Allowed

The Manager M/S Hinduja Leyland Finance v. the State of Maharashtra and Anr.

Bombay HC7 Apr 2018APPLN/1702/2016

Case brief

AI extract

What is this about?

The High Court quashed an FIR alleging theft of a two-wheeler that was lawfully repossessed by a finance company due to loan default. Reliance was placed on precedents regarding hire-purchase and loan agreements where repossession does not constitute a criminal offence.

What did the court decide?

The first information report bearing Crime No. 0402/2015 for offence under Section 379 IPC is quashed and set aside; Rule made absolute.

The Manager M/S Hinduja Leyland Finance Vs the State of… — Property and Title | Bombay HC (2018)

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(Judgment) (1) Cri. Appln. No. 01702 of 2016

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY, AURANGABAD BENCH, AT AURANGABAD.

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Criminal Application No. 01702 of 2016

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District : Aurangabad

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Shashank s/o. Shrikrishna Dani, Age : 42 years, Occupation : Manager, M/s. Hinduja Leyland Finance, Having its registered office at # 1, Sardar Patel Road, Guindy, Chennai - 600 032 & Having its Branch Office at Kandi towers, Above IndusInd Bank Ltd., Rokadiya Hanuman Colony, Jalna Road, Aurangabad - 431 001. .. Applicant. versus 1. The State of Maharashtra, Through Police Station Officer, Satara Police Station, Aurangabad. 2. Nitin Trimbakrao Shejwal, Age : 35 years, Occupation : Service, R/o. Jai Bhawani Nagar, Aurangabad. .. Non-applicants. ........... Mr. M.D. Narwadkar, Advocate, for the applicant. Mr. S.W. Munde, Addl. Public Prosecutor, for non-applicant no.01. Mr. M.N. Navandar, Advocate, for non-applicant no.02.

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...........

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(Judgment) (2) Cri. Appln. No. 01702 of 2016

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CORAM : PRASANNA B. VARALE &
 SMT. VIBHA KANKANWADI, JJ.

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 DATE : 07TH APRIL 2018

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ORAL JUDGMENT [Per Prasanna B. Varale, J.] :

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Heard learned Advocate for the applicant,
learned Addl. Public Prosecutor for non-applicant
no.01 and the learned Advocate for non-applicant
no.02.

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02.Rule. Rule made returnable forthwith. By
consent, heard finally.

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03.At the outset, Mr. Narwadkar, learned
Advocate for the applicant, orally prays for
amendment to the application. He submits that
inadvertently the applicant is made party to the
application in his capacity as Manager of M/s.
Hinduja Leyland Finance, Chennai, having its
branch office at Aurangabad, and the name is not
referred to though the same is in the later part
of the application i.e. at the stage of
verification of the application. Learned
Advocate, thus, orally prays for adding the name
of the applicant i.e. Mr. Shashank s/o.
Shrikrishna Dani in the cause title of the
applicant.

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04.That being a formal prayer and the learned

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(Judgment) (3) Cri. Appln. No. 01702 of 2016

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Addl. Public Prosecutor, in view of the fact that
in the investigation papers also, the person Mr.
Shashank s/o. Shrikrishna Dani is referred to as
the Manager and notice is also issued to him, is
not opposing the prayer. The oral prayer is
granted. Amendment be carried out forthwith.

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05.Learned Advocate for the applicant, by
inviting our attention to the copy of the first
information report, submitted that the report was
lodged on 15.12.2015 at the instance of non-
applicant no.02, stating therein that his two
wheeler which was parked at a place known as
Devlai Chowk and while non-applicant no.02
proceeded for purchase of apples and when he
returned back to that place, he found that his
vehicle was not there. An amount of Rs. 35,000/-
was also kept in the compartment of the two
wheeler. With these averments, he approached to
the police station. Offence was registered under
Section 379 of the Indian Penal Code against an
unknown person.

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06.Mr. Narwadkar, learned Advocate appearing
for the applicant, submits that in a transaction
of the nature providing loan for purchase of two
wheeler, non-applicant no.02 was a borrower and
the loan was sanctioned by the applicant's finance
company. As per the terms of the loan agreement

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(Judgment) (4) Cri. Appln. No. 01702 of 2016

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which are placed on record at Exhibit "B", the
vehicle was hypothecated. Mr. Narwadkar then
submits that the brother-in-law of non-applicant
no.02 obtained the loan from the applicant on
08.08.2014. It was assured to repay the loan in 24
months in equal instalments. As per the terms and
conditions of the loan agreement, in case of
default as provided in Article 13 the lender was
entitled to re-possess the vehicle as per Article
14 of the agreement. There was continuous default
in payment of the amount of instalments. As the
applicant - finance institution took the steps
provided under the conditions of the agreement and
the vehicle was re-possessed, an intimation was
forwarded to the police station. Copy of the said
intimation notice dated 13.12.2015 is placed on
record at Exhibit "D". It was the submission of
the learned Advocate for the applicant, that
though non-applicant no.02 was having knowledge of
all these facts, on a spacious plea of missing of
the vehicle, a report was lodged on an allegation
of theft of vehicle.

