R.C.Kathuria, J.

1. The petitioners seek quashing of FIR No. 913 dated 22.11.2000 registered under Sections 406 and 420 of the Indian Penal Code with Police Station Sadar Hisar.

2. In order to focus the controversy involved in the petition, a few facts need to be noticed. Present case came to registered on the report lodged by Nand Kishore Aggarwal, Branch Manager, Haryana Financial Corporation, Hisar. It is stated therein that Haryana Financial Corporation, Hisar (hereinafter referred to as `the Corporation) had advanced loan of Rs. 7.94 lacs as term loan, Rs. 7.40 lacs as W.C.T. loan and Rs. 22.50 lacs as Additional Term loan to M/s Deva Disc and Tiller, Hisar, petitioner No. 1 through its partners Anil Kumar son of Dev Raj and Des Raj son of Lekh Ram, who are petitioner Nos. 2 and 3 in the present petition. In all total amount of Rs. 37.84 lacs were given to the aforesaid partnership concern, accused No. 1 on 13.3.1995, 22.7.1995 and 11.11.1997. As per terms of loan agreement, the borrowers had undertaken not to replace, remove, mortgage the hypothecated machinery/stock or raw material/finished goods affixed/stored in the factory premises mortgaged and hypothecated to the Corporation. At the time of taking over of possession of the unit in the month of September 2000 by the Corporation, it was found that above mentioned borrowers had removed the following items :-

Sr.No. Name of the machinery Nos. 1. Cutting Press hydraulic with Motor 3 HP Ujala Make 1 2. Turning Machine 10 size heavy duty with 2 HP Motor 1 3. Turning Machine 12 size heavy duty with 2 HP Motor 1 4. Drill Machine 2 5. Drill Machine (Parts missing) 1 6. Welding set 1 7. Welding set (Parts missing) 1 8. Tools 1 9. Main Hammer 250 capacity 15 HP motor 1 10. Rolling Mill with 100 HP Motor & reduction dear gear box 1 11. Oil Tank make Disc Hard & Temp. Machine 1 12. Farma of Press 3 13. Furnace with motor, heated sheets & oil tank 1 14. MS Angle of different size 20 tons value 15. MS Channel of different size 15 tons at 16. MS Plate sheets of different size 26 tons ------------------ Rs. 9.88 lacs."

3 On inquiry being made no satisfactory explanation was given by the above named accused for removal of the machinery and stocks from the premises of the unit. Therefore, it was concluded that machinery/stock had been misappropriated by the petitioners-accused and the proceeds of the security had been diminished. It was alleged in the report lodged that machinery and stock was held by the accused as the proceeds of the Corporation as they have no title in the said machinery and stock till the entire due amount to the Corporation was paid by them. Accordingly, it was prayed that case be registered and action be taken against them. On these allegations, the present case came to be registered under aforesaid sections.

4. While seeking quashing of the FIR in question the stand taken on behalf of the petitioners is that the dispute involved is purely of a Civil nature and from the circumstances of the case no criminal offence is made out against the petitioners-accused. In support of the stand taken, it was pleaded that ownership of the hypothecated goods remained with the petitioner-firm and there being no entrustment of the property by the Corporation, the lodging of the report at the behest of the Corporation was abuse of the process of the Court.

5. In pursuance to the notice given to the respondents, reply had been filed by respondent No. 1, wherein it had been stated that the Corporation had advanced at the first instance loan of Rs. 16.10 lacs including working capital loan of Rs. 7.40 lacs on 29.12.1994 to the petitioners-concern for setting up a unit for manufacture of Discs with installed capacity of 90,000 Discs per year. Initially, it was sole proprietorship concern of Anil Kumar, petitioner No. 2. On 11.4.1997, additional loan of Rs. 22.50 lacs was advanced to the petitioners-concern for setting up a rolling mill and it is at this stage Des Raj son of