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Judgment
Heard learned counsel for the petitioner and learned counsel appearing on behalf of the Union of India as well as learned counsel appearing on behalf of Tata Motors Finance Ltd.
The present writ application has been filed, inter alia, for the following relief(s):-
i.For issuance of writ/writs, order/orders in the nature of mandamus directing the respondent no. 7 to release the vehicle (Truck) of the petitioner bearing Registration no. BR06GF5379 having Chassis no. MAT820006P1B06050 which has been illegally seized by the respondent no. 7.
ii.For issuance of writ/writs, order/orders in the nature of mandamus directing the respondent no. 7 to compensate the losses of the petitioner caused by them and the third party along with the cost of this litigation.
iii.For the issuance of writ/writs in the nature of mandamus to dispose of the representation dated 13.08.2024.
iv.For issuance of writ/ writs, order/orders directing the concerned authorities to conduct the whole process with complete honesty.”
The brief facts of this case, in nutshell, are that the petitioner had purchased a Truck (Tata LPT 4825), a commercial vehicle, bearing registration No. BR06GF5379, Chassis No. MAT820006P1B06050, and Engine No. B6.7B6A250Do2132B64272550 with the assistance of loan amount of Rs. 42,06,495/- from the respondent- Tata Motors Finance Limited and the he had entered into an agreement with the respondent on 28.02.2023. In terms of the agreement and repayment schedule, the petitioner had been repaying the monthly installment to the tune of Rs. 98,130/- regularly, however, on account of financial crisis, the petitioner failed to pay the installment amount on two occasions on their due dates. However, he had paid the last installment of Rs. 98,130/- on 09.08.2024, which is evident from annexure-3 to the writ application. All of a sudden, he came to know that his vehicle has been seized on 11.08.2024 by respondent No.7 without any prior notice or information. Thereafter, the petitioner filed a representation before the Superintendent of Police, Hapi, Hisar, Haryana on 11.08.2024 regarding illegal seizure of his commercial vehicle without any prior knowledge of the petitioner. When the petitioner tried to gather information regarding illegal seizure of his vehicle from the Motihari Branch office of respondent No.7, he has been subjected to abuse and physical assault made by the staffs of the respondent No.7 on account of failure of his monthly installment. In this regard, the petitioner reported the incident to S.H.O., Harsidhi Police Station, East Champaran on 13.08.2024 vide Annexuer-5 to the writ application but the same does not yield any result for him.
It is the specific case of the petitioner that at the time of illegal seizure of the vehicle on 09.08.2024, a consignment of iron rod to the tune of Rs. 20,00,023/- was loaded on the Truck to be delivered on 11.08.2024 to the customer, despite that vehicle of the petitioner has been illegally seized causing disruption of business and damage to the goods of the customer (third party). On the intervention of the third party, the goods were released in favour the customer after lapse of ten days with damages, for which the third party is claiming to the petitioner. Being aggrieved by the action of respondent No.7, the petitioner, being left with no option, has approached this Court by way of filing the present writ application.
It has been brought to the notice of this Court that this Court, while issuing notice to respondents Nos. 7 to 9 on 25.09.2024, has directed the respondents not to sell the vehicle, which is the subject matter of this writ application, if not already sold, till the final adjudication of the present writ application. However, the vehicle in question has been sold by the respondents on 19.10.2024 and this fact has also been brought on record by filing a counter affidavit on behalf of respondent No.7.
On the query made by this Court as to why the vehicle in question has been sold out despite the order of this Court, learned counsel for respondent No.7 has contended that since the respondent was not appearing on the date such order has been passed by this Court, they had no knowledge about the order dated 25.09.2024 and, therefore, the respondent has acted upon in terms of award dated 30.11.2023 passed in arbitration proceeding. On the contrary, it has been contended by the learned counsel for the petitioner that the said order has been passed in the presence of the advocate of the respondent and not only that the petitioner has also communicated the said order in the office of respondent No.7. A statement to that effect has also been made in paragraph-20 of the rejoinder filed by the petitioner.
Before expressing any view of this Court on the action of the respondent No.7, this Court deems it appropriate to address the preliminary objection raised by the respondents on the ground of maintainability of this writ application.
