Ashok Kumar Singh v. State Of West Bengal And Others

1. The petitioner has filed the present writ petition challenging the inaction on the part of the police authorities for not taking steps to recover the vehicles/trucks bearing registration Nos. WB-11A-2658, WB-11A-2659, WB-IIA-2665 and WB-11A-2542 which according to the petitioner have been forcibly taken away by the hired men engaged by the financier company, namely, Ashok Leyland Finance Limited, the respondent No. 4 herein.

2. According to the petitioner, the aforesaid vehicles were loaded with cement and the same were stopped by the hired antisocial persons engaged by the financier company, namely, the respondent No. 4 near Alampur More within the Sankrail Police Station, Howrah, and thereafter the said vehicles are forcibly taken away by those hired persons. It has also been alleged by the petitioner that those vehicles have been kept in the garage of the respondent No. 5.

3. It has been submitted on behalf of the writ petitioner that initially five trucks were purchased by the petitioner on 20th April 2001 and subsequently in May 2001, further five trucks were purchased by the said petitioner. According to the petitioner, the sale of the aforesaid vehicles, was partly financed by the said financier company, namely, the respondent No. 4 herein and the balance payment was made by the petitioner our of his own funds.

4. It has been specifically alleged by the petitioner that the financier company, Ashok Leyland Finance Limited, being the respondent No. 4 herein, took the forcible possession of the aforesaid 4 vehicles from the custody of the petitioner without initiating or even attempting to initiate any legal proceeding. The petitioner on the other hand took recourse to the process of law by lodging a complaint with the higher police authorities of the Howrah District for recovery of the aforesaid vehicles but according to the petitioner. But no step has been taken by the police authorities and therefore, the present writ petition has been filed by the petitioner herein.

5. The learned counsel for the petitioner submits that the vehicles were purchased by the petitioner directly from the manufacturer and a portion of the total sale price of the aforesaid vehicles was financed by the respondent No. 4 herein and the balance amount was paid admittedly by the petitioner. It has also been submitted on behalf of the petitioner that the said respondent No. 4 is not the vendor of the aforesaid vehicles. The petitioner however, admitted that he could not make payment of the last three instalments due to the financial crunch.

6. The petitioner has claimed ownership of the vehicles in question from the date of purchase. Admittedly, the name of the petitioner has been recorded as the registered owner in the Certificate of Registration issued by the Motor Vehicles Department in respect of the aforesaid vehicles.

7. Mr. Asish Sanyal, learned Senior Counsel for the petitioner submits that the agreement between the respondent No. 4 and the petitioner is essentially a loan agreement and the petitioner cannot be called a hirer in respect of the vehicles in question. Referring to the said Certificate of Registration learned counsel of the petitioner submits that the respondent No. 4 was never the owner of the vehicles. According to the petitioner, the vehicles are hypothecated to the respondent No. 4 by way of security for the loan advanced towards the sale price of the 10 vehicles including the aforesaid four vehicles although the petitioner is the owner in respect of the said vehicles. Mr. Sanyal urged before this Court that the financier cannot take possession of the security, namely, the vehicles in question without initiating any proceeding in law.

8. Mr. Sanyal further submits that the police authorities herein failed to act in an appropriate manner even after lodging of the complaint by the petitioner. The learned counsel of the petitioner also submits that no one can be deprived of the possession of any property without due process of law which is the mandate of Article 300-A of the Constitution of India but the respondent No. 4 took the law in its own hands and forcibly took the possession of the vehicles in question by engaging hired muscle men.

9. It has also been submitted by Mr. Sanyal that the police authorities remained silent spectators in the present case even after lodging of the complaint by the petitioner and therefore this Hon'ble Court should issue an appropriate direction upon the police authorities for taking appropriate steps to recover the vehicles in question from the custody of the respondent Nos. 4 and 5 and hand over the same to the petitioner who is the registered owner of the vehicles in question. The learned counsel of the petitioner cited the following decisions in support of his aforesaid contentions:

(1) AIR 1961 SC 1570 (Bishan Das & Others v. State Of Punjab & Others).

(2) 1989 (2) SCC 505 : (AIR 1989 SC 997) (State of Uttar Pradesh v. Maharaja Dharmander Prasad Singh)

(3) AIR 2003 P & H 98 (Tarun Bhargava v. State of Haryana)

(4) 2003 (2) Cal LJ 155 (Amal Kumar Bose v. The State of West Bengal).

