M/S Hytone Merchants Pvt. Ltd. & ... vs Asit Das
2022 Latest Caselaw 7878 Cal

IN THE HIGH COURT AT CALCUTTA

(Criminal Revisional Jurisdiction)

APPELLATE SIDE

Present:

The Hon'ble Justice Shampa Dutt (Paul)

CRR 2130 of 2019

M/s Hytone Merchants Pvt. Ltd. & Ors.

                                       Vs

                                  Asit Das




For the Petitioners           : Mr. P. K. Srivastava




For Opposite Party            : None




Heard on                      : 21.11.2022




Judgment on                   : 29.11.2022



Shampa Dutt (Paul), J.:

The criminal revision application has been preferred by the

petitioners/accused persons praying for quashing of the proceedings in C.R.

Case No. 5012 of 2018 under Sections 420/406/323/341/506/ 120B of

the Indian Penal Code pending before the learned Judicial Magistrate, 7th

Court, Alipore, South 24 Parganas.

The petitioner's case is that the petitioner no.1 is a private limited

company registered under the Companies Act, 1956 and the petitioner no.2

is a firm. The petitioner no.3 is the director of the petitioner no.1 and the

petitioner no.4 is the son of the petitioner No.3 and the petitioner no.5 is

the employee of petitioner no.1 and 2. The petitioner no.1 is engaged in the

business of providing financial facilities to its various customers for

purchase of vehicles including commercial vehicles amongst others.

The opposite party namely Asit Das took a loan of Rupees Four Lakh

Two Thousand and Three Hundred (Rs. 4,02,300/-) on May 22, 2017 for

purchasing a Second hand Maruti car by executing an agreement for hire

purchase dated May 22, 2017 along with an agreement for arbitration.

The said loan had to be repaid by twenty seven equal monthly installments

of Rupees Fourteen thousand and nine hundred only (Rs.14,900/-) as per

the agreement for hire purchase dated May 22, 2017. The opposite party

failed to pay the said installments as per the hire purchase agreement and

thereby defaulted in making payment despite repeated request and

demands.

Further case of the petitioner is that the custodian, appointed by the

Learned Arbitrator vide the Arbitral tribunal's order dated October 9, 2018

repossessed the said maruti car on October 27, 2018 from the custody of

Asit Das, the opposite party herein upon whom a copy of the inventory list

was also served. The fact of such repossession of the said maruti car by the

duly appointed custodian, was intimated to the Officer in Charge, Behala

Police Station, Lake P.S. as directed by the Arbitral tribunal and the

opposite party by letter dated November 9, 2018. The complainant filed the

present case on 16.11.2018.

Inspite of proper service in this case there is no representation on

behalf of the opposite party/complainant.

The complainant's case before the trial Court is that one Biswajit

Chakraborty called the complainant claiming himself as a passenger

wanting to hire a car for travelling to Barasat and the complainant agreed

to the said proposal. When the complainant came to the location in the said

maruti car, the said Biswajit Chakraborty snatched the keys of the car and

further threatened the complainant that they would sell the car if the loan

amount is not repaid. The complainant then filed an application for return

of the vehicle under Section 94 of the Code of Criminal Procedure along

with the said complaint petition on 16.11.2018.

Cognizance was taken by the Trial Court and process was issued

against the petitioners/accused persons herein. The learned Magistrate also

directed the Officer-in-charge of the Lake Police Station to search the

premises of 21/3, S.N. Chatterjee Road, Police Station-Behala and recover

the said Maruti Car from the custody of the said accused person. As per

Order dated 26th November, 2018 the said vehicle was seized by the Sub-

Inspector and the learned 7th Judicial Magistrate directed the Officer-in-

Charge Lake Police Station to return the seized vehicle on furnishing a

'Zimma' bond of Rupees Three Lakh by the complainant. Accordingly, the

said vehicle was returned to the complainant.

Mr. P.K. Srivastava, learned counsel for the petitioner has

submitted before the Court that in a hire purchase agreement, the financer

remains the owner of the vehicle so long as the entire loan remains to be

liquidated by the borrower. The said vehicle was repossessed as per the

direction /order of the Learned Arbitrator in view of the fact that the

opposite party was a chronic defaulter.

As such the continuation of the criminal proceeding against the

accused persons being C.R. Case No. 5012 of 2018 (T.R. 2169 of 2018),

would amount to abuse of process of law since the dispute is civil in nature.

It is further submitted that the recovery of possession of vehicle by

financer was through the duly appointed receiver/custodian as per order

dated 09th October, 2018 passed by learned Arbitral Tribunal and in terms

of the hire purchase agreement and agreement for arbitration which clearly

does not amount to criminal offence.

The wrongful release of vehicle being subject matter of hire purchase

agreement is required to be set aside and the possession of the vehicle

should be restored to the custodian.

Thus being aggrieved by the said Orders of the learned magistrate in

C.R. Case No. 5012 of 2018 pending before the learned Judicial Magistrate,

7th Court, Alipore, the present revision application has been preferred

stating that the said proceedings is a clear abuse of process of Court and

totally against interest of justice and if the said decisions are not quashed

there will be serious miscarriage of justice.

