IN THE HIGH COURT OF JUDICATURE AT PATNA Cr.Misc. No.3141 of 2007 1. Sanjeev Agrawal @ Papu Babu ,Son of Late Sheo Prasad Bbho Nagarwala, Director, Shrachi Securities Ltd. Todi Mansion, P-15 Trade Exchange, Purlea, Kolkata 2. Santosh Singh @ Santosh Kr.Singh, Son of Sri Rama Sharan Singh, Agent, Shrachi Securities Ltd. Todi Mansion, P-15,Trade Exchange, Purlea, Kokata 3. Mahesh Tola ( wrongly described as Mahesh Toda), Son of Sri Bijay Kumar Tola, Area Manager for Bihar Shrachi Securities Ltd. Todi Mansion, P-15, Trade Exchange, Purlea, Kolkata ---------------------------- Petitioners Versus 1. THE STATE OF BIHAR 2. Dilip Rai, Son of Sri Darai Rai, resident of Village-Shahpur, P.S.Shahpur in the district of Patna ----------------------- Opp.Parties. ----------- For the petitioners : M/S Akhileshwar Pd.Singh, and Ranjan Kumar Sharma, Advocates. For the State : Mr. Jharkhandi Upadhaya, A.P.P. For Opp.Party no.2: M/S Badri Narayan Singh, Sanjay Kumar Pandey, Advocates. ----------------- O R D E R Three of the four persons arrayed as accused in Complaint Case No.825(C) of 2005 have prayed for the quashing of the order dated 3.6.2005 passed therein by Sri D.N.Tripathy, Judicial Magistrate, 1st Class, Patna , whereby a prima facie case under Sections 384,392 , 420 and 120 B I.P.C. was found to have been made out against the accused persons including the petitioners herein and processes were directed to be issued against the accused persons on filing of the requisites. One Dilip Rai, the complainant, impleaded herein as Opp.Party no.2, filed the aforesaid complaint on 21.3.2005 inter alia stating that he had purchased the truck through M/S. Godawari Leasing & Finance Ltd for Rs.5,94,000/- out of which before purchasing the same the - 2 - complainant had paid Rs.73,483/- through different demand drafts. It is alleged that after taking signature of the complainant and his guarantor on blank, printed as well as typed papers, the Chasis of the truck was delivered on 20.12.2001. Thereafter, the complainant got constructed the body of the truck on the Chasis at the cost of Rs.1,50,000/- and after getting the vehicle registered put the same on the road after payment of taxes , insurance and obtaining permit. According to the complainant, apart from Rs.73,483/- paid by him at the time of the delivery of the Chasis , he further paid 24 instalments each of Rs.21,716/- in between 8.2.2002 and October,2004 amounting to Rs.5,21,184/- and compensation received from the insurance company against accident claim of Rs.67,350/- thereby amounting to Rs.6,62,017/- against the total price of the Chasis being Rs.5,24,000/-, and as such, there were no dues outstanding with the Financer. It has further been alleged that on 11.9.2004 when the said truck was going to Hajipur through the by-pass road and had reached near Agamkuan within the territorial jurisdiction of Patrakar Nagar Police Station , all the accused persons named in the complaint petition along with 4-5 muscle men in a Marshal Jeep stopped the truck. It is further said that they over-powered Manoj Kumar, driver Devashish Rai and khalasi Ram Naresh Rai forced them to sit in the jeep at the point of pistol and drove the truck by their own driver and went to Samastipur where they asked the driver to put his signature on some papers and disclosed that they were men of financer, Shrachi Security Ltd. and they were seizing the vehicle. It is also alleged that Manoj Kumar, Devashish Rai and Ram Naresh Rai were asked to get down from vehicle - 3 - at a lonely place near Samastipur whereafter they came to Shahpur(Patna) and narrated the entire incident to the complainant. It is said that on the next day the complainant met Santosh Singh at Hotel Arya who revealed that they have seized the truck by force under orders of Pappu Babu (accused no.1) and he was directed to go to Kolkata to meet petitioner no.1 and handed over the seizure list to the complainant. The complainant claims to have gone to Kolkata and met petitioner no.1 who is alleged to have asked the complainant to come after a month for settlement of account. It is further alleged that on 13.12.2004 the accused persons refused to hand over the vehicle to the complainant and thereafter on going to Samastipur he found the truck lying in a garage. The grievance of the complainant is that the seizure of the vehicle by the accused on behalf of Shrachi Security Ltd. was wholly unwarranted and illegal because the financer of the complainant was M/S Godawari Leasing & Finance Ltd.,Kolkata and not M/S. Shrachi Security Ltd. Assailing the impugned order, it was submitted on behalf of the petitioners that they had been falsely implicated in the case with an ulterior motive and oblique purpose by levelling false accusations and suppressing material facts. In this connection, it was sought to be submitted