Patna High Court

Kuldeep SinghversusState Of Bihar and Anr

Decided: 5 May 2026
Disposal: ALLOWED
Bench: SUNIL DUTTA MISHRA

Holding

The repossession was a lawful exercise of contractual rights lacking dishonest intention, so the cognizance under Section 379 read with Section 34 IPC was unsustainable and was quashed.

Summary

The petitioner, an employee of Mahindra & Mahindra Financial Services, repossessed a tractor and attached cutter machine from a borrower who had defaulted on a loan, pursuant to the terms of the loan agreement. The borrower's brother filed a criminal complaint alleging theft under Section 379 read with Section 34 of the IPC. The magistrate took cognizance of the offence, but the petitioner filed a petition under Section 482 of the CrPC to quash the order. The High Court examined whether the repossession, being a contractual right, could constitute theft and whether the proceeding amounted to an abuse of process. Relying on precedents that a financier’s right to repossess under a hire‑purchase agreement lacks the requisite dishonest intention, the Court held that the allegations did not disclose a criminal offence. Consequently, the order of cognizance was set aside and the criminal proceedings against the petitioner were quashed.

Issues considered

Whether repossession of a financed vehicle under a loan agreement amounts to theft under Section 379 IPC.
Whether the absence of dishonest intention precludes criminal liability under Section 379 read with Section 34.
Whether the criminal proceeding constitutes an abuse of process warranting quash under Section 482 CrPC.

Legislation cited

Code of Criminal Procedure, 1973 — s. 482
Indian Penal Code — s. 24, 34, 379

Subjects

theft
dishonest intention
Section 379 IPC
Section 482 CrPC
hire purchase
repossession
abuse of process
civil dispute
loan agreement

Judgment

IN THE HIGH COURT OF JUDICATURE AT PATNA
CRIMINAL MISCELLANEOUS No.9811 of 2018
Arising Out of PS. Case No.-63 Year-2017 Thana- ROHTAS COMPLAINT CASE District-
Rohtas
======================================================
Kuldeep Singh, S/o Shri Prayag Raj Singh, aged about 34 Years, Area
manager- Soft Bucket, Collection, Sasaram Branch, Mahindra and Mahindra
Financial Services Ltd. Mangla Bhawan, Opposite Prakash Petrol Pump, G.T.
Road, Sasaram.

... ... Petitioner/s
Versus
1. The State of Bihar
2. Sanjay Dubey, S/o Sri Kant Dubey, R/o Village- Durgapur, P.S.- Indrapuri,
District- Rohtas Bihar.

... ... Opposite Party/s
======================================================
Appearance :
For the Petitioner/s : Mr. Sheela Sharma, Advocate
Mr. Shivendra Kumar Roy, Advocate
For the Opposite Party/s : Mr. Shantanu Kumar, APP
======================================================
CORAM: HONOURABLE MR. JUSTICE SUNIL DUTTA MISHRA
ORAL ORDER

8 05-05-2026 1. Heard learned counsel for the petitioner as well as

learned APP for the State.

2. The present application has been filed under

Section 482 of the Code of Criminal Procedure, 1973 for

quashing the order dated 09.11.2017 passed by learned

S.D.J.M., Dehri, Rohtas (hereinafter referred to as ‘Magistrate’)

in connection with Complaint Case No.63 of 2017, wherein the

learned Magistrate took cognizance of the offence under Section

379 read with Section 34 of the Indian Penal Code, 1860 against

the present petitioner and two other accused persons.

3. The prosecution case, as emerging from the
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complaint petition, is that the brother of the complainant (O.P.

No.2) had obtained a loan from Mahindra & Mahindra Financial

Services Limited for purchase of a tractor, which was being

repaid in instalments. It is alleged that on 29.01.2017, the

accused persons, including the present petitioner, came and took

away the said tractor along with a paddy cutter machine

attached thereto, without any prior notice or lawful authority. It

is further alleged that upon receiving information from the

driver, the complainant (O.P. No.2) and his brother reached the

spot and objected to such taking of the tractor and the cutter

machine, but the accused persons stated that they were acting

under the orders of the company and advised them to settle the

matter with the company. According to the complainant (O.P.

No.2), despite request, the cutter machine was not separated and

both the tractor and cutter machine were taken away. It is further

the case of the complainant (O.P. No.2) that though the tractor

was later released in favour of the complainant’s brother after

payment of certain dues, the cutter machine was not returned. It

is alleged that when the complainant (O.P. No.2) and his brother

approached the accused persons on 14.03.2017 demanding

return of the cutter machine, the accused persons abused them

and informed that the cutter machine had already been sold. On
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these allegations, claiming loss of Rs.1,30,500/-, the present

complaint case bearing Complaint Case No.63 of 2017 was

instituted.

