15.01.2025 Sl. No.: 10 Court No.30 BM CRR 796 of 2023 Md. Mirajuddin Shah & Anr.

Vs.

Industrial Bank Limited Zonal Mr. Manas Ajai Sonkar … for the petitioner Mr. Subhankar Chakraborty Ms. Ruchira Manna … for the opposite party

1. The present revisional application has been preferred praying for quashing of the proceedings being CS No.107142 of 2018 under Sections 34/120B/415/418/420 of the Indian Penal Code, pending before the learned CMM, Calcutta.

2. From the materials on record, it appears that the parties had entered into a Hire Purchase Agreement and due to default in payment of monthly instalments, the complainant company has taken possession of the vehicle in question as per the terms and conditions of the agreement.

3. The agreement of hire purchase also includes a clause for Arbitration but the complainant (company) in the present case has chosen to initiate the present criminal case against the petitioner herein who allegedly defaulted in re-payment of loan as per the Loan-cum-Hypothecation Agreement.

4. The said nature of transaction remains in the position of hire till the hirer (petitioner herein) exercises his option of purchase by making full payment towards the goods purchased

5. Registration of the said vehicle in such cases may be made showing the hirer as registered owner with an endorsement of hire purchase in favour of the owners. The terms and conditions of the said hire purchase agreement has been clearly laid down in the said agreement which includes an agreement of arbitration.

6. The present complaint filed by the opposite party/complainant is in respect of the said nonpayment of EMI in respect of the said vehicle in connection with the hire purchase agreement between the parties.

7. Herein the opposite party has initiated the proceedings against the petitioners as he is a defaulter in repayment of loan and the vehicle in question was repossessed.

8. From the documents relating to the case in the case diary placed by the State, there is no challenge as to the legality of the Hire purchase agreement and the agreement for arbitration.

9. Admittedly there has been a breach of contract (Hire purchase agreement) as prima facie the petitioner has failed to perform his part of the agreement.

10. An agreement with an arbitration clause survives/exits even after there is a breach, as the seed of arbitration which is planted at the time of the agreement, germinates only when there is a breach of performance. The parties right and liabilities depends on the order/award in the arbitration.

11. Admittedly, the Arbitration Clause has not been invoked by either parties in this case.

12. In Ramesh Chandra Gupta vs. State of Uttar Pradesh and Ors., 2022 LiveLaw (SC) 993, Criminal Appeal No(s). ……… of 2022 (Arising out of SLP (Crl.) No(s). 39 of 2022), the Supreme Court held:-

―15. This Court has an occasion to consider the ambit and scope of the power of the High Court under Section 482 CrPC for quashing of criminal proceedings in Vineet Kumar and Others vs. State of Uttar Pradesh and Another, (2017) 13 SCC 369 decided on 31st March, 2017. It may be useful to refer to paras 22, 23 and 41 of the above judgment where the following was stated:

―22. Before we enter into the facts of the present case it is necessary to consider the ambit and scope of jurisdiction under Section 482 CrPC vested in the High Court. Section 482 CrPC saves the inherent power of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any court or otherwise to secure the ends of justice. 23. This Court time and again has examined the scope of jurisdiction of the High Court under Section 482 CrPC and laid down several principles which govern the exercise of jurisdiction of the High Court under Section 482 CrPC. A three-Judge Bench of this Court in State of Karnataka v. L. Muniswamy (1977) 2 SCC 699 held that the High Court is entitled to quash a proceeding if it comes to the conclus