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2016 DIGILAW 49 (GAU)

Indusind Bank v. State of Assam

2016-01-22

PARAN KUMAR PHUKAN

body2016
JUDGMENT AND ORDER : Paran Kumar Phukan, J. By means of this application under Section 482 of the Cr.P.C., the petitioners are seeking for quashing of the order dated 12.05.2010 passed by the learned Judicial Magistrate, First Class, Dibrugarh in C.R. Case No. 388C/2009, whereby, the learned Court took cognisance of the offence under Sections 448/384/420/34 of the IPC against the petitioners. 2. The facts leading to the filing of the petition in brief are that the respondent No. 2, herein, availed a loan from the petitioner No. 1, the Indusind Bank Limited through Ashok Leyland Finance Ltd. for purchasing a motor cycle by executing an agreement dated 21.06.2004. The loan was to be repaid in 36 equated monthly instalments. But after repayment of few instalments, there was default on the part of the respondent No. 2 and the post dated cheques issued by him at the time of availing the loan were dishonoured for which, his loan account was categorised as a Non-Performing asset. Due to default of the respondent No. 2 and on his failure to respond to the notices repeatedly issued to him, the vehicle was repossessed on 16.01.2006 and after a reasonable time, it was disposed of on 31.03.2006 and the sale proceed was credited to his loan account in terms of the loan agreement. 3. Since huge amount was outstanding, the petitioner-bank issued a notice dated 27.11.2009 to the respondent No. 2 informing that Arbitration Proceeding would be initiated for recovery of the outstanding amounts. However, the respondent No. 2 failed to respond to the aforesaid notice. Thereafter, a notice dated 07.12.2009 was sent to respondent No. 2 by the sole Arbitrator calling upon the respondent No. 2 to appear in the arbitration proceedings. 4. On receipt of the said notice, the respondent No. 2 instead of appearing before the sole Arbitrator filed a complaint in the Court of the learned Chief Judicial Magistrate, Dibrugarh on 29.12.2009 by arraying the officials of the petitioner-bank including the Managing Director bringing some vague allegations. On that complaint, the learned Judicial Magistrate, First Class, Dibrugarh took cognisance of the offences under Sections 448/384/420/34 of the IPC against the petitioners and issued summons. On that complaint, the learned Judicial Magistrate, First Class, Dibrugarh took cognisance of the offences under Sections 448/384/420/34 of the IPC against the petitioners and issued summons. Against this order Criminal Revision No. 38(2)/2010 was preferred before the learned Sessions Judge, Dibrugarh but the same was dismissed on 27.12.2011 on the ground that the matter relates to question of repayment of loan which is to be decided in the trial. 5. Being highly aggrieved and dissatisfied, the petitioners have preferred this petition under Section 482 of the Cr.P.C. for quashing of the criminal proceedings. 6. It is an admitted fact that the respondent No. 2 availed loan from the petitioner-bank for purchasing the scooter through Ashok Ley land and the loan was to be repaid in 36 equated monthly instalments. It has been alleged by the respondent No. 2 in the complaint that at the time of availing the loan 36 numbers of post-dated cheques were issued to the petitioner-bank as security against the loan amount, out of which, the petitioner-bank enchased 8 numbers of cheques for Rs. 10,000/-. Further allegations is that on 03.01.2006, the accused Nos. 1, 2, 4 and 5 named in the complaint took forcible possession of the vehicle without issuing any documents and subsequently, it was sold to some other person at Rs. 27,500/-. Further allegations is that the accused persons had shown Rs. 18,000/- as the sale price of the scooter but in the money receipt, it has been shown as Rs. 15,000/-. It was further stated in the complaint that on 08.07.2009, the accused persons had sent a notice dated 05.09.2007 demanding Rs. 22,031/- along with interest from him and it was intimated that they would repossess the vehicle which they already took on 16.01.2006 and sold out the same and misappropriated the amount and thereby they have committed offences under Sections 379/448/420/387/34 of the IPC. The respondent claims to have filed a police case for forcible taking away of the vehicle but it was reported by police that no case has been registered and no information has been received by police regarding the incident. 7. The respondent claims to have filed a police case for forcible taking away of the vehicle but it was reported by police that no case has been registered and no information has been received by police regarding the incident. 7. Learned counsel appearing on behalf of the petitioners by relying on the decision of the Apex Court in Anup Sarmah v. Bhola Nath Sarma and Others submitted that in a hire purchase agreement, the purchaser remains merely as a trustee on behalf of the financier and actual ownership remains with the financier. In the above mentioned case also, the vehicle was forcibly taken away by the financier. The Apex Court has held as under:- "In an agreement of hire purchase, the purchaser remains merely a trustee/bailee on behalf of the financier/financial institution and ownership remains with the latter. In case the vehicle is seized by the financier, no criminal action can be taken against him as he is re-possessing the goods owned by him. No cogent reason to interfere with the impugned judgment order passed by the High Court quashing the criminal proceedings pending before the learned Magistrate." 8. In view of the above, the law can be summarised that in an agreement of hire purchase, the purchaser remains merely a trustee/bailee on behalf of the financier/financial institution and ownership remains with the latter. Thus, in case, the vehicle is seized by the financier, no criminal action can be taken against him as he is re-possessing the goods owned by him. 9. Similar view has been expressed by the Apex Court in Charanjit Singh Chadha and Others v. Sudhir Mehra, wherein, the Apex Court has held that recovery of possession of goods by owner/financier as per terms of the hire purchase agreement, does not amount to a criminal offence. The Apex Court also observed as follows: "The whole case put forward by the respondent complainant is to be appreciated in view of the stringent terms incorporated in the agreement. If the hirer himself has committed default by not paying the instalments and under the agreement the appellants have taken repossession of the vehicle, the respondent cannot have any grievance. The respondent cannot be permitted to say that the owner of the vehicle has committed theft of the vehicle or criminal breach of trust or cheating or criminal conspiracy as alleged in the complaint. The respondent cannot be permitted to say that the owner of the vehicle has committed theft of the vehicle or criminal breach of trust or cheating or criminal conspiracy as alleged in the complaint. When the agreement specifically says that the owner has got a right to repossess the vehicle, there cannot be any basis for alleging that the appellants have committed criminal breach of trust or cheating. The plea that the appellants have committed theft is without any basis as the appellants have taken repossession of the vehicle in exercise of their right under commit theft of his own goods as indicated in Illustration (k) of Section 378 IPC. But in the instant case, the owner repossessing the vehicle delivered to the hirer under the hire-purchase agreement will not amount to theft as the vital element of "dishonest intention" is lacking. The element of "dishonest intention" which is an essential element to constitute the offence of theft cannot be attributed to a person exercising his right under an agreement entered into between the parties as he may not have an intention of causing wrongful gain or to cause wrongful loss to the hirer." 10. In the instant case also repossession is clearly permissible in view of the hire purchase agreement and for repossession of the same criminal liability could be attributed to the petitioners. In the light of the judgment of the Apex Court in the above mentioned cases, recovery of possession of the vehicle by the financier/owner does not amount to criminal offence. The respondent No. 2 instead of appearing before the sole Arbitrator for adjudication of the dispute, filed the complaint before the Court alleging that the vehicle was forcibly taken away. On the basis of the complaint, the learned Chief Judicial Magistrate should not have taken cognisance against the accused petitioners and the revisional Court also failed to properly appreciate the factual and legal aspects of the case. 11. Consequently, the complaint case No. 388C/2009 now pending in the Court of Judicial Magistrate, First Class, Dibrugarh is liable to be quashed and set aside which I accordingly do. Send down the LCR along with a copy of the judgment for information and necessary action.