4. Upon perusal of the materials available on record

including the complaint petition, solemn affirmation of the

complainant (O.P. No.2) and the statement of witness recorded

during inquiry, the learned Magistrate found a prima facie case

and accordingly took cognizance of the offence punishable

under Section 379 read with Section 34 of the Indian Penal

Code against the three named accused persons including the

petitioner herein vide the impugned order of cognizance dated

09.11.2017. Aggrieved by the said impugned order of

cognizance dated 09.11.2017, the petitioner has preferred this

Criminal Miscellaneous Application to quash the same.

5. Learned counsel for the petitioner submits that the

impugned order of cognizance is wholly unsustainable in the

eyes of law, as the allegations made in the complaint petition,

even if taken at their face value, do not constitute the offence of

theft under Section 379 of the Indian Penal Code. It is submitted

that the subject vehicle (tractor) was admittedly financed by the

employer company of the petitioner and, upon default in

repayment of instalments by the borrower i.e., the brother of the
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O.P. No.2, the vehicle was repossessed strictly in terms of the

loan agreement. He further submits that the repossession, being

an exercise of a contractual right, cannot be construed as a

dishonest taking so as to attract the ingredients of theft. Learned

counsel submits that the petitioner, being merely an employee of

the finance company, has been falsely implicated for acts done

in the discharge of his official duties, and no specific overt act

constituting any criminal offence has been attributed to him.

6. Learned counsel for the petitioner further submits

that the entire dispute, at best, arises out of a contractual and

financial transaction between the borrower and the finance

company, and the same is purely civil in nature. He submits that

the continuation of the criminal proceeding is nothing but an

abuse of the process of the Court, instituted with an ulterior

motive to avoid repayment of the outstanding dues. It is also

submitted that the vehicle (tractor), along with the cutter

machine, was duly released to the borrower upon payment of

certain amounts, which is evident from the documents on

record, and therefore, the allegation of misappropriation is

wholly false and untenable. He lastly submits that the present

case falls within the well-settled parameters for quashing of

criminal proceedings and the impugned order deserves to be set
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aside.

7. Per contra, learned APP for the State submits that

the learned Magistate has rightly taken cognizance after

considering the materials available on record, including the

complaint petition and the statements recorded during inquiry.

He submits that the allegations disclose prima facie commission

of offence, and at this stage, meticulous examination of defence

documents or disputed facts is not warranted.

8. Despite sufficient opportunities having been

granted, no one appears on behalf of O.P. No. 2 to contest the

present application. Accordingly, this Court proceeds to consider

and decide the matter in absence of representation on behalf of

O.P. No. 2 on the basis of materials available on record.

9. I have heard learned counsel for the petitioner and

learned APP for the State and have carefully perused the

materials available on record, including the complaint petition,

the impugned order of cognizance, and the documents brought

on record by the petitioner.

10. Before adverting to the facts and circumstances of

the case, it would be apposite to consider the scope of

interference by this Court in exercise of its inherent jurisdiction

under Section 482 of the Code of Criminal Procedure. It is well
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settled that the power of quashing is to be exercised sparingly

and with circumspection, and only in cases where the

allegations made in the complaint, even if taken at their face

value and accepted in entirety, do not disclose the commission

of any offence or where the continuation of the criminal

proceeding would amount to an abuse of the process of the

Court. At the same time, where the dispute is predominantly

civil in nature arising out of contractual obligations and has

been given a colour of criminality, the High Court would be

justified in exercising its inherent powers to prevent misuse of

the judicial process and to secure the ends of justice.

11. Upon careful consideration of the materials on

record, it emerges that the subject vehicle (tractor) was financed

by the company of which the petitioner is an employee, and the

borrower (brother of O.P. No.2/complainant) had admittedly

defaulted in repayment of instalments. The repossession of the

tractor was carried out in pursuance of the terms of the loan

agreement, which authorized the financier to take possession of

the hypothecated asset in case of default. It further appears from

the documents brought on record that prior information

regarding the repossession was duly given to the concerned

police station, which lends support to the contention that the act
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was not clandestine or illegal, but undertaken in a structured and

lawful manner. In such circumstances, the element of “dishonest

intention,” which is sine qua non for constituting an offence

under Section 379 of the Indian Penal Code, is conspicuously

absent.

12. It is also significant to note that the materials on

record, including the release documents, indicate that upon

payment of certain dues, the tractor as well as the cutter

machine were released in favour of the borrower, and an

acknowledgment to that effect was obtained. This clearly belies

the allegation of misappropriation or wrongful retention of the

cutter machine. Furthermore, the complaint itself has been

instituted not by the borrower, who is the principal party to the

loan transaction, but by his brother, thereby raising a serious

doubt regarding the locus and veracity of the allegations. The

cumulative effect of these facts indicates that the dispute

essentially arises out of enforcement of contractual obligations,

devoid of any criminal intent on the part of the petitioner, and

has been given a colour of criminality for oblique reasons.

