Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Central Motor Vehicles Rules 1989 |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Central Motor Vehicles Rules, 1989: r.61 – Termination of hire purchase agreement – Hire purchase agreement entered into by appellant financier with the original owner/purchaser of vehicle – While registering the vehicle, an entry regarding hypothecation was made in the registration certificate – Failure on part of original owner to pay installment of loan – Appellant referred dispute to arbitrator who passed award in favour of appellant for an amount of Rs.25,97,053/- – Subsequently, original owner filed application before the Regional Transport Office (RTO), Basti for cancellation of entry of appellant as person with whom vehicle was hypothecated – Resultantly, entry of appellant’s name in the registration certificate of the vehicle was cancelled and fresh registration certificate in Form 23 was issued in the name of original owner without any entry of hypothecation – Clearance certificate was also issued by RTO, Basti for transfer of the vehicle to Respondent No. 1 within the jurisdiction of registering authority, Sitapur – On 9.1.2019, when vehicle was taken into possession by four persons, respondent no.1 lodged FIR under ss.364 and 392 IPC – The vehicle was seized by police – Chief Judicial Magistrate in his order while rejecting the application of respondent No.1 for release noticed the claim of the appellant, who had filed objection to the release application – The award was also placed before the Magistrate – The Magistrate noticed the case of the appellant that original owner and the second owner had manufactured fraudulent documents and in collusion with the officials of RTO, Basti managed to get the clearance certificate – Magistrate rejected the application for release – Meanwhile, appellant had filed an application before RTO, Basti claiming that cancellation of entry of hypothecation in favour of the appellant in the registration certificate was based on forged documents – RTO, Basti passed order dated 29.06.2019 setting aside order of cancellation of finance agreement – Respondent no.1 filed application u/s.482 Cr.P.C. challenging order rejecting his application for release of vehicle – High Court allowed the application and directed release of vehicle in favour of respondent no.1 – On appeal, held: Order dated 29.06.2019 was passed in exercise of the statutory power of the registration authority under s.55(5) of the Act, the legal consequence of the said order was that registration certificate issued in Form 23 by RTO, Basti showing the name of only the original owner with no entry of appellant has been treated to be null and void – In consequence of that, all subsequent acts including registration certificate issued in the name of respondent No.1 by RTO, Sitapur became non est – Respondent No.1 although claimed that he was a bonafide purchaser but fact remained that he was beneficiary of fraud – High Court committed error in directing the release of vehicle in favour of respondent No.1 – Order of the High Court, thus, is unsustainable – Order passed for release of vehicle in favour of the appellant – Motor Vehicles Act, 1988 – s.55(5). |
Judge | Hon'ble Mr. Justice Ashok Bhushan |
Neutral Citation | 2021 INSC 3 |
Petitioner | Srei Equipment Finance Ltd. |
Respondent | Ramjan Ali & Ors. |
SCR | [2021] 1 S.C.R. 36 |
Judgement Date | 2021-01-05 |
Case Number | 6 |
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