Allowed

M/S Cholamandalm Insurance Company v. State of Rajasthan

Rajasthan HC15 Dec 2023CRLMP/4836/2022

Case brief

AI extract

What is this about?

The High Court of Rajasthan allowed a miscellaneous petition filed by an insurance company challenging a lower court order. The Court permitted the petitioner to auction its seized vehicle, which was insured against theft and involved in an NDPS case, provided a bank guarantee is submitted.

What did the court decide?

Petition allowed. Impugned order dated 23.05.2022 quashed and set aside. Petitioner permitted to sale, transfer or auction the vehicle upon submitting a bank guarantee.

M/S Cholamandalm Insurance Company Vs… — Pension and Retirement Benefits | Rajasthan HC (2023)

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HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

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S.B. Criminal Miscellaneous (Petition) No. 4836/2022

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M/s Cholamandalm Insurance Company, Through Its Authorized Signatory Amit Kumar Malla Son Of Avtaar Krishna Malla Resident Of F-150, B.k Dutt Colony, New Delhi, India.

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----Petitioner

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Versus

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State of Rajasthan, through Public Prosecutor.

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----Respondent

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For Petitioner(s) : Mr. Sankalp Todi For Respondent(s) : Mr. Suresh Kumar, PP

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HON'BLE MR. JUSTICE ANIL KUMAR UPMAN

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O R D E R

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DATE OF PRONOUNCEMENT : 15/12/2023

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The petitioner M/s Cholamandalm Insurance Company (hereinafter referred to 'Insurance Company') through its authorized signatory has preferred this misc. petition under Section 482 Cr.P.C. challenging the order dated 23.05.2022 passed in Misc. Application No.12/2022, by learned Addl. District & Sessions Judge, Aklera District Jhalawar whereby the application of the petitioner Insurance Company seeking permission to sale the vehicle (Toyota Fortuner) No.KA 01 MT 0984 was dismissed.

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Brief facts of the case are that a complaint regarding theft of the aforesaid Toyota Fortuner was filed at Police Station Uperpet, Bengaluru by its registered owner Biramram. Since the vehicle was insured with the petitioner Insurance Company, the entire claim amount of the aforesaid vehicle was paid to the owner as

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per the terms and conditions of the insurance policy and after settling the entire claim, the Insurance Company became the exclusive owner of the vehicle. After some time, the aforesaid vehicle Toyota Fortuner came to be seized by the Police Station Aklera, Jhalawar in connection with FIR No.248/2021 registered for offences under Sections 8/15 and 8/29 of the NDPS Act. After coming across of this fact, the Insurance Company moved an application under Section 457 Cr.PC. before learned District & Sessions Judge, Aklera for release of the vehicle in question on supurdagi. The said application was allowed by the learned court below vide order dated 01.02.2022 and the vehicle in question was released in favour of the petitioner Insurance Company. However, since the vehicle was allegedly involved in a case registered under the NDPS Act, while releasing the vehicle on supurdagi, certain conditions were also imposed by the learned court below in its order dated 01.02.2022. Out of those conditions, one condition with which the Insurance Company is aggrieved, was that the petitioner Insurance Company will not transfer or dispose of the vehicle in question. Being aggrieved and dissatisfied with the said condition, the petitioner Insurance Company moved an application (No.12/2022) before the learned Addl. District and Sessions Judge, Aklera seeking permission to transfer, sale, auction or dispose of the vehicle in question. However, the learned court below dismissed the application of the petitioner Insurance Company vide order dated 23.05.2022. Hence, this misc. petition. 3. Learned counsel for the petitioner submits that the petitioner Insurance Company is reputed Insurance company and the vehicle has already been released in its favour on Supurdagi by the