Further contention of the petitioner is that the said maruti car was

legally recovered and not stolen by the petitioner/accused person and as

such section 94 of the Code of Criminal Procedure will not be attracted in

the present case.

Heard the counsel at length. Perused the materials on record.

Considered.

Annexure P-1, is the agreement of hire purchase between the

petitioner no.1 and the opposite party. The said agreement is dated 22nd of

May, 2018 and relates to an old maruti car of the Model 2017. The said car

was taken by the opposite party on the basis of the said agreement of hire

purchase which includes an agreement for arbitration.

The said nature of transaction remains in the position of hire till

the hirer exercises his option of purchase by making full payment

towards the goods purchased.

Registration of the said vehicle in such cases may be made showing

the hirer as registered owner with an endorsement of hire purchase in

favour of the owners. The terms and conditions of the said hire purchase

agreement has been clearly laid down in the said agreement which includes

an agreement of arbitration.

By enforcing the agreement of arbitration the petitioners/accused

persons referred the matter to the learned arbitrator who by his Order

dated 9th October, 2018 passed an Order in favour of the

accused/petitioners company for repossession of the vehicle.

The learned Arbitrator came to the finding that the complainant /

opposite party herein had defaulted in making payment as per the terms of

the agreement and as such an award for repossession of the said vehicle

was passed.

The learned Arbitrator clearly held that the complainant/opposite

party herein is a defaulter and as such are not entitled to retain possession

of the said vehicle and accordingly allowed the petitioners/accused persons

prayer for custody of the said vehicle which should be taken with the help

of the local concerned police station on making an inventory and seizure

list. A custodian was also appointed by the learned Tribunal for the said

purpose.

On 27.10.2018 the said vehicle was repossessed from the custody of

the complainant/opposite party as per the Order of the learned Arbitral

Tribunal dated 9th October, 2018. The said document of repossession and

seizure list cum inventory list has been filed annexed to the supplementary

affidavit by the petitioners.

The present complaint case filed by the opposite

party/defaulter/complainant is in respect of the said seizure of the said

vehicle and the hire purchase agreement between the parties. The present

complaint was filed under Section 200 fo the Cr.P.C by the

accused/opposite party before the Court of Chief Judicial Magistrate,

Alipore on 16th November, 2018 i.e., long after the vehicle had been

repossessed and seized lawfully on 27.10.2018.

The opposite party has chosen not to appear. From the

documents relating to the case before the magistrate filed by the opposite

party, there is no challenge as to the legality of the Hire purchase

agreement and the agreement for arbitration.

Admittedly there has been a breach of contract (Hire purchase

agreement) as prima facie the opposite party has failed to perform his part

of the agreement.

An agreement with an arbitration clause survives/exits even

after there is a breach, as the seed of arbitration which is planted at the

time of the agreement, germinates only when there is a breach of

performance. The parties right and liabilities depends on the award of the

arbitration.

On what basis the criminal case was filed by the complainant

/opposite party is a matter of record before the Learned Magistrate and as

to why the vehicle was released in favour of the opposite party/complainant

herein by the Magistrate in also a matter of record.

But considering the materials before this Court, including the

award of the Learned Arbitrator and the documents relating to the lawful

repossession of the vehicle by the custodian appointed by the Learned

Arbitrator, the question remains as to why inspite of such circumstances,

the vehicle was given in Zimma to the opposite party/complainant.

The petitioner/accused person's present stand is that, the

outstanding amount has still not been paid by the opposite

party/complainant which is not rebutted herein by the opposite party by

his non-appearance.

Considering all these facts and the materials on record, the present

case is fit to be interfered with under Section 482 CrPC.

The Supreme Court in Neeharika Infrastructure Pvt. Ltd. Vs. State of

Maharashtra and Others (2021) SCC online SC 315 has laid down the

guidelines to be followed by the High Courts while exercising its power under

Section 482 of the Cr.P.C./or under Article 226 of the Constitution of India in

para 80 of the said judgment as under:-

" * * * * * *

iii) It is only in cases where no cognizable offence or offence of any kind is disclosed in the first information report that the Court will not permit an investigation to go on;

iv) The power of quashing should be exercised sparingly with circumspection, as it has been observed, in the 'rarest of rare cases (not to be confused with the formation in the context of death penalty).

vii) Quashing of a complaint/FIR should be an exception rather than an ordinary rule;

* * * * * * *

x) Save in exceptional cases where noninterference would result in miscarriage of justice, the Court and the judicial process should not interfere at the stage of investigation of offences;

xiii) The power under Section 482 Cr.P.C. is very wide, but conferment of wide power requires the court to be more cautious. It casts an onerous and more diligent duty on the court;

xiv) However, at the same time, the court, if it thinks fit, regard being had to the parameters of quashing and the self-restraint imposed by law, more particularly the parameters laid down by this Court in the cases of R.P. Kapur (supra) and Bhajan Lal (supra), has the jurisdiction to quash the FIR/complaint;

xv) When a prayer for quashing the FIR is made by the alleged accused and the court when it exercises the power under Section 482 Cr.P.C., only has to consider whether the allegations in the FIR disclose commission of a cognizable offence or not. The court is not required to consider on merits whether or not the merits of the allegations make out a cognizable offence and the court has to permit the investigating agency/police to investigate the allegations in the FIR;

The court while deciding the said case also considered several other

judgments of the said Court relating to the core issue therein being:-

For the appellants there in ......

