Jeevan Ram Garg vs State of Uttarakhand and Others

Hon''ble Servesh Kumar Gupta, J.—By way of this Criminal Miscellaneous Application, moved u/s 482/483 CrPC, the applicant petitioner has prayed to quash and set aside the order of the learned Sessions Judge, Haridwar dated 14.3.2007, passed by him while adjudicating the Criminal Revision No. 98/2007, Ramaswami & 2 Others v. State of Uttarakhand & Jeevan Ram Garg.

The background facts qua controversy lying in the pivot of the dispute are that on 4.9.2004, a hire-purchase agreement was entered into between the petitioner Jeevan Ram Garg (borrower) and M/s Sundarm Finance Ltd. (creditor/bailor). The private respondents no. 2 to 4 are the officers of the said finance company, which is having its head office at New Delhi and local office at Rajpur Road, Dehradun. Under the said agreement, Jeevan Ram Garg and his wife took possession of the two transport trucks, each valued at ` 9,30,000/-, and the purchase of these trucks was made by the said finance company, which after purchasing the same, delivered these trucks in the custody of Jeevan Ram Garg and his wife. Thus, the total amount, which became due upon the couple Jeevan Ram Garg and his wife was ` 18,60,000/-. All the terms and conditions of this agreement were reduced into writing, a copy of which also been annexed along with the counter affidavit filed by the respondents. Mr. Garg and his wife had to repay the aforesaid amount to the finance company in 48 installments in respect of each of the trucks in order to satisfy the entire debt. The couple paid only 16 installments, and thereafter they committed default in making payment of further installments. The finance company issued a number of notices dated 23.3.2006, 24.3.2006 and 26.3.2006 to Mr. Garg and his wife. But all these notices did not yield any result to the favour of the said finance company. So, the company, as per the terms and conditions stipulated in the agreement, took possession of both the trucks on 1.6.2006 through its officers/agents. The recovery was quite peaceful. Pursuant to the recovery of the trucks, the finance company informed the police vide its letter dated 1.6.2006, and also issued a notice to Jeevan Ram Garg and his wife on 12.6.2006 and thereafter again on 28.6.2006, but all went in vain. However, Mr. Garg wrote a letter to the company admitting the aforementioned agreement and the default made by them in payment of the installments. Mr. Garg requested time till August, 2006 to resume the payment of installments. The company, considering the said request, granted time till July, 2006 instead of August, 2006, and expressed its inability to grant further time intending to recover the outstanding money by auctioning the trucks in case of any further default. But even after receiving of this reply and availing the opportunity and time, granted by the company, no money was paid by Jeevan Ram Garg and his wife. So, the company was constrained to make the auction of the trucks and recover its dues. The company did so.

Jeevan Ram Garg filed a complaint on 18.9.2006 for the offence of Section 406, 420 IPC against all the officers of the company, which have been arraigned as respondents no. 2 to 4 in this petition. The learned Magistrate after recording the statement of the complainant u/s 200 CrPC and the statements two witnesses, namely, Pradeep Agarwal and Ashish Jain u/s 202 CrPC, passed the order of cognizance on 19.10.2006 and summoned the accused respondents to face the trial for the offences punishable u/s 406 & 420 IPC. Feeling aggrieved, the respondents filed a revision before the Sessions Judge, and contended before him that Mr. Garg has concealed the true facts before the court of Magistrate. Revisionists highlighted all the facts before the Sessions Judge, as have also been narrated by this Court supra. Learned Sessions Judge, appreciating the contentions put forward by the revisionists, allowed the revision vide his order dated 14.3.2007 and set aside the order of cognizance, and remitted the matter back to the court of Magistrate with direction to pass the order afresh taking into consideration the entire facts and circumstances of the case after rendering opportunity of hearing to the prospective accused. It is this order of the learned Sessions Judge, which is under challenge in this petition.

Learned Counsel for the petitioner has relied upon the judgment of the Hon''ble Apex Court rendered in the case of Adalat Prasad Vs. Rooplal Jindal and Others, . Reliance has also been placed on the another authority of the Hon''ble Supreme Court delivered in the case of Subramanium Sethuraman v. State of Maharashtra & Another reported in 2005 SCC (Cri) 242.

In both the aforementioned precedents, the Hon''ble Apex Court has observed in clear terms that there is no provision under CrPC which enables the Magistrate with reviewing powers of its own order after hearing the prospective accused. Hence, learned Sessions Judge, while hearing the revision filed against the cognizance order, could not direct the Magistrate to extend the opportunity of hearing to the prospective accused and then pass fresh orders. This ratio is based upon the sound principles of law and has repeatedly been reiterated by the Hon''ble Apex Court in so many other cases, and is being followed by all the subordinate courts throughout the country.

