Bombay High Court
Mercedes Benz Financial Services India ... vs State Of Maharashtra And Anr on 16 October, 2024
HEMANT
CHANDERSEN
2024:BHC-AS:41293
SHIV
Digitally signed by
HEMANT
CHANDERSEN SHIV
Date: 2024.10.17 H.C. SHIV 201.w92.24.doc
17:31:27 +0530
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
WRIT PETITION NO.92 OF 2024
M/s. Mercedes Benz Financial
Services India Pvt.Ltd.
(Formerly Known as Daimler Financial
Services India Pvt. Ltd.)
Through its Authorized Representative
Nagesh S/o Ganu Gawde
Age: 39 years, Occu: Service
Having Registered Office Address at,
5th Floor, Plot No.8, Baashyam Willow Square,
9 & 10, First Street, Thiruvika Industrial Estate,
Guindy, Chennai-600032. ...Petitioner
vs.
1. The State of Maharashtra
Through DCB CID Unit-10.
2. Sushil Damu Sakhare
R/o. Flat No.502, Savitri Sankul,
CHS, Pakhudi Road, Kalwa Dist Thane, 400605.
ALSO AT
1st Floor, Sai Suman Apartment,
Old Parsik Tunnel, Uday Nagar,
Mumbra- Thane-400612. ...Respondents
Mr. Mahesh Deshmukh a/w Ms. Bijal Gogri i/by GNP Legal for the
Petitioner.
Dr. D. S. Krishn Iiyer APP for the State.
Mr. Jayadip Jadhav, API, DCB,CID Unit-5, Kurla, present.
CORAM : SHYAM C. CHANDAK, J.
RESERVED ON : 3rd OCTOBER, 2024
PRONOUNCED ON : 16th OCTOBER, 2024
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H.C. SHIV 201.w92.24.doc
JUDGMENT :
. Present Petition seeks for quashing and setting aside of
the impugned Judgment and Order dated 1st November, 2023 passed
by the learned Additional Sessions Judge, Greater Mumbai in
Criminal Revision Application No.1013 of 2022 and the impugned
Order dated 19th October, 2022 passed by the 37th Court of learned
Additional Chief Metropolitan Magistrate, Esplanade, Mumbai in
Misc. Application bearing No.482/2022, in C.C.No.258/PW/2021.
1.1) Additionally, Petition is seeking to allow the said Misc.
Application filed by the Petitioner claiming custody of a vehicle i.e.,
Mercedes Benz GLA 200 CDI Sports bearing registration No.MH-04-
JM-9309, Chassis No. WDC1569086L009822 and Engine
No.65193034706098 with permission to sale the said vehicle (' the
car', for short).
2) Mr. Amol Mali, Assistant Police Inspector, DCB, CID,
Unit-V, Kurla has filed an affidavit thereby he conveyed that, he has
no objection to release the car in the interim custody of Petitioner.
3) Despite notice Respondent No.2 did not appear and file
his appearance. The car is costly; that it was purchased out of the loan
amount, which is a public money; that pursuant to the arbitral
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proceedings the car is subject matter of the recovery of the loan; and
that each day, the car is loosening its road-worthiness as well as its
market value, which has an adverse impact on the loan amount to be
recovered. Hence, and considering the say of the Respondent No.2
filed before the Sessions Court, the Petition was taken up for hearing
in the interest of justice. None appeared for Respondent No.2.
4) Heard Mr. Deshmukh, learned counsel for Petitioner and
Ms. Krishna Iyer the learned A.P.P. along with Mr. Amol Mali,
Assistant Police Inspector, DCB, CID, Unit-V, for the Respondent
No.1-State. Perused the record.
5) The submissions advanced by learned counsel for the
Petitioner are identical to the grounds stated in the Petition.
6) Learned A.P.P. stated that, in view of the affidavit in reply
filed by the Respondent No.1-DCB-CID and considering the facts and
circumstances of the case, necessary orders may be passed, in the
interest of justice.
7) The facts giving rise to this Petition are that, Petitioner is a
Non-Banking Finance Company (formerly known as M/s. Daimler
Financial Services India Pvt. Ltd.). That, by a 'Loan Agreement' dated
19th October 2018, Respondent No.2 availed a finance facility for a
H.C. SHIV 201.w92.24.doc
sum of Rs.31,72,000/- to purchase the said car. Said loan was
refundable subject to certain terms and conditions stated in the loan
Agreement. At the same time, a Deed of Hypothecation dated 19th
October, 2018 was also executed thereby said car was Hypothecated
in favour of the Petitioner as a security for the total amount repayable
under the Loan Agreement. As per contractual terms and conditions
in the loan Agreement and Moratorium, Respondent No.2 was bound
to pay to the Petitioner a total sum of Rs.30,59,680.55 due as on 27 th
August, 2020 together with interest at 18% per annum till the date of
realisation/payment thereof. The Respondent No.2, however, failed
to pay the due amount as per loan Agreement. Therefore, as per
clause 66 of the Loan Agreement, the Petitioner initiated the
arbitration proceedings therein the sole arbitrator observed that the
Respondent No.2 defaulted in payment of his loan EMIs and,
therefore, the Loan Agreement was terminated on 10 th December,
2019 and entire amount was called upon to be paid. In due course the
Arbitral Award dated 25th January, 2021 came to be passed.
