SHIBI FRANCIS Vs. STATE OF KERALA & ANOTHER

JUDGEMENT

(1.) The writ petitioner who is the registered owner of a car, Innova 2.0 G3 with Registration No. KL-4/S-3655, has sought for a direction to the second respondent, Sub Inspector of Police, North Police Station, Alappuzha to register a case on the complaint submitted by her dated 22-07-2006 regarding the theft of her vehicle and also for a direction to have an expeditious recovery of the above vehicle and produce the same before the Judicial First Class Magistrate, Alappuzha having the jurisdiction over the area. It is submitted that the petitioner had executed loan agreement as per which she had availed finance from the third respondent, Financier with the condition that the same shall be repaid in equal monthly installments. Blank cheques were also obtained by the financier as a further security for the transaction apart from the vehicle. The monthly payment was at the rate of Rs. 14,000/- and the amount is to be paid in 57 installments. Agreement is dated 13-2-2005. Owing to financial stringency, the petitioner could not remit two installments. A lawyer notice was received from the third respondent directing to clear the dues within seven days from the date of the notice. Notice dated 12-7-2006 was received on 21-7-2006 before the expiry of the date mentioned in the notice, the husband of the petitioner had gone with the vehicle to Alappuzha Town and near the Y.M.C.A., Alappuzha, four goondas came to him and snatched away the key of the vehicle and drove away the vehicle. The husband of the petitioner rushed to the police station and narrated the incident, but the police refused to register the case. Thereafter, the petitioner, who was out of station, on her return filed complaint on 22-7-2006 to the Sub Inspector of Police, North Police Station, Alappuzha. A receipt for having received the complaint is produced as Ext. P2. Therefore, the petitioner received Ext. P3 communication from the third respondent directing him to pay the entire amount due within seven days failing which the vehicle would be disposed of. The third respondent, financier has filed a counter statement detailing the terms of the agreement, i.e. a sum of Rs. 7 lakhs was availed by the petitioner on the basis of a loan-cum-hypothecation agreement executed by the petitioner and that the same is endorsed in the R.C. of the vehicle. It is asserted that as per the terms of the agreement, the respondent/financier is entitled to take possession of the vehicle in case of default of installments. It is further stated that in terms of the agreement, the petitioner has agreed that she shall not prevent the Bank or its agents from taking possession of the vehicle and that Bank's representative will have unrestricted right or entry to the premises where the vehicle is kept. Copy of the agreement has also been produced. According to the third respondent, they are entitled to repossess the vehicle as per the terms of the agreement.

(2.) Counsel for the petitioner has relied on mainly the decision of the Punjab & Haryana High Court in Tarun Bhargava v. State of Haryana,2003 3 KerLT 397 (P & H High Court-) wherein the High Court has considered the rights of the financier as per the hypothecation agreement in the background of Section 172 and 176 of the Contract Act and the distinction regarding the instance of the hire purchase in terms of the Hire Purchase Act, 1972 and the implication of the agreement providing for re-possession and held that such a clause to take possession of the security without intervention of the court will be void under Section 23 of the Contract Act. As in the case of a loan transaction, the ownership of the security will be of the borrower and the principle applicable to hire purchase agreement will not apply. It was a similar case as in the instant case that was considered by the High Court of Punjab & Haryana. The petitioner has also relied on the decision of this Court in Katteri Moideen Kutty Haji v. State of Kerala., 2002 1 KerLT 835 wherein the Division Bench of this Court consisted of the Chief Justice Shri. B.N. Srikirshna as he then was, held in a similar instance that the police is obliged to register a crime and conduct investigation and proceed in accordance with the provisions of the Code of Criminal Procedure. The counsel has also relied on the decision of the Supreme Court in K.L. Johar&B. Co. v. Dy. Commercial Tax Officer, 1965 AIR(SC) 1082. wherein Supreme Court has considered the distinction between the transfer of property in the goods with respect to a movable property in the case of a hire purchase agreement as distinct from other transactions and recognized the right of the hirer in a hire purchase transaction to repossess the vehicle without the intervention of the court. The above distinction has also been explained by the Supreme Court in Charanjit Singh Chadha v. Sudhir Mehra., 2001 7 SCC 417. The decision of the Delhi High Court in Bhagya Products v. Commissioner of Police,2003 2 KerLT 1054 (Delhi High Court) was also relied on wherein the court has condemned the predatory practice adopted by certain finance companies.

(3.) Counsel for the Finance Company has relied on the decision of the Supreme Court in Orix Finance (India) Ltd. v. Shri. Jagmander Singh, 2006 1 KerLT 814 wherein the Supreme Court has observed that in respect of contractual matters unless the parties succeed in showing that the contract is unconscionable or opposed to public policy the scope of interference in writ petitions in such contractual matters is practically nonexistent. Counsel has also relied on the decision in Re. S.Y.C.W. & Mills (AIR 1969 Mysore 280. and State Bank of India v. Quality Bread Factory. Batala, 1983 AIR(P&H) 244 and also Section 51 of the Motor Vehicles Act which enables the financier to have the R.C. transferred in his name.