that M/S Godawari Leasing & Finance Ltd. was a sister concern of M/S. Sharachi Security Ltd. and both the companies are situated in one premises and were managed and looked over by the petitioners themselves. It was further submitted that on 19.12.2001 a hire purchase agreement was arrived at M/s Godawari Leasing & Finance Ltd and Dilip Rai for hire of a Chasis on condition of payment of initial - 4 - amount of Rs.87,893/- and total amount of hire purchase was fixed at Rs.7,60,340/- which was amount to be paid in 35 instalments beginning from 19.1.2002 and out of 35 instalments, the first instalment was fixed at Rs.22,540/- and the remaining instalments were fixed at Rs.21,700/- and that the initial amount of Rs.87,893/- to be paid by the complainant was not to be adjusted from the total hire purchase amount of Rs.7,60,340/- and as a matter of fact, the said amount of Rs.7,60,340/- to be paid in 35 instalments was in addition to the initial amount of Rs.87,893/- paid by the complainant. It was further submitted that complainant Dilip Rai had put his signature on the hire purchase agreement as hirer whereas his son Manoj Kumar and Dhanjay Singh had put their signatures as guarantors of the complainant and an agreement of arbitration was also executed on the same day which was also signed by the complainant and his guarantors Manoj Kumar and Dhananjay Singh. It was further submitted that Sri Pulin Bihari Das had been appointed as the sole arbitrator in the agreement of arbitration. The further submission on behalf of the complainant was that out of total sum of Rs.7,60,340/- to be paid in 35 instalments the complainant had paid only 31 instalments and that, too, by way of delayed payment which made him liable for payment of interest including penal interest for the delay caused. It was further submitted that the complainant had agreed that sums due and payments to the owners under the agreement if not paid by the due date shall be recoverable along with compensation for delay in payment @ Rs.1/- per thousand for part thereof per day with quarterly rest from the due day until the date of - 5 - payment by the hirer on account of the owners incurring loss in his business turn-over due to such delay without in any way affecting the owner’s right to repossess or retake possession of the vehicle and/or terminate the agreement. It was also agreed that the owners at their sole discretion may appropriate any money received from the hirer first against the said compensation for late payment and thereafter any other claim of the owners under agreement. One of the clauses of the hire purchase agreement empowered owner’s right to dispose of the motor vehicle after repossession thereof either by a private sale or by public auction or rehiring without any notice to the hirer on such terms as they think fit. The further submission of the petitioners is that on failure of the complainant to make payment after 31 instalments the owner was entitled to seize the vehicle in question and accordingly M/S Shrachi Security Ltd was authorized to seize the vehicle on default of payment of instalment made and in pursuance of the authorization M/S Shrachi Security Ltd. seized the vehicle in question. The petitioners denied that the payment of Rs.1,50,000/- for building the body of the truck was to be adjusted against hire purchase amount of Rs.7,60,340/- On the aforesaid premise , it was submitted that no offence either under Section 398 or 392 or 420 or 120B I.P.C. was made out against the petitioners in view of the decision of the Apex Court in Charanjit Singh Chadha and another Vrs. Sudhir Mehra, reported in ( 2001) 7 SCC 417 and Trilok Singh and others Vrs. Satyadeo Tripathy ( AIR 1979 SC 850) wherein it was held that in a case of purchaser launching criminal prosecution against the financer, the dispute raised was purely of civil nature and criminal - 6 - proceeding initiated is an abuse of the process of the court and deserve to be quashed. It was held in Charanjit Singh Chadha’s case ( Supra): “The hire purchase agreement in law is an executory contract of sale and confers no right in rem on the hirer until the condition for transfer of the property to him have been fulfilled”. Therefore, the repossession of goods as per the term of the agreement may not amount to any criminal offence. Even in a later decision the Apex Court in Managing Director, Orix Auto Finance ( India ) Ltd. Vrs. Jagmander Singh, reported in 2006 (2) SCC 598 observed that repossession in terms of the 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 circumstances of the case, the criminal prosecution against the petitioners deserves to be quashed. Accordingly, the application is allowed so far as the petitioners are concerned. ( Abhijit Sinha, J ) Patna High Court,Patna Dated : the 5th May,2009 Nawal Kishore Singh/A.F.R.