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2020 Supreme(P&H) 1024
IN THE HIGH COURT OF PUNJAB AND HARYANA
Anil Kshetarpal, J.
Au Small Finance Bank Ltd. - Appellant
Versus
State Of Haryana And Another - Respondent
Criminal Revision No. 1008 of 2020
Decided On : 24-07-2020
Deepika Mittal, Advocate, Chetan Sharma, Advocate
A finance company or bank, not being the registered owner of a vehicle, cannot claim interim custody of the vehicle based solely on hypothecation.
Headnote:
Hypothecation - Interim Custody - The court dismissed the application for grant of interim custody of a vehicle to the petitioner-Bank, holding that the bank, not being the registered owner, had no right to claim the vehicle based on hypothecation.
Fact of the Case:
The petitioner-Bank sought interim custody of a vehicle hypothecated with the bank by the registered owner, who had failed to pay the loan amount and interest. The court held that the application was not maintainable as the bank was not the registered owner of the vehicle.
Finding of the Court:
The court found that the petitioner-Bank, not being the registered owner, had no right to claim the vehicle based on hypothecation. The judgments cited by the petitioner were not applicable as they pertained to different circumstances.
Issues: The main issue was whether the petitioner-Bank, based on hypothecation, had the right to claim interim custody of the vehicle despite not being the registered owner.
Ratio Decidendi: The court's decision was based on the fact that the petitioner-Bank was not the registered owner of the vehicle and therefore had no legal right to claim it based on hypothecation alone.
Final Decision: The court dismissed the application for grant of interim custody of the vehicle to the petitioner-Bank, as the bank's claim based on hypothecation was not maintainable.
JUDGMENT
Anil Kshetarpal, J. - The challenge herein is to the order passed by the learned Additional Sessions Judge, Ambala, dismissing the application, filed by the petitioner, for grant of sapurdari/interim custody of the vehicle bearing registration No. HR-51-BB-2968 to the petitioner-Bank.
2. The petitioner-Bank claims that the vehicle in question was hypothecated with the bank and since, the registered owner-Rajesh Kumar has failed to pay the principal amount as well as interest at the agreed rate and consequently, violated the terms and conditions of the loan, therefore, the Bank has lien and first charge over the vehicle in question.
3. Admittedly, the petitioner-Bank is not the registered owner of the vehicle. The vehicle is only alleged to have been hypothecated with the Bank. Therefore, the application filed on behalf of the Bank has been held to be not maintainable.
4. Learned counsel for the petitioner relies upon the judgment of the Supreme Court of India in Ganga Hire Purchase Pvt. Ltd. v. State of Punjab, (1999) 5 SCC 670 . This Court has carefully read the aforesaid judgment, wherein the validity of the order of confiscation of the vehicle under Section 60(3) of the Narcotic Drugs & Psychotropic Substances Act, 1985 was in question. The Supreme Court held that the finance company has no right to get the vehicle, which is liable to be confiscated. Learned counsel for the petitioner has further relied upon the judgment in Union of India v. Dinesh Kumar Verma,2005 9 SCC 630 . In this brief order, the Hon'ble Supreme Court set aside the order of release of the vehicle on sapurdari.
5. The learned trial Court has specifically held that the petitioner is not the registered owner of the vehicle. In the revision petition, the petitioner has not claimed that the Bank is the registered owner. The petitioner only claims that the vehicle has been hypothecated with the Bank by the registered owner. The agreement inter se between the registered owner and the Bank does not give any right to the petitioner-Bank to claim the vehicle as a registered owner. In view thereof, there is no ground to interfere.
6. Dismissed.
7. The miscellaneous application(s) pending, if any, shall also stand disposed of in terms of the main order.
