Under challenge in these petitions is the common order dated 2.5.2019

passed by the learned Chief Judicial Magistrate, Thrissur, by which, the custody

of a car, which was the subject matter of a proceeding under the Securitisation

and Reconstruction of Financial Assets and Enforcement of Securities Interest

Act, 2002 (for brevity, 'SARFAESI Act') was given to the de facto complainant/

bank. The de facto complainant as well as the accused, being aggrieved by the

order, have come up with separate petitions.

2.

Brief facts necessary to be noticed for deciding these petitions are

that a sports utility vehicle was purchased by the 2^nd respondent by availing a

loan from the erstwhile State Bank of Travancore, which has now merged with

the State Bank of India. Her mother and brother stood as guarantors. When the

EMI’s were defaulted, the respondent Bank initiated proceedings under the

'SARFAESI Act'. A notice under Section 13(2) of the Act was initially issued.

However, the borrowers did not respond. The Bank then filed a petition before

the learned Chief Judicial Magistrate, Thrissur under Section 14 of the Act

seeking possession of the vehicle and to realize the amounts due. A

Commissioner Advocate was appointed to seize the vehicle by the learned

Magistrate. However, he was not able to locate the whereabouts of the car. This

prompted the Bank to approach the police and lodge a complaint alleging

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conversion of the vehicle and the offence of cheating. Crime No.2531 of 2016 of

the Town East Police Station was registered, inter alia, under Sections 406, 420

r/w. Section 34 of the IPC. Later, the respondents 2 and 3 were arrested and the

vehicle was seized by the police. Both sides filed applications before the learned

Magistrate seeking interim custody. The learned Magistrate allowed the

application filed by the respondent Bank and dismissed the application filed by

the 2^nd respondent.

3.

The respondent Bank is aggrieved by that part of the order by

which, the Bank was restrained from alienating the vehicle. The 2^nd respondent

contends that she being the registered owner of the vehicle, the interim custody

should have been given to her.

4.

Heard Sri.Easwaran, the learned counsel appearing for the de facto

complainant, who is the petitioner in Crl.M.C.No.4492/2019, Smt. C.M.Charisma,

the learned counsel appearing for the accused, who is the petitioner in

Crl.M.C.No.4724/2019, and the learned Senior Public Prosecutor.

5.

There is no dispute that a medium term loan (Hire Purchase) was

availed by the 2^nd respondent for purchase of a car from the State Bank of

Travancore, on 2.6.2015, for a sum of Rs.15,80,868/-. Towards collateral

security, the party respondents had created security interest by hypothecation of

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the car as is evident from Annexure-A2 Hypothecation Agreement. The loan

amount outstanding as on 22.01.2018 was Rs.15,46,000/-. The records reveal

that notice under Section 13(2) of the Act was issued on 29.08.2016 and the

same was served on the respondents on 7.9.2016. However, they have not

effected any payment till date. Annexure-A4 order dated 16.02.2018 of the

learned Magistrate reveals that though a Commissioner Advocate was appointed

to take possession of the vehicle, he was not able to locate the vehicle. Finally,

it was on 17.01.2019 that the vehicle was seized by the police.

6.

The SARFAESI Act has been enacted with a view to provide a

special procedure for recovery of debts due to the banks and the financial

institutions. In the event of default by a borrower, the Act authorizes the lender

to issue a demand notice to both the borrower and the guarantor to pay off the

dues within the statutory period. The Act also enables the secured creditor to

approach the learned Magistrate to get possession of the vehicle so that they

can expeditiously sell the assets and realize the amount due.

7.

In the cases on hand, the vehicle is the subject matter of a

hypothecation agreement between the