M.L Singhal, J.:— This is a Crl. Misc. petition filed under Section 482 Cr.P.C by Citi Bank N.A through its Assistant Vice President Shri Surinder Kumar seeking the quashing of FIR No. 758 dated 17.10.1993 under Section 382 IPC 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.

2. Petitioner is a body corporate, constituted under the law prevailing in USA, and having its Registered Office at 399, Park Avenue, New York - 10043, USA and inter alia, a Branch Office at Jeevan Bharati Building, Cannaught Place, New Delhi. 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 or 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. Loan agreement dated 22.1.1992 was executed to which respondent No. 2 is a signatory. 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. Respondent's loan account was maintained by the petitioner which is B4-146-38493. In pursuance to receiving the loan from the petitioner, respondent No. 2 purchased Maruti car which was registered as DL-2CC-1687. This car was hypothecated in favour of the petitioner-Bank. Among others, irrevocable power of attorney authorising and empowering the petitioner to deal with the vehicle or selling 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:—

“9. The Bank is entitled to take repossession of the hypothecated vehicle whether the entire loan amount has been recalled or not, whenever in the absolute discretion of the Bank there is likelihood of due money not being paid and/or the vehicle is likely to be transferred to defeat the security and the due amounts of the Bank.”

3. The Bank's right to sell the vehicle will be exercisable only after 7 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 or 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 towards 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 last payment on 25.8.1993 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 31.10.1993 per the certified copy of the statement of account Annexure P4. 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 18.9.1993, forwarded communications to PS Central Faridabad, Annexures P6 & P7. 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, the respondent No. 2 chose to lodge FIR No. 758 dated 17.10.1993 at PS Central Faridabad Annexure P9 under section 382 IPC. 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 financer to seize the vehicle and it did not amount to take 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 IPC. Hirer by his conduct became disentitled to the possession of the vehicle.

4. Respondent No. 2 contested this petition urging that on 18.9.1993, the car was snatched illegally by 6-7 hooligans who over took the car in their jeep and forcibly stopped him when he was travelling with his father in this car. They told him that they had permission of the police to take possession of the car. They could not show any such permission to him. Out of them, 4 persons forcibly got into the car and drove it away. Terms of the loan agreement are onerous inasmuch as they tilt heavily towards the petitioner-Bank. They are harsh towards the loanee that the Bank can recall the loan at any time. It was denied that the petitioner Bank made any demand for inspection of the car. It was denied that there was any condition in the agreement incorporating that car was to be made available for inspection on regular basis even without any demand by the petitioner Bank. Vehicle was taken forcibly out of his possession and the petitioner-Bank had no power to authorise any person to forcibly take the vehicle from his custody. Petitioner-Bank presented the cheques to the bank almost after 4 months of the due dates for the payment of equated monthly instalments and sometimes the petitioner would present 2 post dated cheques in one month when there would be no money available in the account of the respondent No. 2 with the bank for payment. It is well known that the businessman's money is always in circulation and respondent No. 2 could not anticipate such irregular presentation of the cheques by the bank. Presentation of these post dated cheques at small intervals of 3 days or 7 days was unjustified. He had paid more than Rs. 85,000/- by August 1993 even as per the statement of account Annexure P4 attached by the petitioner with this petition and was always ready and willing to pay the balance amount.

5. I have heard Mr. H.S Mattewal, Senior Advocate for the petitioner, Mr. R.S Cheema, Senior Advocate for respondent No. 2 and Mr. Raman Gaur, Advocate for the State of Haryana.

6. Section 382 IPC reads as follows:—

“382. Theft after preparation made for causing death, hurt or restraint in order to the committing of the theft.

Whoever commits theft, having made preparation for causing death, or hurt, or restraint, to any person, in order to the committing of such theft, or in order to the effecting of his escape after the committing of such theft, or in order to the retaining of property taken by such theft, shall be punished with rigorous imprisonment for a term which may extend to ten years, and shall also be liable to fine”.

