M/S Axis Bank Limited vs State Of Karnataka
2021 Latest Caselaw 5278 Kant

  IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 2ND DAY OF DECEMBER, 2021
                        BEFORE

       THE HON'BLE MR. JUSTICE V. SRISHANANDA

 CRIMINAL REVISION PETITION NO.1039 OF 2021

BETWEEN:

M/S AXIS BANK LIMITED
PLOT NO.41, SESHADRI ROAD
ANANDA RAO CIRCLE
BENGALURU-560009
REPRESENTED BY ITS SPA HOLDER
MR. KEERTHI KASHYAP.K
AGED ABOUT 29 YEARS
S/O LATE N. KRISHNA MURTHY
                                          ...PETITIONER
(BY SRI. MAHESH.Y.L, ADVOCATE-PH)

AND:

1. STATE OF KARNATAKA BY
   CHANDRA LAYOUT P.S
   REPRESENTED BY HCGP
   HIGH COURT OF KARNATAKA
   BENGALURU-560001

2. STEPHAN ARTHUR JONES
   AGED ABOUT 35 YEARS
   S/O ARTHUR VIJAYA KUMAR
   RESIDING AT NO.22
   3RD BLOCK, 5TH LINE
   DASAPPA LAYOUT
   RAMAMURTHY NAGAR
   BENGALURU-560016
                                         ... RESPONDENTS
(BY SRI. V.S. VINAYAKA, HCGP FOR R1-PH;
    SRI. R.A. DEV ANAND, ADVOCATE FOR R2-PH)
                           2


     THIS CRIMINAL REVISION PETITION IS FILED UNDER
SECTION    397   R/W    401    CR.P.C  PRAYING   TO
SET ASIDE THE ORDER DATED 18.09.2021 PASSED BY THE
HON'BLE PRINCIPAL CITY CIVIL AND SESSIONS JUDGE, AT
BENGALURU IN CR.NO.2/2021 AND ETC.

     THIS CRIMINAL REVISION PETITION COMING ON FOR
ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING:-

                        ORDER

1. Though this matter is listed for admission, with

the consent of the parties, the matter is taken up for

final disposal.

2. Heard Sri.Y.L.Mahesh, learned counsel for the

revision petitioner, Sri. V.S.Vinayaka, learned HCGP

for respondent No.1 and Sri. R.A. Dev Anand, learned

counsel for respondent No.2 who are present and

perused the records.

3. The revision petitioner has challenged the order

passed in Crime No.2/2021 on the file of the Principal

City Civil and Sessions Judge, Bengaluru on an

application filed under Section 451 read with Section

457 of Cr.P.C. seeking interim custody of the Blue

BMW 730 LD Car bearing Registration No.KA-03-NB-

777, which was seized by the competent authority and

authorized officer in the said criminal case and

produced before the Court in PF No.4/2021. The

application was opposed by the respondent herein and

so also the State by filing written objections.

4. Thereafter, the learned Special Judge heard the

matter and dismissed the application filed by the

revision petitioner and granted the custody to the

respondent No.2 herein. The facts also reveals that

the car in question was financed by the revision

petitioner and as on the date of filing of the

application, more than Rupees One Crore was due to

the revision petitioner by the respondent No.2. The

application also reveals that based on the

hypothecation clause in the RC book, the Financer

Bank is entitled for the interim custody of the vehicle

and sought for interim custody before the Special

Court. The learned Judge, after considering the rival

contentions of the parties, following the settled

principles of law and noting the fact that the

respondent No.2 is the RC owner and the

hypothecation clause would not be of any avail to the

revision petitioner in getting the order of interim

custody of the vehicle and dismissed the application

filed by the revision petitioner. There is a detailed

discussion as to the principles of law made applicable

with regard to the dispute in question in Paragraph

Nos.12 and 13 of the impugned order. Being

aggrieved by the same, the revision petitioner-

financer of the car is before this Court.

5. In the revision petition, the grounds raised by

the revision petitioner have been culled out

hereunder:-

"8. The said vehicle was purchased by Respondent No.2 on the loan availed from Petitioner i.e., M/s Axis Bank Limited. It is again being reiterated that, as on 22/09/21, the outstanding loan amount is Rs.10,943,129/- (Rupees One Crore Nine Lakhs Forty Three Thousand One Hundred and Twenty Nine Only) when such being the situation, the Petitioner bank stands at a better footing to get the custody of the Vehicle, this important aspect has been completely ignored by the court below.

9. Based on the present facts and circumstances of the case, Petitioner i.e., M/s Axis. Bank Limited has made out a superior title over the said Vehicle. Out of the said sanctioned sum of Rs.1,12,76,805/- still an outstanding of Rs.10,943,129/- (Rupees One Crore Nine Lakhs Forty Three Thousand One Hundred and Twenty Nine Only) is pending as on 22/09/21. Therefore, it is M/s Axis Bank Limited which has superior right over the said Vehicle. The Hon'ble Court below not only should have given custody of the said vehicle to Petitioner but also ought to have given permission to sell the vehicle and adjust the same towards the loan.

