Bona fide purchasers are entitled to possess vehicles even amid allegations of fraud against the seller, pending a thorough judicial inquiry into the fraud.

ORDER

The 1st petitioner herein, M/s. Sai Service Private Limited is a company registered under the Companies Act, 1956. They contend that they are the authorized sales and service partner for the vehicles manufactured by Maruti Suzuki India Ltd. It is contended that the 1st petitioner has a subsidiary by name “M/s. True Value”, which is set up to be an authorized reseller of used cars.

2. According to the petitioner, a certain Febin P. Ibrahim was the “Team Leader” in charge of “M/s. True Value” showroom at Kolencherry, Piravam, and Koothattukulam. Being the team leader, and the authorized signatory, the aforesaid Febin, was empowered to deal with and sell the cars.

3. While so it came to the notice of the petitioner that with the intention to cause wrongful loss to the petitioners herein and to gain unlawfully, the aforesaid Febin P. Ibrahim forged records and thereafter sold cars bearing registration Nos. KL-40-K-9867, KL-39-B-2409, KL-01-BB-0019, KL-63-C-6364, KL-34-B-0168, and KL-40-B-9428 and thereby caused a loss of Rs.11,35,000/-. Based on the complaint lodged by the 2nd petitioner, a crime was registered interalia under sections 406, 420, and 408 of the IPC. A Tata Indica Car bearing Registration No. KL-01-BB-0019, a Volkswagen Polo car bearing No. KL-63-C-6364 and a Maruti Alto Car bearing No. KL-40-B-9428 were seized by the Police. Records reveal that the aforesaid Febin P. Ibrahim, acting as the authorized signatory of the 1st petitioner herein, had sold the vehicles to the 2nd respondent in these cases, and registration has also been transferred to their name.

4. After the seizure of the cars, separate applications under Section 451 of the Code were filed before the learned Magistrate by the petitioner herein and also the 2nd respondent in all these cases, who had respectively purchased the cars from the authorized signatory. The learned Magistrate before whom the application for interim custody had come up considered the rival contentions and took note of the fact that the second respondent herein in all these cases were bonafide purchasers for value and they were in possession of the vehicle and they being the persons in whose name the R.C. book also stood, proceeded to grant the interim custody of the vehicles to the 2nd respondents by imposing appropriate conditions.

5. The aforesaid order is under challenge in this petition, which is filed under section 482 of the Code of Criminal Procedure .

6. Sri. Jayabal Menon, the learned counsel appearing for the petitioners, submitted that the order passed by the learned Magistrate cannot be sustained under law. According to the learned counsel, while passing the order, the learned Magistrate failed to take note of the fact that the 2nd petitioner herein was the defacto complainant and also that the allegations in the FIR were that the team leader Febin P. Ibrahim had manipulated records and had sold the vehicles without authority. It is submitted that as the possession of the vehicle and the transfer of the registration certificate was in pursuance to the commission of a crime, the registered owners were not entitled to claim custody of the vehicles. The learned counsel would further point out that the records which are produced as Annexures-3 to 7, which are the purchase agreement in respect of the vehicle, delivery receipts, Form Nos. 29 and 30 would show that the petitioners were entitled to possess the vehicles in terms of the original purchase. However, those documents were also not adverted to by the learned Magistrate.

7. The learned counsel appearing for the 2nd respondent opposed the submissions advanced by the learned counsel appearing for the petitioner. It is submitted that the learned Magistrate took note of the fact that the registration certificate of the disputed vehicles was with the second respondent in the respective cases. The 2nd respondent in the respective cases had also placed on record the original of the R.C. Book as well as the Insurance Certif