'Forgery Of Documents Not Relevant When Deciding Interim Custody Of Vehicle In Cases Of Loan Default': Bombay High Court

The Bombay High Court has held that issues relating to forgery of documents cannot be examined at the stage of deciding the interim custody of a vehicle. The Court observed that for the purpose of granting interim custody, the primary considerations are whether the applicant is the owner and whether the vehicle was seized from their possession.Justice M.M. Nerlikar was hearing a petition filed by AU Small Finance Bank Limited challenging concurrent orders passed by the Judicial Magistrate First Class, Amravati, and the Additional Sessions Judge, Amravati, rejecting the Bank's plea for custody of a Bolero pick-up vehicle and instead granting custody to the respondent purchaser. The Bank alleged that the vehicle was fraudulently transferred by the borrower, respondent no.3, using forged documents, including a fabricated No Objection Certificate (NOC) and Form 35. It contended that since the loan remained unpaid, the Bank retained ownership rights and should be granted custody.The Court noted that at the instance of the Bank, the police registered an offence for forgery and allied offences, the vehicle was seized from respondent no.2, and the registration certificate was issued in the name of respondent no.2. Further, respondent no.2 availed a loan from the Mahindra and Mahindra Finance Company Ltd., for the purchase of the said vehicle and 20 installments have been paid.The Court observed that questions of forgery and document fabrication can be determined only during trial and not at the stage of interim custody. It observed: “The allegations in the said First Information Report are in respect of forgery of the documents by which the transfer of the vehicle was effected. However, at this stage of deciding on the interim custody, forgery of those documents cannot be discussed. For deciding interim custody, firstly, it is necessary to see whether the respondent no.2 is the owner and secondly, whether the seizure of the vehicle is from the possession of respondent no.2.”The Court observed that if the interim custody is not handed over to the respondent no.2, an irreparable loss would be caused to him, and not only that, it would be difficult for him to repay the loan to the finance company.Finding that the Magistrate had imposed adequate conditions safeguarding both parties' interests, the Court declined to interfere with the concurrent findings and dismissed the Bank's petition.Case Title: M/s. AU Small Finance Bank Ltd. v. State of Maharashtra & Ors. [Criminal Writ Petition No. 657 of 2024]Click Here To Read/Download Order

'Forgery Of Documents Not Relevant When Deciding Interim Custody Of Vehicle In Cases Of Loan Default': Bombay High Court

Saksham Vaishya

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