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learned court below vide order date 01.02.2022. He further submits that the petitioner Insurance Company is ready to comply with the procedure defined in Section 52A of the NDPS Act for making the clarification of inventory of the case property so that same will be treated as primary evidence in the absence of or disposal of the case property during trial. He also submits that the first registered owner namely Biramram, with whom the Insurance Company has settled the claim, has also not been found involved in the FIR registered under the NDPS Act. He argues that the since the petitioner Company involves in insurance business, the vehicle in question is of no use for it except to sell, transfer or auction to some other party. Further, the vehicle in question was being junked day by day as the same was lying idle for a long period of time. He thus, prays that permission to sale, auction or transfer the vehicle in question may be granted. He has placed reliance upon the following judgments:-

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(i). Sunderbhai Ambalal Desai vs. State of Gujarat, reported in AIR 2003 SC 638.

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(ii) General Insurance Council & Ors. vs State of A.P. & Ors. being Writ Petition (C) No.14 of 2008 decided on 19.04.2010 reported in (2010) 6 SCC 768

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(iii). Esskay Auto Finance Pvt. Ltd. vs State of Rajasthan reported in 2017 SCC OnLine Raj 2711

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Per contra, learned Public Prosecutor has vehemently opposed the instance misc. petition. He submits that since the vehicle in question is involved under the NDPS Act, the Insurance Company may not be permitted to sale or dispose of the vehicle

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especially when the vehicle has already been released to the Insurance Company and it is enjoying it. He however, admits that the first owner Biramram was not found involved in the FIR registered under the NDPS Act so far.

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I have heard and considered the submissions advanced at bar and have gone through the material available on record. 6. The vehicle in question has already been released on supurdagi in favour of the petitioner Insurance Company vide order dated 01.02.2022 as after settling the entire claim, the Insurance Company has become its exclusive owner. The first registered owner of the vehicle in question has also not been found involved in the FIR registered under the NDPS Act. Apart from this, the seized vehicles which in a wider sense, are national property, would not be allowed to become junk day by day.

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In the case of Esskay Auto Finance Pvt. Ltd. (supra), a coordinate bench of this Court has granted permission to auction the vehicle on bank guarantee of auction amount with other conditions. Relevant paras are reproduced hereinbelow for the sake of ready-reference:

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"2. Learned counsel for the petitioner states that the petitioner is reputed Financial Company and the vehicle has already been released. Learned counsel for the petitioner further submits that since the vehicle has already been released, therefore, permission to sale the vehicle may be released on bank Guarantee.

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3. Learned counsel for the petitioner has relied upon the judgment in S.B. Crl. Misc. Petition No. 378/2013 ( Cholamandalam Investment & Finance Cl. Ltd. v. State of Rajasthan ) decided on 29.06.2013, which reads as under:—

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“ The instant miscellaneous petition has been filed by the petitioner Finance challenging the order dated 24.1.2013

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passed by the learned Chief Judicial Magistrate, Nagaur in Cr. Misc. Case No. 19/2013 whereby the application filed by the petitioner for selling the vehicle bearing registration No. RJ 07 GA 3059 was rejected.

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Learned counsel for the petitioner submits that the vehicle in question was financed by the petitioner company and was seized during the course of investigation of the F.I.R. No. 137/2009 registered at P.S. Kotwali, Nagour under Section 379 I.P.C. The vehicle was directed to be returned back to the petitioner on Supurdaginama because the purchaser Surji Devi failed to pay instalments thereof. It was prayed on behalf of the Finance Company that it should be permitted to put the vehicle in question to auction because the vehicle was deteriorating as the same was lying idle for a long period of time. The said application was rejected by the trial court by the impugned order and hence the instant miscellaneous petition.

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A notice of the petition was issued to the respondent no. 2 but nobody has appeared on her behalf despite service.

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Learned counsel for the petitioner submitted that the petitioner Finance ompany was having a lien over the vehicle in question as it had financed the same. The respondent no. 2 (hirer) who had taken the finance facility did not pay the instalments towards hire purchase agreement on which the vehicle was seized by the Finance Company.

