Gujarat High Court
Ess Kay Fincorp Limited Through ... vs State Of Gujarat on 16 March, 2021
Bench: B.N. Karia
R/SCR.A/1355/2021 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CRIMINAL APPLICATION NO. 1355 of 2021
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ESS KAY FINCORP LIMITED THROUGH BHALABHAI AJUBHAI MAKWANA
Versus
STATE OF GUJARAT
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Appearance:
MR MAHESH K POOJARA(5879) for the Applicant(s) No. 1
MR.KISHAN PRAJAPATI(7074) for the Applicant(s) No. 1
MR MANAN MEHTA, APP for the Respondent(s) No. 1
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CORAM: HONOURABLE MR. JUSTICE B.N. KARIA
Date : 16/03/2021
ORAL ORDER
1. On the facts and in the circumstances of the case and with
the consent of the learned advocates for the respective parties, the
petition is taken up for final disposal.
2. This petition is filed under Articles 226 and 227 of the
Constitution of India, wherein the petitioner has prayed for
direction, for quashing and setting aside condition no.4 imposed by
the learned Judicial Magistrate First Class, Jetpur vide order dated
17.09.2018 passed in Criminal Misc. Application No.34 of 2018.
3. Brief facts, as emerging from the record, are as under:
3.1 The applicant is providing finance to purchase the vehicle in
all over India and have many branches. Accordingly, one
Bharatbhai Devsibhai Makwana who intents to purchase the vehicle
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and accordingly loan facility was provided and therefore, vehicle
Bolero Car was purchased bearing Registration No.GJ11Z2607,
Engine No.GHC1A12269, Chassis No.MA1ZN2GHKC1A16818 and
the loan amount was Rs.3,30,000/ was sanctioned on 17.08.2015
and the said amount is not repaid and he is in list of defaulter. That
the said vehicle came to be seized by the police pursuant to
registration of the FIR being C.R.No.I10 of 2018 with Jetpur City
Police Station, Rajkot Rural under Sections 379 and 114 of the IPC
as well as Section 11(1) of the Prevention of Animal Cruelty Act.
3.2 Pursuant to the above numbered FIR, vehicle came to be
seized accordingly and applicant has preferred application under
Section 451 of the Cr.P.C. before the learned Judicial Magistrate
First Class, Jetpur by way of filing Criminal Misc. Appilcation no.34
of 2018 and by order dated 17.09.2018, Courtbelow allowed the
said application upon certain terms and conditions. While alowing
the application, Courtbelow has restricted the applicant by not
permitting to sell or transfer the said vehicle and being aggrieved
and dissatisfied with the same, present application is filed.
3.3 Against the imposition of such condition, the petitioner has
preferred present petition for deletion of condition no.4 imposed by
learned Judicial Magistrate First Class, Jetpur vide order dated
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17.09.2018 passed in Criminal Misc. Application No.34 of 2018.
4. Heard learned advocate for the petitioner and learned
Additional Public Prosecutor for the respondent State.
5. Learned advocate for the petitioner submitted that the Court
below has not properly considered the facts of the present case and
committed an error in imposing the condition, inter alia, restricting
the sale or transfer and change in the ownership of the vehicle in
question. It is submitted that if the petitioner is not permitted to
sell the vehicle in question, it will further deteriorate and will not
be worthy of usage in future. It is submitted that the Court below
has not properly considered the judgment of the Apex Court in case
of General Insurance Council and others vs. State of A.P.,
reported in 2010 AIR SCW 2967 relied upon by the petitioner,
wherein the Apex Court has categorically held in paragraph 14 that
insurer be permitted to move separate application for release of the
recovered vehicle and ordinarily, release shall be made within a
period of 30 days from the date of the application.
5.1 It is further submitted that the petitioner is ready and willing
to abide by all the conditions as may be imposed by this Court;
however, with a liberty to sell the vehicle in question. Reliance has
been placed on the judgment in the case of General Insurance
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Council and others vs. State of A.P. (supra) to contend that the
Apex Court has issued direction with regard to the seized vehicles
and their release. Learned advocate for the petitioner has also
placed reliance on various orders passed by the coordinate benches
of this Court releasing the vehicles by imposing conditions. It is
thus submitted that applying the principles laid down by the Apex
Court so also various orders passed by the coordinate benches of
this Court, the present petition be allowed and the petitioner be
permitted to sell the vehicle in question by imposing suitable
conditions.
6. On the other hand, learned Additional Public Prosecutor for
the respondent State has opposed the petition and submitted that
the vehicle in question was involved in the offence under the
provisions of the Gujarat Prohibition Act, 1949 and at this stage,
permission for selling the vehicle in question to the petitioner may
not be granted. Reliance has been placed on the oral judgment
dated 05.04.2018 of this Court passed in Special Criminal
Application No.2185 of 2018, wherein the coordinate bench of this
Court has, though granted permission for release of the vehicle of
the muddamal, restricted the applicant from alienating, transferring
or creating any charge over the vehicle till the conclusion of the
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trial. Further, reliance has been placed on the judgment in the case
of Jhala Ghanshyamsingh Mobatsingh vs. State of Gujarat,
reported in 2018 (2) GLR 1516. It is thus submitted that the
petition may not be entertained and deserves to be rejected.
7. Pertinently, the Apex Court in case of General Insurance
Council (supra) has observed in paragraphs 14 and 15 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. "(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
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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."
