Case – Sekar v. Arumugham, 2000
Fact
Sekar had taken loan for a sum of Rs. 4 lakhs during November 1994 from the Bank of Madura, cantonment Branch, Trichy towards purchase of Ashok Leyland Lorry. The petitioner executed a deed of hypothecation dated 9- 11-1994 in favour of the bank and in terms of which had hypothecated the lorry in question as a security towards the due repayment of the amount borrowed by him. The loan was repayable in 60 monthly instalments.
In terms of Clause 14(3) of the deed of hypothecation, in the event of any default in the payment of the loan instalments, the bank had the right to seize the said lorry. As per Clause 15(b) of the deed of hypothecation, the bank upon seizure of the vehicle was vested with the right to sell the same and appropriate the sale proceeds towards the outstanding due and payable to it.
He had defaulted in payment of monthly instalments. On 30-7-1998 the bank seized the lorry due to non-payment of instalment. The private complaint has been filed against the respondent for alleged offence under Section 379, IPC.
Issue
Is the Bank liable for theft?
Observation & Judgement:
- When the respondent had been empowered to seize the lorry under Clause 14(e), it cannot be said that the respondent had committed theft of the lorry when the petitioner had committed default in payment of installments, the bank has seized the lorry.
- The bank was continues to be the owner of the lorry till the payment of all the installments.
- Bank had not committed offence of theft. Lorry was ceased according to terms and conditions of the hypothecation.
