Remanded

Nitheesh v. State of Kerala and Others

Kerala HC17 Nov 2020Crl.MC/1322/2010

Case brief

AI extract

What is this about?

In Crl.M.C. No.1325/2010, the Kerala High Court quashed criminal proceedings regarding the seizure of a hypothecated car. The court held that alleged loan default and seizure under contract terms are civil disputes and do not attract criminal liability for theft or conspiracy without a prior civil determination.

What did the court decide?

Both Criminal Miscelllaneous Applications No.1322 and 1325 of 2010 were allowed, and the private complaint and its further proceedings were quashed.

Nitheesh Vs State of Kerala and Others — Contract and Commercial Disputes | Kerala HC (2020)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE P.SOMARAJAN

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TUESDAY, THE 17TH DAY OF NOVEMBER 2020 / 26TH KARTHIKA, 1942

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Crl.MC.No.1322 OF 2010

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CC 4013/2007 OF JUDICIAL MAGISTRATE OF FIRST CLASS -I, ALUVA

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PETITIONER/ACCUSED:

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NITHEESH, COLLECTION MANAGER, HDFC BANK, MATHER SQUARE, NEAR NORTH RAILWAY STATION, ERNAKULAM.

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BY ADVS.SRI.P.G.THAMPI (SR.) SRI.P.PAULOCHAN ANTONY SRI.S.SREEKUMAR (SR.)

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RESPONDENT/COMPLAINANT:

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1 STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA,ERNAKULAM.

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2 SEBASTIAN.T.T, S/o THOMAS, THAIKUTIL, VAZHAKKALA, KAKKANAD P.O., ERNAKULAM.

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R2 BY ADV. SRI.K.G.CLEETUS

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R1 BY PUBLIC PROSECUTOR SMT.M.N.MAYA

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THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 17.11.2020 ALONG WITH Crl.MC.1325/2010. THE COURT ON THE SAME DAY PASSED THE FOLLOWING:

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Crl.M.C.Nos.1322 & 1325 of 2010

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE P.SOMARAJAN

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TUESDAY, THE 17TH DAY OF NOVEMBER 2020 / 26TH KARTHIKA, 1942

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Crl.MC.No.1325 OF 2010

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CC 4013/2007 OF JUDICIAL MAGISTRATE OF FIRST CLASS -I, ALUVA

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PETITIONER/ACCUSED:

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SUMITH P PRASAD, AREA LEGAL MANAGER, HDFC BANK, S.L PLAZA, PALARIVATTOM P.O., ERNAKULAM.

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BY ADVS.SRI.P.G.THAMPI (SR.) SRI.P.PAULOCHAN ANTONY SRI.S.SREEKUMAR (SR.)

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RESPONDENT/COMPLAINANT:

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1 STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA,ERNAKULAM.

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2 SEBASTIAN T.T., S/o THOMAS, THAIKUTIL, VAZHAKKALA, KAKKANAD P.O., ERNAKULAM.

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R2 BY ADV. SRI.K.G.CLEETUS R1 BY PUBLIC PROSECUTOR SRI. K.B. UDAYAKUMAR

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THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 17.11.2020 ALONG WITH Crl.MC.1322/2010. THE COURT ON THE SAME DAY PASSED THE FOLLOWING:

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Crl.M.C.Nos.1322 & 1325 of 2010

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ORDER

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Earlier, this Court by order dated 3/1/2014 quashed

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the private complaint by relying on Sree Krishna Sharma

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v. State of Kerala [2013 (1) KLT 666], Anup Sarmah v. Bhola Nath Sharma and others [(2013) 1 SCC 400] and Charanjit Singh Chadha v. Sudhir Mehra [(2001) 7 SCC

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417] , but it was subsequently recalled on the reason that no notice was given to the defacto complainant.

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It is the accused No.1 and 2, who came up

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against the registration of crime under Sections 379, 341, 392, 394, 120(B), 411, 403 and 465 r/w Section 34 IPC. The dispute is pertaining to an alleged hypothecation of a Maruthi car in connection with a loan facility extended by the accused. Subsequently, the vehicle was seized by the accused. The decisions

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drawn in Bhahuleyan v. State of Kerala and others

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[2007 (3) KHC 663], George V.A. and others v. Abraham Augustine and Another [2012 (1) KHC 729] and Sundaram Finance Ltd. v. The State of Kerala and another [AIR

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1966 SC 1178] were relied on against the involvement of goondas in seizing the vehicle violating the law and

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Crl.M.C.Nos.1322 & 1325 of 2010 4

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order situation.

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There is lot of difference between a hire-

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purchase arrangement and a hypothecation of movable property. In the former case, there would be hirer and owner of a vehicle and the hirer would become the owner only on compliance of the agreed terms and conditions

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within the stipulated time. Till that time, the financier would remain as the owner of the goods. But in the matter of hypothecation of movable property, there would be a loan transaction and hypothecated property would stand as security. Admittedly, there is no document or any material to show the creation of a hire purchase arrangement, but the document entered into is named and styled as a hypothecation with a

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clause to seize the vehicle when there is default in

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repayment of the loan amount. Clause 14.2 in the hypothecation agreement empowers the financier to seize the vehicle in the event of default of payment of installment agreed into. But the agreement is only a printed form agreement and as such, the binding nature

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of printed clauses yet to be decided. The issue

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involved is only a civil liability and may not be

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Crl.M.C.Nos.1322 & 1325 of 2010 5

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sufficient to attract the main offence alleged i.e.

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offence of theft under Section 379 IPC. Since there is a clause in the hypothecation agreement giving a right to take possession or seize the vehicle on non-payment of loan amount as agreed, it would prima facie sanctify the act of the accused in taking possession of the vehicle. The legal validity or binding nature of the said clause has to be agitated in a properly instituted suit. Hence, no offence under Section 379 IPC will stand attracted. Needless to say that the other offences alleged in connection with the main offence under Section 379 IPC also will not stand. As such, the complaint and its further proceedings are hereby quashed.

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Both the Crl.M.C. are allowed accordingly.

Sd/-

P.SOMARAJAN

DMR/-

JUDGE

Crl.M.C.Nos.1322 & 1325 of 2010

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APPENDIX OF Crl.M.C. 1322/2010

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PETITIONER'S ANNEXURES:

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ANNEXURE A : COMPLAINT FILED UNDER SECTION 156(3) BEFORE JFMC-1

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ALWAYE DATED 17.11.2007.

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ANNEXURE B : SURRENDER LETTER DATED 05.05.2007.

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RESPONDENTS' ANNEXURE:

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ANNEXURE R2(a) : TRUE COPY OF DUPLICATE NOTICE AND THE

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ENDORSEMENT. ANNEXURE R2(b) : TRUE COPY OF REPORT DATED 24.05.2010 PREPARED BY ONE MANIKANDAN, PC 8757 WHICH IS SUBMITTED BY THE STATION HOUSE OFFICER, THRIKKAKARA. ANNEXURE R2(c) : TRUE COPY OF ORDER IN Crl.M.C. No.1322/10 DATED 03.01.2014.

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// TRUE COPY //

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P.A. TO JUDGE

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Crl.M.C.Nos.1322 & 1325 of 2010

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APPENDIX OF Crl.M.C 1325/2010

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PETITIONER'S ANNEXURES:

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