1. The writ petitioner who is the registered owner of a car, Innova 2.0 G3 with Registration No. KL-4/S-3655, has sought for a direction to the second respondent, Sub Inspector of police, north Police Station, Alappuzha to register a case on the complaint submitted by her dated 22-7-2006 regarding the theft of her vehicle and also for a direction to have an expeditious recovery of the above vehicle and produce the same before the Judicial First Class Magistrate, Alappuzha having the jurisdiction over the area. It is submitted that the petitioner had executed loan agreement as per which she had availed finance from the third respondent, Financier with the condition that the same shall be repaid in equal monthly instalments. Blank cheques were also obtained by the financier as a further security for the transaction apart from the vehicle. The monthly payment was at the rate of Rs. 14,000/- and the amount is to be paid in 57 instalments. Agreement is dated 13-2-2005. Owing to financial stringency, the petitioner could not remit tow instalments. A lawyer notice was received from the third respondent directing to clear the dues within seven days from the date of the notice. Notice dated 12-7-2006 was received on 20-7-2006 as it is dispatched only on 18-7-2006. On 21-7-2006 before the expiry of the date mentioned in the notice, the husband of the petitioner had gone with the vehicle to Alappuzha Town and near the Y.M.C.A, Alappuzha, four goondas came to him and snatched away the key of the vehicle and drove away the vehicle. The husband of the petitioner rushed to the police station and narrated the incident, but the police refused to register the case. Thereafter, the petitioner who was out of station, on her return filed complaint on 22-7-2006 to the Sub Inspector of Police, North Police Station, Alappuzha. A receipt for having received the complaint is produced as Ext.P2. Thereafter, the petitioner received Ext.P3 communication from the third respondent directing him to pay the entire amount due within seven days failing which the vehicle would be disposed of.
2. The third respondent, financier has filed a counter statement detailing the terms of the agreement, ie. a sum of Rs. 7 lakhs was availed by the petitioner on the basis of a loan-cum-hypothecation agreement executed by the petitioner and that the same is endorsed in the R.C of the vehicle. It is asserted that as per the terms of the agreement, the respondent/financier is entitled to take possession of the vehicle in case of default of instalments. It is further stated that in terms of the agreement, the petitioner has agreed that she shall not prevent the Bank or its agents from taking possession of the vehicle and that Bank's representative will have unrestricted right or entry to the premises where the vehicle is kept. Copy of the agreement has also been produced. According to the third respondent, they are entitled to repossess the vehicle as per the terms of the agreement.
3. Counsel for the petitioner has relied on mainly the decision of the Punjab & Haryana High Court in Tarun Bhargabva v. State of Haryana, 2003(3) KLT 397 (P & H High Court) where in the High Court has considered the rights of the financier as per the hypothecation agreement in the background of Sections 172 and 176 of the Contract Act and the distinction regarding the instance of the hire purchase in terms of the Hire Purchase Act, 1972 and the implication of the agreement providing for re-possession and held that such a clause to take possession of the security without intervention of the court will be void under Section 23 of the Contract Act. As in the case of loan transaction, the ownership of the security will be of the borrower and the principle applicable to hire purchase agreement will not apply. It was a similar case as in the instant case that was considered by the High Court of Punjab & Haryana. The petitioner has also relied on the decision of this Court in Katteri Modieen kutty Haji v. State of Kerala, 2002(1) KLT 835 wherein the Division Bench of this Court consisted of the Chief Justice Shri B.N.Srikrishna as he then was, held in a similar instance that police is obliged to register a crime and conduct investigation and proceed in accordance with the provisions of the Code of Criminal Procedure. The counsel has also relied on the decision of the Supreme Court in K.L.Johar & b Co. v. Dy.Commercial Tax officer, AIR 1965 SC 1982, wherein Supreme Court has considered the distinction between the transfer of property in the goods with respect to a movable property in the case of a hire purchase agreement as distinct from other transactions and recognized the right of the hirer in a hire purchase transaction to repossess the vehicle without the intervention of the court. The above distinction has also been explained by the Supreme Court in Charanjit Singh Chadha v. Sudhir Mehra, (2001) 7 SCC 417. The decision of the Delhi High court in Bhagya Products v. Commissioner of Police, 2003(2) KLT 1054 (Delhi High Court) was also relied on wherein the court has condemned the predatory practice adopted by certain finance companies.
