Case: Niranjan Vs. State of Maharashtra

02. Petitioner herein is named as accused No. 1 in Crime No.147/11, dated 4.5.2011 registered with Bidkin Police Station, District Aurangabad. Offences have been registered under Sections 406, 424, 420 read with Section 34 of the Indian Penal Code.03. By this petition, the petitioner has moved this court under Articles 226, 227 and 21 of the Constitution of India.

Court's reasoning:
23. The stipulation on free alienability, which is an essential ingredient of stock in trade, does not, by any connotation, apply to plant and machinery of the borrower company in present set of facts.24. The proposition that the hypothecated properties continue to be under ownership of the borrower, is as clear as day light. However, due to stipulation as to restriction on alienability, the proposition that hypothecated goods being property of borrower, are absolutely alienable, is not an absolute rule of law or of practice in trade, commerce and Banking.25. Hypothecated properties can always be classified in two categories, namely, alienable andand alleged absoluteness of right always carries a clog on inalienability, and right of liquidation by redemption available with the lender, operates as a strong and rigid clog on alienability.26. On the sole ground that stipulation of free alienability was not attached to machinery, the borrower company was under a positive obligation to the contrary i.e. to preserve, conserve and to maintain those in usable and worthy condition.27. Hypothecation of plant and machinery is sui generis in nature and is distinct from generic hypothecation of freelyand deliverable goods. The goods covered by generic hypothecation are freely movable, analogous to currency. Goods with restriction on saleability are inambulate due to the promise to that effect. Promise and Trust is the spinal cord of life, including trade and commerce.28. What else would be the breach of Trust, if promise to preserve and conserve the property in ones possession for the benefit and security of other, is betrayed. Had the Bank a grievance thator other tradable goods and consumables etc. were sold, such grievance could have been rebuffed as a cantankerous plea. Goods, which did not carry a qualification of saleability, attract the obligation of trust, and breach of such obligation would, prima facie, become a breach of Trust.29. Therefore none amongst the cases relied upon by the petitioner would apply to the facts of the present case.30. The result is that, the entire foundation of the petition is fictional and in the nature of hide and seek, and therefore, petition does not deserve any further indulgence31. The observations made hereinbefore, were necessary to have the reasons leading to conclusion duly spelt out and made vivid. The FIR is still at the stage of investigation. Therefore, the Investigating Officer shall be free to proceed on what emerges upon investigation, since whatever we have opined and expressed is what appears to us prima facie. The Investigating Officer in the process of investigation, and the trial court in case of a chargesheet, shall not be influenced by observations made hereinbefore and would be governed by the facts and evidence as would surface.