IN THE HIGH COURT OF GUJARAT AT AHMEDABAD CRIMINAL REVISION APPLICATION No 64 of 2000 For Approval and Signature: Hon'ble MR.JUSTICE D.C.SRIVASTAVA sd/- ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements? 2. To be referred to the Reporter or not? : YES 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? : NO -------------------------------------------------------------- SATPALSINGH AJITSINGH BAJAJ Versus KALYANI TRADING CO. THRO' ITS PARTNER SUNILBHAI D KALYANI -------------------------------------------------------------- Appearance: MR NIRAV C THAKKAR for Petitioner MR YN RAVANI for Respondent No. 1 MR BP MUNSHI for Respondent No. 2 Mr.M.A.Bukhari, A.P.P. for Respondent No. 3 -------------------------------------------------------------- CORAM : MR.JUSTICE D.C.SRIVASTAVA Date of decision: 19/10/2000 C.A.V. JUDGEMENT 1. The order of the Additional Sessions Judge, Jamnagar, passed on 21.1.2000 is under challenge in this Revision. Briefly stated the facts giving rise to this Revision are as under : The Truck No. GRX 4963 was seized by the Police on 4.4.1999 as case property for investigation of offences under Sections 392, 406, 420 read with Section 114 of the I.P.Code. The said case was registered on the complaint of Satpalsingh Ajitsingh who is revisionist in this Revision. He moved an application praying that the aforesaid truck be given in his interim custody on imposing terms and conditions. He apprehended that if the truck is not given in his custody and remains idle at the police station for long time then it will be damaged and since the truck is the sole source of business of the complainant he will suffer monitory loss as well. Objection was submitted against this Application by Sunilbhai D. Kalyani, partner of M/s. Kalyani Trading Co. inter-alia pleading that the revisionist was not lawful owner of the said truck. On the other hand Kalyani Trading Co. is a firm engaged in financing business. One Purshottam Mavjibhai Dangaria obtained loan/finance of Rs.1,11,000/- on the said truck, but he did not pay instalments since long. It came to the knowledge of the Kalyani Trading Co. that Purshottam Dangaria had sold the truck to the revisionist. This Agreement between the original owner and the revisionist was said to be illegal and as such on the basis of such agreement possession of the truck could not be handed over to the complainant revisionist. It was also alleged that the name of Satpalsingh, the revisionist has not been registered in the R.C. and other papers hence he was not entitled to interim custody of the Truck. 2. Purshottam Dangaria, the real owner of the truck also filed objection to the application of the revisionist pleading that the revisionist is not the lawful owner of the truck and he has no authority and right to get interim custody of the truck. He also maintained that the truck has not been registered in the office of the R.T.O. in the name of the revisionist. 3. On account of failure of payment of instalments by the owner of the truck, the Kalyani Trading Co. instructed its agent to obtain possession of the truck from the owner. This instruction was given on 1.4.1999. However, on the complaint of the revisionist the police had seized the truck from Financier. There were thus three rival claimants to the possession and interim custody of the truck, namely, Purshottam Dangaria, the revisionist and Kalyani Trading Co. 4. Learned J.M.F.C., Jamnagar, allowed the application of the revisionist and directed interim custody of the truck to be given to him on the terms and conditions imposed in the order dated 15.9.1999. Feeling aggrieved revision was filed by the partner of Kalyani Trading Co. which was allowed under the impugned order and after setting aside the order of the learned J.M.F.C. the Court below directed that the truck be given in the interim custody of Kalyani Trading Co. on the terms and conditions imposed in the said order dated 21.1.2000. It is, therefore, this revision. 5. The first contention of Shri N.C.Thakkar, learned Counsel for the revisionist has been that the order of the learned J.M.F.C. Jamnagar passed under Section 451 Cr.P.C. is interlocutory order and against such order no revision could be filed before the Sessions Judge, Jamnagar, in view of the bar created by Section 397(2) Cr.P.C. The impugned order is without jurisdiction and illegal hence it deserves to be set aside. He has relied upon the cases of JOSHY v/s. THE STATE, reported in 1986 Cr.L.J. 263 and YADAV AGENCIES PVT.LTD. v/s. PHILOMINA & ANR., reported in 1985 Cr.L.J. 1798, both of Kerala High Court. This contention of Shri N.C.Thakkar cannot be accepted in view of pronouncement of this Court in THAKKAR MAHENDRAPRASAD BAPALAL & ANR. v/s. THE STATE OF GUJARAT & ANR., reported in 1985 G.L.H. 61. In this case it was laid down that even though an order u/s.451 does not finally terminate the proceeding and in that sense it may