The judgment established that the nature of an agreement should be determined based on the intention of the parties, and that clauses enabling repossession without court intervention and forfeiture of instalments paid may be deemed void. It also clarified that in a loan transaction, the creditor cannot forcibly repossess the hypothecated item without court intervention.

Adarsh Kumar Goel, J.

1. This petition has been filed for quashing the FIR No.1237 dated 24.10.1997, under Sections 392/323/506/120-B of the Indian Penal Code (for short, the Code), Police Station City Gurgaon.

2. The above FIR was registered on a direction of the Chief Judicial Magistrate under Section 156(3) Cr.P.C. on a complaint filed by respondent No.2 (hereinafter referred to as the complainant), wherein it was stated that the complainant purchased a car for Rs.2,44,603/- through the accused petitioner (hereinafter referred to as the petitioner) In August, 1995 arid paid an initial amount of Rs.52.5M/- and paid 26 instalments of Rs.8944/- each amounting to Rs.2,32,544/- and though there was no default by the petitioner in the payment of instalments upto 20.10.1997, the petitioner alongwith others went to the place of the complainant and snatched the car from him by using a duplicate key which was with the accused. It is further slated that the complainant was the registered owner of the car and though he objected to the car being taken away, the petitioner used filthy language and pushed away the complainant and forcibly took away the car. It is also stated that the complainant was threatened with dire consequences, if he pursued his complaint with the consumer forum and thus, the petitioner committed an offence under Sections 323/506/392/120-B of the Code. It was further stated that though the accused had assured that relevant papers and second key of the car will be given to the complainant, no paper and second key of the car was handed over to the complainant.

3. In the petition filed in this Court, it is stated that the petitioner company was doing the business of a financier and had entered into an agreement under which if there are more than two consecutive defaults, the financier could take repossession of the vehicle. It is also stated that apart from.possession of the vehicle, the petitioner finance company was also entitled to balance amount of Rs. 1,10,796.95 paise and the act of taking possession of the car did not amount to an offence under Section 392 of the Code nor offences under Sections 323/506/120-B of the Code can be said to have been committed. It is also stated in the petition that post dated cheques were given by the compai-nant and after May, 1997 the Cheques were dishonoured, for which a notice dated 28.9,1997 was given and the petitioner had filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 for dishonour of the cheques, which was pending. The complaint is annexed to the petition as Annexure P-l1, which does not support this version and shows that the dishonoured cheques are dated 28.12.1997, 28.1,1998 and 28.2.1998, which are all after the date of repossession i.e. after 20.10.1997. It is further stated that the complainant has filed a civil suit, a copy of which is Annexura P-8. A reference to the plaint of the said suit, Annexure P-8, shows that the case of the complainant was that the petitioner had given 31 blank undated signed cheques. On a proposal for financing the car, the complainant/ plaintiff was made to sign blank agreement with an assurance that a copy of the agreement will be given to the complainant, which was never given; summary of agreement was given to the plaintiff, which was not as per the agreed terms; though all instalments were regularly paid, the vehicle was illegally snatched and on demand of the vehicle, the complainant was given threats, which has led to the filing of the complaint and in complaint proceedings, the plaintiff has been given possession of the vehicle on superdari. A declaration is sought that the agreement between the parties was null and void.

4. It is further stated in the petition that the petitioner had acted under an agreement, a copy of which was Annexure P-l and under the said agreement, the ownership was with the petitioner and the petitioner could repossess the vehicle at any time, forfeit the instalments paid