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07.Learned Advocate for the applicant further
submitted that even perusal of the report would
show that no offence under Section 379 of the
Indian Penal Code could have been attracted
against the applicant. He submitted, firstly it
was a report against some unknown person and

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(Judgment) (5) Cri. Appln. No. 01702 of 2016

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subsequently the applicant is dragged in a
criminal proceedings. A notice was issued to the
applicant and on receiving the notice, the
applicant immediately approached the police
stationauthorityandco-operatedthe

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investigating agency. His statement was also recorded. The documents were also submitted to the investigating agency. Learned Advocate then submitted that firstly on the face of report, as no offence is made out against the applicant, in view of the judgment of the Hon'ble Apex Court in the matter of State of Haryana & others Vs. Ch. Bhajan Lal & others [AIR 1992 SC 604] , the report lodged against the applicant needs to be quashed and set aside and secondly, even considering the nature of the transaction which was of a loan agreement, the judgment of the Hon'ble Apex Court in the case of Charanjit Singh Chadha Vs. Sudhir Mehra [2001 AIR (SC) 3721] is squarely applicable to the case of the present applicant.

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08.Learned Addl. Public Prosecutor has
vehemently opposed the application. He has made
available the papers of investigation for our
perusal.

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09.On going through the material collected by
the investigating agency and on hearing respective
Advocates for the parties, we are of the opinion

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(Judgment) (6) Cri. Appln. No. 01702 of 2016

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that the learned Advocate for the applicant has made out a case for grant of relief as prayed in the petition. Learned Advocate for the applicant was also justified in placing heavy reliance on the judgment of the Hon'ble Apex Court in the matter of Charanjit Singh Chadha (supra) . In the said matter, the Hon'ble Apex Court has observed thus :-

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"11. The whole case put forward by the respondent - complainant is to be appreciated in view of the stringent terms incorporated in the agreement. If the hirer himself has committed default by not paying the instalments and under the agreement the appellants have taken re-possession of the vehicle, the respondent cannot have any grievance. The respondent cannot be permitted to say that the owner of the vehicle has committed theft of the vehicle or criminal breach of trust or cheating or criminal conspiracy as alleged in the complaint. When the agreement specifically says that the owner has got a right to re-possess the vehicle, there cannot be any basis for alleging that the appellants have committed criminal breach of trust or cheating.

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Before the learned Single Judge, the respondent had contended that the vehicle was in the possession of the respondent and it was taken out of his custody without his consent and, therefore, the offence of theft is made out. This plea is also without any basis as the appellants have taken re-possession of the vehicle in exercise of their right under the agreement. There may be instances where the owner of the goods may commit theft of his own goods. The illustration (k) of Section 378 Indian Penal Code, which is an instance of such a theft, is to the following effect :-

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"Again, if A, having pawned his watch to Z, takes it out of Zs possession without Zs consent, not having paid what he borrowed on the watch, he commits

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(Judgment) (7) Cri. Appln. No. 01702 of 2016

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theft, though the watch is his own property in-as-much as he takes it dishonestly."

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But in the instant case, the owner repossessing the vehicle delivered to the hirer under the hire-purchase agreement will not amount to theft as the vital element of dishonest intention is lacking. The element of dishonest intention which is an essential element of constitute the offence of theft cannot be attributed to a person exercising his right under an agreement entered into between the parties as he may not have an intention of causing wrongful gain or to cause wrongful loss to the hirer. It is appropriate to note that the term dishonestly is defined under Section 24 of the Indian Penal Code as follows :

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"Dishonestly --- Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is said to do that thing 'dishonestly'."

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The hire-purchase agreement in law is an executory contract of sale and confers no right in rem on hirer until the conditions for transfer of the property to him have been fulfilled. Therefore, the re-possession of goods as per the term of the agreement may not amount to any criminal offence. The agreement [Annexure P-1] specifically gave authority to the appellants to re-possess the vehicle and their agents have been given the right to enter any property or building wherein the motor vehicle was likely to be kept. Under the hire-purchase agreement, the appellants have continued to be the owners of the vehicle and even if the entire allegations against them are taken as true, no offence was made out against them. The learned Single Judge seriously flawed in his decision and failed to exercise jurisdiction vested in him by not quashing the proceedings initiated against the appellants. We, therefore, allow this appeal and set aside the impugned judgment. The complaint and any other proceedings initiated pursuant to such complaint are quashed. "

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Though in the judgment of the Hon'ble Apex Court,

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(Judgment) (8) Cri. Appln. No. 01702 of 2016

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in the matter of Charanjit Singh Chadha (supra) , the nature of agreement was a hire purchase agreement and in the present case, it is a loan agreement, but there is hardly any difference in the nature of these two agreements.

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10.In the result, the criminal application is
allowed.

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The first information report bearing Crime No.
0402/2015 registered on 15.12.2015 at Satara
Police Station, Aurangabad, for offence punishable
under Section 379 of the Indian Penal Code, is
quashed and set aside.

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11.Rule made absolute in the above terms.

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...........

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puranik / CRIAPPLN1702.16

The Manager M/S Hinduja Leyland Finance v. the State of Maharashtra and Anr.

Case brief

What is this about?

What did the court decide?

The Manager M/S Hinduja Leyland Finance v. the State of Maharashtra and Anr.

Case brief

What is this about?

What did the court decide?

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