Gujarat High Court
H.D.B. Finacial Ltd. Thro Mehulkumar G. ... vs State Of Gujarat on 23 February, 2021
Author: A. C. Joshi
Bench: Ashokkumar C. Joshi
R/SCR.A/367/2021 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CRIMINAL APPLICATION NO. 367 of 2021
FOR APPROVAL AND SIGNATURE:
HONOURABLE DR. JUSTICE ASHOKKUMAR C. JOSHI
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1 Whether Reporters of Local Papers may be allowed No
to see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy No
of the judgment ?
4 Whether this case involves a substantial question No
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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H.D.B. FINACIAL LTD. THRO MEHULKUMAR G. THAKAR
Versus
STATE OF GUJARAT
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Appearance:
DHRUVIK K PATEL(7769) for the Applicant(s) No. 1
KALPESH R PATEL(7896) for the Applicant(s) No. 1
MR. MAITHILI MEHTA, APP for the Respondent(s) No. 1
RULE SERVED(64) for the Respondent(s) No. 2,3
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CORAM: HONOURABLE DR. JUSTICE ASHOKKUMAR C. JOSHI
Date : 23/02/2021
ORAL JUDGMENT
1. The petitioner is before this Court seeking prayer to hold auction of sale of vehicle in question being Maruti Ertiga VDI bearing registration no. GJ-12-CD-9892 to recover the outstanding dues on suitable conditions.
2. It appears that the petitioner approached this Court seeking Page 1 of 8 Downloaded on : Wed Feb 24 23:54:06 IST 2021 R/SCR.A/367/2021 JUDGMENT release of muddamal vehicle i.e. Maruti Ertiga VDI bearing registration no. GJ-12-CD-9892 which has been seized in connection with FIR being I- CR No. 27 of 2019 registered with Aadesar Police Station, District- Kachchh (East- Gandhidham) for the offences punishable under Sections 302 and 114 of the IPC.
3. The petitioner has moved Criminal Misc. Application before the learned Additional Sessions Judge, Bhachau, District- Kachchh which came to be rejected by order dated 15.10.2020.
4. The present petition has been moved on the ground that the loan has been disbursed in favour of the respondent no.3 and the loan agreement has been executed between the petitioner company and the respondent no.3 vide loan agreement. The said vehicle has been hypothecated by respondent no.3. The loan disbursed in favour of respondent no.3, since, has not been recovered, the request is made for sale of the vehicle by the petitioner herein - finance company.
5. It is urged that no purpose is likely to be served to continue the possession of the vehicle without any permission to sell the same. Therefore, the following prayers have been made:-
"(A) Your Lordships may be pleased to allow this petition by issuing appropriate writ, order or direction directing the Police Inspector, Aadesar, Dist- Kutch to handover the custody of Maruti Ertiga VDI bearing registration No. GJ-
12-CD-9892 to the present petitioner pending the trial on suitable conditions.
(B) Your Lordships maybe please to permit the petitioner company to release the vehicle by giving Bank Guarantee as security and surety instead of bond amount and solvent surety of the equivalent amount;
(C) Your Lordships may be pleased to permit Page 2 of 8 Downloaded on : Wed Feb 24 23:54:06 IST 2021 R/SCR.A/367/2021 JUDGMENT the petitioner company to hold auction and sold the vehicle in question i.e. Maruti Eartiga VDI bearing registration No. GJ-12-CD-9892 to recover the outstanding dues on suitable conditions"
6. Learned advocate Mr. Kalpesh R. Patel appearing for the petitioner has relied upon the decision of the Apex Court rendered in the case General Insurance Council and Ors. vs. State of Andhra Pradesh and Ors.; 2010(6) SCC 768. He has also placed reliance upon the order dated 26.07.2019 passed by the coordinate Bench in Special Criminal Application No. 5119 of 2019 in case of AU Small Finance Bank Ltd, through Rajan Sureshbhai Chudasma Vs. State of Gujarat.
6.1 Learned advocate for the petitioner has urged this Court that the respondent having failed to pay the amount and also showing his inability to make good the outstanding dues, denying permission would deteriorate the condition of the vehicle which is presently not in use. He has urged that the Hon'ble Apex Court in the case of General Insurance Council and Ors. (Supra) has permitted the insurer to move the separate petition for release of recovered vehicle as soon as it is informed of such recovery before the Jurisdictional Court. He has further urged that the decision in the case of Sunderbhai Ambalal Desai vs. State of Gujarat; 2002(10) SCC 283 since has been applied in the case of the present petition, the Court has released the vehicle. No purpose is likely to be served and the letter and spirit of the said judgment will not be fulfilled, if such a permission is rejected.