7.1) That, an F.I.R. bearing C.R. No.11 of 2021 dated 13 th
January, 2021 was registered with Kurla Police Station against
Dharmavir Sharma @ Vajimuddin Shaikh @ Bhaskar Gouda @
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Dharm and eight others, under Sections 420, 419, 467, 468, 471, 485
read with 34 of I.P.C. Thereafter, said crime was transferred to Kurla
Crima Branch, Mumbai (CRB CID Unit-V) for further investigation,
where it was re-registered as, C.R. No.22 of 2021. On completion of
investigation charge-sheet came to be filed before the Court
concerned and it has been registered as C.C.No.258/PW/2021. It is
alleged that the accused-Pradeep Maurya in the said crime forged
document in the name of Respondent No.2 and availed said financial
facility to purchase the said car and mortgaged that car with one
Amar Umesh Singh for a sum of Rs.10,00,000/-. Said Amar Umesh
Singh further mortgaged the car to Dr. Mukul Singh, for a sum of
Rs.10,00,000/-. During investigation of the said crime, Respondent
No.1-Police seized the said car.
8) In the backdrop, the Petitioner filed the Misc. Application
No.482/2022 under Section 451 of Cr.P.C. seeking for custody of the
car and permission to sale the same. This Application was pressed on
the grounds that, since Respondent No.2 has failed to repay the loan
amount, the Petitioner is entitle for the custody of the said car. That,
the car was Hypothecated with the Petitioner. That, the Respondent
No.2 failed to comply with the Arbitration Award dated 25th January,
H.C. SHIV 201.w92.24.doc
2021, therefore, the Petitioner is entitled to seize and take possession
of the said car under the said Award.
9) The Respondent No.1 filed say to the Application and
stated that the police has no objection to release the car in custody of
the Petitioner. However, learned A.P.P. before the trial Court objected
the Application. Respondent No.2 also objected the Application on
several grounds.
10) After considering matter, the learned Magistrate held that,
Petitioner has filed an arbitration proceedings against Respondent
No.2, seeking for recovery of the loan amount and possession of the
car. An Arbitral Award has been passed, accordingly. Hence, it would
not be proper to release the car in custody of the Petitioner. The
Petitioner assailed the said Order in Criminal Revision Application
No.1013 of 2022, relying on following decisions :
(i) Sunderbhai Ambalal Desai Vs. State of Gujarat1
(ii) General Insurance Council & Ors. Vs. State of Andhra
Pradesh and Ors.2
(iii) Tata Motors Finance Ltd. Vs. The State of Maharashtra &
Anr.3
1 (2002) 10 Supreme Court Cases 283
2 (2010) 6 Supreme Court Cases 768
3 Cri. Writ Petition No.620 of 2016 dt. 10/01/2017
H.C. SHIV 201.w92.24.doc
(iv) Equitas Small Finance Bank Ltd. Vs. The State of
Maharashtra & Anr.4
11) Respondent No.1-State filed its reply and objected to
handover the custody of the car to the Petitioner.
12) The Respondent No.2 appeared in the Revision and filed
his reply as same in the trial Court. In the reply he contended that the
Engine and Chassis Nos. of the car stated in the loan Agreement as
well as the Misc. Application are totally different from the Engine and
Chassis Nos. of the car stated in the Panchnama. The Application is
devoid of the details as to the loan installments paid and the loan
payable by Respondent No.2. That, the Respondent No.2 could not
pay the loan due to his poor financial condition. Yet, the Respondent
No.2 has stated that, if the car sale proceeds exceeds the outstanding
loan amount on the particular day, then the excess amount shall be
transferred to his bank account.
13) After considering the matter in the light of the rival
submissions, the learned Additional Sessions Judge, dismissed the
Revision by the impugned Judgment and Order dated 1 st November,
2023. In this regard, the learned Sessions Judge observed that, "the
4 Cri. Application No.1307 of 2018 dt. 17/07/2019
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Respondent No.2, who is registered owner of the car, has not taken
steps to obtain the custody of the car. As per the Arbitral Award, in
the event the Respondent fails to make the due payment or surrender
the car and, claimant is unable to seize and take possession of the car
and sale the same, the claimant shall execute the Award to recover the
amount from the Respondent. It is not brought on record as to
whether execution of the Award is proceeded. The Petitioner has
recourse to execute the Award. It appears that instead of executing
the Award the Petitioner has approached the learned Magistrate for
custody of the car to sale it. As on today the care stands in the name of
Respondent No.2. Under the Award Respondent No.2 was expected
to handover the custody of car to the Petitioner. First claim on the car
will be of the registered owner. The Petitioner has other recourse
open to recover the due amount in respect of the Loan Agreement.
The Petitioner wants to recover the loan amount by sale of the car.
The Petitioner can not directly execute the Award through this Court.