10. Mr. Sanyal also referred to the Mode of Seizure as mentioned in Paragraph 275 in the Halsbury's Laws of England (4th Edition) Volume 22, at page 228. The said paragraph 275 is quoted hereunder:

“275. Mode of seizure. Although the owner or seller may have the right under the agreement to enter upon the premises where the chattel may be and retake possession of it, he must do so in a peaceable and orderly manner, and not with force, as it is an offence, both at common law and by statute, to enter forcibly upon any land or tenement without due warrant of law. Where a third party is in possession of the chattel under a colourable title only, having acquired it from a hirer or buyer who could give no title, the owner or seller may render himself liable in an action for trespass if he forcibly removes the chattel instead of demanding it and, on refusal to deliver, proceeding by way of an action for wrongful interference with goods.”

11. Mr. Anindya Mitra, learned Senior Counsel appearing for the respondent No. 4 raised a preliminary objection regarding maintainability of the writ petition. According to Mr. Mitra, the vehicles in question are commercial vehicles and the financier has retaken possession of the same as undisputedly the petitioner being the hirer has defaulted in making payment of the instalments in terms of the Hire Purchase Agreement. Mr. Mitra further submits that the Hire Purchase Company remains the owner of the vehicles till the entire instalments under the Hire Purchase Agreement are paid by the hirer. Mr. Mitra referred to and relied upon the following decisions of the Supreme Court in this regard:

(1) AIR 1966 SC 1178 (Sundaram Finance Ltd. v. State of Kerala)

(2) AIR 1965 SC 1082 (K.L Johar & Co. v. The Deputy Commercial Tax Officer, Coimbatore III)

12. The learned counsel of the respondent No. 4 also submitted that the petitioner herein is admittedly, the defaulter and under the specific terms of the Hire Purchase Agreement respondent No. 4 can take possession of the vehicles as financier in case of default of making the payment of instalments by the petitioner as hirer. Mr. Mitra urged before this Court that the right of repossession of the said vehicles as per the specific terms of the agreement can be exercised without any specific order and/or intervention of the Court. Mr. Mitra referred to and relied upon the following decisions in this regard:

(1) AIR 1969 Mysore 280 (Bank of Maharashtra Ltd. Poona v. Official Liquidator, High Court Buildings)

(2) 1965 All LJ 214 (Pooran Mai v. Sandho Ram)

13. It has been submitted on behalf of the respondent No. 4 that the possession was retaken peacefully and without applying any force. Furthermore, the learned counsel of the respondent No. 4 also submitted that the drivers and Khalasis of the vehicles in question did not make any complaint till today regarding use of force. The learned counsel of the respondent No. 4 submits that the petitioner herein lodged complaint with the Superintendent of Police after expiry of 8 days from the actual date of retaking possession of the said vehicles in question by the respondent No. 4. The learned counsel of the respondent No. 4 further submits that till date no First Information Report has been filed either by the petitioners or by the drivers and/or Khalasis concerned with the Officer-in-Charge of the local police station as required under Section 154 of the Code of Criminal Procedure.

14. It has been submitted by the learned counsel of the respondent No. 4 that the complaint lodged by the hirer regarding dispossession of the vehicles in question is a civil dispute and not a matter of criminal offence and as such the FIR lodged by the petitioner herein should be quashed. The learned counsel of the respondent No. 4 cited the following decisions in support of his aforesaid contention:

(1) (1979) 4 SCC 396 : (AIR 1979 SC 850) (Sardar Trilok Singh v. Satya Deo Tripathi)

(2) (2000) 9 SCC 238 (Tata Finance Ltd. v. Ajaya Kumar Biswal)

15. It has been argued on behalf of the respondent No. 4 that the petitioner has no legal right to retain possession of the vehicles under the Hire Purchase Agreement and the petitioner has failed to establish any legal right in order to repossess the vehicles in question. The learned counsel of the respondent No. 4 also submits that in order to maintain an application under Article 226 of the Constitution of India the petitioner is required to establish that his legal right has been infringed by or at the instance of any authority under Article 12 of the Constitution of India.

16. The learned counsel of the respondent No. 4 accordingly, submitted that as the legal right of the petitioner has not been established before this Court the petitioner is not entitled to claim any relief from this Hon'ble Court in its Constitutional Writ Jurisdiction. The learned counsel of the respondent No. 4 referred to the following decisions in support of his aforesaid contentions:

(1) AIR 1973 Cal 506 (Corporation of Calcutta v. Dhirendra Nath Sen)

(2) AIR 1963 SC 516 (Bokaro and Bangur Ltd. v. State of Bihar)

17. Mr. Mitra also submits that if somebody is dispossessed from the property then, he is entitled to initiate legal proceedings for getting back possession of the same under Section 6 of the Specific Relief Act or under Section 9 of the Arbitration Act. Mr. Mitra further submits that the complaint lodged by the petitioner does not disclose any cognizable offence for retaking possession by the respondent No. 4.