7. Learned APP Ms. Maithili Mehta for the State has requested the Court to pass an appropriate order as may be deemed just and proper.
7.1 Learned APP does not dispute the ratio laid down by the
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R/SCR.A/367/2021 JUDGMENT
Hon'ble Apex Court, in the case of General Insurance Council and Ors. (supra). However, it is urged that due care be taken in taking the photographs and recording videography inasmuch as the requirement of the Court while trying the matter shall need to be taken care of.
8. Having heard the arguments of both the sides and considering order dated 26.07.2019 passed by the coordinate Bench in Speical Criminal Application No. 5119 of 2019 in case of AU Small Finance Bank Ltd, through Rajan Sureshbhai Chudasma Vs. State of Gujarat, wherein the coordinate Bench has taken into consideration the ratio laid down by the Hon'ble Apex Court in the case of General Insurance Council and Ors.(supra) the relevant findings of which shall be profitable to reproduce hereinafter:-
"10. This Court in the said matter after considering the issue came to the following conclusion:-
"Since there is a mandatory requirement to act in the manner provided in Section 158 (6) there is no justifiable reason as to why the requirement is not being followed.
It is, therefore, directed that all the State Governments and the Union Territories shall instruct, if not already done, all concerned police officers about the need to comply with the requirement of Section 158 (6) keeping in view the requirement indicated in Rule 159 and in Form 54. Periodical checking shall be done by the Inspector General of Police concerned to ensure that the requirements are being complied with. In case there is non-compliance, appropriate action shall be taken against the erring officials. The Department of Transport and Highway shall make periodical verification to ensure that action is being taken and in case of any deviation immediately bring the same to the notice of the concerned State Government/Union Territories so that necessary action can be taken against the concerned officials."
The writ petition is accordingly disposed of."
11. Despite the aforesaid directions having been issued by this Court in the aforesaid two matters, grievance is still being made by the Petitioners, that the Page 4 of 8 Downloaded on : Wed Feb 24 23:54:06 IST 2021 R/SCR.A/367/2021 JUDGMENT police, investigating agency and the prosecuting agency are not taking appropriate and adequate steps for compliance of aforesaid directions issued by this Court. Therefore, a need has arisen for giving further directions so as to clear the clouds and iron out the creases.
12. Notice of the said petition was issued to all the States and Union Territories. Almost all the States have contended that they have already issued necessary guidelines and directions for full and complete compliance of the provisions contained in Sections 451 and 457 of the Code as elaborated in Sunderbhai Ambalal Desai (supra) as also under Section 158 (6) of the M.V. Act and 159 of the Rules as directed in General Insurance Council case (supra). Thus, in one voice, they have contended that there would not be any difficulty in compliance of the directions that may be issued in furtherance of achieving the object as directed by this Court. Thus, in our view, there appears to be consensus in this matter.
13. Petitioners have submitted that information with regard to all insured vehicles in the country is available with the Insurance Information Bureau created by IRDA. This information could be utilised to assist the police to identify the insurer of the vehicle. Upon recovery of the vehicle in police station, insurer/ complainant can call an All India Toll Free No. to be provided by Insurance Information Bureau to give the information of the recovered vehicle. Thereafter, the insured vehicle database would be searched to identify the respective insurer. Upon such identification, this information can be communicated to the respective insurer and concerned police stations for necessary coordination.
14. In our considered opinion, the aforesaid information is required to be utilised and followed scrupulously and has to be given positively as and when asked for by the Insurer. We also feel, it is necessary that in addition to the directions issued by this Court in Sunderbhai Ambalal Desai (supra) considering the mandate of Section 451 read with Section 457 of the Code, the following further directions with regard to seized vehicles are required to be given.
"(A) Insurer may be permitted to move a separate petition for release of the recovered vehicle as soon as it is informed of such recovery before the Jurisdictional Court.
Ordinarily, release shall be made within a period of 30 days from the date of the petition. The necessary Page 5 of 8 Downloaded on : Wed Feb 24 23:54:06 IST 2021 R/SCR.A/367/2021 JUDGMENT photographs may be taken duly authenticated and certified, and a detailed panchnama may be prepared before such release.
(B) The photographs so taken may be used as secondary evidence during trial. Hence, physical production of the vehicle may be dispensed with.
