M/s. Srei Equipment Finance Ltd. Vs the State of Ap

M/s. Srei Equipment Finance Ltd., Vishwakarma, 86 C, Topsia Road (South), Topsi a , Kolkata 700 046, Kolkata. Rep by its Assistant Manager M r. V. Praveen Goud

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...Petitioner

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AND

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THE STATE OF AP, Rep by its Principal Secretary, Hom e Department, Secretariat Buildings, Velagapudi, Amaravathi. 2. AntiCorruption Bu r eau, AT.,Headquaters Office, 2nd Floor, N.T.R. AcImn. Block, Pandit Nehru Bus Station, Vijayawada - 5200QI Rep by its Director General

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The Range Inspe c torI, Anti Corruption Bureau, Vijayawad a Range, Pinnamane n i Poly Clinic Road, Moughalrajpuram, Vijayawada.

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The Regional Tra n sport Officer, Office of the Regional Transport office, M G Road, Vijayawada.

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...Respondent(S):

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Counsel for the Petitioner: S.V.S.S.SIVA RAM

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Counsel for the Respondent(S): S.V.S.S.SIVA RAM,A GAYATHRI REDDY Standing Counsel for ACB cum Spl. PP

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THE HONOURABLE SRI JUSTICE HARINATH.N

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WRIT PETITION NO: 3950 OF 2019

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The Court made the following Order:

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This Writ Petition is filed aggrieved by the proceedings dated 05.01.2018 issued by the 3rd respondent, whereby the 4th respondent was directed to freeze all transactions in respect of the following vehicles belonging to the petitioner bearing registration Nos.AP16TB5199, AP16TB5319, AP16TD5379, AP16TD5529, AP16TD5349, AP16TE5775, AP16TD5559, AP16TD5259, AP16TD5739, AP16TD5829, AP16TD6159, AP16TE5919, AP16TE5439, AP16TE5529, AP16TE5619, AP16TE6129, AP16TD5439, and AP16TD5349 is arbitrary, illegal, and without jurisdiction.

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Learned counsel for the petitioner submits that the 3^rd respondent issued proceedings dated 05.01.2018, to freeze all the transactions in respect of the vehicles mentioned above, whereby the 4^th respondent issued a communication to the petitioner calling upon the petitioner to freeze all transactions related to the said vehicles. It is submitted that the officer of the petitioner-company filed an application dated 24.12.2018 seeking information under the Right to Information Act, 2005, with respect

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to the impugned action. In response, the 4^th respondent, vide proceedings dated 28.01.2019, informed the petitioner that the action of freezing transactions was taken at the request of the 2^nd and 3^rd respondents and based on a notice issued under Section 91 Cr.P.C. dated 05.01.2018.

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Learned counsel for the petitioner submits that the petitioner is the absolute owner of the subject vehicles, which were sold under hypothecation to Haripriya Bulk Carriers. Hypothecation agreements were duly executed between the petitioner and the said concern in respect of the vehicles. It is submitted that the husband of the proprietor of Haripriya Bulk Carriers was arrested in connection with allegations under Section 13(2) read with Section 13(1)(e) of the Prevention of Corruption Act, 1988, in Cr.No.15/RCA/ACB/VJA/2017. It is further submitted that, in terms of the hypothecation agreements,

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in the event of default in repayment of the secured obligations or in case of breach of any of the terms and conditions by the hirer, the petitioner is entitled to repossess the vehicles in accordance with Clause 7.2.1 of the agreement.

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It is further submitted that thereafter, the vehicles were kept in the yard of the petitioner-company, and the petitioner was in the process of regularizing the account and initiating appropriate sale proceedings to adjust the outstanding dues payable to the petitioner-company. In the meantime, a notice under Section 91 Cr.P.C. was issued to the petitioner-company, directing the freezing of transactions in respect of the subject vehicles, as detailed therein. Learned counsel for the petitioner submits that the petitioner is the registered owner of the subject vehicles, and the registration certificates also reflect the petitioner's name as the owner. Additionally, the names of the hirers are recorded in the registration certificates as such, thereby indicating that the petitioner retains ownership while the vehicles are under hypothecation with the hirers.

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5. It is submitted that the subject vehicles are belonging to the

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petitioner-company unless and until repayment of the final equated monthly installment (EMI) is made in full by the hirer. Unless and until the entire loan amount is discharged, a No Objection Certificate (NOC) for effecting any change in ownership or transfer in the registration records cannot be issued by the

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petitioner-company. In the present case, it is submitted that the vehicles were repossessed by the petitioner on account of default committed by the hirer in making the agreed repayments, in accordance with the terms and conditions of the hypothecation agreement. It is further submitted that the subject vehicles cannot be treated as case property or crime property as the procedure contemplated under Section 457 Cr.P.C., for claiming custody before the trial court. Moreover, during the pendency of the proceedings, the sole accused in the criminal case has passed away, and consequently, the proceedings have abated.

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Learned Standing Counsel for respondent Nos. 2 and 3 has placed on record the order passed in R.C.S. No.03 of 2021 in Cr. No.15/RCA-ACB-VJA/2017, wherein the learned Special Judge for SPE & ACB Cases-cum-Additional Metropolitan Sessions Judge, Vijayawada, has abated the proceedings on account of the death of the sole accused. However, liberty was reserved to the prosecution to deal with the property seized from the possession of the accused officer, in accordance with Section 457 Cr.P.C., by conducting an appropriate enquiry. The said order is also taken on record.

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Considering the submission of the learned counsel for the petitioner that the svehicles in question are the property of the petitioner-company and cannot be made subject to proceedings initiated under Section 457 Cr.P.C., this Court is of the view that the action of freezing the vehicles is unsustainable.

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Accordingly, the Writ Petition is allowed and the impugned proceedings dated 05.01.2018 issued by the 3^rd respondent are set aside. The 4^th respondent is hereby directed to defreeze all transactions in respect of the subject vehicles forthwith. There shall be no order as to costs.

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As a sequel thesreto, miscellaneous applications pending, if any, shall stands closed.

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______________________ JUSTICE HARINATH. N

Date:02.07.2025

KKV

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