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2013 Supreme(Mad) 3254
Madurai Bench of Madras High Court
S. NAGAMUTHU, J.
Future Generali India Insurance Co. Ltd., rep. by its Manager
Versus
The Deputy Superintendent of Police, District Crime Record Bureau
W.P.(MD).No.2495 of 2013 & M.P.(MD).Nos.1 & 2 of 2013
Decided On : 16-09-2013
Advocate Appeared:
For the Petitioner:S. Srinivasa Raghavan, Advocate.
For the Respondent: T.S. Mohammed Mohideen, Addl. Government Pleader.
The main legal point established in the judgment is the violation of principles of natural justice in passing the confiscation order and the right of the insurer to challenge the order under Section 14(5) of the Act.
Headnote:
Insurance - Confiscation of Vehicle - Tamil Nadu Prohibition Act, 1937 - Section 14(4), Indian Penal Code - Sections 420, 468, 471 - Summary of Acts and Sections: The court discussed the violation of principles of natural justice in passing the confiscation order under Section 14(4) of the Tamil Nadu Prohibition Act, 1937, and the legal obligation of the respondent to inform the police about the stolen vehicle. The court also emphasized the illegality of confiscating the vehicle to the detriment of the owner and the insurer, and the right of the insurer to file an appeal under Section 14(5) of the Act.
Fact of the Case:
The petitioner, an insurance company, paid a claim for a missing vehicle based on a certificate issued by the police. The vehicle was later found carrying illicit liquor and seized by the police. The respondent initiated proceedings for confiscation of the vehicle without informing the petitioner.
Finding of the Court:
The court found that the confiscation order was passed in violation of principles of natural justice and was illegal. It held that the petitioner, as the insurer, had the right to file an appeal under Section 14(5) of the Act.
Issues: The issues included the violation of natural justice in passing the confiscation order, the legal obligation of the respondent to inform the police about the stolen vehicle, and the right of the insurer to challenge the order.
Ratio Decidendi: The court held that the confiscation order violated principles of natural justice and was illegal. It also emphasized the right of the insurer to file an appeal under Section 14(5) of the Act.
Final Decision: The court set aside the confiscation order, directed the respondent to hand over the vehicle to the police for investigation, and allowed the insurer to initiate steps to recover the amount paid to the vehicle owner. It also instructed the police to prosecute the culprits and file a final report within six months.
The petitioner is a General Insurance Company. One Mr.G.Gabirial took a policy covering the TATA SUMO VICTA EX Car belonging to him and bearing Regn.No.TN-22 BZ 9056. The said vehicle was found missing from 06.11.2011 onwards. On a complaint made by Mr.G.Gabirial to the Inspector of Police, Nazarethpettai Police Station, a case was registered in Crime No.658/2011 on 09.11.2011. Despite the steps taken by Investigating Officer, the vehicle could not be traced. Therefore, on 10.04.2012, the Investigating Officer issued a Certificate stating that the vehicle was not traceable. (It is not known as to what has happened to the further fate of the case.). Relying on the said certificate, Mr.G.Gabirial made a claim for a sum of Rs.3,40,000/- from the petitioner under the Insurance Policy. Accepting the said claim, the petitioner paid a sum of Rs.3,40,000/- to Mr.G.Gabirial, on 23.05.2012, by means of a cheque.
2. In the meanwhile, the above said vehicle was found moving on Karur – Dindigul Road on 10.03.2012 and the same was intercepted at 10.00 a.m. by one Mr.M.Mahesh, Inspector of Police, attached to the Prohibition Enforcement Wing Police at Karur. He found that one Mr.Ramachandran @ Karuppaiah @ Ramakrishnan @ Radhakrishan, S/o.Silaiappan, was in charge of the vehicle. The vehicle was found carrying illicit liquor in contravention of the provisions of the Tamil Nadu Prohibition Act, 1937 (hereinafter referred to as “the Act”). The said Inspector of Police attached to Prohibition Enforcement Wing Police at Karur arrested the accused and seized the vehicle and brought them to the police station. He registered a case in Crime No.74/2012 under Section 4(1)(aaa) read with Section 4(1-4) of the Act and Rules 5 & 6 of TNRS Rules, 2000 as well as under Sections 420, 468 and 471 of the Indian Penal Code.
3. Admittedly, the vehicle was not produced before the jurisdictional Magistrate to whom FIR was forwarded by the Police. Instead, the respondent herein, who is the Prohibition Officer for Karur District, appointed under Section 25 of the Act, initiated proceedings for confiscation of the vehicle under Section 14(4) of the Act. During the course of the proceedings, the respondent issued a notice to Mr.Gabirial, namely the owner of the vehicle. Mr.Gabirial submitted his reply stating that the vehicle was stolen away long before and in respect of the same, on his complaint, a case had been registered by the Inspector of Police, Nazarethpettai Police Station. He also submitted that he had received a sum of Rs.3,40,000/-, as compensation, from the petitioner/Insurance Company under the Policy of Insurance, based on the certificate issued by the Inspector of Police, Nazarethpettai Police Station that the vehicle was not traceable. Thereafter, the respondent did not choose to either inform the Inspector of Police, Nazarethpettai Police Station about the seizure of the vehicle or to the petitioner/Insurance Company. He simply passed final order on 27.12.2012 in Na.Ka.No.142/Ku.Kaa.Ka/MVA/ Karur/2012, thereby ordering confiscation of the said vehicle under Section 14(4) of the Act.
4. Admittedly, the petitioner was not aware of the said proceedings. Subsequently, the respondent, in pursuance of the above confiscation order, brought the said vehicle for sale in public auction. At that time, the petitioner came to know of the above confiscation order. Immediately, the petitioner approached the respondent and made a claim for the vehicle. The respondent issued proceedings, dated 25.01.2013, permitting the petitioner to take back the vehicle, after paying a sum of Rs.3,25,000/- towards the cost of the vehicle. Challenging the same, the petitioner is before this Court with this writ petition.
5. When writ petition came up for hearing on 13.02.2013, this Court granted interim injunction restraining the respondent from auctioning the vehicle. In pursuance of the same, the vehicle has not been auctioned and the same is now in the custody of the
