Allahabad High Court
Vishal Dubey vs State Of U P And 2 Others on 27 May, 2024
Author: Siddharth
Bench: Siddharth
HIGH COURT OF JUDICATURE AT ALLAHABAD
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Neutral Citation No. - 2024:AHC:95897-DB
Court No. - 46
Case :- CRIMINAL MISC. WRIT PETITION No. - 10702 of 2022
Petitioner :- Vishal Dubey
Respondent :- State Of U P And 2 Others
Counsel for Petitioner :- Rahul Chaudhary
Counsel for Respondent :- G.A.,Rajesh Kumar Bind
Hon'ble Siddharth,J.
Hon'ble Prashant Kumar,J.
1. Additional cause list revised. Neither any counter affidavit has been filed on behalf of respondent no.3, nor anyone respondents on his behalf. Learned AGA has filed short counter affidavit on behalf of the State respondents.
2. Heard Sri Kartikey Saran, learned counsel for the petitioner and learned AGA for the State respondents.
3. This writ petition has been filed with the prayer to quash the First Information Report dated 03.07.2022, registered as Case Crime No. 0361 of 2022, under sections 406, 504, 506 I.P.C., at Police Station Meja, District Prayagraj. Further prayer has been made not to arrest the petitioner in the aforesaid case.
4. Learned counsel for the petitioner submits that the petitioner is a Collection Executive of a finance company, as per FIR version, informant has taken a loan for purchase of vehicle; on default, the hypothecated vehicle has been seized by the Finance Company.
5. Learned counsel for the petitioner submits that the vehicle was rightly repossessed by the petitioner working on behalf of the financier and under the hire-purchase agreement, the financier remains the owner of the vehicle till the entire payment is made and, therefore, possession taken by the financier for non-payment of instalments by the informant could not be held an offence. In support of his contention, he has relied upon a judgement of Hon'ble Supreme Court in Anup Sarmah v. Bhola Nath Sharma & Ors. reported in (2013) 1 SCC 400. The relevant paragraphs of Anup Sarmah (supra) are quoted hereunder:-
"6. In K.A. Mathai alias Babu & Anr. v. Kora Bibbikutty & Anr., (1996) 7 SCC 212, this Court had taken a similar view holding that in case of default to make payment of instalments financier had a right to resume possession even if the hire purchase agreement does not contain a clause of resumption of possession for the reason that such a condition is to be read in the agreement. In such an eventuality, it cannot be held that the financier had committed an offence of theft and that too, with the requisite mes rea and requisite dishonest intention. The assertions of rights and obligations accruing to the parties under the hire purchase agreement wipes out any dishonest pretence in that regard from which it cannot be inferred that financier had resumed the possession of the vehicle with a guilty intention.
7. In Charanjit Singh Chadha & Ors. v. Sudhir Mehra, (2001) 7 SCC 417, this Court held that recovery of possession of the vehicle by financier-owner as per terms of the hire purchase agreement, does not amount to criminal offence. Such an agreement is an executory contract of sale conferring no right in rem on the hirer until the transfer of the property to him has been fulfilled and in case the default is committed by the hirer and possession of the vehicle is resumed by the financier, it does not constitute any offence for the reason that such a case/dispute is required to be resolved on the basis of terms incorporated in the agreement. The Court elaborately dealt with the nature of the hire purchase agreement observing that in a case of mere contract of hiring, it is a contract of bailment which does not create a title in the bailee. However, there may be variations in the terms and conditions of the agreement as created between the parties and the rights of the parties have to be determined on the basis of the said agreement. The Court further held that in such a contract, element of bailment and element of sale are involved in the sense that it contemplates an eventual sale. The element of sale fructifies when the option is exercised by the intending purchaser after fulfilling the terms of the agreement. When all the terms of the agreement are satisfied and option is exercised a sale takes place of the goods which till then had been hired. While deciding the said case, this Court placed reliance upon its earlier judgments in M/s. Damodar Valley Corporation v. The State of Bihar AIR 1961 SC 440; Instalment supply (Private) Ltd. & Anr. v. Union of India & Ors., AIR 1962 SC 53; K.L. Johar & Co. v. The Deputy Commercial Tax Officer, Coimbtore III, AIR 1965 SC 1082; and Sundaram Finance Ltd. v. State of Kerala & Anr. AIR 1966 SC 1178.
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."
6. After considering the submissions made by the parties and perusing the dictum of Hon'ble Supreme Court in Anup Sarmah (supra), we are of the view that the possession of vehicle taken by the petitioner on behalf of the financier for non-payment of instalments by the informant could not be held an offence. Hence, the First Information Report dated 03.07.2022, registered as Case Crime No. 0361 of 2022, under sections 406, 504, 506 I.P.C., at Police Station Meja, District Prayagraj is hereby quashed.
7. The Writ Petition is allowed.
Order Date :- 27.5.2024
S.P.
(Prashant Kumar, J.) (Siddharth,J.)
