Balbir Singh vs State of U.P. and Others

Amar Saran, J.—Heard Sri V. D. Chauhan, learned Counsel for the applicant and Sri Hemendra Pratap Singh, learned Counsel for the private opposite party.

This application u/s 482, Cr. P.C. has been filed for quashing charge-sheet in Case No. 846 of 1999, State v. Balbir Singh(Crime No. 147 of 1997) u/s 406, I.P.C., pending before the C.J.M., Aligarh.

The applicant claims to be carrying on a business of financing vehicles under the name and style of M/s. Balbir Finance Company, A-32, Petrol Pump, Cannaught Place, New Delhi.

An F.I.R. was filed on 24.4.1997 by Narendra Singh, alleging that on 24.4.1997, he left his car parked near Suman Vidyalaya and had gone to his factory at Hakeem Ki Sarai in Aligarh. At about 5.30 p.m., when the complainant had returned, he found that some unknown persons had stolen his car. Later on, the car in question was recovered from the applicant vide recovery memo of the same date. The case of the applicant is that in a wholly mala fide manner the present F.I.R. was lodged against the applicant. In fact, the applicant was engaged in a hire-purchase business and he had financed a loan of Rs. 2,30,000 for purchase of a Maruti car to one Harish Chandra in 1996 under a hire-purchase agreement. Harish Chandra was to pay back the loan in 12 monthly instalments. However, Harish Chandra did not adhere to the terms of the loan and repaid only Rs. 58,000 towards the loan amount. Consequently, on his failure to repay the loan, he handed over the car No. DL-2CF 9612 to the applicant on 15.4.1997. However, mischievously and with an ulterior end, the complainant filed the F.I.R. and got the vehicle recovered from the applicant. The C.J.M., Aligarh, even passed an order releasing the vehicle in favour of the applicant on 8.7.1997, holding that the applicant was the registered owner and he possessed the papers. Therefore, he rejected the application of Harish Chandra, who claimed that he had paid Rs. 1,27,000 to Balbir Finance Company from where he got the car financed and subsequently he paid sums of Rs. 15,000, Rs. 20,000 and Rs. 23,000, i.e. totalling Rs. 1,85,000. The C.J.M. did not accept the plea of the complainant that he had paid Rs. 1,85,000, but accepted the claim of the applicant that only Rs. 58,000 had been paid to him as per the statement of accounts maintained by the applicant''s company. The initial payment of Rs. 1,27,000 was also not accepted by the learned C.J.M. As the complainant had agreed to pay the balance amount to the applicant, the learned C.J.M. observed that it was apparent that some amount was due to the applicant. The applicant was also shown to be the registered owner of the vehicle as per its registration certificate and insurance papers, which stood in the name of Balbir Finance Company. He also referred to the hire-purchase agreement dated 2.2.1997, according to which Rs. 2,00,000 has been financed to Harish Chandra and Rs. 30,000 was the financing charges. On payment of only Rs. 58,000, he wanted the custody of the car. He also believed the receipt dated 15.4.1997, filed by the applicant. Under Clause 8 of the hire-purchase agreement, until the entire money in respect of the vehicle was paid to the finance company, the finance company would continue to be the owner of the vehicle. Only after the payment of the entire amount, Harish Chandra was entitled to get the car registered in his own name.

In this view of the matter, the custody of the car was given to the applicant.

In my view, even if it was taken to be true that Harish Chandra had paid a larger sum than Rs. 58,000 to the applicant, still this is apparent that the entire sum had not been paid to the applicant''s firm and under Clause 4 of the hire-purchase agreement, which has been annexed with this application, he was entitled to terminate the said agreement and re-take and recover the car. In any case, no mens rea can be attributed to the applicant. The applicant had taken possession of the car as per the terms of the said agreement and no breach of trust was involved in taking the vehicle, which stood registered in his own name. In this connection, there are a series of decisions of the Apex Court, and this Court also, which have endorsed the view that by mere taking of possession of the vehicle in such circumstances, no offence of cheating or criminal breach of trust or theft could be said to be made out.

Thus, in case of Charanjit Singh Chadha and Others Vs. Sudhir Mehra, , referring to the clauses giving a right to the first financier to take possession of the vehicle for default of hirer, which is similar to the hire-purchase agreement in the present case, the Apex Court held that there was no right in rem in the hirer until the conditions of transfer of the vehicle had been fulfilled. Therefore, taking of re-possession of the vehicle would not amount to any criminal offence. The Supreme Court, thereafter, quashed the criminal complaint and consequent proceedings. Likewise, in the case of Sardar Trilok Singh and Others Vs. Satya Deo Tripathi, , where the complainant had alleged that the accused in a high-handed manner had forcibly removed the truck from his possession and thereby committed the offence of dacoity, the Apex Court held that this was basically a dispute of civil nature, where even if the fact was assumed to be correct, money must have been advanced by the financier to the hirer and if the truck had been seized, that amounted to a bona fide seizure on failure to pay the monthly instalments in time. The Court thereupon proceeded to quash the criminal proceedings. Similarly, in case of K. A. Mathai alias Babu v. Kora Bibbikutty, (1996) 7 SCC 212 , a bus was obtained by the complainant on a hire-purchase agreement. Only a part of the consideration was paid and on default of the monthly payment, the vehicle was taken into its possession by the financier and the accused who had driven away the bus from the possession of the complainant and the financier were proceeded against u/s 379 read with Section 114, I.P.C. The Court held that the bus was taken away on the terms of the agreement and it could never be said that the financier had the requisite mens rea for committing any criminal offence.

In view of the aforesaid decisions, and in view of the aforesaid facts and circumstances of the case, allowing criminal proceedings against the applicant to continue would amount to the abuse of the process of the Court, and, accordingly, this criminal application u/s 482, Cr. P.C. is allowed and the charge-sheet and the consequent criminal proceedings against the applicant in Case No. 846 of 1999, State v. Balbir Singh (Crime No. 147 of 1997) u/s 406, I.P.C., pending before the C.J.M., Aligarh, are quashed.