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2002 Supreme(P&H) 608

PUNJAB & HARYANA HIGH COURT
R.C.Kathuria, J.
M/s Ashok Leyland Finance Limited
Versus
State Of Haryana
Criminal Misc. No. 37251-M of 2001,
Decided On : MAY 29, 2002

The hirer does not become the absolute owner of the vehicle under a hire purchase agreement until the payment of all instalments due, and the financer has the right to claim interim custody of the vehicle until the payment of the instalments due.

Headnote:

hire purchase agreement - ownership rights - Motor Vehicles Act, 1988, Section 230 - M/s Shriram Transport Finance Co. Ltd. v. Shri R. Kaishiulla Khan and others, 1993(2) RCR(Criminal) 175 (Karnataka) (DB) : 1993 Cr. L.J. 1069, Manipal Finance Corpn. Ltd. v. T. Bangarappa and another, 1994 Supp. (1) S.C.C. 507, Charanjit Singh Chadha v. Sudhir Mehra, 2001(4) RCR(riminal) 192 (SC) : 2002(1) Civil and Rent Judicial Reports 426 - Section 230 of the Motor Vehicles Act, 1988 recognizes the hirer as the owner to retain the registration certificate and obtain necessary compliance under the Act. The hirer does not become the absolute owner until the payment of all instalments due under the hire purchase agreement. The financer has the right to claim interim custody of the vehicle until the payment of the instalments due.

Fact of the Case:

The petitioner challenged the legality of the order directing the release of a vehicle under a hire purchase agreement to the registered owner, who had not paid the entire instalments, after the vehicle was impounded by the Transport Officer.

Finding of the Court:

The court found that the registered owner had not paid the entire instalments due under the hire purchase agreement, and the petitioner, as the financer, had the right to claim interim custody of the vehicle until the payment of the instalments due.

Issues: Ownership rights under hire purchase agreement, legality of releasing the vehicle to the registered owner who had not paid the entire instalments, interpretation of Section 230 of the Motor Vehicles Act, 1988.

Ratio Decidendi: The hirer does not become the absolute owner until the payment of all instalments due under the hire purchase agreement. The financer has the right to claim interim custody of the vehicle until the payment of the instalments due.

Final Decision: The impugned orders were set aside, and it was directed that the vehicle be released to the petitioner on furnishing necessary Supardariama containing the terms of the release to the satisfaction of the Chief Judicial Magistrate.

Judgment

R.C.Kathuria, J.

1. The petitioner has challenged the legality of the order dated 18.8.2001 passed by the Additional Sessions Judge, Sonepat whereby order dated 27.7.2000 passed by the Chief Judicial Magistrate, Sonepat directing the release of the vehicle on Spurdari to respondent No. 2 was affirmed.

2. A few facts need to be noticed in order to decide the controversy raised in the present petition. Raj Kumar (respondent No. 2 herein) had entered into hire purchase agreement dated 2.1.1996 with the petitioner in order to avail facility of finance to the extent of Rs. 2 lacs for the purchase of Mahindra and Mahindra Jeep bearing registration No. HR-10B-6819. On 24.5.2000, the said jeep was challaned and impounded by the Transport Officer, camp Sonepat. The petitioner applied for the release of the said vehicle to the Court of the Chief Judicial Magistrate, Sonepat. Vide order dated 27.7.2000, the Chief Judicial Magistrate, Sonepat directed the release of the vehicle to the registered owner that is respondent No. 2. Aggrieved by that order the petitioner filed Criminal Misc. Appeal No. 24 of 2000 dated 27.8.2000. The same was dismissed vide order dated 18.8.2001 by the Additional Sessions Judge, Sonepat. It is these orders which have been challenged in the present petition.

3. I have heard learned counsel for the petitioner and State counsel for respondent No. 1 at length. None has appeared on behalf of respondent No. 2.

4. It has been contended by the counsel for the petitioner that in terms of agreement dated 2.1.1996, the petitioner continues to be the owner of the vehicle in question and as respondent No. 2 has committed default in the payment of instalments and has not paid the entire instalments of the hire purchase money, therefore, he has violated the terms of the hire purchase agreement dated 2.1.1996 and for that reason the petitioner has a right to get the possession of the vehicle in question and get the released in favour of the petitioner from the Court of the Chief Judicial Magistrate, Sonepat in favour of the petitioner being the financier and owner of the vehicle. In support of the stand taken reliance was placed on M/s Shriram Transport Finance Co. Ltd. v. Shri R. Kaishiulla Khan and others, 1993(2) RCR(Criminal) 175 (Karnataka) (DB) : 1993 Cr. L.J. 1069, Manipal Finance Corpn. Ltd. v. T. Bangarappa and another, 1994 Supp. (1) S.C.C. 507 and Charanjit Singh Chadha v. Sudhir Mehra, 2001(4) RCR(riminal) 192 (SC) : 2002(1) Civil and Rent Judicial Reports 426.

5. The State Counsel has justified the orders of the Courts below for the reasons stated therein.

6. It is apparent from the orders dated 27.8.2000 passed by the Chief Judicial Magistrate, Sonepat that he had directed the vehicle in question to be given on Spurari to the registered owner on furnishing Spurdarinama for a sum of Rs. 2 lacs and two sureties in the like amount on the terms specified in the order. The Additional Sessions Judge, Sonepat while dealing with the respective claims of the parties had observed in paras 6 to 9 of the order as under :-

"6. There is no dispute about this fact that Raj Kumar has got financed the jeep in question from M/s Ashok Leyland Finance Ltd. and has taken a loan of Rs. 2,53,000/- which was to be repaid in 23 monthly instalments. As per case of Raj Kumar, he had paid a sum of Rs. 2,25,700/- to the revisionist. In this case, the vehicle was not impounded by the Finance Company but it was impounded by the Transport Inspector under th Motor Vehicle Act. With regard to the non-payment of the instalment, if any, it is a civil liability and for that reason if the vehicle is impounded by the Transport Authority under the Motor Vehicle Act, then it can not be released on Superdari to the Finance Company. The Finance Company can proceed under the law as per the terms of the agreement to recover the amount and the vehicle in question can not be released on Superdari in his favour.

7. My view in this regard is fortified b





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