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SUPREME COURT OF INDIA
Ashok Bhushan, R. Subhash Reddy, M.R. Shah, JJ.
Srei Equipment Finance Ltd. - Appellant
Versus
Ramjan Ali & Ors. - Respondents
Criminal Appeal No. 6 of 2021 (arising out of SLP (Crl.) No.3893/2020)
Decided On : 05-01-2021
Criminal Procedure Code, 1973 – Section 482 – Motor Vehicles Act, 1988 – Section 51 – Central Motor Vehicle Rules, 1989 – Rule 61 – Release of vehicle under hire purchase agreement – Entry of appellant’s name in registration certificate of vehicle was got cancelled by submission of Form 35 by original owner and thereafter fresh registration certificate in Form 23 was issued in the name of original owner as original owner without any entry of hypothecation – Registering authority has come to conclusion that Form 35 on the basis of which entry in name of appellant as person with whom vehicle was hypothecated was fraudulently removed – Assistant Divisional Transport Officer has cancelled order as well as No Objection Certificate of vehicle and registration certificate given by office of Regional Transport Office, has been held to be null and void – All subsequent proceedings including certificate of registration obtained by respondent No.1 on the basis of certificate of clearance shall also automatically be treated non est – Present is a case where registration certificate which was issued by Regional Transport Office, in Form 23 stood cancelled including setting aside of clearance certificate – Subsequent registration obtained from Regional Transport Office, Sitapur on strength of clearance certificate shall also be of no avail to respondent No.1 in view of registration certificate having been set aside – High Court failed to notice that entry of hypothecation of vehicle in favour of appellant was very much there in original registration certificate which entry was got deleted by submitting a forged Form 35 by original owner – High Court committed error in directing release of vehicle in favour of respondent No.1 – Order of High Court is unsustainable and hereby set aside and vehicle to be released in favour of appellant. (Paras 13, 16, 17, 19, 20, 22 and 23)
Facts of the case:
Present appeal has been filed challenging judgment dated 28.01.2020 of High Court of Judicature at Allahabad, Lucknow Bench allowing the application under Section 482 Cr.P.C. filed by respondent No.1. By impugned judgment, High Court has directed for release of vehicle in favour of respondent No.1. The appellant, who was respondent No.3 before the High court aggrieved by judgment has come up in this appeal.
Findings of Court:
High Court failed to notice that entry of hypothecation of vehicle in favour of the appellant was very much there in the original registration certificate, which entry was got deleted by submitting a forged Form 35 by original owner, which finding has been recorded in order of Assistant Regional Transport Officer dated 29.06.2019 cancelling the registration certificate on which reliance has been placed by the High Court in paragraph 9.
Result : Appeal allowed.
JUDGMENT :
ASHOK BHUSHAN, J.
Leave granted.
2. This appeal has been filed challenging the judgment dated 28.01.2020 of High Court of Judicature at Allahabad, Lucknow Bench allowing the application under Section 482 Cr.P.C. filed by respondent No.1. By impugned judgment, High Court has directed for release of vehicle JCB No. UP 51 AT 5709 in favour of the respondent No.1. The appellant, who was respondent No.3 before the High court aggrieved by the judgment has come up in this appeal.
3. Brief facts of the case and events necessary to be noted for deciding this appeal are:-
3.1 One Amarnath Yadav purchased the JCB machine and entered into a finance agreement dated 22.10.2016 with the appellant under which agreement the appellant financed an amount of Rs.19,83,360/-. Under the agreement, Shri Amarnath Yadav (hereinafter referred to as “original owner”) agreed to repay the loan in 46 monthly instalments @ Rs.56,300/-for each month from 15.12.2016 to 15.09.2020.
3.2 The original owner being resident of District Basti, State of Uttar Pradesh applied for registration of the vehicle to the Regional Transport Officer, Basti. The vehicle was registered by Regional Transport Officer, Basti, Shri Amarnath Yadav as owner of JCB machine bearing Registration No. UP 51 AT 5709 and there being agreement of finance with appellant, in the registration certificate the entry was made of the appellant as person in whose favour the vehicle was hypothecated as required by Section 51 of the Motor Vehicles Act, 1988. The original owner failed to pay any instalment of loan. The appellant as per terms of the finance agreement dated 22.10.2016 referred the dispute to an arbitrator. The arbitrator proceeded to decide the reference as per Arbitration and Conciliation Act, 1996. Notices were issued by Arbitrator to original owner. Original owner failed to appear before the arbitrator. The arbitrator gave an award dated 26.03.2018 in favour of the appellant namely M/s. Srei Equipment Finance Private Limited for an amount of Rs.25,97,053/-with interest @ 10% p.a. from the date of notice of termination (07.03.2017).
3.3 The original owner made an application with the Regional Transport Officer, Basti praying for seeking cancellation of entry of the appellant as person with whom the vehicle was hypothecated. Regional Transport Officer, Basti issued an order on 16.08.2018 cancelling the entry of appellant as financer. The Regional Transport Officer, Basti without any information to the appellant cancelled the entry of the appellant from the registration certificate and issued a fresh registration certificate in the name of original owner. On 16.08.2018, the Regional Transport Officer, Basti issued a clearance certificate in favour of original owner noticing the fact that vehicle has been sold to Ramjan Ali, the respondent No.1 in the jurisdiction of other registration authority, i.e., Sitapur.
3.4 On the basis of clearance certificate issued by Regional Transport Officer, Basti, the respondent No.1, Ramjan Ali submitted an application for certificate of registration to Transport Department, Sitapur and a registration certificate dated 27.08.2018 was issued in the name of Ramjan Ali as owner. The registration certificate dated 27.08.2018 also noted the entry of hypothecation in favour of Magma Fincorp Limited. The respondent No.1 after obtaining transfer from original owner has been using the vehicle.
3.5 On 09.01.2019, the vehicle was taken possession by four persons, with regard to which an FIR Case Crime No.08 of 2019 under Sections 364 and 392 was lodged by respondent No.1, Ramjan Ali in Police Station Sidhauli District Sitapur. The vehicle was seized on 27.01.2019 by the police. Ramjan Ali filed an application before the Chief Judicial Magistrate, Sitapur for release of the vehicle No. UP 51 AT 5709. Police submitted a report before the Chief Judicial Magistrate, Sitapur on the application of respondent No.1. The appellant also appeared before Chief Judicial Magist
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