement to buy goods; the hirer being under no legal obligation to buy, has an option to return the goods or to become its owner by payment in full of the stipulated hire and the price for exercising the option. This class of hire-purchase agreement must be dis­tinguished from transaction in which the cus­tomer is the owner of the goods and with a view to finance his purchase he enters into an agree­ment which is in the form of a hire-purchase agreement with the financer, but in substance evidences a loan transaction, subject to hiring agreement under which the lender is given the licence to seize the goods." 67. In the light of what have been observed and held in Sundaram Finance Ltd. (supra), it becomes abundantly clear that even the Apex Court has recognized, in Sundaran Fi­nance Ltd.(supra), that an agreement of hypothecation may make provisions for the financer to repossess the hypothecated goods in the event of default in repaying the loan secured by the hypothecated goods. The de­cision, in Sundaram Finance Ltd (supra), also clarifies that the provisions, so made in an agreement of hypothecation, would confer a licence on the hypothecatee to obtain pos­session or to repossess the hypothecated goods. The Supreme Court has, nowhere, held that a hypothecatee should not be al­lowed to act upon the licence so granted by the borrower. This apart, I may, with great humility, point out that I find myself unable to agree that no borrower, under any hypothe­cation agreement, can ever consciously, will­ingly' and voluntarily agree to allow the financer, as hypothecatee, to take possession of the hypothecated goods in the event of default in making repayment of loan. Morever, the question as to whether a par­ticular term, appearing in an agreement, is unconscionable or not, is largely a question of fact and not necessarily a general question of law. Further-more, if a term, in a given con­tract, is unconscionable, it cannot be enforced by court too. Unless, therefore, it is shown, in a given case, that the agreement entered into by the hypothecator, permitting the hypothecatee to take possession of the hypothecated goods on his own or without going to court, was against the hypothecator's free will, or suffered from lack of equal bar­gaining power, such an agreement cannot be treated as unconscionable contract or void in law. An unconscionable contract is nothing, but a contract to which consent is given not by free will and in honest exercise of option by the borrower. If a borrower needs loan to make purchase of a property, the law does not prohibit that such a loan be secured by an appropriately valued property, which the bor­rower may have, permitting the hypothecate to take possession of the hypothecated prop­erty if the hypothecator defaults in, making repayment of his loan. It is in this light that a hypothecation agreement needs to he con­sidered; and if it is so considered, there re­mains no room for doubt that a hypothecation agreement, permitting a hypothecatee to take possession of the hypothecated goods with­out going to court, cannot, as a class, be treated as an unconscionable agreement and void. This apart as already indicated above, the Supreme Court has, nowhere, held in Sundaram Finance Ltd. (supra), that the li­cence, granted to a hypothecatee to take over the hypothecated goods, is void and uncon­scionable in law. 68. What logically follows from the above discussion is that hypothecatee can be permitted to seize or take possession of the hypothecated goods and such permission is the licence. When a licence acts on such a licence given to him by the licensor, can the licencee be said to have committed an offence of theft is the question, which one has to decide in the present revision. 69. What is also important to note is that if the licence, granted under a hypothecation agrement, to the financer to take possession of the hypothecated property, is an enforce­able contract, it would be equally true that until the time the licence, so granted, is revoked in accordance with law, the hypothe­catee remains entitled to exercise his option to take possession of the hypothecated prop­erty without going to the court: can a licence, granted under any agreement, be arbitrarily withdrawn? Law never permits arbitrariness as a weapon to either enforce an agreement or rescind an agreement. . 70. Law never permits arbitrariness as a weapon to either enforce an agreement or rescind an agreement. . 70. Besides what have been discussed above, in a hypothecation agreement, when the hypothecator has permitted the hypothectee to take posession of the hypoth­ecated property in the event of default in mak­ing payment of the loan secured by the hypothecated property and the Court has no reason to infer that such an agreement was arrived at without free will and consent of the hypothecator, it would logically follow that the consent of the hypothecator, giving licence to the hypothecatee to take possession of the hypothecated property, covered by such an agreement, remains valid. Acting upon such an agreement, when the financer wants to take over possession of the hypothecated prop­erty and the borrower refuses to handover the property, would the licence, given under the agreement, permitting the financer to take possession of the hypothecated property, can be said to stand revoked. Let us not confuse between resistance offered showing with­drawal of consent and the licence already granted under an agreement. By merely of­fering resistance and showing that at the time, when the financer attempted to take posses­sion of the hypothecated property, the bor­rower's consent did not exist thereto, it can­not be said that the licence, granted under the agreement, stood revoked, for, in such an event, the licence given to the hypothecatee to take possession of the hypothecated prop­erty (given under the agreement), can be en­forced by the Court. When an agreement can be enforced by the Court, the logical implication is that the licence, granted under the agreement, did not stand revoked. 