Madhya Pradesh High Court
M/S. Sundaram Finance Ltd., Jabalpur vs Mohd. Abdul Wakeel And Another on 28 November, 2000
Equivalent citations: 2001CRILJ2441, 2001(3)MPHT124
ORDER S.C. Pandey, J.
1. This revision under Section 397 read with Section 401 of the Code of Criminal Procedure is directed against the Order dated 10-4-96 passed by Chief Judicial Magistrate, Seoni in an unregistered case.
2. The applicant is a registered Finance Company. Its Head Office is at Madras. It has opened a Branch Office at 103/3, Shastri Bridge Road, Napier Town, Jabalpur.
3. The applicant agreed to finance the purchase of Mahindra Commander Jeep, under a hire-purchase agreement dated 21-12-94 with the non-applicant No. 1 Mohd. Abdul Wakeel. The jeep aforesaid was purchased in the name of the applicant, at its order, as per invoice dated 21-12-94 issued by the dealer on payment of Rs. 2,30,649/-. The non-applicant had given his assent to the purchase of jeep on payment of initial sum of Rs. 60,449/- and the balance out of total sum calculated at that time likely to become due amounted to Rs. 3,02,559/- by the time the last instalment was paid. Thus, balance of Rs. 2,41,910/- was to be paid in twenty monthly instalments starling from 21-12-94 and ending on 21-7-96. It is obvious that applicant had included the interest due on the loan advanced. The agreement dated 21-12-94 described the applicant as the "owner" and non-applicant as "the hirer". It was agreed that during the period between 21-12-94 to 21-7-96 the applicant shall be the owner and status of the non-applicant No. 1 would be that of a hirer only. The vehicle was registered in the name of the non-applicant No. 1 as M.P. 20-H/2592 and he was allowed to retain possession of the vehicle. The non-
applicant was given an option to claim title of the jeep in writing, that on or about 21-7-96 after payment of all the instalments and other sum due to the applicant. Thereupon the applicant was required to assign the jeep in favour of the non-applicant.
4. The hire purchase agreement dated 21-12-94 provided inter alia regarding the duties of the hirer. In this connection Clause No. 9 is of utmost importance to the decision of this case. It is being reproduced here :--
"9. In case the hirer shall during the continuance of this Agreement do or suffer any of the following acts or things, viz, either :--
(a) fail to pay any of the hiring instalments within the stipulated time whether demanded or not;
(b) die, become insolvent, or compounded with his creditor;
(c) the hirer being a limited company shall pass a resolution for voluntary winding up or shall have a petition for winding up presented against it or if a receiver shall be appointed of its undertaking;
(d) pledge or sell or assign or attempt to pledge or sell or assign or part with possession of or otherwise alienate or transfer the vehicle;
(e) do or suffer any act or thing whereby or in consequence of which the said vehicle may be distrained, or taken in execution under legal process, or by any public authority;
(f) fail to keep the vehicle comprehensively insured during the period of Agreement;
(g) fail to pay to the Government or any public authority any tax or surcharge or other levies due in respect of the vehicle;
(h) removes the vehicle to another State and gets it re-registered there;
(i) break or fail to perform or observe any of the conditions on his part herein contained;
then and on the occurrence of any such event, the rights of the hirer under this Agreement shall forthwith stand determined ipso fact without any notice to the hirer and all the instalments previously paid by the hirer shall be absolutely forfeited to owner who shall thereupon be entitled to enter any house or place where the said vehicle may then be, remove and retake possession of the same and to sue for all the instalments due and for damage for breach of the Agreement and for all the costs of retaking possession of the said vehicle and all costs occasioned by the hirer's default."
It is apparent from the terms of Clause No. (9) of the Agreement that applicant reserved its right to dispossess the non-applicant on breach of terms mentioned therein. One of the terms is non-payment of instalment on due date.
5. It appears that the non-applicant defaulted in payment of instalments. The applicant served notices dated 8th January, 96 and February 13, 1996 with a copy to the guarantor in each case to clear up the account up to date. This default was not disputed by non-applicant and he requested for two months' time by his letter of reply dated 23-1-96. However, he did not pay even after two months.