18. According to Mr. Mitra, Hire Purchase Agreement in the present case specifically permitted the respondent No. 4 to repossess the vehicles in question in case of any default in making payment of the instalments by the hirer. Furthermore, according to Mr. Mitra in the instant case, the owner re-possessing the vehicles delivered to the hirer under the Hire Purchase Agreement will not constitute any offence under the Code of Criminal Procedure. Mr. Mitra cited the following decisions in support of his aforesaid contentions:

(1) (2001) 7 SCC 417 : AIR 2001 SC 3721 (Charanjit Singh Chadha v. Sudhir Mehra)

(2) (1996) 7 SCC 213. Gurmit Singh v. State Of Punjab)

19. Lastly, it has been submitted by the learned counsel of the financier that the hirer cannot ask for restoration of possession in a writ proceeding in view of the specific provision of Section 456 of the Criminal Procedure Code.

20. Scrutinising the Certificate of Registration issued by the Motor Vehicles Department, Government of West Bengal in respect of the vehicles in question, it appears that the petitioner is the registered owner in respect of the vehicles in question although it has been mentioned in the said Certificate of Registration that the said vehicles are hypothecated to the respondent No. 4 under Hire Purchase Agreement. Since the name of the petitioner has been recorded as the registered owner in respect of the vehicles in question, the entire transaction should be regarded as a loan transaction. The Hire Purchase Agreement, in the present case, therefore, in substance, should be regarded as loan transaction.

21. The petitioner herein is undisputedly the registered owner of the vehicles in question which were directly purchased by the petitioner from the manufacturer and the respondent No. 4 was never in possession of the said vehicles and as such question of retaking of possession by the said respondent No. 4 cannot and does not arise. The petitioner entered into an arrangement with the respondent No. 4 in the form of hire purchase agreement with a view to get financial assistance but the entire transaction in the present case must be regarded as a loan transaction as the petitioner was and still is the owner of the vehicles in question.

22. The majority view expressed by the Supreme Court in the case of Sundaram Finance Limited v. The State of Kerala reported in AIR 1966 SC 1178 is very much applicable in the facts of the present case and the relevant paragraphs from the said judgment are quoted hereunder:

“22…………………………….it was the intention of the parties not to transfer any interest in the vehicle by the customer to the appellants: it was intended to give security by hypothecating the vehicle in favour of the appellants and for ensuring repayment of the loan advanced that the customer submitted to the various onerous conditions of the hire purchase agreement………………….”

“28. In the light of these principles the true nature of the transactions of the appellants may now be stated. The appellants are carrying on the business of financiers: they are not dealing in motor vehicles. The motor vehicle purchased by the customer is registered in the name of the customer and remains at all material times so registered in his name. In the letter taken from the customer under which the latter agrees to keep the vehicle insured, it is expressly recited that the vehicle has been given as security for the loan advanced by the appellants. As a security for repayment of the loan, the customer executes a promissory note for the amount paid by the appellants to the dealer of the vehicle. The so-called ‘sale letter’ is a formal document which is not made effective by registering the vehicle in the name of the appellants and even the insurance of the vehicle has to be effected as if the customer is the owner. Their right to seize the vehicle is merely a license to ensure compliance with the terms of the hire purchase agreement. The customer remains qua the world at large the owner and remains in possession, and on condition of performing the covenants has a right to continue to remain in possession. The right of the appellants may be extinguished by payment of the amount due to them under the terms of the hire purchase agreement even before the dates fixed for payment. The agreement undoubtedly contains several onerous covenants, but they are all intended to secure to the appellants recovery of the amount advanced. We are accordingly of the view that the intention of the appellants in obtaining the hire purchase and the allied s agreements was to secure the return of loans fadvanced to their customers, and no real sale of the vehicle was intended by the customer to the appellants. The transactions were merely financing transactions.”

23. In the case of Tarun Bhargava v. State of Haryana reported in AIR 2003 (P & H) 98, Justice Goel held as hereunder:

“28. I, therefore, hold that a hypothecatee cannot be allowed to take possession of hypothecated property without intervention of the Court, particularly when there is unequal bargaining power irrespective of the agreement to the contrary. In the present case, I hold that repossession clause is void. The second question is answered accordingly by holding that the right of the petitioner was to proceed against the complainant only through Court and not to take over the vehicle by force.”