not be final judgment or order, yet it may decide rights and liabilities of the parties concerning a particular aspect. According to this case an order regarding interim custody of a very very valuable article like truck decides and touches very important right of the parties. Any party who is denied even interim possession could be substantially and adversely affected by it and should be entitled to invoke the revisional jurisdiction of the High Court because by such order the Court is affecting and adjudicating important rights of the parties on the particular aspect and such order cannot be said to be an interlocutory order as contemplated by Section 397(2) Cr.P.C. It was further held that merely because an order u/s.451 is for interim custody, possession and disposal of the muddamal property, it cannot be said to be an interlocutory order not revisable by the High Court. It cannot be said to be an interlocutory order in that sense. It is an order which decides the substantial and important rights of the parties and, therefore, revision application against such an order is maintainable. 6. Coming to the merits of the impugned order Shri N.C.Thakkar has argued on the basis of certain decisions that the impugned order is illegal and contrary to law. Those cases are (i) B. LALITHCHAND NAHAR v/s. STATE reported in 1991 Cr.L.J. 1111 from Madras High Court and V.PRAKASHAN v/s. K.P.PANKAJAKSHAN & ORS. reported 1985 Cr.L.J. 951 from Kerala High Court. In Lalithchand's case (supra) the vehicle was purchased on hire purchase. The purchaser failed to pay instalments. The financier took forcible possession of the vehicle. The hirer moved an application for interim custody. The Magistrate ordered interim custody to the hirer and refused to return the vehicle to the financier. This order of the Magistrate was held to be valid. However, as against this Shri Ravani representing the Kalyani Trading Co. has referred to Supreme Court decision in KA MATHAI v/s. KORA BIBBIKUTTY & ANR., reported in 1996 Supreme Court Cases (Cri.) 281. In this case it was held by the Apex Court that in pursuance of hire purchase Agreement if instalments were not paid by the hirer the financier has right to resume possession even if the Agreement does not contain the clause of resumption of possession. According to the Apex Court this right of the financier has to be read in the Agreement. Thus, according to this verdict of the Apex Court if there is failure by the hirer in paying instalments the financier has right to resume possession of the vehicle and such right can be claimed even in the absence of specific stipulation in the hire purchase agreement. In the case before me it emerges from the order under revision that the lower Revisional Court found that there was specific Agreement in the Deed of Hypothecation in favour of Kalyani Trading Co. that till the amount of principal, interest or cost are falling due the debtor shall not be entitled to sell or transfer such vehicle or to create any encumbrance thereon to give such vehicle to anybody on rent by licence or otherwise nor shall be entitled to part with its possession to anybody else till such period. Inspite of such stipulation in the hire purchase Agreement and Deed of Hypothecation the owner Purshottam Dangaria had sold the truck to Satpal Singh, the revisionist on 14.8.1995. In face of this stipulation in the Hypothecation Deed the financier, namely, Kalyani Trading Co. was entitled to resume possession of the vehicle. 7. It may be mentioned that it cannot be said that the revisionist had no knowledge of the hypothecation Agreement. It is in evidence that though the name of the revisionist has not been entered in the office of the R.T.O. but all the papers including R.C. Books were handed over by Purshottam Dangaria to the revisionists. The revisionist, therefore could have seen from the Note of hypothecation in the RC Book that the truck was not liable to be sold and if in face of this note he decided to purchase the truck he cannot resist the right of the financier to resume possession of the truck. 8. It may also be noted that Purshottam Dangaria had obtained loan on three occasions on this truck and executed hypothecation Deeds on 6.12.1996, 17.12.1996 and 18.3.1998 and even if subsequent two hypothecation Deeds were after the sale in favour of the revisionist still the first hypothecation deed date 16.12.1993 gave right of resumption of possession of the vehicle to the Kalyani Trading Co. Moreover the owner did not intimate Kalyani Trading Co. that the truck was sold to the revisionist on 14.8.1995. Thus, it emerges that there were three hypothecation deeds in respect of the same truck and all the instalments of these finances could not be paid by the owner Purshottamdas Dangaria. As such also Kalyani Trading Co. had right of resumption. Further, under the terms of the hypothecation Deed the financier had right to