CITI BANK N A Vs. STATE OF HARYANA

JUDGEMENT

(1.) .

(2.) THIS is a criminal miscellaneous petition filed under Section 482 of the Criminal Procedure Code, by Citi Bank N. A. through its Assistant Vice President, Shri Surinder Kumar, seeking the quashing of FIR No. 758, dated October 17, 1993, under Section 382 of the Indian Penal Code, lodged by Harmit Singh, respondent No. 2, at PS Central Faridabad (Haryana ). For understanding the controversy, the recitation of the facts is necessary to be given. The petitioner is a body corporate constituted under the law prevailing in the USA and having its registered office at 399, Park Avenue, New York -10043, USA, and, inter alia, a branch office at Jeevan Bharati Building, Connaught Place, New Delhi. The petitioner is operating, inter alia, a citimobile finance scheme under which it lends money to the beneficiary payable at an equated monthly instalment for the purchase of car. Harmit Singh approached and requested the petitioner for the grant of a loan for the purchase of a Maruti Standard car under the aforesaid scheme. Respondent No. 2 agreed to repay the loan in 36 equated monthly instalments with interest. He secured the loan against the said vehicle and agreed to adhere strictly to the repayment schedule. A sum of Rs. 1,31,000 was sanctioned as loan to respondent No. 2 by the petitioner. The loan agreement dated January 22, 1992, was executed to which respondent No. 2 is a signatory. The loan was subject to the terms and conditions as stipulated in the agreement and other documents which respondent No. 2 agreed to and accepted by way of his endorsement on the said documents. The respondent's loan account was maintained by the petitioner which is B4 -146 -38493. In pursuance of receiving the loan from the petitioner, respondent No. 2 purchased a Maruti car which was registered as DL -2cc -1687. This car was hypothecated in favour of the petitioner -bank. Among others, an irrevocable power of attorney authorising and empowering the petitioner to deal with the vehicle or sell it off or otherwise parting with the same in any manner whatsoever as the bank deemed fit and proper was executed. This power of attorney is irrevocable since the consideration has been paid to respondent No. 2. This authority was to be used only in case of default and recall of loan amount. It was agreed between the parties that in the event of default in making payments of equated monthly instalments to the petitioner, the petitioner shall take possession of the vehicle. The relevant clause of the agreement is reproduced as under :

(3.) THE bank's right to sell the vehicle will be exercisable only after seven days' period commencing from the taking over of the possession of the vehicle. It is averred that Harmit Singh -respondent No. 2 failed to adhere to the financial discipline of repayment of the loan amount either towards principal or interest charges. Several cheques issued by respondent No. 2 for repayment of the loan were dishonoured/returned unpaid with the remarks "refer to drawer/insufficient funds". Respondent No. 2 was served with reminders to pay the amount which was due from him due to dishonouring of the cheques. Respondent No. 2 failed to abide by the terms of the contract though persistent requests were made to him. Respondent No. 2 failed to make the vehicle available for inspection to the officials of the petitioner -bank in consonance with the terms of the hypothecation. He made the last payment on August 25, 1993, for the month of May, 1993. As per the books of account, he was required to pay a sum of Rs. 87,145. 22 towards principal, interest and other dues as on October 31, 1993, per the certified copy of the statement of account, annexure P -4. Notice was issued to him prior to the repossession of the car by the petitioner -bank. Respondent No. 2 did not reply to the notices and deliberately violated the equated monthly instalment schedule. After taking repossession of the car on September 18, 1993, forwarded communication to PS Central Faridabad, annexures P -6 and P -7. It is further averred that although the repossession of the car hypothecated with the petitioner -bank was eminently justified by the default clause incorporated in the loan agreement, respondent No. 2 chose to lodge FIR No. 758, dated October 17, 1993, at PS Central Faridabad, annexure P -9 under Section 382 of the Indian Penal Code. This FIR was lodged by respondent No. 2 maliciously with an ulterior motive for wreaking vengeance for having addressed communications to respondent No. 2 calling upon him to repay the instalments due and reminding him of the default committed by him. In this case mens rea is totally absent inasmuch as the right was given to the financier to seize the vehicle and it did not amount to taking possession of the vehicle dishonestly because such an act does not fall in the category of cases in which the person seizing gains possession wrongfully nor the hirer loses possession wrongfully so as to make such act of seizure an offence falling within the ambit of Section 379 of the Indian Penal Code. The hirer by his conduct became disentitled to the possession of the vehicle.