BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 22/01/2011 CORAM THE HONOURABLE MR.JUSTICE K.CHANDRU W.P.(MD)NO.10110 of 2009 M/s.Sundaram Finance Limited, No.21, Patullos Road, Chennai-600 002. rep. By its Madurai Branch Manager, Mr.A.P.Veeraraghavan .. Petitioner Vs. 1.The Commissioner of Customs, Customs House, Harbor Estate, Tuticorin-628 004. 2.S.N.R.Joshua Rathinaraj 73-A, Tooveyapuram, 10th Street, Tuticorin, Tuticorin District. .. Respondents This writ petition has been preferred under Article 226 of the Constitution of India praying for the issue of a writ of mandamus to direct the first respondent to release the vehicle 2007 Model Leyland Trailer bearing engine No.NPH 507953 and chassis No.NPE 639846 and hand it over to the petitioner. !For Petitioner ... Mr.A.R.M.Ramesh ^For Respondents ... Mr.R.Aravindan for R-1 - - - - :ORDER
The petitioner is a Finance Company. They are also financing for the
purchase of transport vehicles. The petitioner company has filed the present
writ petition seeking for a direction to the first respondent to release the
vehicle 2007 Model Leyland Trailer bearing Engine No.NPH 507953 and Chassis
No.NPE 639846 and hand it over to the petitioner.
2.In the writ petition, notice of motion was ordered on 09.10.2009. On
notice from this court, the first respondent has filed a counter affidavit,
dated 6.11.2009.
3.The case of the petitioner was that the second respondent had purchased
the vehicle after availing loan from the petitioner Company on 24.12.2007 on
Hire Purchase basis. He has to pay 47 monthly installments commencing from
22.01.2008 ending on 22.11.2011. The vehicle was also hypothecated with the
petitioner company which finds place in the certificate of register. Under
Clause 2.9(a) of the loan agreement, the second respondent undertook to pay the
amount in installments as per the agreement. The default clause provides
surrender of vehicle. The second respondent had defaulted from the fifth
installments and did not surrender the vehicle. It so happened that the vehicle
was used for illegal transportation in contravention of loan agreement. However,
the vehicle was seized by the first respondent Customs Department. The
petitioner has sent a letter, dated 4.12.2008 to the first respondent setting
out these facts and claimed that since they have first charge over the vehicle,
they sought for the release of the vehicle. When there was no reply, the present
writ petition came to be filed.
4.The first respondent in his counter affidavit claimed that based upon
specific intelligence, the officers attached to the Directorate of Revenue
Intelligence, Thoothukudi seized 6.720 MT of red sanders wooden logs and
attempted to export out of India under the guise of semi husked coconuts through
Thoothukudi Port on 19.04.2008. The D.R.I officials had seized the Trailer lorry
bearing Registration No.TN 69/M 3499 involved in transportation. The contraband
goods were seized at Viraganur, Madurai on way to the Port. On completion of the
investigation, the D.R.I had issued a show cause notice under Section 124 of the
Customs Act, 1962 to show cause as to why the vehicle should not be confiscated
in terms of Section 115 of the Customs Act. The case is pending adjudication by
the Customs Department.
5.It was also claimed that the second respondent is not only the owner of
the seized vehicle, but he had played a role as Managing Director of M/s.Vivegha
Logistics Private Limited, an Exporter, Custom House Agent as well as
transporters of consignment. They had consciously devised the entire modus
operandi to illegally export the red sanders wooden logs, which is a prohibitory
item of Customs. Therefore, under Section 115(2) of the Customs Act, any
conveyance as means of transport in the smuggling of any goods is liable for
confiscation. Hence a show cause notice under Section 124 of the Customs Act was
issued.