4. Counsel for the Finance Company has relied on the decision of the Supreme Court in Orix Finance (India) Ltd v. Shri Jagmander Singh, 2006(1) KLT 814 (SC) wherein the Supreme Court has observed that in respect of contractual matters unless the parties succeed in showing that the contract is unconscionable or opposed to public policy the scope of interference in writ petitions in such contractual matters is practically non-existant. Counsel has also relied on the decision in Re, S.Y.C.W. & S.Mills (AIR 1969 MYSORE 280, and State Bank of India v. Quality Bread Factory, Batala (AIR 1983 P & H) 244 and also section 51 of the Motor Vehicles act which enables the financier to have the R.C transferred in his name.
5. I find that the stress of the counsel for the third respondent, financier is on the terms of the agreement, i.e Ext.R3(a) wherein it is provided that the financier can in case of default of the instalments or instalment forthwith take physical possession of the vehicle either by itself or through its agents and sell the same and also that the financier shall have unrestricted right of entry to any premises where the vehicle is kept. Hence, according to him, the petitioner is not entitled to contend against the above terms.
6. I find that the decision of the Supreme Court in Orix Finance (India) Ltd's case (op.cit) is not applicable in the circumstances as the dispute in the above case was in between the hirer in a hire purchase transaction and the person who possessed the vehicle. Of course, writ jurisdiction cannot be exercised regarding contractual matters, the court has observed, unless the terms are unconscionable or opposed to public policy. In the instant case it is the contention of the counsel for the petitioner that the above term permitting forcible taking possession of the vehicle is opposed to public policy. So far as the State Bank of India's case (op.cit) is concerned, the same is with respect to the key loan and cash credit facility as per which the hypothecated goods were kept in the joint custody of the financier as well as that of the borrower. The context is entirely different. The same is the case with the decision in Re, S.Y.C.W. & S.Mills (op.cit) wherein the matter related to the machineries which were hypothecated, of a closed down factory. Section 51 of the Motor Vehicles Act envisages a perfectly legal transfer of ownership as provided by the statute. The same cannot be relied on to aid the stance of the third respondent. I am in fully agreement with the decision of the Punjab & Haryana High Court in Tarun Bhargava's case (op.cit). The right to take possession by force overcoming the resistance if any and thereby igniting to a law and order situation etc. cannot be conferred by agreement by the party who is in need and who would be agreeable to sign on the dotted lines. Enforcing the terms of the agreement by availing the services of hired hoodlums is sought to be justified on the basis of the allegedly legally valid terms of the agreement. I find that the above terms in the agreement that the financier will have right to take physical possession of the vehicle can be enforced only through lawful means, failing which same would be equivalent to giving license to unleash violence which cannot be permitted in the State where law enforcement is entrusted with the State machinery. The contention that such type of agreement are an extension of the concept of pledge and hence the financier is entitled to as per the terms of the Indian Contract Act to enforce the terms of agreement to take physical possession is not supported by the provisions of the Constitution or the laws.
In the circumstances, I find that the petitioner is entitled to the relief sought for. The second respondent is legally bound to register case and investigate when a cognizable offence is reported to him. Hence, the second respondent, Sub Inspector of Police, North Police Station, Alappuzha is hereby directed to register the case on the complaint of the petitioner and investigate the matter and recover the vehicle, KL-4/S-3655, and produce the same before the court. The writ petition is allowed as per the above terms.