In Brief
The Supreme Court allowed a finance company's appeal against the High Court's order to release a JCB machine to a third-party buyer. The original owner had entered into a hire-purchase agreement with the financer, with hypothecation recorded in the vehicle's registration. After defaulting on loan payments, the original owner fraudulently cancelled the financer's hypothecation entry using forged documents and sold the vehicle. The Registrar of Motor Vehicles subsequently declared this fraudulent cancellation void. The Court held that the third-party buyer could not acquire valid title through a fraudulently obtained transfer. Section 51(4) of the Motor Vehicles Act prohibits transfer of hypothecated vehicles without the financer's consent. The vehicle was ordered released to the financer.",
The lawyer headnote and full judgment text are available to registered users.