24. Although it has been submitted by Mr. Mitra, the learned counsel for the respondent No. 4 that the Hire Purchase Company remains the owner of the vehicles till the entire instalments under the Hire Purchase agreement are paid by the hirer but the ‘owner’ has been defined otherwise under the Motor Vehicles Act which is quoted as under:

“Sec. 2(30) ‘Owner’ means a person in whose name a motor vehicle stands registered, and where such person is a minor, the guardian of such minor, and in relation to a motor vehicle which is the subject of a hire-purchase agreement, or an agreement of lease or an agreement of hypothecation, the person in possession of the vehicle under that agreement”.

In the present case, admittedly, the petitioner herein was in possession of the vehicles in question under the agreement and as such even under the Motor Vehicles Act he should be regarded as the owner of the said vehicles.

25. As recorded earlier, Mr. Mitra has also seriously argued that even without any specific order and/or intervention of the Court the respondent No. 4 is entitled to take possession of the vehicles in question under the specific terms of the agreement but I am unable to accept the aforesaid contention of the learned counsel of the financier. The Supreme Court in the case of State of U.P v. Maharaja Dharmander Prasad Singh reported in (1989) 2 SCC 505 : (AIR 1989 SC 997) has specifically held as under (at page 1004 of AIR):

“30. A lessor, with the best of title, has no right to resume possession extra-judicially by use of force, from a lessee, even after the expiry or earlier termination of the lease by forfeiture or otherwise. The use of the expression ‘re-entry’ in the lease deed does not authorise extra-judicial methods to resume possession. Under law, the possession of a lessee, even after the expiry or the earlier termination is juridical possession and forcible dispossession is prohibited; a lessee cannot be dispossessed otherwise than in due course of law………………………”

26. Furthermore, the Mode of seizure as mentioned in paragraph 275 of Halsbury's Laws of England also does not permit the owner to retake possession forcibly and without due process of law.

27. Admittedly, in the present case, the petitioner is the registered owner of the vehicles in question and under the Motor Vehicles Act also, the petitioner should be regarded as owner in respect of the said vehicles as the petitioner was undisputedly in possession of the vehicles under the agreement. In any event, the situation cannot be different in case of a hirer under the Hire Purchase Agreement in view of the specific pronouncement of the Hon'ble Supreme Court in the case of State of U.P v. Maharaja Dharmander Prasad Singh (supra).

28. In the said decision, Supreme Court has specifically held that a lessor with the best of title has no right to resume possession extra-judicially by use of force and the lessee cannot be dispossessed otherwise than in due course of law.

29. This Court also in the case of Amal Kumar Bose v. State of West Bengal, reported in 2003 (3) CHN 16 has specifically held that in a civilized society the financial institutions cannot take possession of the vehicles by using physical force. It has also been observed in the aforesaid judgment that by flexing muscle power the financial institutions should not take possession of the hypothecated vehicles.

30. Moreover, in a civilized society, no financier can take possession of the hypothecated vehicles by using physical force and therefore, I strongly condemn the steps taken by the respondent No. 4 in the present case for taking forcible possession of the vehicles from the custody of the petitioner.

31. Although Mr. Mitra sought to argue that the possession was retaken peacefully and without applying any force but the same cannot be accepted as the petitioner herein did not surrender the possession of the vehicles in favour of the respondent No. 4 and the respondent No. 4 also did not claim so. [Since the petitioner did not surrender the possession of the vehicles in favour of the respondent No. 4, it cannot be said that the possession was taken by the respondent No. 4 without application of any force.

32. In the suddenness of the situation and presence of hired muscle men might help the respondent No. 4 to take possession of the vehicles in question avoiding blood bath and/or physical assault but it cannot be said under any stretch of imagination that the respondent No. 4 got the possession of the vehicles in question in absence of any physical force. The drivers and/or Khalasis of the petitioner obviously could not challenge the said muscle men and/or put proper resistance considering the real strength of the said muscle men who were deployed by the financier for the purpose of taking possession of the vehicles in question. Therefore, in the aforesaid circumstances, it can be said without any hesitation that the financier took the possession of the vehicles in question by using physical force of the hired muscle men who were deployed specifically for the purpose of taking possession of the aforesaid vehicles from the custody of the petitioner.

33. Admittedly, no one can be deprived of the possession of any property without due process of law which is also the mandate of Article 300-A of the Constitution of India. The said Article 300-A is quoted hereinbelow:

“300A. No person shall be deprived of his property save by authority of law.”

