Andhra HC (Pre-Telangana)
The Asia Pacific Investments Trust Ltd. vs Ac, Excise And Prohibition, Hyderabad ... on 17 June, 1996
Equivalent citations: 1996(3)ALT412
Author: Ramesh Madhav Bapat
Bench: Ramesh Madhav Bapat
ORDER Ramesh Madhav Bapat, J.
1. This Petition has been filed by third party Finance Company, under Article 226 of Constitution of India to issue a writ, direction or order preferably in the nature of Certiorari calling for the records relating to the proceedings in Cr. No. A7/2729/95/ACH/EX dated 20.11.1995 on the file of the 1st respondent and to examine the legality, propriety and correctness of the said order and quash the same holding that the impugned proceedings is violative of Articles 14, 300-A and 19(1)(g) of the Constitution and forbid the respondents from proceeding in any manner in pursuance of the above referred impugned proceedings.
2. The writ affidavit filed by the petitioner herein shows that the petitioner is a Finance Company. Petitioner buys certain vehicles, machines etc., which are identified by their customers. In the present case, 4th respondent, who was interested in buying motor vehicle, approached the petitioner company with a request to purchase a vehicle for him. Accordingly, respondent No. 4 identified vehicle and it was purchased by the petitioner herein and it was let out on monthly instalments to respondent No. 4. While respondent No. 4 was using the vehicle, the vehicle was confiscated or taken in possession by 1st and 2nd respondents on the pretext that the 4th respondent fell in arrears of excise dues payable to the State of Andhra Pradesh, and now it is apprehended by the petitioner herein that the first respondent is likely to take steps in selling the said vehicle by harming the interest of the petitioner. Under such circumstances, the petitioner was constrained to file a Writ Petition No. 23620 of 1995 in this Court. The said Writ Petition was allowed and a direction was given to the 1st Respondent therein by this Court to issue an appropriate notice to the petitioner and hear and dispose of the matter according to law.
3. In compliance of the order passed in the above Writ Petition, respondent No. 1 issued notice to the petitioner, matter was heard on merits and the representation filed by the petitioner herein was rejected by the impugned order and, therefore, the present Writ Petition has been filed.
4. ld. Counsel for the petitioner Mr. A.T.M. Rangaramanujam, submitted that the petitioner in this petition is a Finance Company. The petitioner will buy the vehicles or machinery which are identified by their customers. In the present case, respondent No. 4 had identified a Motor vehicle for his own use and requested the petitioner company to buy the said vehicle for him. Accordingly the petitioner bought the vehicle and an agreement of hire-purchase was entered into between the parties and the respondent No. 4 was using the said vehicle.
5. It was submitted by the ld. Counsel that the impugned order passed by first respondent is illegal and not maintainable in law.
6. Ld. Counsel however submitted, that as a matter of fact the real owner of the motor vehicle is the finance company and not Respondent No. 4. Though respondent No. 4 might have fell in arrears of excise dues, this property being the property of the petitioner cannot be sold in auction for recovery of dues of the Government.
7. Ld. Counsel for the petitioner herein invited my attention to Section 17 of Andhra Pradesh Excise Act, 1968. My attention was also drawn to Section 65 of the Act, which speaks about recovery of Government dues which is extracted as follows :
RECOVERY OF GOVERNMENT DUES :
1. The following moneys, namely :-
(a)all excise revenue.
(b)any loss that may accrue when, in consequence of default, a lease under Section 17 has been taken under management of the Collector or has been resold by him.
(c) amounts due to the Government by any person on account of any contract relating to the excise revenue, and
(d) the costs, charges and expenses (including the salaries and allowances of the Prohibition and Excise Officers) specified in sub-section (2) of Section 28 :
may be recovered from the person primarily liable to pay the same or from his surety, as if they were arrears of land revenue.
2. When a lease has been taken under management by the Collector, or has been resold by him, the Collector may recover, in the manner authorised by sub-section (1), any money due to the defaulter by lessee or assignee.
3. Arrears of moneys recoverable under this Section shall bear interest at the rate as may be prescribed.
8. Ld. Counsel also drew my attention to Section 66 of the said Act, which is (extracted) as follows :-
GOVERNMENT'S LIEN ON PROPERTY OF DEFAULTER :-
In the event of default by any person licensed or holding a lease under this Act distillery, brewery, warehouse, shop or premises and all fittings, apparatus, stocks of intoxicants or materials for the manufacture of the same, held in or upon any such distillery, brewery, warehouse, shop or premises, shall be liable to be attached in satisfaction of any claim for excise revenue or in respect of any loss incurred by the Government through such default and to be sold to satisfy such claim which shall be a first charge upon the proceeds of such sale.
9. Ld. Counsel submitted that, even if a person falls in arrears of Government dues, Section 66 of the said Act does not authorise respondent No. 1 or any other Excise Officers to proceed to sale (sic. sell) the motor vehicle as it has been specifically exempt under Section 66 of the Act.
10. Ld. Counsel for the petitioner herein also invited my attention to sub-section (30) of Section 2 of the Motor Vehicles Act which defines :-
"Owner" means a person in whose name a motor vehicle stands registered and where such person is a minor the guardian of such minor and in relation to a motor vehicle which is the subject of a hire-purchase agreement, or an agreement of lease or an agreement of hypothecation, the person in possession of the vehicle under that agreement.
11. Ld. Counsel for the petitioner herein invited my attention to the agreement of hypothecation produced on record and submitted that as per the agreement the finance company i.e., petitioner herein, was the absolute owner of the said vehicle and Respondent No. 4 has nothing to do with the said vehicle, as the said vehicle was purchased by the petitioner at their costs.
12. Ld. Counsel for the petitioner herein also relied upon a ruling rendered in Gundu Govind Dhumale and Anr. v. Collector of Customs & Central Excise & Ors. [1980 Karnataka Law Journal 308].
13. While dealing with the case, it was held by his Lordship that definition of owner is not exhaustive; financier under hire purchase agreement held real owner. My attention was also invited by the ld. Counsel to a ruling rendered in Mrs. Masseys (1930) Limited v. C.R. Krishnaswamy Iyer [AIR 1935 Madras 603], wherein it is held :-
To sum up, the law of hire and hire-purchase stems from the law of contracts of which it forms an important segment. It is comparatively modern in origin and is designed to serve the needs of credit buying while at the same time protecting the vendor from being caught in the meshes of the law relating to sales stricto sensu. In effect, hire purchase is bailment with an option to purchase though it is sometimes used in a wider sense to include agreements where there is an irrevocable agreement to buy in instalment terms with the proviso that the title shall not pass until the instalments are paid. A hire purchase agreement thus creates a bailment, but is a bailment plus an option to purchase. The transaction is compounded of the element of both the law of hire and sale, and it would be clearly wrong to assimilate it to a hypothecation of movable property.
14. Considering the above position of law as well as the facts, this Court holds that the petitioner is the real owner of the vehicle. Respondent No. 4 has fallen in arrears of Government dues and, therefore, respondent No. 1 has no authority to proceed against respondent No. 4 by selling Maruti Van No. AP 15-B 7776. Respondents 1, 2 and 3 are directed to release the vehicle in favour of the petitioner herein on proper identification. The order passed by this Court will not be barred to recover the Government dues from respondent No. 4 by any other legal means.
15. With this direction, the Writ Petition stands allowed. No Costs.