It is contended by learned counsel for the respondent No.7 that this writ application is not maintainable on the ground that respondent No.7, Tata Motors Finance Ltd. is a private company and neither a State or Instrumentality of the State as defined under Article 12 of the Constitution of India, rather its a company falls within the category of Non Banking Financial Company, therefore, writ would not lie in the fact and circumstances of the present case. It is further contended that the dispute raised in this writ application arises out of a purely private contractual relationship between the parties inasmuch as that Tata Motors Finance Ltd. is a Non-Banking Financial Company (NBFC), therefore, the dispute raised, in this writ application, pertains to enforcement of contractual obligations. Hence, no writ would lie against the respondent in the facts and circumstances of the present case. It is specifically contended that the writ application involves disputed question of facts, hence cannot be entertained. Apart from the aforesaid, it is also contended that the respondent No.7, being an NBFC, has an option either to re-possess the hypothecated vehicles in terms of the loan agreement and without taking recourse to Court or to follow the procedure prescribed under the SARFAESI Act, 2022 and the Rules framed thereunder.
In support of his contention, learned counsel for the respondent relied upon a judgment of the Hon’ble Supreme Court in the case of Shobha Vs. Muthoot Finance Ltd. reported tin 2025 INSC 117, wherein it is held that a writ petition is not maintainable against the Non Banking Financial Companies.
Further, a reliance has been placed on the judgment of this Court in the case of Prinsu Kumar Vs. The State of Bihar passed in Cr. W.J.C. No. 797 of 2023, wherein the Co-ordinate Bench of this Court has held that since the hire purchase agreement was executed between the petitioner and respondents and the petitioner has made out a case of forceful possession of the harvesting machine in violation of the terms of agreement, the obligation between the parties arises out of contractual relationship between the parties. The State authority was involved as party respondents to bring this writ petition within the jurisdiction of this Court. However, essential disputes relates to non-compliance of contractual obligation and resultant effect of breach of contract. A contractual obligation is not amenable to writ jurisdiction, until an unless, it does not violates any public policy.
To substantiate the submission, a reliance has also been placed on the judgment of Hon’ble Supreme Court in the case of Phoenix ARC Private Limited vs. Vishwa Bharati Vidya Mandir and Ors. reported in AIR 2022 SC 1045.
Besides the aforesaid reliance, it has been contended by the learned counsel for respondent No.7 that vehicle in question has been repossessed in accordance with law after following the due procedure in light of the direction passed in the arbitral award dated 30.11.2023 and even after providing sufficient opportunity and issuance of several notices to the petitioner. The factum of receipt of arbitral award dated 30.11.2023 is also admitted by the petitioner, which can be manifest from the Annexure- P/2 to this writ application. He further contends that if the petitioner is aggrieved with the arbitral award, he could have invoked his remedy under Section 34 of the Arbitration and Conciliation Act, 1996 instead of filing the present writ application and since the validity of arbitral award has not been questioned before the appropriate forum, it is construed that it has attained its finality. Therefore, the respondent left with no option but to act upon in terms of the arbitral award has sold the vehicle in question in order to compensate its financial liability created by the default of payment at the behest of the petitioner. He lastly, contends that since the vehicle in question has been sold on 09.10.2024 after providing opportunity to the petitioner and the third party right has been created, interference of this Court is not warranted in this case, at this stage, as it amounts to multiplicity of proceedings, therefore, this writ application may be dismissed being it not maintainable at its threshold.
This Court, while considering the submission advanced on behalf of the respondent No.7 on the issue of maintainability of the present writ application, finds it appropriate to refer to the decision of Hon’ble Constitution Bench of the Hon’ble Supreme Court in the case of Kaushal Kishore Vs. State of Uttar Pradesh and Others reported in (2023) 4 SCC 1 wherein the Hon’ble Supreme Court has held in in paragraphs 81.15, 81.16, 82 and 83, which are being reproduced hereinbelow:
81.15.In Jeeja Ghosh v. Union of India [Jeeja Ghosh v. Union of India98, the petitioner, a disabled person suffering from cerebral palsy, was unceremoniously ordered off a SpiceJet aircraft by the flight crew on account of the disability. The petition was filed for putting in place a system to ensure such a violation of human dignity and inequality is not meted out to similarly placed persons. This Court observed as follows : (SCC p. 771, para 10)”
“10.It is submitted by the petitioner that the Union of India (Respondent 1) has an obligation to ensure that its citizens are not subject to such arbitrary and humiliating discrimination. It is a violation of their fundamental rights, including the right to life, right to equality, right to move freely throughout the territory of India, and right to practise their profession. The State has an obligation to ensure that these rights are protected — particularly for those who are disabled.”
