IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL Writ Petition No. 228 of 2008 (M/S) Mahindra & Mahindra Financial Services Ltd. …………Petitioner. Vs. State of Uttarakhand …….Respondent Sri Pradeep Hariya, learned counsel for the petitioner. Sri S.S. Adhikari, learned A.G.A. for the State/respondent. Hon’ble B.C. Kandpal, J. This petition under Article 226 of the Constitution of India has been filed by the petitioner – Mahindra & Mahindra Financial Services Ltd. (Financer of Maruti Esteem Chassis No. 334366 and Engine No. MA3EBE41S00472437). By way of this petition, the petitioner has prayed for a writ in the nature of certiorari for quashing the impugned order dated 18.10.2007 (Contained as Annexure No. 5) as well as order dated 09.10.2008 (Contained as Annexure No.7). The petitioner has further sought the direction in the nature of mandamus commanding the respondents to release the vehicle in question in favour of the petitioner. 2. Brief facts of the case are that the petitioner is a corporate company and registered under the Companies Act, 1956 under the name and style of ‘Mahindra & Mahindra Financial Services Ltd.’ having its registered office at Mumbai. This company deals with the business of hire-purchase, loan financing, leasing etc. One borrower, namely, Ranjeet Singh S/ o Sri Karnail Singh R/o Village Begamabad, Post Officer, Bilaspur, District Rampur has sought a financial assistances for a sum of Rs. 3,25,000/- from the petitioner. After both the parties have entered into mutual agreement and agreed upon the terms and conditions of the said loan agreement, the borrower was provided a loan of Rs. 3,25,000/-. The borrower had to pay a loan in 36 monthly installments and the monthly installment was fixed at Rs. 11,863/-as per the condition No. 7 of the loan agreement. The borrower thereafter purchased the car and got the same registered in his name. The borrower paid only one installment against his loan, but thereafter had been regular default in the payment of the monthly installment in spite of the repeated request by the company. One First Information Report was lodged regarding forged transfer of the vehicle who had been financed by the Finance Company and pursuant to that First Information Report the Police conducted the inquiry and got information regarding accused persons in the racket. The police apprehended the accused persons and after the interrogation, the name of the borrower also came in the light along with the other accused persons The police accordingly recovered the vehicle in question from the possession of the borrower – Ranjeet Singh S/o Sri Karnail Singh. The report was also registered at the police station with regard to the recovery of the vehicle in question. After the recovery of the vehicle, the petitioner moved an application before the court of Chief Judicial Magistrate, Rudrapur for release of the vehicle. The petitioner also gave an undertaking to furnish the bank guarantee but the learned Chief Judicial Magistrate rejected the application on the ground that the petitioner could not produce the documents regarding he ownership of the said vehicle. 3. The petitioner thereafter filed a criminal revision before the learned Sessions Judge, Udham Singh Nagar, but the same was also dismissed on the ground that the investigation in the criminal case in which the point regarding the ownership was also in question was pending. 4. Feeling aggrieved by the aforesaid orders passed by the courts below, the petitioner has filed this writ petition before this Court which has been place before me for final disposal. 5. Heard Sri Pradeep Hariya, learned counsel for the petitioner, Sri S.S. Adhikari, learned A.G.A for the State/respondent and perused the record. 6. The loan agreement has been annexed as Annexure No. 1 to the writ petition. The condition No. 7 of the loan agreement reads as following:- “The Lender agrees to permit the Borrower to have the registration of the Product (where the Product is a motor vehicle) in this own name provided that the registration certificate the name of the Lender is endorsed as following: “The Product described above is held and hypothecated under a Loan Agreement with MAHINDRA & MAHINDRA FINANCIAL SERVICES LIMITED, GATEWAY BULIDING, APPOLLO BUNDER, MUMBAI-400 001.” Provided however that the failure to get the registration certificate so endorsed shall not be deemed to be or construed as an absence of hypothecation in favour of the Lender, but such failure would, on the contrary be deemed to be a default under the terms of the agreement.” 7. It appears from the aforesaid condition envisaged in the Loan Agreement that the petitioner who is the financer of the loan shall be deemed to be an owner of the said vehicle till the full and final payment of he said loan amount is not paid. 8. It is not disputed that the petitioner is the financer and paid the loan to the borrower Ranjeet Singh S/o Karnail Singh who happens to be registered owner of the vehicle in question. It would again be pertinent to quote Section 2(30) of the Motor Vehicle Act which reads as follows “owner” means a person in whose name a motor vehicle stands registered and where such person is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire- purchase, agreement, or an agreement of lease or an agreement of hypothecation, the person in possession of the vehicle under that agreement. 9. Therefore, in view of the aforesaid provision of the motor vehicle Act, the registration certification in the nature of hire i.e. Ranjeet Singh S/o Karnail Singh does not make him absolute owner unless the full and final payment under the hire-purchase agreement is not paid by the registered owner. The financer, therefore, is entitled to the custody of the vehicle. 10. The Hon’ble Apex Court in a decision of K.L. Johar & Company Vs Deputy Commercial Officer, reported in AIR 1965 SC 1082 has observed that the distinguishing feature of the hire-purchase agreement is that the property does not pass when the agreement is made but only passes when the option is finally exercised after complying with all the terms of the agreement. 11. In view of the aforesaid judgment of the Hon’ble Apex Court, the situation emerges that the property i.e. the vehicle in question in the instant case does not pass to the hirer (Ranjeet Singh) until all the conditions imposed on him under the hire-purchase agreement are fulfilled, including the payment of entire amount advanced under the agreement. 12. Nothing has been stated in the counter affidavit filed by the State that the borrower Ranjeet Singh S/o Karnail Singh has paid the entire amount advanced to him under the loan agreement. Therefore, in view of the aforesaid circumstances, the petitioner could not have been denied to get the custody of the vehicle in question being the financer of the same. 13. In view of the discussion made above, the impugned orders passed by both the courts below are liable to be set aside. 14. Accordingly, the petition is allowed. It is directed that the vehicle in question be released in favour of the petitioner being the financer on furnishing the bank guarantee to the satisfaction of the Chief Judicial Magistrate concerned. (B.C. Kandpal, J.) 05.08.2008 ASWAL