In a detailed order pronounced on October 17, 2025, Justice M.M. Nerlikar of the Nagpur Bench of the Bombay High Court dismissed a writ petition filed by AU Small Finance Bank. The Bank had sought custody of a Bolero pick-up vehicle it financed, which was allegedly sold fraudulently by a borrower using forged documents. The court, however, sided with the farmer who had purchased the vehicle in good faith, affirming the concurrent findings of the Magistrate and the Sessions Court.
Background
The case stemmed from a dispute over a Bolero pick-up bearing registration number MH-30-BD-0266, initially financed by AU Small Finance Bank for one Ravi Dange, the third respondent. According to the Bank, Dange defaulted on his loan and went on to sell the vehicle to Sunil Shrikrishna Nandhe, the second respondent, using forged forms and fake “No Objection” certificates.
Following the Bank’s complaint, the Rajapeth Police Station in Amravati registered an FIR under Sections 420, 464, 468, and 469 read with Section 34 of the IPC, accusing Dange of fraud and forgery. The police subsequently seized the vehicle from Nandhe’s possession.
Both the Bank and Nandhe filed applications before the Judicial Magistrate, First Class, Amravati, seeking interim custody under Section 454 of the CrPC. The Magistrate, after hearing both sides, rejected the Bank’s plea and granted custody to Nandhe. The Sessions Court later upheld this decision, prompting the Bank to approach the High Court under Article 227 of the Constitution.
Court’s Observations
During the hearing, the petitioner’s counsel argued that the vehicle’s transfer was clearly based on forged documents and that the Bank retained ownership until full repayment of the loan. “It has become a modus operandi of some borrowers to sell financed vehicles through forged papers,” counsel submitted, citing the 1999 Bombay High Court ruling in B.C.L. Financial Services Ltd. vs. State of Maharashtra.
On the other side, Nandhe’s counsel countered that his client had purchased the vehicle bona fide, paying ₹5.53 lakh through a loan from Mahindra & Mahindra Finance. “My client is the sole breadwinner, and his family survives on the income from this very vehicle,” he argued. He also pointed out that the RTO had verified and registered the transfer in Nandhe’s name after reviewing the documents, and that 20 loan installments had already been paid.
Justice Nerlikar acknowledged the complexity of ownership in hire-purchase agreements but emphasized that possession and registration were key considerations for interim custody. Quoting from the Supreme Court’s decision in Vaibhav Jain vs. Hindustan Motors Pvt. Ltd. (2024), the judge noted:
“The ‘owner’ of a vehicle is not limited to the categories specified in Section 2(30) of the Motor Vehicles Act. If the context so requires, even a person in possession or control of the vehicle could be treated as its owner.”
The judge added that while forgery allegations were serious, they could not be conclusively addressed at the stage of deciding interim custody. The primary questions, he observed, were whether Nandhe was the vehicle’s registered owner and whether the seizure was made from his possession—both of which were established.
The Decision
After reviewing the records and lower court orders, Justice Nerlikar concluded that both the Magistrate and the Sessions Judge had exercised due care and imposed sufficient conditions to safeguard the Bank’s interests. The Court observed that withholding the vehicle from Nandhe would cause him “irreparable loss” and hinder his ability to repay his own loan.
“The concurrent findings of the courts below deserve no interference,” the judge stated, affirming that interim custody rightly remained with respondent no.2 (Nandhe).
The writ petition filed by AU Small Finance Bank was therefore dismissed, and the rule was discharged.
Case Title: M/s. AU Small Finance Bank Limited vs. State of Maharashtra & Others
Case Number: Criminal Writ Petition No. 657 of 2024