(emphasis supplied)
This Court awarded compensation to the petitioner against the private Airline on the ground that the airline, though a private enterprise, ought not to have violated her fundamental right.
81.16.In Zee Telefilms Ltd. v. Union of India [Zee Telefilms Ltd. v. Union of India99, this Court held that though BCCI does not fall within the purview of the term “State”, it discharges public duties and that therefore even if a remedy under Article 32 is not available, the aggrieved party can always seek a remedy before the ordinary courts of law or by way of a writ petition under Article 226. This Court pointed out that the violator of a constitutional right could not go scot-free merely because it is not a State. The said logic was extended by this Court to a “Deemed to be University” in Janet Jeyapaul v. SRM University,100on the ground that though it is a private university, it was discharging “public functions”, by imparting education.
82.All the above decisions show that on a case-to case basis, this Court applied horizontal effect, considering the nature of the right violated and the extent of obligation on the part of the violator. But to enable the courts to have certain basic guidelines in place, for dealing with such cases, this Court developed a tool in K.S. Puttaswamy (Privacy-9 J.)20. While affirming the right to privacy as a fundamental right, this Court laid down the landscape as follows : (SCC p. 539, paras 397-98)
“397.Once we have arrived at this understanding of the nature of fundamental rights, we can dismantle a core assumption of the Union's argument : that a right must either be a common law right or a fundamental right. The only material distinctions between the two classes of right—of which the nature and content may be the same—lie in the incidence of the duty to respect the right and in the forum in which a failure to do so can be redressed. Common law rights are horizontal in their operation when they are violated by one's fellow man, he can be named and proceeded against in an ordinary court of law. Constitutional and fundamental rights, on the other hand, provide remedy against the violation of a valued interest by the “State”, as an abstract entity, whether through legislation or otherwise, as well as by identifiable public officials, being individuals clothed with the powers of the State. It is perfectly possible for an interest to simultaneously be recognised as a commonlaw right and a fundamental right. Where the interference with a recognised interest is by the State or any other like entity recognised by Article 12, a claim for the violation of a fundamental right would lie. Where the author of an identical interference is a non-State actor, an action at common law would lie in an ordinary court.
398.Privacy has the nature of being [Ed. : The word between two asterisks has been emphasised in original.] both [Ed. : The word between two asterisks has been emphasised in original.] a common law right as well as a fundamental right. Its content, in both forms, is identical. All that differs is the incidence of burden and the forum for enforcement for each form.”
(emphasis supplied)
83.Thus, the answer to Question 2 is partly found in the nine-Judge Bench decision in K.S. Puttaswamy (Privacy-9 J.)20 itself. We have seen from the line of judicial pronouncements listed above that after A.K. Gopalan v. State of Madras,101 lost its hold, this Court has expanded the width of Article 21 in several areas such as health, environment, transportation, education and prisoner's life, etc. As Vivian Bose, J., put it in a poetic language in S. Krishnan v. State of Madras102 (S. Krishnan case102 SCC p. 524, para 63)
“63.Brush aside for a moment the pettifogging of the law and forget for the nonce all the learned disputations about this and that, and “and” or “or”;, or “may” and “must”. Look past the mere verbiage of the words and penetrate deep into the heart and spirit of the Constitution.”
(emphasis supplied)
The original thinking of this Court that these rights can be enforced only against the State, changed over a period of time. The transformation was from “State” to “Authorities” to “instrumentalities of State” to “agency of the Government” to “impregnation with Governmental character” to “enjoyment of monopoly status conferred by State” to “deep and pervasive control”103 to the “nature of the duties/functions performed”39 . Therefore, we would answer Question 2 as follows: “A fundamental right under Articles 19/21 can be enforced even against persons other than the State or its instrumentalities.”
