Ess Kay Fincorp Limited Through ... vs State Of Gujarat
2021 Latest Caselaw 691 Guj

           R/SCR.A/6304/2019                                    ORDER




         IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

     R/SPECIAL CRIMINAL APPLICATION NO. 6304 of 2019
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ESS KAY FINCORP LIMITED THROUGH BHALABHAI AJUBHAI MAKWANA
                           Versus
                     STATE OF GUJARAT
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Appearance:
MR.KISHAN PRAJAPATI(7074) for the Applicant(s) No. 1
NOTICE SERVED(4) for the Respondent(s) No. 3
Ms. Monali Bhatt, APP (2) for the Respondent(s) No. 1 & 2
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 CORAM: HONOURABLE MR. JUSTICE B.N. KARIA

                               Date : 19/01/2021

                                ORAL ORDER

1. Board reflects that notice is served to private respondent No.3 however, no body appeared for contesting this petition.

2. Rule. Learned APP waives service of notice of rule for and on behalf of the respondent Nos. 1 and 2.

3. By way of this application, the applicant has prayed to allow this present Special Criminal Application by quashing and setting aside the judgment and order passed by Judicial Magistrate First Class, Deodar on 1.3.2018 as well as judgment & order passed by 5th Additional Sessions Judge, Banaskanatha on 9.10.2018 in Criminal Revision Application No. 19 of 2018 and further prayed to direct respondent No.2 to release/handover the interim custody of Muddamal vehicle having its registration No. GJ-12-BR-8040 during pendency of trial.

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3. Heard learned advocate for the applicant.

4. In support of his arguments, learned advocate for the applicant has relied upon orders passed by this Court in Special Criminal Application Nos. 2538 of 2014.

5. This Court had passed the following order in Special Criminal Application No. 2538 2014 which reads as under :-

"16. In such circumstances, I am of the view that the vehicle should be handed over to the finance company and the company should be permitted to sell the vehicle subject to certain terms and conditions. In this context may quote with profit a decision of the Supreme Court in the case of General Assurance Counsel and others v. State of A.P. And others, 2010 AIR SCW 2967. The Supreme Court has made the following observations in paragraph Nos. 14 and 15 which reads as under:-

"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 with Section 457 of the Code, the following further directions with regard to

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seized vehicles are required to be given.

"(A) Insurer may be permitted to move a separate application for release of the recovered vehicle as soon as it is informed of such recovery before the Jurisdicitonal Court. Ordinarily, release shall be made within a period of 30 days from the date of the application. The necessary photographs may be taken duly authenticated and certified, and a detailed panchamama 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, pursuant to the application 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

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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."

17. The respondent No.2 has not yet become the absolute owner of the property as he is obliged to pay the loan amount. Even as per the RTO records, the ostensible ownership is with the applicant company."

6. Learned advocate for the applicant submits that the respondent No.3 has applied for loan on his vehicle i.e. Maruti Swift having its registration No. GJ-12-BR-8040 to the present applicant -company and after due verification of the documents and necessary process, the applicant has provided him finance of Rs.2,70,000/- on the said vehicle and the respondent No.3 has to repay the loan in 36 installments and he entered into hypothecation agreement with the applicant -company and it is also agreed between applicant company and respondent No.3 that the vehicle remain as security (HPA) in name of company in RTO and in any case if loan amount is not paid or if there is breach of agreement by respondent No.3 the company would be entitled to get the custody of vehicle first. That, it is also agreed between parties that the respondent No.3 has to pay the

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installments regularly and if he is failed to do so then company of applicant is first entitled to get custody of vehicle and respondent No.3 has no right whatsoever in the vehicle. That, after taking vehicle on finance, it came to the notice of the applicant -company that the respondent No.3 has used the said vehicle in crime and for which the FIR came to be registered being prohibition CR No. III-261 of 2017 with Deodar Police Station, Banaskantha and said vehicle came to be seized by the police authority and at present said vehicle is lying at police station. That, respondent No.3 has stopped the repayment of loan amount and he has only paid 10 installments and till date, there is total outstanding of Rs.2,95,882/- and therefore, as per agreement made between respondent No.3 and the present applicant and as the respondent No.3 has stopped to make the payment of installments now, respondent No.3 has been shown in defaulter list and therefore, the applicant is entitled to get the custody of the said vehicle and recover the loan amount from it.

7. In the result, this application is allowed. The impugned orders passed by the Courts below are quashed and set aside. The concerned Police Station shall handover the possession of the vehicle to the applicant at the earliest. It shall be open for the applicant company to sell the Maruti Swift bearing registration No. GJ-12-BR-8040, after executing a bond in the sum of the amount of sale consideration before the trial Court.

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The applicant is at liberty to dispose of the vehicle in question after following the necessary procedure prescribed in law for the transfer of vehicle i.e. after drawing panchnama and taking photos of the vehicle. The applicant shall intimate the trial Court about the sale consideration received by it. The applicant shall also file an undertaking before the trial Court that he shall deposit the entire sale proceeds in the Court if required/ordered by the Court at the end of the trial. Rule is made absolute.

Direct service is permitted.

(B.N. KARIA, J) BEENA SHAH