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Rajasthan High Court · body

2011 DIGILAW 1049 (RAJ)

Mahindra and Mahindra Financial Services Ltd. v. State of Rajasthan

2011-05-17

R.S.CHAUHAN

body2011
JUDGMENT 1. - The issue which has arisen before this Court in the present case is that whether the finance company which had granted a loan to the owner for buying a vehicle is entitled to recover the vehicle in case, the higher purchaser defaults in payment and in case the offending vehicle is involved in commission of criminal offence? 2. The issue arises in the following background: on 30th July, 2007, the SHO, Police Station Rohit Pali had stopped a Toyota Innova Car, bearing No.RJ 27 TC 0070994I, and a search was made. The police had discovered ten bags of doda post, weighing 217 Kg. doda post powder. Thus, a case was chalked out for offence under the NDPS Act and the vehicle was duly seized. Since the petitioner company had granted a loan to Ramesh for the said vehicle, since Ramesh had failed to repay the loan amount, the petitioner-company had filed an application under Section 457 Cr.P.C. before the learned trial Court and prayed that the custody of the vehicle be given to it. However, vide order dated 25.08.2010, the said application was dismissed. Hence, this petition before this Court. 3. The learned counsel for the petitioner has relied upon the cases of Sunderbhai Ambalal Desai v. State of Gujarat, JT 2002 (10) SC 80 ; Bharat Mehta v. State by Inspector of Police, Chennai, AIR 2008 SC 1970 and on the case of General Insurance Council & Ors. v. State of Andhra Pradesh & Ors., 2010 Cri LJ 2883 to buttress his contention that even if the vehicle is involved in a criminal offence, since the petitioner company had been shown as the owner of the offending vehicle, it is entitled to seek the custody of the vehicle. Secondly, the Apex Court had laid down certain guidelines for exercising of power under Section 451 Cr.P.C. in the case of Sunderbhai Ambalal Desai (supra). However, the said guidelines have been ignored by the learned Judge while dismissing the application under Section 451 Cr.P.C. 4. On the other hand, the learned Public Prosecutor has vehemently contended that under the provisions of NDPS Act, the vehicle is subject to confiscation by the Government. Therefore, the custody of the vehicle should not be given to the finance company. 5. On the other hand, the learned Public Prosecutor has vehemently contended that under the provisions of NDPS Act, the vehicle is subject to confiscation by the Government. Therefore, the custody of the vehicle should not be given to the finance company. 5. Heard the learned counsel for the parties and perused the impugned order as well as the case law cited at the Bar. 6. In the case of Sunderbhai Ambalal Desai (supra), the Hon'ble Supreme Court has laid down the guidelines for the exercise of power under Section 451 Cr.P.C. The guidelines dealing with the vehicles are as under:- "13. Learned senior counsel Mr. Dholakia, appearing for the State of Gujarat further submitted that at present in the police station premises, number of vehicles are kept unattended and vehicles become junk day by day. It is his contention that appropriate directions should be given to the magistrates who are dealing with such questions to hand over such vehicles to its owner or to the person from whom the said vehicles are seized by taking appropriate bond and the guarantee for the return of the said vehicles if required by the court at any point of time. 14. However, the learned counsel appearing for the petitioners submitted that this question of handing over of vehicles to the person from whom it is seized or to its true owner is always a matter of litigation and a lot of arguments are advanced by the concerned persons. 15. In our view, whatever be the situation, it is of no use to keep seized vehicles at the police stations for a long period. It is for the Magistrate to pass appropriate orders immediately by taking appropriate bond and guarantee as well as security for return of the said vehicles, if required at any point of time. This can be done pending hearing of applications for return of such vehicles. 16. In case where the vehicle is not claimed by the accused, owner, or the insurance company or by third person, then such vehicle may be ordered to be auctioned by the court. If the said vehicle is insured with the insurance company then insurance company be informed by the court to take possession of the vehicle which is not claimed by the owner or a third person. If the said vehicle is insured with the insurance company then insurance company be informed by the court to take possession of the vehicle which is not claimed by the owner or a third person. If insurance company fails to take possession the vehicles may be sold as per the direction of the court. The court would pass such order within a period of six months from the date of production of the said vehicle before the court. In any case, before handing over possession of such vehicles, appropriate photographs of the said vehicle should be taken and detailed panchnama should be prepared. 7. Thus, according to the Apex Court even if the vehicle were involved in a commission of crime, even then both in the interest of the owner and in the interest of the nation, the vehicle should be returned to the owner after imposing certain conditions. Moreover, in the case of Bharat Mehta (supra), a case under the Excise Act, the Hon'ble Supreme Court has noted that according to the hire purchase agreement, the finance company is shown as an owner. Therefore, instead of letting the vehicle be devalued by exposing it to natural elements, the Apex Court had directed that the vehicle should be returned to the finance company. The present case is squarely covered by the case of Sunderbhai Ambalal Desai (supra) and the case of Bharat Mehta (supra). 8. Keeping in view the guidelines established by the Apex Court in the case of Sunderbhai Ambalal Desai (supra), this Court has no hesitation in setting aside the order dated 25.08.2010 and to direct that the custody of the Toyta Innova Car, bearing No.RJ 27 TC 0070994 I, shall be returned forthwith to the petitioner-company provided the petitioner-company submits a bank guarantee of the value of the car before the learned trial Court. Moreover, the finance company is directed not to transfer or to sell the said car to a third party. Furthermore, it shall submit a written undertaking before the learned trial court that in case the car is required for the purpose of confiscation, the same shall be made available to the learned trial Court at the time of passing of the final judgment in the criminal trial. 9. The revision petition is, hereby, allowed.Revision petition allowed. *******