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Calcutta HC dismissed Criminal charges against HDFC Bank in reclamation of a vehicle following a default on EMI

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 LI Network

Published on: 21 August 2023 at 09:07 IST

The Calcutta High Court, presided over by Justice Siddhartha Roy Chowdhury, has dismissed criminal charges against HDFC Bank Limited in a case revolving around the reclamation of a vehicle following a default on EMIs.

The case has drawn attention due to its implications on hire-purchase agreements and the legality of repossession.

The focal point of the dispute was Jadavpur P.S. Case No. 657 of 2009, wherein the complainant, Sunil Kumar Sharma, alleged that HDFC Bank Limited had forcibly seized his TATA Indica Car after some of his post-dated cheques were dishonored.

Sharma further claimed that unknown individuals assaulted the driver and absconded with the vehicle.

Represented by Mr. Debasish Roy and Mr. Kaushik Chatterjee, the bank countered the allegations by asserting that the repossession adhered to the hire-purchase agreement terms between the parties and did not involve any criminal misconduct.

The bank cited legal precedents that established financiers’ legal right to repossess under such agreements.

Justice Siddhartha Roy Chowdhury, overseeing the case, cited these legal precedents and commented, “In the context of the hire-purchase agreement, the financier retains ownership of the vehicle, and the person availing the loan merely possesses the vehicle as a trustee or bailee. Consequently, reclaiming the vehicle due to non-payment of installments has consistently been recognized as a legal right of the financier.”

Considering the legal principles and the absence of criminal intent on the bank’s part, Justice Roy Chowdhury concluded, “Given the circumstances of the case where the lender or financer repossessed the vehicle pursuant to the executed agreement between the parties, it cannot be construed that the lender committed an offense as per the Penal Code, backed by the requisite mens rea and dishonest intention. At most, it could be deemed a civil dispute that has been tinged with criminal undertones.”

In light of this analysis, the judge invoked Section 482 of the Code of Criminal Procedure to quash the criminal proceedings against HDFC Bank Limited, highlighting the imperative to prevent the misuse of legal procedures.

Case Name: HDFC BANK LIMITED & ANR. VS. THE STATE OF WEST BENGAL & ANR