Allowed

Heerchand Surana v. the Union Territory of Puducherry

Madras HC7 Jun 2023CRL OP/3841/2021

Case brief

AI extract

What is this about?

The Court allowed a Criminal Original Petition filed to quash proceedings for theft under Section 379 IPC. Relying on Supreme Court precedents regarding hire-purchase agreements, the Court held that repossession due to payment default does not constitute theft and quashed the impugned proceedings.

What did the court decide?

The Criminal Original Petition was allowed; the impugned proceedings were quashed; connected Criminal Miscellaneous Petitions were closed.

Heerchand Surana Vs the Union Territory of Puducherry — Property and Title | Madras HC (2023)

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Crl.O.P.No.3841 of 2021

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED: 07.06.2023

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CORAM:

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THE HONOURABLE MR. JUSTICE SUNDER MOHAN

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Crl.O.P.No.3841 of 2021 and Crl.M.P.Nos.2284 & 2285 of 2021

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Heerachand Surana ...Petitioner / Accused -Vs1.The Union Territory of Puducherry Rep. by The Station House Officer, Katterikuppam Police Station, Puducherry. (Crime No.70 of 2006) ...... 1^st Respondent / Complainant 2.Sengadir ... 2^nd Respondent / Defacto Complainant

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Prayer: Criminal Original petition filed under Section 482 of Code of Criminal Procedure, to call for the records in C.C.No.871 of 2016 on the file of the Judicial Magistrate No.IV, Puducherry and to quash the same.

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For Petitioner : Mr. V.S. Senthilkumar For R1 : Mr. M. V. Ramachandramuthry, Addl. Public Prosecutor, Puducherry For R2 : No appearance

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https://www.mhc.tn.gov.in/judis

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Crl.O.P.No.3841 of 2021

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ORDER

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This Criminal Original Petition has been filed seeking to quash the proceeding in C.C.No.871 of 2016 on the file of the learned Judicial Magistrate No.IV, Puducherry, filed for the offence under Section 379 IPC.

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2.It is alleged in the final report that the petitioner had committed

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theft of the lorry bearing Registration No.PYT - 397 which belong to the complainant. Hence, the complaint.

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3.The learned counsel for the petitioner would submit that the original owner of the lorry J. Ayyanar had purchased the lorry and entered into a Hire Purchase Agreement with the petitioner. The said J. Ayyanar had defaulted in payment of dues to the petitioner and hence, the petitioner had a right to repossess the vehicle under the Hire Purchase Agreement. The existence of the Hire Purchase Agreement between the

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petitioner and the said Ayannar cannot be justifiably refuted by the respondents. The learned counsel also produced the copy of the Hire

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Purchase Agreement dated 30.10.1998, wherein the parties had agreed that, if there is a default in payment, the petitioner shall be entitled to repossess the vehicle.

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4.The learned counsel further relied upon the judgment of the

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Hon'ble Supreme Court reported in (2001) 7 SCC 417, Charanjit Singh Chadha and others Vs. Sudhir Mehra and the judgment of this Court reported in 2015 SCC Online Mad 10573, HDFC Bank Limited Represented through its Branch Manager Vs. State Represented by The Inspector of Police, and another .

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5.The learned Additional Public Prosecutor submitted that the investigation revealed that the 2^nd respondent had purchased the vehicle from the said Ayyanar and he was not aware of any alleged dues to the petitioner. The learned Additional Public Prosecutor also submitted that it appears the said Ayyanar had created records to make it appear that he had cleared the dues and sold it to the 2^nd respondent. The learned Additional Public Prosecutor further submitted that since the 2^nd respondent was not aware of the documents created by Ayyanar, he was

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justified in lodging the complaint and that during investigation, the lorry was seized and handed over to the 2^nd respondent.

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6.Though notice was sent to the 2^nd respondent, it was returned with an endorsement 'no such person'. This Court instructed the learned Additional Public Prosecutor to direct the 1^st respondent to inform the defacto complainant about the pending proceedings. On instructions, the learned Additional Public Prosecutor submitted that the whereabouts of the 2^nd respondent are not known to the 1^st respondent.

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7.This Court finds that admittedly there is a Hire Purchase Agreement between the said Ayyanar and the proprietary concern belonging to the petitioner. The said Ayyanar had defaulted in payment of dues. The act of repossession, in such circumstances, cannot be called as theft. The Hon'ble Supreme Court in Charanjit Singh Chadha ( referred supra) had held as follows:

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“17. The hire-purchase agreement in law is an executory contract of sale and confers no right in rem on the hirer until the conditions for transfer of the property to

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him have been fulfilled. Therefore, the repossession of goods as per the terms of the agreement may not amount to any criminal offence. The agreement (Annexure P-1) specifically gave authority to the appellants to repossess 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 complainant and any other proceedings initiated pursuant to such complaint are quashed.”

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8.This Court had followed the above said judgment in Charanjit

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Singh Chadha ( referred supra) and another judgment of the Hon'ble Supreme Court in CDJ 2012 SC 792, Anup Sarmah V. Bhola Nath Sharma in HDFC Bank Limited ( referred supra) and held as follows:

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5. The decisions rendered by the Hon'ble Supreme Court in the judgments referred to above, have been reiterated by the Apex Court in the recent judgment in Anup Sarmah v. Bhola Nath Sharma, reported in CDJ 2012 SC 792, wherein it has been held thus:

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“8. In view of the above, the law can be summarised that in an agreement of hire purchase, the purchaser remains merely a trustee/bailee on behalf of the financier/financial institution and ownership remains with the latter. Thus, in case vehicle is seized by the financier, no criminal action can be taken against him as he is repossessing the goods owned by him.”

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6. From the aforesaid judgments of the Apex Court, it is vividly clear that the purchaser remains merely a trustee/bailee on behalf of the financier/financial institution and the ownership remains with the latter/financial institution.

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7. In the case on hand, no criminal action could be taken against the petitioner herein, as the petitioner has repossessed the vehicle for default committed by the defacto complainant in respect of the loan obtained by him. Therefore, this Court is of the view that the FIR registered in Crime No. 66 of 2015 on the file of the respondent police is liable to be set aside.

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9.The observations made in the above judgments squarely apply to

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the facts of this case.

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10.Therefore, this Court is of the view, that the impugned proceedings as against the petitioner for the alleged offence under Section 379 IPC cannot be sustained. Accordingly, this Criminal Original Petition is allowed. Consequently, connected Criminal Miscellaneous Petitions are closed.

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07.06.2023

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smv

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Index : Yes/No Speaking order : Yes / No Neutral Citation : Yes / No

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To,

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