IN THE HIGH COURT OF JUDICATURE AT PATNA Cr.Misc. No.6768 of 2007 1. ANAND ROY, SON OF RAM NARAIN ROY, DIRECTOR MITHILA AUTOS PVT. LTD., NH 31, PS K HAT, DISTRICT- PURNIA, RESIDENT OF DOLLAR HOUSE, SIPAHITOLA, PS- K HAT, DISTRICT-PURNIA. 2. ASHOK KUMAR, SON OF LATE BINDESHWARI MISHRA, DEALING ASSISTANT, MITHILA AUTOS PVT. LTD, N.H. 31, PS-K. HAT, DISTRICT-PURNIA. 3. BIJAY KUMAR MISHRA, SON OF JAGTANAND MISHRA, RESIDENT OF VILLAGE DWASAY, PS-DANDKHORA, DISTRICT-KATIHAR. ……………………………………………………PETITIONERS. Versus 1. THE STATE OF BIHAR. 2. NARESH SINGH, SON OF SRI SARYU SINGH, RESIDENT OF MOHALLA GRP CHAOUK, PURANA BUS STAND, PS & DISTRICT-KATIHAR(COMPLAINANT). …………………………………………………OPPOSITE PARTIES. ----------- For the Petitioners : M/s. Madhav Rai and Navin Kumar and Mrs. Kanti Singh, Advocates. For the State : Mr. Jharkhandi Upadhyay, A.P.P. For O.P. No.2 : M/s. P.K. Jaipuriyar and Anshuman Jaipuriyar, Advocates. ---------- O R D E R The three petitioners who have been arrayed as accused in Complaint Case No.1021 of 2006 have prayed for the quashing of the order dated 18.11.2006 passed therein by Sri R.K. Pandey, the learned Judicial Magistrate, First Class, Katihar, whereunder he has taken cognizance of offences under Sections 420, 408, 120-B and 477-A I.P.C. One Naresh Singh, impleaded herein as O.P. No.2, filed the Complaint Case No.1876 of 2003 which was sent to the Katihar Town Police Station under Section 156(3) Cr.P.C. Since the police allegedly - 2 - did not register the case and dilly-dallied with the matter, the complainant filed the present case being Complaint Case No.1021 of 2006 and the learned Chief Judicial Magistrate, Katihar, held an inquiry under Section 202 Cr.P.C. wherein apart from complainant, four of his witnesses were examined and being satisfied with the evidence that had come on record he took cognizance of offences under Sections 420, 468, 120-B and 477A I.P.C. According to the case of the complainant, accused no.3, misrepresenting himself as an agent of M/s. Mithila Autos and claiming to have helped several persons in getting commercial finance by the said firm he induced the complainant by giving false assurances to get a commercial vehicle (truck) financed with his help. The complainant managed Rs.1,81,000/- as informed by accused no.3 for getting a truck financed with the help of accused no.3 with the collaboration of accused no.2. The initial hire purchase amount of Rs.1,81,000/- was paid by the complainant on 24.10.2000 and the two of them talked to accused no.1, the proprietor of M/s. Mithila Motors who willingly became ready to help the complainant in getting the truck financed by a Company, namely, Mukesh Trade and Finance Private Limited (hereinafter referred to as “the Financier”) and accordingly a hire purchase agreement was prepared for Rs.3,92,200/- whereunder the complainant was required to pay Rs.1,81,000/- as initial hire purchase payment and the rest of the amount was to be paid in 22 equal instalments. The amount of Rs.1,81,000/- was allegedly received on behalf of the Financier by accused no.1 who did not grant a receipt for the same and an agreement paper was prepared in - 3 - the name of the complainant giving the registration number of the vehicle as BR-11 A- 9587 but the copy of the agreement was not handed over to the complainant. The agreement is also said to have contained the dates on which the instalments were to be paid and although the vehicle was delivered to the complainant, the owner book and other concerning documents were retained by the accused persons which were prepared in the name of the financier. It is further alleged that after taking delivery of the vehicle the complainant used it for commercial purposes and paid instalments of hire purchase agreement with some irregularities and in all had paid Rs.1,39,000/- upto 28.9.2002 and got receipts signed by accused no.2 regularly and as a matter of fact only Rs.1,07,300/- remained due against the complainant . The hire purchase agreement is said to have expired on 25.9.2002 and the complainant having become a defaulter in payment, a letter dated 12.11.2002 was sent by the financier to the complainant claiming Rs.1,07,300/- as outstanding dues against him and requested for payment within 15 days which alongwith due charges amounted to Rs.1,57,281.41 failing which the financier threatened to take further action. It is alleged that on 29.11.2002 all the accused persons alongwith 10-12 anti social elements came to the complainant and demanded payment of the aforesaid sum immediately failing which they threatened to take re-possession of the commercial vehicle which was standing near the tea stall of the complainant. It is