6. Thereafter the applicant in terms of Clause (9) of Agreement took possession of the vehicle Mahindra Commander Jeep bearing No. MP-02H/2592. However, by way of an abundant caution, the Branch Manager moved the Court under Section 438 of the Code of Criminal Procedure for grant of anticipatory bail. The application was dismissed by Sessions Court of Seoni as it was found that no offence was registered against the applicant's Branch Manager or any other person. The learned Sr. Counsel Shri Rajendra Singh read out the contents of that order during the course of his arguments. He asserted that position remains the same.
7. However, vehicle No. MP-20H/2592 was seized by the police at the instance of S.H.O. Police Station, Seoni. Both the applicant as well as the non-applicant applied for delivery of the jeep in question under Section 457 of the Code of Criminal Procedure. The learned C.J.M. granted custody of the vehicle to non-applicant on furnishing a security of Rs. 2 lacs and on an undertaking to the effect that loan shall be repaid to applicant by paying the instalments in time. The non-applicant was required to undertake that he shall maintain good relations with the applicant and keep the vehicle in good condition.
8. The learned Sr. Counsel Shri Rajendra Singh appearing for the applicant alongwith Shri Sharad Verma argued that the non-applicant had retained the vehicle and had not paid a single paisa towards the instalments. Nobody appeared on behalf of non-applicant No. 1 to oppose the application, despite notice and issuance of special post card.
9. It cannot be disputed that legal position is now settled that financier under the hire-purchase agreement can take back the possession of a vehicle according to the terms of that agreement. Non-payment of instalment is one of them which conferred upon the applicant, light of redelivery of possession. Therefore, if the applicant took possession of the vehicle, it cannot be said that he was guilty of theft. There was no intention to lake the vehicle dishonestly. Thus, the essential ingredient of the offence of theft as per Section 378 of IPC was not there. Similarly by signing the agreement dated 21-12-94, the non-applicant No. 1 gave implied consent to the right of taking the possession of vehicle from him, on failure to observe the terms of Clause (9). In any case, this right was exercised bona fide and not a colourable exercise or mere pretence. In the case of Trilok Singh and others Vs. Satya Deo Tripathi (AIR 1979 SC 850), quashed complaint case wherein summons were issued to appellants far an offence punishable under Section 395, IPC among others in similar circumstances. It was held that the nature of dispute was bona fide dispute of civil nature. It is not necessary to multiply the cases. It is clear that the applicant or his employee could not be held guilty of theft when the possession was taken pursuant to the agreement.
10. It appears to this Court that the delivery in favour of the non-applicant was granted on the ground that the vehicle was registered in the name of the applicant and it was he who would be deemed to be the owner within the meaning of the Motor Vehicles Act, 1988. So far as registration is concerned, it cannot always be taken as a "thumb rule" that the registration manifests a title. Ordinarily it does, prima facie. But this is not so in a case of hire purchase agreement. The non-applicant remained a hirer till he exercised his option in writing to purchase the vehicle after full payment of all the dues and the applicant assigned the vehicle to him. Till then the title of motor vehicle did not vest in him. This is one of the exception to the rule that prima facie a registered owner is deemed to have title to the vehicle. It is true that a hirer under the hire-purchase agreement is deemed to be the owner for the purposes of the Motor Vehicles Act, 1988 as per definition of an "owner" under Section 2(30) thereof. By that section of the Motor Vehicles Act, 1988, a fiction is created for the protection of the real owner from liability created by that Act. It is the hirer who would be under the actual physical control of motor vehicle under the terms of the agreement so long he pays the instalments. The definition caters to the requirement of the Motor Vehicles Act, 1988 which in terms prohibits of driving of Motor Vehicle in public by person without licence as per Section 3. Similarly it prohibits driving of a vehicle without permit where it is required as per Section 66 of the Motor Vehicles Act, 1988. That apart the Motor Vehicles Act, 1988 creates civil liability of payment of compensation to the victims of an accident with or without fault. It requires compulsory insurance of vehicle regarding third parties. These liabilities cannot be vicariously fulfilled by an owner under the agreement. The conclusion of this Court is affirmed by Section 51 of the Motor Vehicles Act, 1988. Under Section 51(1) of that Act a hirer gets a registration certificate subject to the entry that it was purchased under hire purchase agreement. Sub-section (2) thereof provides for contingency of transfer of that vehicle to another party subject to agreement for hire-purchase. The sub-section (3) provides for cancellation of certificate with the consent of the person who has given the vehicle on hire. This could only happen when the entire dues of" the financier are paid. The most important provision is sub-section (5) of Section 51 of