The authority of law must mean due authority of a valid law.

34. In the present case, the respondent No. 4 has taken law in its own hands by engaging hired people for taking possession of the vehicles from the custody of the petitioner and this Court cannot permit the respondent No. 4 to indulge in the aforesaid illegal activities.

35. The petitioner has already lodged complaint before the Superintendent of police, Howrah, but in spite of lodging the said complaint respondent-Superintendent of Police, Howrah, failed and/or neglected to take appropriate steps for recovery of the aforesaid vehicles and restore the possession of the same to the petitioner even after lapse of a considerable period. The aforesaid inaction on the part of the police authorities has been specifically challenged in this writ petition.

36. In my view, the police authorities should not have ignored the aforesaid complaint lodged by the petitioner and should have taken necessariy steps to recover the vehicles in question as the same were forcibly taken away from the possession of the petitioner by the muscle men of the financier. Undisputedly, the petitioner was in possession of the aforesaid vehicles in question and the same were taken away by the agents/muscle men of the financier in absence or any order passed by any Court of law and thus, the respondent No. 4 has deprived the petitioner of his property without due process of law.”

37. The police authorities cannot permit anybody to take law in their own hands. In the present case, the respondent No. 4 took the law in its own hands for the purpose of taking possession of the vehicles in question by engaging muscle men. If the rule of law is to prevail in the State then, nobody should be allowed to take law in his own hands.

38. Although Mr. Mitra cited various decisions of different High Courts and Supreme Court in support of his arguments but none of the said judgments authorised any financier to take possession of the hypothecated vehicles by applying physical force. For the aforementioned reasons, the decisions cited by Mr. Mitra are not applicable in the facts of the present case.

39. If the contention of the financier is to be upheld by this Court then, unilateral decision of the financier would compel the hirer to succumb to their demand as otherwise the financier would take possession of the vehicles by engaging hired muscle men instead of approaching any Court of law. Similarly, following the same analogy, the landlord may take possession of the tenanted property by forcefully evicting the tenants with the help of hired muscle men on the plea of non-payment of rent by the said tenants.

40. However, no Court of law can conceive the aforesaid situation as the same would lead towards the vanishing point of rule of law in the society and will create serious law and order problem for the administration. In the aforesaid circumstances, police authorities cannot remain inactive without realising that such inaction would ultimately cause serious law and order problem.

41. The petitioner herein has been deprived of the possession of his property without due process of law and in spite of lodging complaint by the petitioner, respondent Police authorities did not take any step to recover the vehicles in question in order to hand over the possession of the same to the petitioner from whose possession the same were forcibly taken away by the hired muscle men of the respondent No. 4.

42. The aforesaid inaction on the part of the police authorities warrants intervention of this Court in its Constitutional Writ Jurisdiction as otherwise the petitioner will be deprived of his property in clear violation of the provisions of Article 300-A of the Constitution of India. Accordingly, this petition is very much maintainable before this Court and all the objections raised in this regard by the respondents are, therefore, overruled.

43. For the aforementioned reasons, I direct the Superintendent of Police, to recover the vehicles in question which have been unlawfully taken away by the respondent No. 4 by engaging hired muscle men and kept in the garage of the respondent No. 5 and restore the possession of the same to the petitioner subject to execution of the bond by the said petitioner to the effect that he will keep the vehicles in running condition and will produce the same before the police authorities if so directed, in future.

44. It may be recorded that I have not decided the actual amount of outstanding dues payable by the petitioner to the respondent No. 4 in the present proceeding and I also make it clear that disposal of this writ petition will not prevent the respondent No. 4 from initiating appropriate legal proceeding against the petitioner for realising the outstanding dues and/or taking possession of the vehicles in question.

45. Inaction on the part of the Superintendent of Police even after lodging of the specific complaint by the petitioner cannot be appreciated by this Court. The said superintendent of Police is directed to take stern action against the wrong doers on the basis of the aforesaid written complaint of the petitioner without any further delay but strictly in accordance with law.

46. In the aforesaid circumstances, this writ petition stands allowed. There will be, however, no order as to costs.

47. As a special case, let a xerox plain copy of this judgment duly countersigned by the Assistant Registrar (Court) be given to the learned Counsel appearing for the parties on usual undertaking.

LATER:

48. After pronouncement of the judgment, the learned Advocate of the respondent No. 4 prays for stay of the operation of this judgment and order. I find no reason to grant such stay,. Accordingly, the aforesaid prayer for stay is refused.

Petition allowed.