The Hon’ble Supreme Court while considering the question No.2 framed in the case of Kaushal Kishore (Supra) has dealt in detail as to how the law has developed so far and has recognized that a fundamental right under Article 19 or 21 can be claimed against anyone other than the State or its instrumentality. The Hon’ble Apex Court has discussed the question as to whether Part III of the Constitution has a “vertical” or “horizontal” effect. It has been held that wherever constitutional rights regulate and impact only the conduct of the government and government actors in their dealings with private individuals they are said to have a “vertical” effect. But wherever constitutional rights impact even the relations between private individuals, they are said to have a “horizontal” effect.
In Kaushal Kishore (supra) , the Hon’ble Supreme Court has shown that some of the Articles of Part III are in the form of a Directive to the State while others are not. In paragraph ‘79’ of the judgment, their Lordships observed inter alia:-
“This is an indication that some of the rights conferred by Part III are to be honored by and also enforceable against, non-State actors.”
While addressing the question as to how the Courts in India have dealt with the cases where there was complaints of infringement of fundamental rights by non-State actors, the Hon’ble Supreme Court referred the several judgments in the cases of P.D. Shamdasani Vs. Central Bank of India reported in (1951) SCC 1237, Vidya Varma Vs. Dr. Shiv Narain reported in AIR 1956 SC 108, Sukhdev Singh Vs. Bhagatram Sardar Singh Raghuvanshi reported in (1975) 1 SCC 421, People’s Union for Democratic Rights Vs. Union of India reported in (1982) 3 SCC 235; S. Rangarajan Vs. P. Jagjivan Ram reported in (1989)2SCC 574; Nilabati Behera Vs. State of Orissa reported in (1993) 2SCC 746; Lucknow Development Authority Vs. M.K. Gupta reported in (1994) 1 SCC 243; Bodhisattwa Gautam Vs. Subhra Chakraborty reported in (1996) 1 SCC 490; M.C. Mehta Vs. Kamal Nath reported in (1997) 1 SCC 388, Vellore Citizens’ Welfare Forum Vs. Union of India reported in (1996) 5 SCC 647, M.C. Mehta Vs. Kamal Nath reported in(2000) 6 SCC 213; Consumer Education and Research Centre & Ors. Vs. Union of India & Ors. reported in (1995) 3 SCC 42; Vishaka Vs. State of Rajasthan reported in (1997) 6 SCC 241; Githa Hariharan (Ms.) & Anr. Vs. Reserve Bank of India & Anr. reported in (1999) 2 SCC 228; Indian Medical Association Vs. Union of India reported in (2011) 7 SCC 179; Society for Unaided Private Schools of Rajasthan Vs. Union of India reported in 2012) 6 SCC 1; Jeeja Ghosh Vs. Union of India reported in (2016) 7 SCC 761; Zee Telefilms Ltd. Vs. Union of India reported in (2005) 4 SCC 649; Janet Jeyapaul Vs. S.R.M. University reported in (2015) 16 SCC 530; Justice K.S. Puttaswamy Vs. Union of India reported in (2017) 10 SCC 1.
In the aforesaid discussion, this Court, taking note of the facts of the present case in which the petitioner is essentially complaining of violation of his fundamental rights to earn his livelihood with dignity and he is being deprived of at the behest of the respondent without following the law and by use of force which cannot be permitted in a State governed by rule of law, refers to Article 21 of the Constitution of India, which guarantees every person that he shall not be deprived of his life and liberty except according to the procedure established by law. The expressions “the State” is not used in Article 21 as has been noticed by the Hon’ble Supreme Court in the case of Kaushal Kishore (supra). In order to put it in the words of the Hon’ble Supreme Court, this Court would reproduce the relevant lines from paragraph ‘86’ of the judgment as under
“Article 21 does not say “the State shall not deprive a person of his life and liberty”, but says that “no person shall be deprived of his life or personal liberty.”
