In a recent legal battle, an intriguing case unfolded involving a dispute over vehicle ownership. The court delved into intricate legal provisions and analyzed the evidence meticulously. Stay tuned to learn more about the court’s detailed legal analysis and its impact on the final outcome of the case.
Facts
- The appellant financed an amount of Rs.19,83,360/- to the original owner under a finance agreement.
- Original owner failed to clear the loan and an arbitration award was passed against him in favor of the appellant.
- Original owner, in collusion with officials, managed to cancel the appellant’s entry as the financer in the registration certificate and obtain a clearance certificate fraudulently.
- Respondent No.1 purchased the vehicle from the original owner and got it registered in his name without the knowledge of the appellant.
- The High Court erroneously released the vehicle in favor of respondent No.1 despite the fraudulent actions of the original owner and lack of ownership rights for respondent No.1.
- The appellant raised objections against the release of the vehicle, citing the fraudulent cancellation of the finance agreement entry and the issuance of a clearance certificate in favor of the original owner.
- The Assistant Regional Transport Officer later canceled the cancellation of the finance agreement and no-objection certificate, acknowledging the fraudulent actions of the original owner.
- The High Court allowed the application under Section 482 Cr.P.C. and set aside the order of the Chief Judicial Magistrate.
- The High Court directed the release of the vehicle in favour of respondent No.1 Ramjan Ali.
- The outstanding amount in favour of the appellant as per the award dated 26.03.2018 is Rs.25,97,053/-.
- The Chief Judicial Magistrate noted the outstanding amount in the case.
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Arguments
- The FIR was registered and investigation was initiated by the Sub-Inspector
- It was discovered that the original owner, Amarnath Yadav, had died of cancer on 08.07.2019
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Analysis
- The appellant entered into a hire purchase agreement with the original owner Amarnath Yadav on 22.10.2016.
- An entry regarding hypothecation was made in the registration certificate for vehicle No UP 51 AT 5709.
- Section 51(1), (3) and (4) of the Motor Vehicles Act, 1988 contain provisions regarding vehicles under hire-purchase agreements.
- Section 51(1) mandates the registering authority to make an entry in the registration certificate regarding the existence of the hire-purchase agreement.
- Section 51(3) allows for the cancellation of this entry upon proof of termination of the agreement.
- Section 51(4) states that no transfer of ownership entry shall be made without the written consent of the person specified in the registration certificate as part of the hire-purchase agreement.
- Rule 61 of The Central Motor Vehicle Rules, 1989 deals with the termination of hire purchase agreements.
- Rule 61 outlines the process for making an entry of termination of a hire-purchase agreement in Form 35 signed by the registered owner and the financier.
- The registration certificate issued in Form 23 by the Regional Transport Office, Basti showing the name of Amarnath Yadav with no entry of the appellant has been declared null and void.
- The order of the Assistant Divisional Transport Officer dated 29.06.2019 cancelling the registration certificate has not been set aside or stayed by any competent court.
- The High Court erred in ignoring the effects and consequences of the order dated 29.06.2019 passed by the Assistant Divisional Transport Officer.
- The High Court’s reliance on the judgment in Manoj and Ors. vs. Shriram Tpt. Finance Co. Ltd. was misplaced as the circumstances of the current case were different.
- The High Court failed to consider that the certificate of registration in the name of Amarnath Yadav was declared void and non est on 29.06.2019.
- The High Court’s decision to release the vehicle in favor of respondent No.1 was deemed unsustainable due to the cancellation of the registration in favor of Amarnath Yadav on 29.06.2019.
- The order of the Assistant Divisional Transport Officer cancelling the registration certificate based on fraudulent documents submitted by the original owner was upheld.
- The statutory authority’s conclusion that the appellant’s entry as the person in whose favor the vehicle was hypothecated was fraudulently deleted was considered.
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Decision
- Vehicle No UP 51 AT 5709 to be released in favor of the appellant
- Chief Judicial Magistrate, Sitapur to ensure vehicle is received back from respondent No.1 and released to the appellant
- Terms and conditions for release to be as deemed fit and proper
- Exercise to be completed within four weeks
- The appeal is allowed
Case Title: SREI EQUIPMENT FINANCE LTD. Vs. RAMJAN ALI (2021 INSC 3)
Case Number: Crl.A. No.-000006-000006 / 2021