8. Thus, the Apex Court has held that company may be
permitted to file an application for release of the seized vehicle and
necessary photographs may be taken duly authenticated and
certified coupled with drawing of panchnama before release. It has
been held that photographs so taken may be used as secondary
evidence during the trial and accordingly physical production of the
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vehicle may be dispensed with. In the present case, the Principal
District & Sessions Court has already released the vehicle in
question, however, with a restriction not to sell the vehicle in
question. If the vehicle in question has been directed to be released,
then in that case, expecting the applicant to retain the vehicle in
question till the completion of trial will not serve the purpose of the
applicant, considering the fact that the applicant being bank
advancing finance would be desirous of recovering the outstanding
loan amount. Besides, the petitioner has shown its readiness that if
the trial Court finally adjudicates the rightful ownership of the
vehicle, it undertakes to remit the proceeds from the sale.
9. Besides, while following the principles laid down in the case
of General Insurance Council (supra), the coordinate benches, in
the petitions with similar set of facts, have granted permissions to
sell the vehicles by imposing suitable conditions. This Court, in the
case of the petitioner itself, i.e. Ess Kay Auto Finance P. Ltd., has
passed an order in Special Criminal Application (Quashing)
No.2538 of 2014, observing in paragraphs 14, 15 and 18 as under:
"14. It also appears from the report filed by the Police that the
vehicle in question was used in the past even for transport of illicit
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liquor for which an offence has been registered against the
respondent No.2 at the Patan 'B' Division Police Station being C.R.
No.72 of 2013 of the offence under the Sections 66(1)(B), 65(A)
(E), 116(B) and Section 81 of the Bombay Prohibition Act.
15. The Vehicle in question is in the custody of the Police past almost
more than two years. It is lying idle at the Police Station. By passage
of time the condition of the vehicle must have deteriorated to a
considerable extent. The trial will take its own time before it is
concluded. The respondent No.2 has no good intentions to repay the
loan amount.
18. In the result, this application is allowed. The impugned orders
passed by the Court below are quashed and set aside. The concerned
Police Station shall handover the possession of the car to the
applicant at the earliest. It shall be open for the applicant company
to sell the Mahindra Bolero Jeep bearing registration No. GJ18
U1467, after executing a bond in the sum of the amount of sale
consideration before the trial Court. 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."
10. Adverting to the facts of the present case, it may be noted
that the petitioner is a company registered under the Companies
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Act, 1956 and is engaged in the business of the banking and
providing loan for the purpose of purchase of the old vehicle on
hypothecation basis. Undisputedly, the petitioner had financed an
auto loan of Rs.3,30,000/ for the purchase of vehicle in question.
It is also not in dispute that respondent had not paid EMI and there
was continuous default. As is discernible from the record, the
vehicle in question has been seized as muddamal by the concerned
Investigating Officer to hand over the custody as well as permission
for the sale of vehicle in question, so that outstanding loan amount
can be recovered.
11. The learned Magistrate passed an order dated 17.09.2018
rejecting the application of the petitioner, inter alia, observing that
the loan has been availed of from two finance companies on the
vehicle in question and thus, with a view to avoid multiplicity of
litigation, the application does not deserve to be entertained.
12. It is thereafter that the petitioner preferred revision
application being Criminal Misc. Application No.34 of 2018 before
the Judicial Magistrate First Class, Jetpur. While partly allowing
the application, the learned Judge has permitted the release of the
vehicle in question, however, conditions have been imposed, inter
alia, that the same should not be sold, alienated or transferred.
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13. Perceptibly, the First Information Report was registered and
since then the vehicle in question is in the custody of the police. It
is the case of the petitioner that owing to lack of parking facilities,
the vehicle in question is parked in the place open to sky and if the
vehicle in question is allowed to remain in such a condition, it
would sustain further damage, rendering it valueless. By now, it is
more than 5 years that the vehicle in question is lying idle with the
police authorities. In such an eventuality, observing the principles
laid down by the Apex Court in various decisions, it would be in the
fitness of things to permit the petitioner to sell the vehicle in
question, imposing suitable conditions.
14. Considering the aforesaid facts and circumstances of the case
and considering the principles enunciated by the Apex Court in the
case of General Insurance Council (supra) and considering the fact
that a sum of Rs.7,77,694/ is due towards closure of the loan
which was availed of from the petitioner for the purchase of vehicle
in question, the Court below ought to have granted permission to
the petitioner to sell the vehicle in question by imposing suitable
condition so that there is no loss to the petitioner as well. Under
the circumstances and for the reasons recorded, the order dated
17.09.2018 passed in Criminal Misc. Application No.34 of 2018 by
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the learned Judicial Magistrate First Class, Jetpur is modified to the
extent, permitting the petitioner to sell the vehicle in question on
the following conditions:
(i) Before release of the vehicle in question, necessary photographs
of vehicle in question be taken duly authenticated and certified and
the same may be produced before the learned Magistrate;
(ii) The petitioner shall submit an undertaking to remit the proceeds
from the sale / auction of the vehicle in question in the event that
the Magistrate finally adjudicates that the rightful ownership of the
vehicle in question does not vest with the petitioner and/or it holds
that the petitioner was not entitled to sell the vehicle in question.
The said undertaking would be furnished at the time of release of
the vehicle in question. All efforts shall be made by the petitioner to
fetch maximum price while selling / auctioning the disputed vehicle
in question.
15. With these observations and modifications, the petition is
allowed to the aforesaid extent. Rule is made absolute to the
aforesaid extent.
Direct service is permitted.
(B.N. KARIA, J)
rakesh/
