IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.SASIDHARAN NAMBIAR THURSDAY, THE 16TH SEPTEMBER 2010 / 25TH BHADRA 1932 Crl.MC.No. 64 of 2010() ---------------------- CC.216/2009 OF CHIEF JUDICIAL MAGISTRATE COURT, ERNAKULAM CRIME NO. 1666/2009 OF ERNAKULAM CENTRAL POLICE STATION, ERNAKULAM .......................................... PETITIONERS / ACCUSED : ------------------------------------ 1. MANEESH KUMAR V.S., S/O. SOMANATHAN, VANCHIPURAKKAL HOUSE, PUTHIYAVILA NORTH, PATTOLI MARKET P.O., KAYAMKULAM, 2. K. SOMANATHAN, S/O. KUNJU PILLAI, DO........DO........ 3. K. KRISHNAN, S/O.MADHAVAN, NANGREATH, KARIYILAKULANGARA P.O., KAYAMKULAM. 4. LAKSHMIKUTTY, W/O. KRISHNAN, DO.......DO...... BY ADVS. SRI.RINNY STEPHEN CHAMAPARAMBIL SMT.ASHA ELIZABETH MATHEW RESPONDENTS / STATE & DEFACTO COMPLAINANT : -------------------------------------------------------------------------- 1. STATE OF KERALA, REP. BY SUB INSPECTOR OF POLICE, ERNAKULAM CENTRAL POLICE STATION, KOCHI THROUGH PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. 2. M/S BELL LEASING AND HIRE PURCHASE LTD., DOOR NO. 40/9715 IST FLOOR, BHAGEERATHA SANTHWANA, CHITTOOR ROAD, KOCHI-10. R1 BY PUBLIC PROSECUTOR SMT. M.K. PUSHPALATHA R2 BY ADVS. SRI.P.N.MOHANAN SRI.K.RAJESH SUKUMARAN THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 16/09/2010, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: Mn M.SASIDHARAN NAMBIAR,J. --------------------------------------------- CRL.M.C.NO.64 OF 2010 --------------------------------------------- Dated 16th September, 2010 O R D E R Petitioners are the accused in C.C.216/2009 on the file of Chief Judicial Magistrate's Court, Ernakulam, taken cognizance for the offence under Section 420 of Indian Penal Code on Annexure-A5 private complaint filed by second respondent. Petition is filed under Section 482 of Code of Criminal Procedure to quash the cognizance taken on Annexure-A7 final report for the offence under Section 420 of Indian Penal Code as well as Annexure-A8 order passed by the learned Magistrate, in a petition filed by the second respondent under Section 451 of Code of Criminal Procedure. Second respondent filed Crmc 64/10 2 Annexure-A5 complaint before the Chief Judicial Magistrate, Ernakulam against the petitioners alleging that they committed offence under Section 420 of Indian Penal Code. Learned Magistrate sent the complaint for investigation under Section 156(3) of Code of Criminal Procedure, based on which Annexure-A6 FIR was prepared and crime No.1666/2009 of Ernakulam Central Police Station was registered. After investigation Annexure-A7 final report was filed which was taken cognizance by the learned Magistrate. When JCB, which was purchased by the first petitioner on the financial assistance of the second respondent was seized, both the first petitioner and the second respondent sought interim custody of the JCB under Section 451 of Code of Criminal Procedure. By Annexure-A8 order interim custody was granted to the second respondent. Case of Crmc 64/10 3 the petitioners is that even if the entire allegations in Annexure-A5 complaint as well as the case in Annexure-A7 final report are accepted, an offence under Section 420 of Indian Penal Code is not attracted and therefore, continuation of the proceedings is only an abuse of process of the Court. 2. Learned counsel appearing for the petitioners and second respondent were heard. 3. Annexure-A5 complaint discloses the case of the second respondent. According to the second respondent company, first petitioner approached the company to purchase a JCB on hire purchase agreement and second respondent agreed to give financial assistance and first petitioner as principal loanee and petitioners 2 to 4 as guarantors executed a hire purchase agreement agreeing to pay the value of JCB in 36 equal monthly installments of Rs.41,560/- Crmc 64/10 4 each and the JCB was purchased and last installment is to be paid on or before 28/2/2011. It is alleged that though first petitioner paid four monthly installments, he defaulted subsequent monthly installments and when second respondent contacted the first petitioner on 7/2/2009 at his residence, he agreed to settle the over dues on or before 15/3/2009. It is alleged that after 31/3/2008 no vehicle tax was paid and RC book was surrendered before the company and insurance taken on 5/11/2007 expired on 4/11/2008 and insurance policy was not renewed and when the representative of the company contacted the first petitioner, he agreed to renew the insurance policy and agreed to pay vehicle tax and still it was not done. On 6/2/2009 second respondent company sent a notice to the first petitioner to pay installment dues amounting to Crmc 64/10 5 Rs.3,03,793.72, namely the amount payable in seven defaulted installments. It is alleged that first petitioner did not turn up and therefore, on 17/3/2009 company sent a notice recalling the entire loan amount advanced as the first petitioner failed to pay the installments and clause 4(a) of the hypothecation Agreement enables the company to take steps to recall the loan and forfeit the vehicle and it was intimated to the first petitioner. It is also contended that meanwhile, the first petitioner issued a cheque dated 13/4/2009 for Rs.12,90,000/- and when it was presented, the same was dishonoured for want of sufficient funds and in spite of notice, the amount was not paid and therefore, proceedings under Section 138 of Negotiable Instruments Act is initiated as S.T.1978/2009. It is claimed that the intention of the Crmc 64/10 6 petitioners is to dismantle the vehicle and thereby cheat the company and therefore, an offence under Section 420 of Indian Penal Code is attracted. Annexure-A7 final report also shows that an offence under Section 420 of Indian Penal Code is alleged contending that though four installments were paid, subsequent installments were not paid and first petitioner did not return the JCB to the company and thereby they committed the offence. 5. As rightly pointed out by the learned counsel appearing for the petitioners even if, the entire allegations in Annexure-A5 as such are accepted, so also the allegations in Annexure-A7 final report, offence under Section 420 of Indian Penal Code is not attracted. What is alleged in the complaint is that first petitioner as the principal debtor and petitioners 2 to 4 as guarantors obtained Crmc 64/10 7 loan for purchasing JCB on hire purchase and the first petitioner agreed to pay the value of JCB in 36 equal monthly installments at the rate of Rs.41,560/- and defaulted to pay subsequent installments after fourth installment and in spite of notice the amount was not paid and even insurance policy was not renewed and the vehicle tax was not paid. None of these aspects would attract an offence under Section 420 of Indian Penal Code. When there is no case for the second respondent that either when the loan was applied for or granted or availed, the first petitioner or his guarantors, petitioners 2 to 4 had a dishonest intention to cheat or not to pay the value of JCB to be purchased on hire purchase. At best it could be said that subsequently they defaulted to pay the installments due under the hire purchase agreement. That will not attract Crmc 64/10 8 an offence under Section 420 of Indian Penal Code. Hence cognizance taken for the offence under Section 420 of Indian Penal Code on Annexure-A7 final report can only be quashed. When cognizance taken is quashed, Annexure-A8 order granting interim custody of the vehicle to the second respondent would lapse by itself. Petition is allowed. C.C.216/2009 on the file of Chief Judicial Magistrate's Court, Ernakulam is quashed. Annexure-A8 order passed by Chief Judicial Magistrate, Ernakulam is also quashed. M.SASIDHARAN NAMBIAR, JUDGE. uj.