The livelihood and all those aspects of life which come to make a man’s life meaningful, complete and worth living are included within the meaning of the words “The Right to Life”
In this case, it is the specific case of the petitioner that respondents have forcibly seized the vehicles while his vehicle was on way. Admittedly the petitioner is the owner of the vehicle, he had borrowed loan and at the time of illegal seizure of the vehicle on 09.08.2024, a consignment of iron rod to the tune of Rs. 20,00,023/- was loaded on the Truck to be delivered on 11.08.2024 to the customer, despite that vehicle of the petitioner has been illegally seized causing disruption of business and damage to the goods of the customer (third party). While doing so, admittedly, the respondents have not taken recourse to the provisions either of the SARFAESI Act, 2002 and the Rules framed thereunder or under Section 36 of the Arbitration and Conciliation Act, 1996. The deprivation, in the present case, is not only by way of violation of the established procedure of law but is also against the human dignity, which attracts the infringement of fundamental rights of the petitioner.
In the aforesaid discussion and the purport of judgment of Hon’ble Supreme Court in the case of Kaushal Kishore (supra) , this Court is of the view that the submission advanced by learned counsel for respondent No.7 on the issue of maintainability of writ against a non-State actor is devoid of merit in the facts and circumstances of the case.
It would be apt to refer to the recent decision of the Hon’ble Supreme Court in the in the case of Karnataka Power Transmission Corporation Limited Vs. Rekha & Ors.. reported in 2026 INSC 847 has held that the question of maintainability of the writ petition is no longer res-integra . The relevant paragraphs of the judgment is being reproduced hereinbelow:
“6.The question of maintainability of the writ petition is no longer res-integra. Numerous judgments of this Court have delineated on this question. We may refer to one such judgment where the principles regarding maintainability have been culled out. In Radha Krishan Industries v. State of H.P.5, it has been observed:
“27.The principles of law which emerge are that:
27.1.The power under Article 226 of the Constitution to issue writs can be exercised not only for the enforcement of fundamental rights, but for any other purpose as well.
27.2.The High Court has the discretion not to entertain a writ petition. One of the restrictions placed on the power of the High Court is where an effective alternate remedy is available to the aggrieved person.
27.3.Exceptions to the rule of alternate remedy arise where : (a) the writ petition has been filed for the enforcement of a fundamental right protected by Part III of the Constitution; (b) there has been a violation of the principles of natural justice; (c) the order or proceedings are wholly without jurisdiction; or (d) the vires of a legislation is challenged.
27.4.An alternate remedy by itself does not divest the High Court of its powers under Article 226 of the Constitution in an appropriate case though ordinarily, a writ petition should not be entertained when an efficacious alternate remedy is provided by law.
27.5.When a right is created by a statute, which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before invoking the discretionary remedy under Article 226 of the Constitution. This rule of exhaustion of statutory remedies is a rule of policy, convenience and discretion.
27.6.In cases where there are disputed questions of fact, the High Court may decide to decline jurisdiction in a writ petition. However, if the High Court is objectively of the view that the nature of the controversy requires the exercise of its writ jurisdiction, such a view would not readily be interfered with.”
These principles have been referred to with approval by a bench of three judges in T.N. Cements Corpn. Ltd. v. Unicon Engineers 6 where it further stood clarified that:
“55.It has been well-settled through a legion of judicial pronouncements of this Court that the writ courts, despite the availability of alternative remedies, may exercise writ jurisdiction at least in three contingencies — (i) where there is a violation of principles of natural justice or fundamental rights; (ii) where an order in a proceeding is wholly without jurisdiction; or (iii) where the vires of an Act is challenged… ”
In light of the aforesaid discussion, this Court taking note of the facts of the present case, is of the considered opinion that the very action of the respondent No.7 in the present case is in violation of principles of natural justice or fundamental rights and is wholly without jurisdiction in terms of the order dated 25.09.2024 passed by this Court, accordingly, it is held that this writ application is maintainable in terms of decision of Hon’ble Supreme Court in the case of Karnataka Power Transmission Corporation Limited (supra).
Now, at this juncture, it would be appropriate to record the limited submission advanced on behalf of the petitioner so as to proceed further in the matter.
