ANUP SARMAHversusBHOLA NATH SHARMA AND ORS.

                        (2012] 11 S.C.R. 360


A                         ANUP SARMAH
                                  v.
               BHOLA NATH SHARMA AND ORS.
          (Special Leave Petition (Crl.} No.8907 of 2009)
                        OCTOBER 30, 2012
B
         [DR. B.S. CHAUHAN AND FAKKIR MOHAMED
                   IBRAHIM KALIFULLA, JJ.]

        Hire-Purchase - Vehicle purchased by petitioner on hire-
C purchase basis - .Complaint filed by petitioner that the
  respondents-financier had forcibly taken the custody of the
  said vehicle - Criminal proceedings initiated against the
  respondents before the Judicial Magistrate - Quashed by
  High Court in criminal revision - Justification - Held: In an
o agreement of hire purchase, the purchaser remains merely
  a trustee/bailee on behalf of the financier/financial institution
  and ownership remains with the latter - Thus, in case the
  vehicle is seized by the financier, no criminal action can
  be taken against him as he is re-possessing the goods
E owned by him.
       Trilok Singh & Ors. v. Satya Deo Tripathi AIR 1979 SC
  850: 1979 (4) SCC 396; K.A. Mathai alias Babu & Anr. v.
  Kora Bibbikutty & Anr. (1996) 7 SCC 212 and Charanjit
  Singh Chadha & Ors. v. Sudhir Mehra (2001) 7 SCC 417
F - relied on.
       Mis. Damodar Valley Corporation v. The State of Bihar
  AIR 1961 SC 440: 1961 SCR 522; Instalment Supply
  (Private) Ltd. & Anr. v. Union of India & Ors. AIR 1962 SC
G 53: 1962 SCR 644; K.L. Johar & Co. v. The Deputy
  Commercial Tax Officer, Coimbtore Ill AIR 1965 SC
  1082: 1965 SCR 112 and Sundaram Finance Ltd. v. State
  of Kera/a & Anr. AIR 1966 SC 1178: 1966 SCR 828 -
  referred to.
                                 360
  ANUP SARMAH v. BHOLA NATH SHARMA AND                       361
                   ORS.
                      Case Law Reference:                            A
    1979 (4) sec 396              relied on           Para 5
    (1996) 1 sec 212              relied on           Para 6
    2001) 1 sec 417               relied on           Para 7         B
    1961 SCR 522                  referred to         Para 7
    1962 SCR 644                  referred to         Para 7
    1965 SCR 112                  referred to         Para 7
                                                                     c
    1966 SCR 828              '   referred to         Para 7
                          I


     CRIMINAL APPELf-ATE JURISDICTION: Spef;ial Leave
(Crl) No. 8907 of 2009 '

    From the Judgment & Order dated 22.6.~009 of the High            D
Court of Guahati at Gauhati in Criminal Revision No. 156 of
2009.
    Gopal Singh, Rituraj Biswas, Sujaya Bardhan for the
Appellant.
                                                                     E
      Naresh Kaushik, Sanjeev Kumar Bhardwaj, Vivya Nagpal
Lalita Kaushik for the Respondents.

     The following Order of the Court was delivered
                                                                     F
                              ORDER

      1. This petition has been filed against the impugned
judgment and oraer dated 22.6.2009 passed by the High Court
of Assam at Gauhati in C~minal Revision No. 156 of 2009
 rejecting the case of the petitioner against the respondents that   G
they had forcibly taken the custody of the vehicle purchased by
 the petitioner on hire-purchase from them. The court has
 quashed the criminal proceedings against the respondents.

     2. Learned counsel for the petitioner has submitted that        H
    362      SUPREME COURT REPORTS                [2012) 11 S.C.R.

A respondents-financer had forcibly taken away the vehicle
  financed by them and illegally deprived the petitioner from its
  lawful possession and thus, committed a crime. The complaint
  filed by the petitioner had been entertained by the Judicial
  Magistrate (Isl Class), Gauhati (Assam) in Complaint Case No.
B 608 of 2009, even directing the interim custody of the vehicle
  (Maruti Zen) be given to the petitioner vide order dated
  17.3.2009. The High Court has wrongly quashed the criminal
  proceedings pending before the learned Magistrate.

       3. On the contrary, learned counsel appearing on behalf
C of the respondents, has submitted that under the hire-purchase
  agreement, the financier remains the owner of the vehicle till
  the entire payment is made and, therefore, possession taken
  by the financier for non-payment of instalments by the petitioner
  could not be held an offence. Thus, the High Court has rightly
D quashed the proceedings and no interference is required.
          4. We have considered the rival submissions raised by the
    learned counsel for the parties and perused the records.

E       5. In Trilok Singh & Ors. v. Satya Deo Tripathi, AIR 1979
  SC 850, this Court examined the similar case wherein the truck
  had been taken in possession by the financier 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 financier under Sections 395, 468, 465, 471, 12-
F B/34, l.P.C. The Court refused to exercise its power under
  Section 482, Cr.P.C. and did not quash the criminal
  proceedings on the ground that the financier had committed an
  offence. However, reversing the said judgment, this Court held
  that proceedings initiated were clearly an abuse of process of
G 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 financier had
  made the payment of huge money and he was in fact the owner
  of the vehicle. The terms and conditions incorporated in the
H
  ANUP SARMAH v. BHOLA NATH SHARMA AND                       363
                  ORS.
agreement gave rise in case of dispute only to civil rights and      A
in such a case, the Civil Court must decide as what was the
meaning of those terms and conditions.

     6. In K.A. Mathai alias Babu & Anr. v. Kora Bibbikutty &
Anr., (1996) 7 SCC 212, this Court had taken a similar view          B
holding that in case of default to make payment of instalments
financier 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,    C
it cannot be held that the financier 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 financier had resumed the possession         D
of the vehicle with a guilty intention.

     7. In Charanjit Singh Chadha & Ors. v. Sudhir Mehra,
(2001) 7 SCC 417, this Court held that recovery of possession
of the vehicle by financier-owner as per terms of the hire           E
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            F
financier, 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 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       G
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 Court further held that in such a contract,
                                                                     H
    364      SUPREME COURT REPORTS                  [2012] 11 S.C.R.


A element of bailment and element of sale are involved in the
  sense that it contemplates an eventual sale. The element of sale
  fructifies when the option is exercised by the intending
  purchaser after fulfilling the terms of the agreement. When all
  the terms of the agreement are satisfied and option is
B exercised a sale takes place of the goods which till then had
  been hired. While deciding the said case, this Court placed
  reliance upon its earlier judgments in Mis. Damodar Valley
  Corporation v. The State of Bihar, AIR 1961 SC 440;
  Instalment Supply (Private) Ltd. & Anr. v. Union of India &
c Ors., AIR 1962 SC 53; K.L. Johar & Co. v. The Deputy
  Commercial Tax Officer, Coimbtore Ill, AIR 1965 SC 1082;
  and Sundaram Finance Ltd. v. State of Kera/a &Anr., AIR 1966
  SC 1178.

        8. In view of the above, the law can be summarised that in
D an agreement of hire purchase, the purchaser remains merely
  a trustee/bailee on behalf of the financier/financial institution and
  ownership remains with the latter. Thus, in case the vehicle is
  seized by the financier, no criminal action can be taken against
  him as he is re-possessing the goods owned by him.
E
        9. If the case is examined in the light of the aforesaid
  settled legal proposition, we do not see any cogent reason to
  interfere with the impugned judgment and order. The petition
  lacks merit and, accordingly, dismissed.
F B.B.B.                                             SLP dismissed.