(C) Insurer would submit an undertaking/guarantee to remit the proceeds from the sale/auction of the vehicle conducted by the Insurance Company in the event that the Magistrate finally adjudicates that the rightful ownership of the vehicle does not vest with the insurer. The undertaking/guarantee would be furnished at the time of release of the vehicle, pursuant to the petition for release of the recovered vehicle. Insistence on personal bonds may be dispensed with looking to the corporate structure of the insurer."
15. It is a matter of common knowledge that as and when vehicles are seized and kept in various police stations, not only they occupy substantial space of the police stations but upon being kept in open, are also prone to fast natural decay on account of weather conditions. Even a good maintained vehicle loses its road worthiness if it is kept stationary in the police station for more than fifteen days. Apart from the above, it is also a matter of common knowledge that several valuable and costly parts of the said vehicles are either stolen or are cannibalised so that the vehicles become unworthy of being driven on road. To avoid all this, apart from the aforesaid directions issued hereinabove, we direct that all the State Governments/ Union Territories/Director Generals of Police shall ensure macro implementation of the statutory provisions and further direct that the activities of each and every police stations, especially with regard to disposal of the seized vehicles be taken care of by the Inspector General of Police of the concerned Division/Commissioner of Police of the concerned cities/Superintendent of Police of the concerned district."
9. It can be seen from the said decision that the Court has made it amply clear that the insurer may be permitted to move a separate petition for the release of the recovered vehicle as soon as it is informed of such recovery before the Jurisdictional Court and such release shall be made within 30 days of the said petition, after taking necessary photographs which is duly authenticated and Page 6 of 8 Downloaded on : Wed Feb 24 23:54:06 IST 2021 R/SCR.A/367/2021 JUDGMENT certified and a detailed panchnama is drawn. The photographs so taken, may be used as secondary evidence during the trial, hence, physical production of the vehicle can be dispensed with. The Court also has directed the insurer to submit an undertaking/ guarantee to remit the proceeds from the sale/auction of the vehicle conducted by the insurance company in the event the learned Magistrate finally adjudicates that the rightful ownership of the vehicle does not vest with the insurer. Such undertaking/ guarantee would be furnished at the time of release of vehicle, pursuant to the petition for release of recovered vehicle. The Court also further directed and observed that looking to the corporate structure of the insurance company, personal bonds may be dispensed with.
10. In the said decision the Apex Court is more conscious about the seized vehicle lying with various police stations and they being prone to the nature decay on account of being kept in the open grounds. The Court also is concerned that the costly parts of the vehicles on being stolen and cannibalized and the vehicle becomes unworthy of being driven on road. Therefore, macro implementation of statutory provisions and careful scrutiny of activities of each and every police station with regard to the disposal of the seized vehicles is handed over to the superior office taking care by the Inspector General of the concerned divisions or the Commissioner of Police of the concerned cities.
11. Applying the law to the factual matrix available in the case of the present petitioner and also on adhering to the letter and spirit of the law laid down, the request of the petitioner has been allowed of handing over the vehicle to the petitioner in Special Criminal petition No.5119 of 2019. This Court has also assistance of that order passed by the coordinate Bench, wherein the coordinate bench has considered the ratio laid down by the Hon'ble Apex Court in case of General Insurance Council and Ors. (supra). This Page 7 of 8 Downloaded on : Wed Feb 24 23:54:06 IST 2021 R/SCR.A/367/2021 JUDGMENT Court has also assistance of the decision in case of Sunderbhai Ambalal Desai (supra).
12. Resultantly, the request of sale is acceded to. The petitioner finance company is permitted to auction publicly the vehicle as per the standard code / rules and regulations of the petitioner company which shall be followed strictly. The Police shall carry out the detailed panchnama at the time of release of the vehicle. Duly authenticated and certified versions of photographs and video recordings also shall be placed before the trial Court. The trial Court concerned shall verify the ownership of the vehicle before releasing the same.
13. If there are any allegations with regard to the hiding of muddamal in cavity, the same shall be accordingly videographed. The petitioner - finance company shall undertake and guarantee to remit the proceeds from the sale /auction of the vehicle that may be conducted at a near future date, to the Court if the learned Magistrate trying the criminal case asks for the same, at the end of the trial. Such an undertaking shall be furnished at the time of release of vehicle before the Court concerned, within two weeks from today.
14. Considering the corporate structure of the petitioner-finance company, the petitioner finance company shall furnish bank guarantee instead of bond.
15. Accordingly, the present petition succeeds and is allowed. Rule is made absolute to the aforesaid extent. Direct service is permitted through E-mail / Fax.
(A. C. JOSHI,J) prk Page 8 of 8 Downloaded on : Wed Feb 24 23:54:06 IST 2021