L.P.A. No. 1304 of 2010(O&M) -1- In the High Court of Punjab and Haryana at Chandigarh L.P.A. No. 1304 of 2010(O&M) Date of Decision: July 20, 2011 Gaurav Mago, Manager, Kotak Mahindra Prime Limited ---Appellant versus State of Punjab and others ---Respondents Coram: HON'BLE MR. JUSTICE M.M.KUMAR HON'BLE MR. JUSTICE GURDEV SINGH *** Present: Mr. A.D.S.Sukhija, Advocate, for the appellant Mr. Suvir Sehgal, Addl. Advocate General, Punjab for respondents No. 1 to 4 Mr. Karan Bhardwaj, Advocate, for respondent No. 5 Ms. Vandana Malhotra, Advocate, for respondent No. 6 *** 1. To be referred to the Reporter or not? 2. Whether the judgment should be reported in the Digest? Gurdev Singh, J. The instant appeal under Clause X of the Letters Patent has been preferred by Gaurav Mago, Manager, Kotak Mahindra Prime Limited, who was arrayed as respondent No. 6 in the writ petition, against the order dated 14.7.2010 passed by learned Single Judge, vide which a direction has been issued to the Senior Superintendent of Police, Ludhiana, to register a case FIR L.P.A. No. 1304 of 2010(O&M) -2- without any delay regarding fabrication of the documents in respect of the sale of the vehicle by the said company in order to cheat the writ petitioner Sukhwinder Singh, respondent No. 5 and to get the same investigated from some senior police officer preferably, having expertise and knowledge of economic offences. Sukhwinder Singh-petitioner-respondent No. 5 has sought a mandamus directing respondent Nos. 1 to 3 to recover his vehicle bearing Registration No. HP 51-A 6426 (for brevity “the vehicle”), which according to him was forcibly taken away by the appellant and respondent Nos. 4, 6 and 7, after putting pressure upon him, in connivance with the police officers and not returned to him in spite of the fact that he had repaid whole of the loan amount. A further prayer was made for directing the Senior Superintendent of Police-respondent No. 3, to decide his representation dated 10.11.2009 (Annexure P-3) in the light of the various judicial pronouncements of this Court and the Hon'ble Apex Court. According to the petitioner-respondent No. 5, he purchased the vehicle after taking loan of ` 5,89,600/- from Kotak Mahindra Prime Limited (hereinafter referred to as “the finance company”). He could not pay the installments due to some extreme financial stringency. He was keen to deposit those installments and also approached the said finance company. Ultimately, he paid the complete amount of ` 3,00,000/- on 8.9.2009. On 27.9.2009, Maninder Singh-respondent No. 7, who is the recovery agent of the finance company, along with some police officials, came to his residence at 5-00 a.m. and forced him to give the possession of the vehicle to them. At that time they were armed with weapons. Though, he begged them not to recover the vehicle, yet they took away the vehicle. He was asked to pay ` 3,75,000/- and on the payment thereof, they promised to return the vehicle. On 7.10.2009, the L.P.A. No. 1304 of 2010(O&M) -3- petitioner-respondent No. 5 informed the appellant that he has arranged a sum of ` 3,00,000/-. Thereupon, the appellant along with respondent No. 7 came to his house and took away the money. However, no receipt was given on the pretext that the receipt would be issued only after the balance amount of ` 75,000/- is paid. On 10.10.2009, he went to the finance company for depositing `75,000/- that amount so that he could get possession of the vehicle. He was told that approval for closing the case had not been received from the head office. Those respondents failed to issue 'No Objection Certificate' etc. to him. On enquiry, he came to know that the appellant and respondent Nos. 6 and 7 obtained a 'No Objection Certificate' from the Finance Company by committing a fraud and sold the vehicle without any intimation to him. About the said criminal acts of the appellant and other respondents, he submitted detailed representation to respondent No. 3, who never bothered to respond to the same in spite of his personal visits to the police station. The petitioner- respondent No. 5 also pleaded in the writ petition that the practice of taking forcible possession by the finance companies is in vogue and that leads to victimization of the weaker party. The police is acting hand in glove with the financial institutions. The practice of taking the forcible possession of the vehicles by those institutions with the help of the musclemen has been deprecated repeatedly by Hon'ble the Apex Court as well as this Court in various judgments. The appellant controverted the contentions of the writ-petitioner by asserting that the finance company is a leading non-banking finance company engaged in providing finance facilities to the customers enabling them to procure moveable properties including the motor vehicles. The petitioner-respondent No. 5 availed the facility of financial assistance for purchasing the vehicle by taking a loan of ` 5,89,600/- and Loan Agreement L.P.A. No. 1304 of 2010(O&M) -4- dated 30.6.2007 was duly executed. The petitioner agreed to pay the borrowed amount in 35 equal monthly installments of ` 20,400/- each, as per the terms of the agreement and the vehicle was hypothecated with it by way of collateral security. The petitioner failed to abide by the terms and conditions of the agreement and failed to honour the fiscal discipline. The 35 EMIs cheques issued by him were dishonoured when those were presented to his banker. Clause 14 of the agreement was invoked for recalling the loan facility and he was called upon to make the payment of ` 6,35,533.96 /-, which was due from him. The petitioner was not interested in paying that amount and was making efforts to dispose of the vehicle. Therefore, an application was filed under Section 9 of the Arbitration and Conciliation Act, 1996 before the District Judge, Ludhiana, in which he was duly served and appeared through his counsel. Subsequently, the petitioner did not appear and was, thus, proceeded against ex parte. On 28.8.2008, learned Additional District Judge, Ludhiana, passed an order appointing the appellant as Receiver in respect of the vehicle and permitted him to take possession thereof. It was only thereafter that the possession of the vehicle was taken with the help of the police in a legal and peaceful manner. In the arbitration proceedings, the award