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Thereafter, the same has been handed over to the Finance Company on interim Supurdaginama. Placing reliance on the decision of the Hon'ble Apex Court in General Insurance Council v. State of Andhra Pradesh being Writ Petition (C) No. 14 of 2008 decided on 19.4.2010 reported in (2010) 6 SCC 768, learned counsel contended that the Hon'ble Apex Court has ruled in the said judgment that the insurer can be permitted to auction the vehicle and thereafter, an undertaking/guarantee can be furnished to the Court that the proceeds from the sale/acution shall be subject to the final adjudication of the case by the Magistrate. Learned counsel thus prayed that the case of the Finance Company also stands on identical footing that the with that of the insurer and that the Finance Company should also be permitted to auction the vehicle. Reliance has also been placed by the learned counsel on the order passed by the learned Single Bench of Madras High Court in the case of Sundaram Finance Ltd. v. State of Tamil Nadu being

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Crl. O.P. No. 5278/2007 and 9744/2010 decided on 9.7.2010.

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Heard and considered the arguments advanced at the bar. Perused the order impugned and the judgments cited.

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The Hon'ble Apex Court in General Insurance Council's case (supra) issued following directions with regard to seized vehicles:—

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“ (A) xxx

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(B) xxx

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(C) Insurer would submit an undertaking/guarantee to remit the proceeds from the sale/auction of the vehicle conducted by the Insurance Company in the event that the Magistrate finally adjudicates that the rightful ownership of the vehicle does not vest with the insurer. The undertaking/guarantee would be furnished at the time of release of the vehicle, pursuant to the application for release of the recovered vehicle. Insistence on personal bonds may be dispensed with looking to the corporate structure of the insurer.”

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Therefore, this Court is of the opinion that there could not have been any reason for the learned Magistrate to have denied permission to the petitioner to auction the vehicle in question as keeping the vehicle in a redundant condition in the premises of the Finance Company would render it waste. On the other hand if the vehicle is put to auction then whatever cost is fetched out of the auction would be at the disposal of the Magistrate to award it to the person best entitled thereto.

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Resultantly, the miscellaneous petition is allowed. The order dated 24.1.2013 is set aside and the petitioner is permitted to auction the vehicle in question. An undertaking/guarantee shall be submitted on behalf of the petitioner that if the learned Magistrate finally adjudicates that the original ownership of the vehicle does not vest with the petitioner, then the auction money shall be deposited in the Court for the disposal thereof as per the discretion of the trial court.”

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4. Resultantly, the present misc. petition is allowed. However, looking to the difference that the present petition is of NDPS, therefore, while invoking the case law of Sunderbai as well as the aforementioned precedent law, this Court deems it appropriate to permit the petitioner to auction the

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vehicle in question while submitting the Bank guarantee of auction amount on behalf of the petitioner with a condition that if the learned court below finally adjudicates that the right of the petitioner did not exist then the Bank Guarantee of the auction shall be deposited in the court for the disposal thereof as per the discretion of the learned trial court."

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Thus, considering the overall facts and circumstances of the case and the observations made in the cases referred to above, the instant misc. petition is allowed. The order dated 23.05.2022 is quashed and set aside. The petitioner Insurance Company is permitted to sale, transfer or auction the vehicle (Toyota Fortuner) No. KA 01 MT 0984 while submitting bank guarantee of the auction amount with the trial court with a condition that if the learned trial court finally adjudicates that the right of the petitioner did not exist then the bank guarantee of the auction amount shall be deposited in the court for the disposal thereof as per the discretion of the learned trial court.

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(ANIL KUMAR UPMAN),J

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Sudhir Asopa

M/S Cholamandalm Insurance Company v. State of Rajasthan

Case brief

What is this about?

What did the court decide?

M/S Cholamandalm Insurance Company v. State of Rajasthan

Case brief

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What did the court decide?

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