Case: Charanjit Singh Chadha Vs. Sudhir Mehra

2. The appellants are running afinancial institution, by name, Messrs Deluxe Leasing Private Limited. The respondent, Sudhir Mehra, partner of a partnership firm, entered into aagreement with the appellants on 3.5.1994 whereunder a motor vehicle was handed over to the respondent. The total consideration agreed to be paid by the respondent was Rs. 3,02,884/and the respondent made an initial payment of Rs. 69,308/and the balance amount was to be paid in 36 monthly instalments of Rs. 8,400/each starting from 3.6.1994. According to respondent, he had been paying the instalments regularly. The respondent filed a criminal complaint before the Judicial Magistrate, Amritsar on 3.12.1998 alleging that the motor vehicle in question had developed some trouble and it was entrusted to a motor mechanic on 14.9.1996 for carrying out repairs and that in the night of 16.9.1996 the appellants forcibly took away the vehicle from the motor mechanic and thus committed offences u/ssIPC. Pursuant to the complaint, the Magistrate took cognizance of the offences and issued summons to the appellants. Appellants filed a petition under Section 482 of Criminal Procedure Code before the High Court of Punjab and Haryana to quash the complaint proceedings. In the petition, it was alleged by the appellants that respondent had committed default in paying the instalments and that as on 1.9.1996 an amount of Rs. 1,34,887/was outstanding against the respondent and therefore the appellants were constrained to terminate theagreement and that the respondent surrendered the motor vehicle to the appellants. The learned Single Judge of the High Court declined to quash the proceedings and held that the allegations in the complaint were capable of making out offences punishable especially under Section 379 IPC and, therefore, the petition under Section 482 Cr.P.C. was dismissed. Aggrieved by the same, the appellants have filed the instant appeal.

Court's reasoning:
13. But in the instant case, the ownerthe vehicle delivered to the hirer under theagreement will not amount to theft as the vital element of `dishonest intention is lacking. The element of `dishonest intention which is an essential element of constitute the offence of theft cannot be attributed to a person exercising his right under an agreement entered into between the parties as he may not have an intention of causing wrongful gain or to cause wrongful loss to the hirer.In K.A. Mathai and Anr. v. Kora Bibbikutty and Anr., [1996] 7 SCC 212 , the bus was obtained by the complainant on aagreement. The complainant paid only part of the consideration and defaulted in paying the instalments and the vehicle was taken possession of by the financier and at that time, both the first accused who had driven away the bus from the possession of the complainant and the second accused were present in the bus. They were prosecuted for the offence punishable under Section 379 read with Section 114 IPC.se agreement in law is an executory contract of sale and confers no right in rem on hirer until the conditions for transfer of the property to him have been fulfilled. Therefore, theof goods as per the term of the agreement may not amount to any criminal offence. The agreement [Annexurespecifically gave authority to the appellants torepossess the vehicle andtheir agents have been given the right to enter any property or building wherein the motor vehicle was likely to be kept. Under theagreement, the appellants have continued to be the owners of the vehicle and even if the entire allegations against them are taken as true, no offence was made out against them. The learned Single Judge seriously flawed in his decision and failed to exercise jurisdiction vested in him by not quashing the proceedings initiated against the appellants.