71. The law has to keep pace with the development in society. Financing is abig busi­ness today and if it be held, unless there is law to support it, that under no circumstances, a hypothecatee can be granted a licence un­der an argument of hypothecation to take possession of the hypothecated property without going to Court, the & entire developing economy would stand to lose. Unless there are very strong reasons, in a given case, a licence, granted in favour of a hypothecatee, to take, possession of the hypothecated prop­erty, cannot be treated as an unconscionable contract. Unless there are very strong reasons, in a given case, a licence, granted in favour of a hypothecatee, to take, possession of the hypothecated prop­erty, cannot be treated as an unconscionable contract. This apart, the question as to whether a contract is or is not unconscion­able is a question, which has to be independ­ently determined in every given case and it cannot as a general principle of law, be laid down that all agreements of hypothecation, permitting the hypothecatee to take posses­sion of the hypothecated property, are un­conscionable contracts. 72. What logically follows from the above discussion is that acting upon a hypothecation agreement, which permits the hypothecatee to take possession of the hypothecated prop­erty, when the hypothecatee exercises the right to take possession of the hypothecated property, such exercise will not amount to commission of offence of theft, for, I have al­ready pointed out above, that mere taking away of any object without the consent of its owner cannot amount to an offence of theft unless such taking is 'dishonest'. By taking the hypothecated property in terms of a hypothecation agreement, which permits the hypothecatee to take possession of the hypothecated property in the event of default in making payment of the loan by the hypothecator, the hypothecatee cannot be said to have taken possession of the hypothecated property without being entitled thereto nor can the hypothecator be said, in such a case, of having been deprived of the hypothecated property, which the hypothe­cator was, notwithstanding the default, enti­tled to retain in his possession. In such a case, the hypothecate, as already discussed above, cannot be said to have made 'wrongful gain 'or caused ' wrongful loss'. 73. In the present case, there is no dis­pute that the agreement between the parties was not an agreement of hire-purchase, but an agreement of hypothecation inasmuch as the loan has been advanced by the financer for purchase of the two vehicles aforemen­tioned by the borrower and, amongst others, the vehicles, so financed, have been hypothecated to the financer with the leave granted to him under the agreement to take possession of the vehicles, if there is a de­fault. I have already held that when such a licence is granted under a hypothecation agreement in favour of the financer and the financer takes possession of the hypothecated property in such a case, he cannot be said to have deprived the hypothecator of the prop­erty, which the hypothecator is entitled to, nor can the financer be said to have acquired the property, which he was not entitled to acquire. In such circumstances, it is difficult, in the present case, to comprehend that the act of taking away of the vehicles, in question, by the financer, for the non-payment of installments and under the award given by the arbitrator, can constitute an offence of theft. 74. What is, now, of immense importance to note is that Section 457 CrPC makes it clear that in respect of disposal of a seized property, the Magistrate has the power to deliver the property to the person entitled to the possession thereof. In the present case, so long as the licence, granted under the agreement, in question, is not revoked in ac­cordance with law, it is the financer, who is best entitled to possess the vehicles, in, ques­tion. In such circumstances, the directions, if given by the learned Court below, to the present petitioners, who are the financers, to handover the vehicles, in question, to the bor­rower, cannot be said to be an order passed in accordance with law. 75. In the result and far the reasons dis­cussed above, this revision succeeds and the impugned order, dated 26.02.2007, is hereby set, aside. The learned Court below is hereby directed to pass necessary order(s) enabling the petitioner herein to receive the custody of the vehicles, in question, on executing a bond of rupees ten lakhs, in respect of each of the vehides, subjct to the condition that the peti­tioner herein shall produce the said vehicles before the Court as and when so required. 76. With the above observations and di­rections, this criminal revision shall stand disposed of. 77. No order as to costs.