10. It is further submitted that, the vehicle is hypothecated to Petitioner bank i.e., M/s. Axis Bank Limited. As per the hypothecation, the said vehicle is pledged as a collateral and since the Respondent No.2 has become a defaulter, the bank has every right to seek the custody of the vehicle for which it has funded. In the present case on hand, undeniably, the Respondent No.2 has become a defaulter, the Respondent No.2 cannot have it both ways i.e., not clearing outstanding and still having the possession of the vehicle. This important aspect has been completely denied by the Hon'ble Trial Court.

11. The Hon'ble Trial Court while adjudicating the applications filed by Petitioner and Respondent No.2 under section 451 R/w 457 of Cr.P.C ought have found out which of the parties are having a superior

right over the vehicle, without doing so, merely because, the Respondent No.2 happens to be the RC Card owner, releasing the vehicle, in favour of the Respondent No.2 is bad in law and opposed to the principles of equity and natural justice".

6. Reiterating the grounds urged in the revision

petition, the learned counsel for the revision petitioner

sought for interim custody. In support of his case, he

has relied on the following decisions:

Sl.No.

Description

CRL.R.P No.503/2013 (KAR-HC)

M/s HDFC Bank Ltd Vs. State by Commercial street, Police Station

CRL.RC (MD) No.212, 213, 214, 215 & 216 of 2016 (Madras-HC)

B. Loganathan Vs. Inspector of Police, Lalapettai Police Station

Crl. W.P. NO.98/1999 (Bombay-HC)

Jagannath Bapu Shirsat Vs. State of Maharashtra and Ors.

Crl.W.P. No.242/1987 (Bombay-HC)

Virendrakumar J. Handa Vs. Dilawarkhan Alij Khan and Ors.

7. Per contra Sri. A.R. Dev Anand, learned counsel

representing the respondent No.2, who is the RC

owner of the car in question supported the impugned

order. He further contended that it is settled

principles of law that the interim custody could be

given to the RC owner. He also pointed out that the

remedy for the revision petitioner lies else where and

the revision petitioner can appropriately take steps to

recover the money due to the revision petitioner and

also seeks appropriate order before the appropriate

forum insofar as hypothecation clause in the RC book

is concerned and sought for dismissal of the revision

petition.

8. The learned HCGP for the State however

contended that the order passed by the Special Judge

in the facts and circumstances of the case is justifiable

and submitted to this Court to pass appropriate

orders.

9. In view of the above factual aspects, it is seen

that the car in question was purchased by the

respondent No.2 and he is the registered owner of the

car. The material on record also reveals that the said

car is possessed by the respondent No.2 by taking

loan from the revision petitioner and as on today

about a crore and odd is due by the respondent No.2

to the revision petitioner. In the RC book, there is a

hypothecation clause. In a matter of this nature, the

remedy for the revision petitioner for recovery of the

money lies elsewhere as rightly argued by the counsel

for respondent No.2. However, by resorting to the

hypothecation clause, the revision petitioner can seek

appropriate order from the appropriate forum. The

scope of Section 451 and Section 457 of Cr.P.C.

cannot be enlarged to settle the civil dispute between

the parties. The interim custody as is ordered by the

learned Special Judge in favour of the respondent

No.2 with conditions is discretionary in nature. The

grounds urged in the revision petition do not indicate

that there is improper exercise of discretionary

jurisdiction by the learned Special Judge. The intrinsic

dispute are complicated questions of law and cannot

be considered by the learned Special Judge at the

time of disposing of an application filed under Section

451 and 457 of Cr.P.C.

10. Insofar as the judgment of the Court in Crl.RP.

No.503/2013 dated 16.01.2014 is concerned,

admittedly the facts involved in the said case are

altogether different from the facts involved in the

present case. In the case on hand, the police have

not seized the vehicle in respect of the loan

transaction but they have proceeded on the pretext of

the allegations made against the respondent No.2 that

he has cheated the general public by resorting to the

Karnataka Protection of Interest of Depositors in

Financial Establishments Act. Therefore, the said

judgment is of no avail to the revision petitioner.

11. The second judgment relied on by the learned

counsel for the revision petitioner in the case of

B.Lognathan vs. Inspector of Police, Lalapettai

Police Station [CRL.RC(MD) Nos.212, 213, 214,

215 and 216 of 2016 (Madras High Court)] is

cited before the learned Special Judge and the learned

Special Judge has taken note of the said decision and

then, negated the contentions urged on behalf of the

revision petitioner. This Court does not find any legal

infirmity in making out that finding by the trial Judge.

12. Jagannath Bapu Shirsat vs. The State of

Maharastra and ors. [Crl.WP No.98/1999

(Bombay High Court)] is the next judgment which

the learned counsel for the revision petitioner has

relied upon. The same was also cited before the trial

judge and the trial judge has considered the effect of

the said judgment. However, the learned trial Judge

placed the reliance on the judgment of the Hon'ble

Apex Court in the case of Sunderbhai Ambalal

Desai vs. State of Gujarat reported in 2002 (10)

SCC 80 to hold that the respondent No.2 is entitled

for the interim custody of the seized car. This Court

does not find any legal infirmity in the impugned order

and therefore, admission declined and pass the

following;

ORDER

The Revision Petition is dismissed.

In view of disposal of the main petition,

I.A.No.2/2021 does not survive for consideration and

it is disposed of.

Sd/-

JUDGE

Prs*