Hence, rejection of the Petitioner's application, by the ld. Addl. Chief
Metropolitan Magistrate is correct.
14) In the aforesaid background, I have carefully considered
the Petition and the documents produced on record in support of the
H.C. SHIV 201.w92.24.doc
Petition. The loan Agreement is produced on record, clauses 51 and
51.1 thereof read as under :-
"51. On the happening of any of the Events of Default, the
lender may at its option by a notice in writing to the
Borrower(s) and without prejudice to the rights and
remedies available to the Lender under Law, equity or
under the Loan Agreement or any other Transaction
Document or otherwise, declare the Borrower's Dues in
respect of the all or any of the Loans (as may be required
by the Lender) and/or (b) declare the Security created in
terms of / pursuant to the Loan Agreement and/or the
other Transaction Documents to be enforceable and
accordingly invoke the Security, and the Lender, its
representatives and/or person in favour of whom any
Security or any part thereof is created shall have, inter
alia, the following rights (notwithstanding anything to the
contrary in the Loan Agreement and/or the other
Transaction Documents and irrespective of whether the
entire Loan or Borrower(s) Dues has/have been recalled)
namely:
51.1 To enter upon and take possession of the Asset(s) in
accordance with the provisions of the Loan Agreement
and as per the guidelines issued by the regulator/s and
Apex Court while doing the repossession of the vehicle."
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15) On a plain reading of aforesaid clauses, it is clear that in
the event of default in payment of loan amount, the Petitioner with
prior notice to Respondent No.2 will be entitled to take possession of
the car. This right or authority is also available to the Petitioner under
the Arbitration Award, as the Respondent No.2 failed to comply the
Award. The say filed by Respondent No.2 before the Courts below
indicates that Respondent No.2 has accepted the arrears.
16) In the affidavit, Amol Mali, Assistant Police Inspector,
DCB, CID, Unit-V, has clarified that the seized car and the pursuant
panchnama has the same Engine Number and Chassis Number as in
the Registration Certificate, based on which the investigation officer
had given his no objection in the Courts below for release of the car.
It is stated that, the Petitioner is the only finance company for the car
and it has no role to play in the crime. It is stated that, Respondent
No.2 had availed the loan facility from the Petitioner under the said
Agreement dated 19th October 2018, for the purchase of the car stated
in the Registration Certificate. Hence, the custody of the car can be
given to the Petitioner, as prayed for in clause (c) of the Petition.
17) Since its seizure, the car is lying in the custody of police. It
is open to the sky and adverse climatic conditions. The car is not
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properly taken care of. As such, every passing day the car is ruining its
road worthiness. The car is costly and it is purchased from loan
amount, which was public money. If the Petition is not allowed with
certain conditions, the depreciation of the car would be more and, at
the end of the trial it may fetch very less value, perhaps minimal. In
view of above discussion, the impugned Judgment and Orders are not
sustainable in law and liable to be quashed and set aside. As a result,
the Petition deserves to be allowed with suitable conditions. Hence,
following Order is passed :-
ORDER
(i) Petition is allowed.
(ii)The impugned Judgment and Order dated 1st November,
2023 passed by the learned Additional Sessions Judge,
Greater Mumbai in Criminal Revision Application No.1013 of
2022 and the impugned Order dated 19 th October, 2022
passed by the 37th Court of learned Additional Chief
Metropolitan Magistrate, Esplanade, Mumbai in Misc.
Application bearing No.482/2022, in C.C.No.258/PW/2021,
are quashed and set aside.
(iii) Respondent No.1 is directed to release the car i.e.,
Mercedes Benz GLA 200 CDI Sports bearing registration
No.MH-04-JM-9309, Chassis No. WDC1569086L009822
and Engine No.65193034706098 in the custody of the
H.C. SHIV 201.w92.24.doc
Petitioner on its executing a Supurtnama bond in the sum of
Rs. 20,00,000/-, on the following conditions :-
(a)Before release of the car, Respondent No.1 shall
record a detailed panchnama of the actual condition of
the car and take photos of the car from all the angles to
preserve its identity for proof during the course of trial.
(b)The said panchnama and the photos shall be placed
on the record of C.C.No.258/PW/2021, as evidence, for
the sake of trial.
(c) Thereafter, Petitioner is permitted to sale the car
subject to condition that, immediately after taking
custody of the car, the Petitioner shall intimate the said
fact to the Arbitrator within seven day from the date of
taking the custody and thereafter take all steps to sale
the car strictly in accordance with the Arbitration
proceedings/Award and the Loan Agreement.
(d) The Petitioner shall complete the sale
proceedings at the earliest and in any case within one
month from the date of this Order and report its
compliance to this Court.
(e)The sale proceeds of the car shall be adjusted against
the arrears of the loan amount.
(f) The Petitioner shall give the Respondent No.2 the
necessary details of the sale proceeds along with its
adjustments with the loan account,.
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(g)On completion of the sale process as above, the
Supurtnama bond shall stand cancelled.
(h) List the matter for recording compliance on
21st November, 2024.
18. Petition stands disposed of.
[SHYAM C. CHANDAK, J.]