6.It was also claimed that the Act itself provides for a remedy by way of
provisional release of seized vehicle under Section 110(A) of the Customs Act to
the owner on fulfilling conditions imposed by the adjudicating authority by
providing proper security and submitting a bond to the satisfaction of the
Commissioner of Customs. The term “owner” is defined under Section 2(30) of the
Motor Vehicles Act, 1955 which only indicates the owner, even in case of hire
purchase agreement, is a person who is in possession of the vehicle under the
agreement. Further under Section 51(5) of the Motor Vehicles Act, 1988, the
motor vehicle authorities only after due notice to the owner can transfer the
vehicle to the hire purchase holder. In the present case, only the second
respondent is recognized as the owner. Since the department is yet to confiscate
the vehicle, the remedy of provisional release will available to the registered
owner. Till date, the owner has not made any such application for provisional
release.
7.Mr.A.R.M.Ramesh, learned counsel for the petitioner company placed
reliance upon a judgment of the Supreme Court in Sunderbhai Ambalal Desai v.
State of Gujarat reported in (2002) 10 SCC 283= 2003 (1) CTC 175 and relied
upon the following passages found in paragraphs 17 and 18, which reads as
follows:
“17.In our view, whatever be the situation, it is of no use to keep such seized
vehicles at the police stations for a long period. It is for the Magistrate to
pass appropriate orders immediately by taking appropriate bond and guarantee as
well as security for return of the said vehicles, if required at any point of
time. This can be done pending hearing of applications for return of such
vehicles.
18.In case where the vehicle is not claimed by the accused, owner, or the
insurance company or by a third person, then such vehicle may be ordered to be
auctioned by the court. If the said vehicle is insured with the insurance
company then the insurance company be informed by the court to take possession
of the vehicle which is not claimed by the owner or a third person. If the
insurance company fails to take possession, the vehicles may be sold as per the
direction of the court. The court would pass such order within a period of six
months from the date of production of the said vehicle before the court. In any
case, before handing over possession of such vehicles, appropriate photographs
of the said vehicle should be taken and detailed panchnama should be prepared.”
8.He also relied upon a subsequent judgment of the Supreme Court in
Godavari Finance Co. v. Degala Satyanarayanamma reported in (2008) 5 SCC 107 to
contend that the financier cannot be treated as the owner and relied upon the
following passages found in paragraphs 11 to 13, which reads as follows:
“11.The appellant admittedly was the financer. As the vehicle was the subject-
matter of hire-purchase agreement, the appellant’s name was mentioned in the
registration book.
12.Section 2 of the Act provides for interpretation of various terms enumerated
therein. It starts with the phrase “Unless the context otherwise requires”. The
definition of “owner” is a comprehensive one. The interpretation clause itself
states that the vehicle which is the subject-matter of a hire-purchase
agreement, the person in possession of vehicle under that agreement shall be the
owner. Thus, the name of financer in the registration certificate would not be
decisive for determination as to who was the owner of the vehicle. We are not
unmindful of the fact that ordinarily the person in whose name the registration
certificate stands should be presumed to be the owner but such a presumption can
be drawn only in the absence of any other material brought on record or unless
the context otherwise requires.
13.In case of a motor vehicle which is subjected to a hire-purchase agreement,
the financer cannot ordinarily be treated to be the owner. The person who is in
possession of the vehicle, and not the financer being the owner would be liable
to pay damages for the motor accident.”
9.Per contra, the first respondent drew the attention of the court a
judgment of the Supreme Court in Ganga Hire Purchase Pvt. Ltd. Vs. State of
Punjab reported in 2000 (121) ELT 9 (SC) and relied upon the following passage
which reads as follows:
“… title to the vehicle taken under hire-purchase agreement no doubt still
with the financier till the entire hire-purchase amount is paid back but looking
to the purpose of section 60(3) of N.D.P.S. Act, 1985 to have it as a deterrent
measure to check offence under the Act and in the absence of any definition of
“OWNER” in the Act, the expression owner must be held to mean the “registered
owner” of the vehicle in whose name the vehicle stands registered under the
Motor Vehicles Act”
Since the department is yet to pass a final order on the confiscation, they are
unable to concede the request of the petitioner.
10.In the light of the above, the relief claimed by the petitioner cannot
be countenanced by this court. Hence the writ petition will stand dismissed.
However, there will be no order as to costs.
vvk
To
The Commissioner of Customs,
Customs House,
Harbor Estate,
Tuticorin-628 004