7. It is thus clear that mere taking away out of one's possession will not constitute theft. It is only dishonestly taking away out of one's possession that there will be an offence of theft. In this case to my mind the petitioner-Bank felt that they were entitled to take repossession of the vehicle hypothecated with them in their discretion when there was likelihood of due money not being paid. In my opinion, the Bank misconstrued clause 9 of the loan agreement. Bank could take repossession of the vehicle hypothecated with them either if there was likelihood of due money not being paid, or the vehicle was likely to be transferred to defeat the security and the due amounts of the bank. In this case the respondent had repaid Rs. 45,563.51 as principal plus Rs. 40,164.49 as interest as is clear from the loan account Annexure P4. Assuming that a sum of Rs. 85,436.49 was still outstanding, almost the same amount had been paid. Total loan taken by the respondent No. 2 for the purchase of the car was Rs. 1,31,000/-. He had executed a ‘Demand Promissory Note’ for Rs. 1,31,000/- with interest @ 1.25% per annum above the Reserve Bank of India rate with a minimum of 16%. He had thus bound himself to repay the loan through demand promissory note executed by him. Hypothecation of this car was another way of enforcing the recovery of loan against respondent No. 2. Vehicle could be repossessed by the petitioner if there was likelihood of the vehicle being transferred to defeat the security and the due amount of the bank. To me, it seems that the petitioner took over the possession of the vehicle after the respondent No. 2 had defaulted in the payment of the equated monthly instalments assuming that it was in their absolute discretion to take over possession of the vehicle when there was likelihood of the dues not being paid. It was held in Tirlok Singh v. Satyadev Tripathi, (1979) 4 SCC 396 that where the truck was sold under hire-purchase agreement and the financer seized truck on default in payment of instalment and the purchaser launched criminal prosecution, launching of criminal prosecution was an abuse of the process of the court since dispute was essentially of a civil nature.

8. In Tirlok Singh's case (supra), the dispute between the parties related to the purchase of truck from Harbans Singh accused No. 5 on March 29, 1973. Agreement was entered into between the respondent and his then partner on the one hand and the Sardar Finance Corporation on the other which firm was represented by appellant No. 1 as its partner in accordance with which about half the money was advanced by the said firm which enabled the respondents to acquire the truck. According to the complainant's case, the amount advanced by the said firm was by way of loan while according to the case of the appellant it was on the basis of hire-purchase agreement entered into between the parties in support of which formal agreement was also executed. The complainant's case further was that he had paid back two monthly instalments the total of which was Rs. 3566/- and the third instalment was payable on July 31, 1973 but before that all the accused in a high-handed manner during his absence came to his house and under the threat of arms took away the truck and thus they were said to have committed various offences including the offence of dacoity. It was held that the dispute raised by the respondent was purely of a civil nature even assuming the facts stated by him to be substantially correct. Money must have been advanced to him and his partner by the financer on the basis of some terms settled between the parties. In my opinion, the facts of the case Tirlok Singh (supra) are pari materia with the facts of the case in hand. Here also for the purchase of car, the bank advanced loan to the respondent No. 2. Respondent No. 2 hypothecated the car with the bank to ensure repayment. To ensure repayment, respondent No. 2 executed demand promissory note in favour of the bank. Bank could enforce the hypothecation agreement for the recovery of the said amount if there was likelihood of the loan amount being not repaid by assuming possession of the car. If the bank assumed possession of the car, that was in the exercise of bona fide belief that there was likelihood of the loan not being repaid or the vehicle was likely to be transferred to defeat the security. It was held in Shriram Transport Co. Ltd. v. Khaishiulla Khan, 1993 (2) RCR (Crl.) 175 : ILR 1993 Ker. 61 that in an act of seizure, it becomes abundantly clear that mens rea is totally absent in the person seizing the vehicle and as by mutual agreement, the right has been given to the financer to seize the vehicle. It does not amount to taking possession of the vehicle 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 under section 379 IPC.

9. It has been brought to my notice that the car was made over to Harmit Singh, respondent No. 2 on spurdari by the Magistrate. It shall remain absolutely with respondent No. 2 and he is discharged of the terms and conditions incorporated in spurdaginama executed by him before the Magistrate. Petitioner-Bank could seize this car from the possession of respondent No. 2 if respondent No. 2 had made tangible attempt for the sale of this vehicle and thus tried to dissipate the hypothecation of this vehicle in favour of the petitioner.

10. For the reasons given above, this Criminal Miscellaneous Petition succeeds and is accepted. FIR No. 758 dated 17.10.1993 under section 382 IPC registered at PS Central Faridabad is quashed. If advised, respondent No. 2, may file civil suit for damages against the one who was not representative of the Bank who took away possession of the Car in question from him unlawfully.