the Act. It provides for the rights of a person who has given the vehicle on hire to get registration in his name when he lakes possession in default. After taking possession, he is entitled to apply for registration in his name subject to conditions mentioned in sub-section (6) of Section 51. Elaborate provisions have been made in case of (i) renewal of permit, (ii) demand of duplicate certificate, (iii) assignment of new registration mark, (iv) renewal of the vehicle to another State, (v) conversion of vehicle from one class to another, (vi) for issue of no objection certificate under Section 47, (vii) change of place of business of the registered owner, (viii) alternation of the vehicle under Section 52 for obtaining consent of the financier or the hirer undersub-section (6) of that Act. Under sub-section (7) the financier is required to issue no objection certificate or refusal with reasons on the application made for doing so. The further sub-sections (8) and (9) empower the appropriate authority to pass orders on the application of the hirer. Sub-section (10) provides what entries are to be made in registration before or after change in the conditions mentioned in that sub-section. Sub-section (11) provides that original registering authority shall inform the financier in case the changes mentioned in that section are made. Sub-section (12) requires that any other authority passing orders under sub-section (1) or (2) or cancelling an entry under sub-section (3) or issuing fresh registration certificate under sub-section (5) shall communicate its order to the original authority. It is amply clear from the aforesaid that the rights of the person who advanced loan have been statutorily recognised under the Motor Vehicles Act, 1988. For our purpose sub-section (5) gives the applicant right to apply for registration under the Motor Vehicles Act, 1988. For all these reasons this Court is of the view that fiction under Section 2(30) of the Motor Vehicles Act has a limited function and it should be confined to the purpose for which it was created. The Criminal Court in exercise of powers under Section 457 of the Code of Criminal Procedure cannot deliver the property to a "deemed owner" under the Motor Vehicles Act as against a person who is exercising his right to get back the vehicle for which he paid the price at the instance of the non- applicant on condition that non-applicant shall repay the part of price plus interest regularly in instalments when it became due. Nor does the insurance of the Motor Vehicle would affect the case of the applicant. Certain terms can be put before the delivery is made to the applicant to safeguard the interests of the claimants. The Motor Vehicles Act, 1988 also recognizes the rights of a person like the applicant.
11. This Court is of the opinion that any other view of the matter is likely to authorize the police to seize the property of citizens without commission of an offence on their part and the Court too may be guilty of being party to the high handed action of the police in getting the property delivered to a person who had no title to it under the contract duly signed by him. It may be that right to property may have been abolished as one of the Fundamental Rights by 44th Amendment Act of 1978 with effect from 20-6-1979. However, Article 300A of the Constitution added by the same Act preserved the right of a person to property by enjoining the State not to deprive him of his property without the authority of law. This Court is of the view that S.H.O. Seoni had no right to seize the jeep in question when the applicant did not commit any offence. The Court below should have seen the case in this light before granting custody of the vehicle to the non-applicant.
12. The result of the aforesaid discussion is that the applicant is entitled to redelivery of possession from the possession of non-applicant. Accordingly the impugned order dated 10-4-96 is set aside. It is directed that learned C.J.M. Seoni shall issue necessary process to the non-applicant and summon him for redelivery of the vehicle Commander Jeep MP-20H/2592. If necessary, he may take coercive measures for production of the aforesaid jeep in accordance with the Code, of Criminal Procedure. He shall deliver the aforesaid jeep to the applicant subject to the following conditions :--
(i) That it shall give an undertaking before C.J.M. that it shall apply for registration of vehicle in its own name under Section 51 (5) of the Motor Vehicles Act, 1988, and shall not permit it to be driven on road until the registration is transferred in its name;
(ii) That, it shall produce the vehicle before the learned C.J.M., if so directed;
(iii) That it shall give further undertaking to the C.J.M. that it shall get an insurance of the vehicle in question transferred in its own name failing which it shall apply and obtain a new insurance policy;
(iv) That, it is further directed that the C.J.M. shall release the vehicle in favour of the applicant on giving a solvent surety together with a personal bond of the concerned officer of Company or on furnishing a bank guarantee to the extent of Rs. 3 lacs. This amount aforesaid shall also cover the guarantee in case of the claims likely to be made by persons who are victims of an accident till the applicant gets the insurance transferred in the name or gets a new insurance policy.
13. Accordingly, this revision succeeds and is allowed.
14. Criminal Revision allowed.