Hence, in view of the above-narrated legal proposition, the revisional order passed by the learned Sessions Judge cannot be sustained in the eyes of law and the same is liable to be quashed.

Now, the question which crops up for consideration is whether this Court can itself be circumspect and deliberate upon the basic controversy considering the entire chain of events, notwithstanding the fact that the petition has been filed by the complainant, and not by the respondents/accused persons challenging the order of cognizance dated 19.10.2006. Keeping in view the language of Section 482 CrPC, which is reproduced below, the answer is in affirmation.

Saving of inherent power of High Court.''Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice.

The aforequoted provision of law equips this Court with inherent powers and further mandates that if there is patent abuse of the process of Court, and if the cognizance order has been passed upon a complaint which did not disclose the true facts, and the vital and relevant facts have been concealed, then this Court itself can take stock of the situation and pass appropriate orders exercising its powers u/s 482 read with Section 483 CrPC in order to prevent the abuse of the process of Court and to secure the ends of justice.

Learned Counsel for the respondents has relied upon a precedent of the Hon''ble Apex Court rendered in the case of Charanjit Singh Chadha & Ors. V. Sudhir Mehra reported in JT 2001 (7) 226. It was a case, which involved squarely similar controversy, and the litigation went up to the Apex Court. The facts of the case were that a vehicle was purchased under hire-purchase agreement. There was default in payment of installments. The vehicle was taken into possession by the financer. Then the bailee filed a complaint for the office of Section 406, 420 IPC against the financer, and the Magistrate passed a mundane order of cognizance for the offence of Section 406 & 420 IPC and summoned the financer to stand trial for the same. In that matter, High Court refused to quash the proceedings. Then the financer approached the Hon''ble Apex Court by way of filing an SLP. While adjudicating the controversy, the Hon''ble Apex Court, at paragraph 17 of the said judgment, has held has under:

The hire-purchase agreement in law is an executory contract of sale and confers no right in rem on hirer until the conditions for transfer of the property to him have been fulfilled. Therefore, the re-possession of goods as per the term of the agreement may not amount to any criminal offence. The agreement (Annexure P-1) specifically gave authority to the appellants to re-possess the vehicle and their agents have been given the right to enter any property or building wherein the motor vehicle was likely to be kept. Under the hire purchase agreement, the appellants have continued to be the owners of the vehicle and even if the entire allegations against them are taken as true, no offence was made out against them. The learned Single Judge seriously flawed in his decision and failed to exercise jurisdiction vested in him by not quashing the proceedings initiated against the appellants. We, therefore, allow this appeal and set aside the impugned judgment. The complaint and any other proceedings initiated pursuant to such complaint are quashed.

Another similar precedent, which is worthy to be cited here, is of Patna High Court delivered in case of Ishwar Chandra v. State of Bihar, 1999 (2) Crimes (HC) 19. In this precedent as well as in the precedent of the Hon''ble Apex Court (supra), principle of law down is that hire-purchase agreement is an executory form of contract. It remains an agreement between the bailor and the bailee till all the installments are paid by the bailee in order to satisfy the entire amount of debt/sale value of the subject of bailment. Till all the installments are paid, the bailor is the owner of the subject of bailment, and the bailee is only the trustee, and it is well within the powers of the bailor to re-possess the subject of the bailment and recover its dues by way of auction as contemplated in the terms and conditions of the agreement. No sooner did the installments are paid and the amount of dues became settled, the agreement converts into the contract and the purpose of the same becomes over. Fortiori, the act, complained of, is not at all covered with the ingredients as envisages u/s 405 IPC. So, there is no question of summoning the respondents for the offence of Section 406 IPC.

In the instant case also, as are clear by the above-narrated facts and circumstances, there is no element of cheating and, therefore, no offence u/s 420 IPC is made out against the respondents. Terms and conditions of the hire-purchase agreement, as have been highlighted by the learned Counsel for the respondents and a copy of which has also been filed along with the counter affidavit, seem to be very reasonable, and these are not at all harsh. So, on this count also, the complainant petitioner does not derive any benefit.

For the reasons recorded above, the impugned order dated 14.3.2007, passed by the learned Sessions Judge in Criminal Revision No. 98/2007 is set aside. At the same time, for the foregoing discussion of legal proposition and facts and circumstances of the case, the cognizance order dated 19.10.2006, passed by the Judicial Magistrate, Haridwar on the complaint of the petitioner against the respondents in Criminal Complaint Case No. 2120/2006 and any other proceeding arising out of such complaint is hereby also quashed. Petition is disposed of accordingly.

Registry is directed to inform the court concerned accordingly.