Authority: High Court of Gujarat at Ahmedabad

Order Date: 19/06/2026

Case Overview

  • Parties: Applicant – Mas Financial Services Ltd (a Non‑Banking Financial Company). Respondents – State of Gujarat & others, principally Mr. Pradipgiri Goswami (purchaser of the vehicle) and Mr. Chandrasinh Jadeja (original owner).
  • Background: The vehicle, a Tata Motors car bearing Registration No. GJ‑03‑W‑7961, was seized by Bhavnagar Police on 08/06/2020 in connection with an FIR registered at Veravadar, Bhal Police Station, Bhavnagar under Sections 65(a)(e), 116, 98(2) and 81 of the Gujarat Prohibition Act.
  • Loan & Hypothecation: Mr. Jadeja purchased the vehicle and obtained a loan from Mas Financial Services Ltd. A loan‑cum‑hypothecation agreement was executed on 31/01/2020, creating a first charge in favour of the finance company.
  • Subsequent Sale: Despite the hypothecation, Mr. Jadeja sold the vehicle to Mr. Pradipgiri Goswami on 23/02/2022. The vehicle was later seized from Mr. Goswami, the accused in the FIR.
  • Initial Court Proceedings:
  • The applicant sought release of the vehicle from Vallabhipur Court under Section 451 of the Criminal Procedure Code, asserting its charge as financier. The Vallabhipur Court rejected the prayer on 16/04/2021.
  • Mr. Goswami filed a writ petition on 24/02/2022 (without joining Mas Financial Services Ltd) requesting interim custody of the vehicle pending the criminal case.
  • The Gujarat High Court, by order dated 26/04/2022, allowed the writ application and directed the concerned authority to release the vehicle in favour of the applicant. The vehicle, however, had already been released to Mr. Goswami.
  • Criminal Trial Developments:
  • Vallabhipur Court acquitted Mr. Goswami and co‑accused, but the trial court ordered confiscation of the vehicle and its auction.
  • Mas Financial Services Ltd filed a revision before the Sessions Court, Bhavnagar, challenging the confiscation. The Revisional Court remanded the matter for fresh consideration and set aside the confiscation order.
  • Grounds for Recall Application: The applicant contended that Mr. Goswami suppressed material facts concerning the hypothecation, pending loan dues, and the existence of a No‑Objection Certificate (NOC) in favour of the finance company. Consequently, the order of 26/04/2022 was obtained by fraud and should be declared a nullity.
  • Hearing: Learned counsel Mr. Tirth Nayak appeared for the applicant; Mr. Ronak Raval for the State; notice was served on Mr. A.M. Saiyed, counsel for Mr. Goswami, who did not appear.
  • Findings:

1. The vehicle was indeed hypothecated to Mas Financial Services Ltd, as reflected in the RC‑book.

2. Mr. Goswami was aware of the hypothecation and the finance company’s charge.

3. Mr. Goswami suppressed three material facts: (i) issuance of NOC favouring the finance company, (ii) pending dues and hypothecation details, and (iii) the necessity of joining the finance company as a party to the writ petition.

4. The High Court held that the order of interim custody dated 26/04/2022 was a nullity because it was obtained by suppression of material facts, citing Supreme Court precedents (K.D. Sharma Vs. Steel Authority of India, 2008; S.P. Chengalvaraya Naidu Vs. Jagannath, 1994) on the principle that litigants with unclean hands are not entitled to relief.

Final Outcome

  • The order dated 26/04/2022 in Special Criminal Application No. 2283 of 2022 is recalled as a nullity.
  • The registry is directed to list the original Special Criminal Application No. 2283 of 2022 for a fresh hearing.
  • Mas Financial Services Ltd and the original RC‑book owner, Mr. Chandrasinh Jadeja, are joined as respondents.
  • The applicant is instructed to amend the pleadings and provide the fresh address of the RC‑book owner.
  • The recall application is disposed of.

Topics: Legal Proceedings, Vehicle Hypothecation