get possession of the vehicle for which finance was raised, but instalments were not paid. The financier became further entitled to attach the said vehicle and to dispose of the same by way of public auction which flows from the hypothecation Deed. 9. Out of the three rival claimants of possession over the truck one is the owner whose name is registered in the R.T.O. office and RC Book. His stand has been changing. When the application for release and interim custody was moved by the revisionist it was opposed by the owner Purshottam Dangaria tooth and nail and he prayed that the truck be given in his interim custody. The second claimant was the financier, namely, Kalyani Trading Co. and the third claimant was the revisionist. In view of these three rival claimants it has to be seen which claim for interim custody and possession of the truck is to be accepted. As stated earlier the owner Purshottam Dangaria raised his claim in the objection, but subsequently he filed purshis in the court below stating that in view of compromise he is not laying his claim of possession over the truck. Even in this Court, in the course of argument his Advocate argued that the interim custody of the truck be given to the revisionist. Thus, the claim of the owner Purshottam Dangaria goes away. Now remain two rival claimants, namely, the revisionist and Kalyani Trading Co. The revisionist is claiming possession on the basis of bonafide sale transaction between him and the owner Purshottam Dangaria. However, he cannot be said to be bonafide purchaser in the sense that even after receiving RC Book from the owner and noticing that there was a note of hypothecation in favour of Kalyani Trading Co. he preferred to enter into sale transaction. If he did so it can be believed that he had intimation that Kalyani Trading Co. has first charge over the truck and in face of this preferential charge of Kalyani Trading Co. the claim of the revisionist can not be preferred. It is also clear from the material on record that three finances were given on the same truck to the owner Purshottam Dangaria by Kalyani Trading Co. and the entire loan has not been repaid. Consequently also the first charge for possession is of Kalyani Trading Co. It appears that under the Sale transaction the truck was handed over by the owner Purshottam Dangaria to the revisionist. However, when Kalyani Trading Co. came to know of this secret sale transaction in violation of the terms and conditions of the hypothecation deed it sent its agent to take possession of the truck from the revisionist and the agent of the finance company obtained possession of the truck from the revisionist and restored the same to the Kalyani Trading Co. If in these circumstances the truck was seized by the Police from Kalyani Trading Co. it cannot be said that the truck cannot be released in favour of Kalyani Trading Co. who has preferential charge and claim of possession over the truck in question. The question of ownership of the truck under the sale transaction between the revisionist and Purshottam Dangaria is not to be determined in this revision. What is to be seen is who is entitled to preferential claim of possession over the truck and in my view preferential claim of Kalyani Trading Co. cannot be ignored in view of the Apex Court's verdict in K.A.Mathai v/s. Kora Bibbikutty & anr. (supra). In M/s. Shriram Transport Finance Co. v/s. R.Khaishiulla Khan & ors., reported in 1993 Cri.L.J. 1069 the Division Bench of Karnataka High Court has held that where the vehicle is seized by a financier on the hirer committing default in payment of nstalments stipulated under the Hire Purchase Agreement, the financier is entitled to an interim custody of the vehicle in an application u/s.451 Cr.P.C. Simply because there is registration certificate in the name of hirer who is in possession of the vehicle in pursuance of such an Agreement, it does not follow that he has become the absolute owner having all the proprietory rights therein, by invoking Sec. 2(3) of the Motor Vehicles Act. In this case also the right of the financier to claim interim custody of the vehicle was recognized as against hirer whose name was entered in the Registration Book, etc. In view of the aforesaid two decisions the case of Sikander Beg v/s. State of Rajasthan & anr. reported in 1993 Cri.L.J. 1114 relied upon by Shri Thakkar cannot be preferred on the facts and circumstances of the case. When the financier is found entitled to interim custody the vehicle cannot be given in interim custody of the person whose name is found entered in the office of the R.T.O. and R.C. Book. 10. In view of aforesaid discussion I am of the view that the impugned order is totally justified and cannot be termed as illegal. The revision is thus, without merit and is liable to be dismissed. The Revision is accordingly dismissed. sd/- Date : October 19, 2000 ( D. C. Srivastava, J. ) *sas*