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Vinay Kumar Umar v. State Of U.P. & Others - WRIT - C No. 637 of 2004 [2004] RD-AH 18 (9 January 2004)


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           Civil Misc. Writ Petition No.637 of 2004

Vinay Kumar Umar  ......... Petitioner


State of U.P. & Ors.                .......... Respondents

Hon. Dr. B.S. Chauhan, J.

Hon. Arun Tandon, J.

(By. Dr. B.S. Chauhan, J.)

Petition raises the question as to whether in a case, which raises the disputes of exclusively civil nature, this Court should issue direction to the investigating agency to entertain the complaint of the petitioner.

The facts are not in dispute. Petitioner has purchased a vehicle through the respondents no. 6 and 7 on hire purchase  and the said respondents had paid a sum of Rs.5,60,000/- and parties executed a hire purchase  agreement.  Petitioner had paid some instalments, i.e. to the tune of Rs.90,000/- and did not deposit the other instalments in time. The said respondents had taken the possession of the said vehicle. Being aggrieved, petitioner has approached the police authorities to lodge a complaint, which is not being entertained. Hence this petition.

Learned counsel for the petitioner has submitted that taking away the vehicle forcibly in possession by the said respondents no. 6 and 7 is an offence punishable under the provisions Indian Penal Code. Therefore, police authorities are bound to entertain the complaint of the petitioner and investigate the case.

On the other hand, Shri C.K. Rai, learned Standing Counsel has submitted that the matter is purely of civil nature. Petitioner is bound by the terms and conditions of the hire purchase  agreement. If he is aggrieved of the taking possession of the vehicle by the said respondents, he must avail the civil remedies but this Court should not entertain the petition. The petition is liable to be dismissed.

We have considered the rival submissions made by the learned counsel for the parties and perused the record.  

The issue involved herein is not more res integra, as it has been examined by the Courts from time to time.

In Trilok Singh & Ors. Vs. Satya Deo Tripathi, AIR 1979 SC 850, the Hon'ble Supreme Court examined the similar case wherein the truck had been taken in possession by the Financer in terms of hire purchase  agreement, as there was a default in making the payment of instalments. A criminal case had been lodged against the Financer under Sections 395, 468, 465, 471, 12-B/34, I.P.C. This Court refused to exercise its power under Section 482, Cr.P.C. and did not quash the criminal proceedings on the ground that the Financer had committed an offence. However, reversing the said judgment, the Apex Court held that proceedings initiated were clearly an abuse of process of the Court. The dispute involved was purely of civil nature, even if the allegations made by the complainant were substantially correct. Under the hire purchase  agreement, the Financer had made the payment of huge money and he was in fact the owner of the vehicle. The terms and conditions incorporated in the agreement gave rise in case of dispute only to civil rights and in such a case, the Civil Court must decide as what was the meaning of those terms and conditions.

In K.A. Mathai alias Babu & Anr. Vs. Kora Bibbikutty & Anr., 1996 (7) SCC 212, the Hon'ble Apex Court had taken a similar view holding that in case of default to make payment of instalments, Financer had a right to resume possession even if the hire purchase  agreement does not contain a clause of resumption of possession, for the reason that such a condition is to be read in the agreement. In such an eventuality, it cannot be held that the Financer had committed an offence of theft and that too, with the requisite mens rea and requisite dishonest intention. The assertions of rights and obligations accruing to the parties under the hire purchase  agreement wipes out any dishonest pretence in that regard from which it cannot be inferred that Financer had resumed the possession of the vehicle with a guilty intention.

In Jagdish Chandra Nijhawan Vs. S.K. Saraf, (1999) 1 SCC 119, the Hon'ble Supreme Court dealt with a case wherein the company had provided an accommodation to its employee and after termination of his services, he did not vacate the said accommodation and a criminal case was lodged against him under Sections 406, 408, 409, I.P.C. also taking the assistance of Section 630 of the Companies Act, 1956. The Hon'ble Apex Court held that as the accused had been granted a rent free accommodation as a part of the conditions of employment, the agreement provided for civil rights and in such a matter, complaint was held to be not maintainable.

In Charanjit Singh Chadha & Ors. Vs. Sudhir Mehra, (2001) 7 SCC 417, again the Hon'ble Apex Court held that recovery of possession of the vehicle by Financer-owner as per terms of the hire purchase agreement, does not amount to a criminal offence. Such an agreement is an executory contract of sale conferring no right in rem  on the hirer until the transfer of the property to him has been fulfilled and in case the default is committed by the hirer and possession of the vehicle is resumed by the Financer, it does not constitute any offence for the reason that such a case/dispute is required to be resolved on the basis of terms incorporated in the agreement. The Apex Court elaborately dealt with the nature of the hire purchase  agreement observing that in a case of mere contract of hiring, it is a contract of bailment which does not create a title in the bailee. However, there may be variations in the terms and conditions of the agreement as created between the parties and the rights of the parties have to be determined on the basis of the said agreement. The Hon'ble Court further held that in such a contract, element of bailment and element of sale are involved in the sense that it contemplates  an eventual sale. The element of sale fortifies when the auction is exercised by the intending purchaser after fructifies the terms of the agreement. When all the terms of the agreement are satisfied and option is exercised and sale takes place of the goods which till then had been hired. While deciding the said case, the Hon'ble Apex Court placed reliance upon its earlier judgments in Damodar Valley Corporation Vs. State of Bihar, AIR 1961 SC 440; Instalment Supply (P) Ltd. Vs. Union of India, AIR 1962 SC 53; K.L. Johar & Co. Vs. C.T.O., AIR 1965 SC 1082; and Sundaram Finance Ltd. Vs. State of Kerala, AIR 1966 SC 1178.

In Lalmuni Devi Vs. State of Bihar & Ors.,  (2001) 2 SCC 17, the Hon'ble Supreme Court held that peculiar facts of a case may give rise to a civil claim and also amount to an offence. Merely because a civil claim is maintainable, it does not mean that the criminal complaint cannot be maintained, therefore, held that no law of universal application can be laid down. It would depend upon  the facts and circumstances of each case depending upon the terms and conditions agreed by the parties.

Thus, in view of the above, it becomes clear that in a given case, there may be civil as well as criminal liability but Court has to examine the facts and circumstances of each case. However, in a case of hire purchase, the Court is required to examine the nature of the agreement reached between the parties after scrutinizing the terms and conditions incorporated in the agreement. In a case of hire purchase  agreement, the person like petitioner, remains merely a hirer and does not become the owner of the vehicle unless he satisfies the terms of the contract, pays instalments and opts for becoming the owner of the vehicle. Prior to reaching that stage, he remains merely a bailee and in case of a bailment, he cannot claim to be the real owner of the vehicle and agitate that by resuming the possession of the vehicle, the Financer has committed an offence for the reason that a bailee/trustee retains the possession of the vehicle on behalf of its owner.

In the instant case, petitioner, for the reasons best known to him, did not place the agreement of hire purchase  on record. Thus, we are not in a position to examine the issue further. More so, the law laid down by the Apex Court, referred to above, enabling clause of resuming possession in case of default, is to be read in the agreement of hire purchase .

Thus, we find no force in the petition. Being devoid of any merit, it is accordingly dismissed.




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