13. The Hon’ble Supreme Court has time and again

reiterated that where a financier exercises its rights under a hire-

purchase or loan agreement to repossess the financed asset upon
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default, such act, being traceable to a contractual right and

obligation between the parties, does not give rise to any

presumption of dishonest intention so as to attract criminal

liability. In such circumstances, the resumption of possession by

the financier or its agents, in accordance with the terms of the

agreement, cannot be construed as an act done with a guilty

mind so as to constitute an offence of theft. The Hon’ble Apex

Court in K.A. Mathai @ Babu and Anr. v. Kora Bibbikutty and

Anr., reported in (1996) 7 SCC 212 has observed as under:

“3. It is more than clear that the
hire-purchase agreement with the financier
was entered into much prior in time,
whereafter the agreement of sale between A-
2 and the complainant took place, and which
was subject to the rights of the financier. It is
even otherwise understandable that A-2
could not have passed a better title of the
bus to the complainant than that she had
acquired for herself under the hire-purchase
agreement. Though we do not have the
advantage of reading the hire-purchase
agreement, but as normally drawn it would
have contained the clause that in the event of
the failure to make payment of instalment/s
the financier had the right to resume
possession of the vehicle. Since the
financier's agreement with A-2 contained
that clause of resumption of possession, that
has to be read, if not specifically provided in
the agreement, as part of the sale agreement
between A-2 and the complainant. It is, in
these circumstances, the financier took
possession of the bus from the complainant
with the aid of the appellants. It cannot thus
be said that the appellants, in any way, had
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committed the offence of theft and that too,
with the requisite mens rea and requisite
dishonest intention. The assertion of rights
and obligations, accruing to the appellants
under the aforesaid two agreements, wiped
out any dishonest pretence in that regard
from which it could be inferred that they had
done so with a guilty intention……………”

14. Moreover, the Hon’ble Apex Court in Charanjit

Singh Chadha and Ors. v. Sudhir Mehra, reported in (2001) 7

SCC 417, has observed as herein under:

“13. But in the instant case, the
owner repossessing the vehicle delivered to
the hirer under the hire-purchase agreement
will not amount to theft as the vital element
of “dishonest intention” is lacking. The
element of “dishonest intention” which is an
essential element to constitute the offence of
theft cannot be attributed to a person
exercising his right under an agreement
entered into between the parties as he may
not have an intention of causing wrongful
gain or to cause wrongful loss to the hirer. It
is appropriate to note that the term
“dishonestly” is defined under Section 24
IPC as follows:
“24. ‘Dishonestly’.—Whoever does
anything with the intention of causing
wrongful gain to one person or wrongful loss
to another person, is said to do that thing
‘dishonestly’.”

15. At this juncture, it would be apposite to refer to

the principles laid down by the Hon’ble Apex Court in State of

Haryana and Ors. v. Bhajan Lal and Ors., reported in 1992

Supp (1) SCC 335, wherein illustrative categories were carved
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out for exercise of inherent powers for quashing of criminal

proceedings. In the facts of the present case, this Court finds

that the case of the petitioner squarely falls within the categories

where the allegations made in the complaint, even if taken at

their face value, do not constitute any offence, and further where

the criminal proceeding appears to have been instituted with an

ulterior motive to exert pressure arising out of a purely civil

dispute. The materials on record clearly indicate that the act

complained of was done in pursuance of a contractual right,

with prior intimation to the police, and without any dishonest

intention, and that the alleged property has already been

released to the borrower. Thus, applying the ratio of the

aforesaid judgment to the present case, this Court is of the

considered view that continuation of the criminal proceeding

against the petitioner would amount to abuse of the process of

the Court and, therefore, the impugned order of cognizance is fit

to be quashed.

16. Accordingly, the impugned order dated

09.11.2017 passed by the learned S.D.J.M., Dehri, Rohtas in

connection with Complaint Case No.63 of 2017, wherein the

cognizance of the offence under Section 379 read with Section

34 of the Indian Penal Code, 1860 has been taken, qua the
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petitioner is hereby set aside.

17. Resultantly, the entire criminal proceeding arising

out of the aforesaid Complaint Case No.63 of 2017, so far as it

relates to the present petitioner, is quashed.

18. The present Criminal Miscellaneous Application,

accordingly, stands allowed.

19. Let a copy of this order be transmitted forthwith to

the Court concerned for information and necessary compliance.

(Sunil Dutta Mishra, J)
Ritik/-

U T

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