Bombay High Court Upholds Interim Custody of Vehicle in Forgery Dispute

Nagpur Bench affirms decisions of lower courts granting possession to bona fide purchaser despite allegations of document forgery.

In a significant legal decision, the Bombay High Court's Nagpur Bench has upheld previous orders granting interim custody of a vehicle to a bona fide purchaser despite allegations of forgery in the transfer documents. The case, M/s. AU Small Finance Bank Limited v. State of Maharashtra, revolved around the possession of a Bolero Pick-up vehicle, which was embroiled in a hire-purchase agreement and subsequent forgery allegations.

Justice M.M. Nerlikar delivered the judgment on October 17, 2025, dismissing the writ petition filed by M/s. AU Small Finance Bank Limited. The bank sought to challenge the orders of the Judicial Magistrate First Class, Amravati, and the Additional Sessions Judge, Amravati, which had denied interim custody of the vehicle to the bank.

The crux of the case was the disputed ownership and possession of the vehicle. The bank alleged that respondent no.3, Ravi Dange, used forged documents to transfer the vehicle to respondent no.2, who was the registered owner and in possession of the vehicle. Despite these allegations, the court determined that interim custody should focus on the current possession and registered ownership.

Justice Nerlikar emphasized that allegations of forgery cannot be the primary consideration at the interim custody stage. Instead, the court must assess the factors of ownership and possession. The court found that respondent no.2 had purchased the vehicle legitimately, was registered as the owner, and had taken a loan to finance the purchase, for which 20 installments had already been paid. These facts led the court to conclude that respondent no.2 should retain interim custody to avoid irreparable loss and financial hardship.

The decision aligns with precedents set by the Supreme Court, particularly in the case of Vaibhav Jain v. Hindustan Motors Pvt. Ltd., which clarified that the definition of 'owner' under the Motor Vehicles Act is not strictly limited to the registered individual but can extend to the person in possession and control of the vehicle.

The court's ruling underscores the importance of possession and bona fide purchase in disputes involving alleged document forgery. It highlights the judiciary's role in balancing legal ownership rights with equitable considerations of possession and financial impact.

Bottom Line:

Interim custody of a vehicle purchased under hire-purchase agreement - Determination of ownership and possession during disputes involving forgery of transfer documents.

Statutory provision(s): Criminal Procedure Code, 1973 Section 454; Indian Penal Code, 1860 Sections 420, 464, 468, 469 read with Section 34; Motor Vehicles Act, 1988 Section 2(30).

M/s. AU Small Finance Bank Limited v. State of Maharashtra, (Bombay)(Nagpur Bench) : Law Finder Doc Id # 2796219