further alleged that since it was not possible for the complainant to pay the huge amount immediately, all the accused forcibly took re-possession of the vehicle with the second key retained by them and went away after giving a - 4 - re-possession certificate to the complainant. Several correspondences by the complainant and personal approach to negotiate in the matter met with no response. It is alleged that after a registered notice sent to the financier was returned the complainant went to Kolkata and found that no such company in the name of the financier existed at the address given and having formed an opinion that he had been cheated, he approached Mithila Autos for the relevant papers which was not furnished. Assailing the impugned order, it was submitted by the learned counsel for the petitioners that the petitioner no.1 is the proprietor of Mithila Autos and authorized dealer of TELCO and was also working as a Liaison Officer of financing companies who operated in financing purchase including M/s. Mukesh Trade and Finance Private Limited. It was further submitted that the complainant-opposite party no.2 had approached the petitioner no.1 with a request to finance him in purchasing a truck and accordingly on the terms and conditions being agreed upon between the parties a hire purchase agreement was entered into between the parties. It is submitted that the complainant paid only Rs.1,81,000/- and agreed to pay the balance amount of Rs.2,11,200/- in 23 instalments of which the first 22 instalments were fixed as Rs.9200/- and the last instalment of Rs.8800/- was to be paid on or before 25.9.2002. Having defaulted in payment notwithstanding repeated requests, both orally and in writing, the dues increased up to Rs.10,70300/- which was never sought to be paid and having given sufficient opportunity to do so notices were served on the complainant personally on 17.10.2002 and 11.11.2002 with a request to clear his dues which was not complied with. Therefore - 5 - on 21.11.2002 the vehicle was seized and a registered letter dated 25.1.2003 was sent to the complainant giving him an opportunity to clear his dues which again was not complied with. Accordingly, the vehicle was handed over to the financier to deal with the same in accordance with law as also terms and conditions of the agreement. It is also submitted that it would be clear from the complaint petition that the complainant has admitted that he had defaulted in payment of instalments, having received notices sent to him and of the vehicle being re-possessed by the financier. He also pleaded his inability to pay the amount and of having lost all papers. The further submission on behalf of the petitioners is that in the light of the terms and conditions of the agreement, it was due to the default of payment of instalments, that the financier had re-possessed the truck and, therefore, no case under any of the provisions whereunder cognizance had been taken can be said to have been made out moreso when as per the admission of the complainant he had defaulted in payment of instalments , had not responded to the notices issued to him and having lost all papers related to the agreement of hire purchase. The law in relation to hire purchase is now well established by the Hon’ble Apex Court in Charanjit Singh Chadha Vs. Sudhir Mehra, reported in (2001) 7 SCC 417 and Trilok Singh Vs. Satyadeo Tripathi, reported in AIR 1979 SC 850, wherein it was held that in a case of a hire purchaser launching criminal prosecution against the financier the dispute raised was purely of civil nature and criminal proceeding initiated is an abuse of the process of the court and deserved to be quashed. - 6 - It was held in Charanjit Singh’s case (supra) that “The hire purchase agreement in law is an executory contract and confers no right in-rem on the hirer until the conditions for transfer of the property to him have been fulfilled. Therefore, the re-possession of goods as per the term of the agreement may not amount to any criminal offence.” Even in a later decision, the Hon’ble Apex Court in Managing Director, Orix Auto Finance (India) Limited Vs. Jagmandar Singh, reported in (2006) 2 SCC 598 observed that re-possession in terms of hire purchase agreement is clearly permissible. In view of the categoric observations of the Hon’ble Apex Court that such disputes were purely of civil nature and also in the facts and the circumstances of the instant case, the criminal prosecution against the petitioners deserves to be quashed. Accordingly, the application is allowed and the impugned order is hereby quashed. (Abhijit Sinha,J) Patna High Court, Patna. Dated: The 28th of May, 2009. Pradeep Srivastava/A.F.R.