was passed on 9.6.2009 and it was in terms of the agreement that the vehicle was sold for ` 3,00,000/- to Palwinder Singh son of Prem Singh. The appellant accordingly claimed that the writ petition filed by the petitioner, who is chronic defaulter and concealed the material facts from the Court, is not maintainable. However, the learned Single Judge disposed of the writ petition in terms of the directions as has been noticed in the opening para of this order. It has been submitted by learned counsel for the appellant that the possession of the vehicle was taken in a lawful manner in pursuance of the orders dated 28.8.2008 passed by the learned Additional District Judge, L.P.A. No. 1304 of 2010(O&M) -5- Ludhiana (R-1) in an application filed under Section 9 of the Arbitration and Conciliation Act, the appellant was appointed as a Receiver and was authorised to take possession of the vehicle. Accordingly the possession of the vehicle was taken with the help of the police force. This falsifies the stand of the writ- petitioner that the possession of the vehicle was taken forcibly from him in connivance with the police. In order to recover the balance loan amount, the vehicle was put to sale in public auction and was sold to the highest bidder. In these circumstances, learned Single Judge could not have passed the impugned order issuing a direction to the Senior Superintendent of Police to register a case FIR and that order is liable to be set aside. Learned State counsel for respondent Nos. 1 to 4 and learned counsel for respondent No. 6 endorsed the submissions made by the counsel for the appellant. However, it has been submitted by learned counsel for the petitioner that the learned Single Judge ordered registration of the case FIR in view of the fact that respondent Nos. 6 and 7 have fabricated the documents for selling the vehicle and no prior notice was issued to the petitioner for selling the vehicle in the alleged open auction. Learned counsel would submit that these respondents not only fabricated the 'No Objection Certificate', but also the affidavit of the petitioner dated 23.10.2009 in order to sell the same to a person who is closely related to respondent No. 7. In order to unearth the truth, it is necessary that the matter be got investigated and the best course for investigating the same is to first register a case FIR. Having heard learned counsel for the parties and perusing the documents placed on the record, we are convinced that possession of the vehicle was taken by the appellant and respondent No. 7 in pursuance of the order dated 28.8.2008 (R-1) passed by learned Additional District Judge, vide L.P.A. No. 1304 of 2010(O&M) -6- which Shri Gaurav Mago, Branch Collection Manager of the finance company, was appointed as the Receiver for recovering the vehicle, as per law. It was in pursuance of the said order a letter was written to the Senior Superintendent of Police for police help, which was provided, and possession of the vehicle was taken. However, we do not find any legal infirmity in the impugned order. The learned Single Judge ordered for registration of a case FIR in view of the fact that respondent Nos. 6 and 7 are alleged to have fabricated the documents for selling the vehicle. There are specific allegations levelled by the petitioner-respondent No. 5 that they wanted to sell the vehicle in a clandestine manner and it was sold to one of the relative of respondent No. 7 for a paltry amount of ` 3,00,000/- though the same was purchased just two years back before the sale, for a sum of ` 7,91,000/-. It is pertinent to notice here that on 11.7.2011, learned counsel for the appellant stated before us that for auctioning the vehicle necessary steps were taken and tenders were invited and that pre-sale notice was issued to the petitioner. For substantiating his submission, requested was made and granted to place those documents on the record. Thereafter the appellant placed on record the notices, which were issued to the petitioner. The first notice is dated 28.9.2009, vide which the petitioner was called upon to pay the amount of award to the tune of ` 8,28,819/- along with interest at the rate of 18% per annum failing which the vehicle was to be disposed of in accordance with the terms and conditions of the agreement. The second notice is dated 8.10.2009. It is mentioned therein that on account of failure of the petitioner-respondent No. 5 for not making the payment after the service of the earlier notice, the vehicle has been sold to the highest bidder for ` 3,00,000/- and he was called upon to make the payment of balance amount of ` 5,28,819/- along with interest at the rate of 18% per annum. L.P.A. No. 1304 of 2010(O&M) -7- On account of failure of the counsel for respondent Nos. 6 and 7 to place on record any other notice, it is to be concluded that no notice was ever served upon the petitioner before the vehicle was actually put to auction. Two quotations have been placed on the record; one of which is by one Palwinder Singh, to whom the vehicle was sold for ` 3,00,000/- and the same is dated 5.10.2009, whereas the other quotation by one Sanjay is undated. This further falsifies the stand of the appellant that the vehicle was sold in open auction. On the face of it, it is a case of cheating. Learned counsel for the petitioner -respondent No. 5 has placed on record photo stat copy of one affidavit, dated 23.10.2009, which purports to be the affidavit of the petitioner and according to the counsel this affidavit has been fabricated by the appellant to get the vehicle transferred in the name of above said Palwinder Singh. It cannot be said that there was any occasion with the petitioner to give such an affidavit on 23.10.2009, when the vehicle had already been sold by the finance company on 5.10.2009. As observed by the learned Single Judge, the No Objection Certificate has also been fabricated by respondent Nos. 6 and 7. When apparently criminal acts have been committed by these respondents, it cannot be said that the order passed by learned Single Judge directing the Senior Superintendent of Police to register a case FIR, suffers from any legal infirmity warranting interference of this Court. The appeal does not deserve admission. There is no merit in this appeal and the same is hereby dismissed. (M.M.KUMAR) (GURDEV SINGH) JUDGE JUDGE July 20, 2011 PARAMJIT