(a) State of Telangana vs. Habib Abdullah Jeelani, (2017) 2 SCC 779.

(b) State of Haryana vs. Bhajan Lal, 1992 Supp (1) SCC 335.

(c) Imtiyaz Ahmad Vs. State of Uttar Pradesh, (2012) 2 SCC 688.

(d) Ravuri Krishna Murthy Vs. The State of Telangana (Criminal Appeal

Nos. 274-275 of 2021, decided on 05.03.2021).

(e) Asian Resurfacing of Road Agency Private Limited Vs. Central Bureau

of Investigation, (2018) 16 SCC 299.

For the respondents there in .........

i) State of Karnataka Vs. L.Muniswamy, (1977) 2 SCC 699.

Several other judgments of the Court were also placed before the Court

while considering the said case. The Court took notice of the decisions in:-

i) R.P. Kapur vs. State of Punjab 1960 AIR 862.

ii) State of Andhra Pradesh vs. Golconda Linga Swamy and Anr.

(Appeal (crl.) 1180 of 2003) dated 27.07.2004.

iii) Sanapareddy Maheedhar Seshagiri vs. State of Andhra Pradesh

Appeal (crl.) 1708 of 2007 dated 13.12.2007. 11

iv) State of Maharashtra & Ors. Vs. Arun Gulab Gawali & Ors.

Criminal Appeal no. 590 of 2007 dated 27.08.2010.

v) State of Bihar v. J.A.C. Saldanha, (1980) 1 SCC 554.

vi) S.M. Sharma v. Bipen Kumar Tiwari, (1970) 1 SCC 653.

vii) Union of India v. Prakash P. Hinduja, (2003) 6 SCC 195.

viii) Satvinder Kaur v. State (Govt. Of NCT of Delhi), (1999) 8 SCC

728.

ix) Supdt. Of Police, CBI v. Tapan Kumar Singh, (2003) 6 SCC 175.

x) P.Chidambaram v. Directorate of Enforcement, (2019) 9 SCC 24.

xi) Skoda Auto Volkswagen India Private Limited v. State of Uttar

Pradesh, 2020 SCC Online SC 958.

xii) Special Director v. Mohd. Ghulam Ghouse, (2004) 3 SCC 440.

xiii) Nitco Tiles Ltd. V. Gujarat Ceramic Floor Tiles Mfg. Association,

(2005) 12 SCC 454.

xiv) Hindustan Times Limited v. Union of India, (1998) 2 SCC 242.

xv) Kranti Associates (P) Ltd. V. Masood Ahmed, (2010) 9 SCC 496.

Among others.

And finally the Court laid down the guidelines as noted above.

In the present case, the complaint before the Learned Magistrate is

connected to a Hire Purchase agreement with an Arbitration Agreement and

the vehicle in question was repossessed lawfully in execution of the award

of the Learned Arbitrator, which was passed on the findings that the

complainant/opposite party herein failed to perform his part of the

agreement.

The facts clearly do not make out a criminal offence as made out in

the written complaint.

The Supreme Court says that, a quashing of a complaint/FIR should be

an exception rather than an ordinary rule.

The prosecution/complaint case before this Court is a case where it is

clearly seen that no cognizable offence or offence of any kind is disclosed in the

petition of complaint and as such this Court cannot permit the said

proceedings to continue and this is one of the said rare circumstances in

which the prayer of quashing should be considered.

Having considered the aforesaid facts and circumstances of the case, if

the present proceeding is allowed to continue, it would be sheer abuse of

process of court and as such this is a fit case where, invoking its the power

under Section 482 of the Code of Criminal Procedure, the present proceeding is

required to be quashed.

CRR 2130 of 2019 is Allowed.

It is further directed that the vehicle in question here in be released in

favour of the petitioner who shall not dispose of or change its nature and

character till the final order in the Arbitral proceeding. The Magistrate

Concerned shall ensure that the vehicle is received back from the

complainant/opposite party and released in favour of the petitioner here in

on such terms and conditions as may be fit and proper, which shall be done

within two weeks from the date of communication of this order. The parties

here in will abide by the Arbitration proceeding as per their agreement.

No order as to costs.

Let a copy of this Judgment/order/be sent to the /trial court at once

for compliance.

Urgent Photostat Certified copy of this Judgment, if applied for, be

supplied expeditiously after complying with all necessary legal formalities.

(Shampa Dutt (Paul), J.)