Learned counsel for the petitioner, relying on a judgment passed by this Court in the case of Dhananjay Seth Vs. The Union of India & Ors. Passed in C.W.J.C. No. 3456 of 2021 and its analogous cases , submits that this Court has categorically held that in cases where the vehicle has been sold to a third party and the Bank/Financial Institution is not in a position to restore the vehicle, they would be liable to pay the petitioner to the extent of the value of the seized vehicles as per their insurance value on the date of their seizure. It has further been held that the said amount shall be adjusted against the outstanding vehicle and thereafter if any surplus comes out, the same will be made available to the petitioner.
In light of the aforesaid judgment, learned counsel for the petitioner submits that in the present case, the respondents have contended that the petitioner was issued with a pre-sale Notice dated 21.08.2024 calling upon him to make payment of Rs. 43,26,699/-, however, the payment was not made by the petitioner and, therefore, the seized vehicle was auctioned sold on 19.10.2024, which would be evident from Annexure-R7/E, therefore, the case, at hands, is squarely covered by the aforesaid judgment. Hence, it is prayed that the respondent No.7 may be directed to compensate the petitioner in light of the aforesaid judgment or to release the vehicle in favour of the petitioner being it in violation of the order dated 25.09.2024 passed by this Court.
I have heard the rival submission advanced by the respective parties and have meticulously gone through the materials available on record.
Undoubtedly, the vehicle, which is the subject matter of the present case, has been auctioned sold by the respondent No.7 and, therefore, a third party right has been created in favour of the auction purchaser, despite there being the order dated 25.09.2024 passed by this Court by which the respondents are directed not to sell the vehicle in question, if not already sold, till the final adjudication of the present case. This Court on this sole ground holds the sale of the vehicle illegal and also contrary to law. Admittedly, there being an arbitral award in favour of the respondent No.7, in which the petitioner has not taken part, and in terms of the arbitral award, the respondent No.7 has proceeded with the matter and auction sold the vehicle of the petitioner and it is the foundational ground of the respondent No.7 in the present case. However, this Court is of the considered opinion that respondent No.7 should have taken recourse before the Court having civil jurisdiction for execution of the arbitral award being it an ex-parte. Besides that Section 36 of the Arbitration and Conciliation Act, 1996 could have been taken into consideration before proceeding to act upon in terms of the arbitral award. Section 36 of the Act is being reproduced hereinbelow for ready reference:
“36.Enforcement.-- (1) Where the time for making an application to set aside the arbitral award under Section 34 has expired, then, subject to the provisions of sub-section (2), such award shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908 (5 of 1908), in the same manner as if it were a decree of the court.
(2)…”
In the present case, the respondent No.7 has failed to act upon in terms of Section 36 of the Arbitration and Conciliation Act, 1996 and taken the law in its hand, which in any circumstance is impermissible. In such a situation, if this Court considers the prayer of the petitioner to release the vehicle (Truck) of the petitioner bearing Registration no. BR06GF5379 in favour of the petitioner, it would amount to multiplicity of proceeding. In the aforesaid background, this Court is persuaded by the submission advanced on behalf of the petitioner that the case of the petitioner is squarely covered by the decision of this Court in the case of Dhananjay Seth (supra) and has also confined his prayer to the extent of compensation for the losses of the petitioner caused by the respondent No.7 and the third party along with the cost of this litigation.
In such view of the matter and taking into account the fact that the vehicle has been auctioned sold to a third party and the respondent No.7/Financial Institution is not in a position to restore the vehicle, it would be liable to pay the petitioner to the extent of the value of the vehicle as per its insurance value on the date of the seizure. The said amount shall be adjusted against the outstanding vehicle loan and thereafter if any surplus comes out, the same will be made available to the petitioner. It will be open for the petitioner, if so advised, to challenge the accounts furnished by the respondent No.7/Financial Institution and claim any compensation etc. for the loss arising out of seizure of his vehicle before appropriate court/forum.
Since the action of the respondent No.7/Finance Companies is found illegal, the petitioner who has been made to contest this case shall be entitled for cost of litigation. Accordingly, this Court directs that respondent No. 7 i.e. Tata Motors Finance Limited would be liable to pay a sum of Rs.25,000/- (twenty five thousand) as cost of litigation to the writ petitioner within a period of 30 days from the date of receipt/production of a copy of this judgment.
Accordingly, this writ application is allowed in the aforesaid term.
Pending application(s), if any, shall also stand disposed of.