Full Text
HIGH COURT OF DELHI
Date of Decision: 23rd December, 2019
M/S ICICI BANK LIMITED ..... Petitioner
Through: Mr. Puneet Kumar Bhalla & Ms. Chetna Bhalla, Advocates
(M:9810080772) with Mr. Sanjeev Bakshi, legal head north in person.
Through: None.
JUDGMENT
1. Allowed, subject to all just exceptions. Application is disposed of.
2. The present petition has been preferred by the Petitioner/Plaintiff - M/s. ICICI Bank Ltd. (hereinafter, “Bank”) challenging the impugned order dated 5th December, 2019, by which the ld. Trial Court has simply adjourned the application filed by the Bank under Order XXXIX Rule 6 CPC, seeking permission to sell the hypothecated vehicle, which is currently in the Bank’s custody.
3. The Respondent/Defendant (hereinafter, “Defendant”) had entered into an agreement for financing of the vehicle. Due to defaults in payment by the Defendant, a suit for recovery was filed by the Bank, along with an application under Order XL Rule 1 CPC, for appointment of a receiver for the hypothecated vehicle, with power to sell. It is submitted that the receiver has already been appointed and the bank official has taken possession of the vehicle. Since the Defendant continued to not appear before the Court, the 2019:DHC:7213 application under Order XXXIX Rule 6 CPC came to be filed by the Bank seeking permission to sell the vehicle.
4. The grievance of ld. counsel for the Bank is that the application has simply been adjourned to 15th April, 2020. Ld. counsel submits that in M/s. ICICI Bank Ltd. v. Kamal Kumar Garewal, [FAO 49/2015, decided on 29th May, 2015], a ld. Single Judge of this Court has already passed directions as to the manner in which such cases are to be dealt with, especially in respect of loan transactions where there is a default in payment. He submits that despite these guidelines having been laid down, the Trial Courts are not following the same and are unnecessarily delaying the suit.
5. After hearing ld. counsel for the Bank and perusing the application under Order XXXIX Rule 6 CPC, handed over to Court today, as also the directions of this Court passed in M/s ICICI Bank Ltd. (supra), it is seen that the Bank has already taken possession of the vehicle. The Defendant, having continued to remain away from the Court, the Trial Court has repeatedly directed filing of fresh process fee and service by publication.
6. Considering that the value of vehicles is likely to deteriorate as time passes on and also considering that there is a steep maintenance cost on the Bank, for preservation of the vehicles, a Ld. Single Judge of this Court under similar circumstances had passed the following directions in M/s ICICI Bank Ltd. (supra):
7. A perusal of the above directions shows that in a similar matter, the Court has followed a particular procedure for dealing with the vehicles and vehicle loans. A similar approach can be followed by this Court. In general, whenever the Court finds that the availment of the loan itself is admitted, either due to the payment of some instalments or on the basis of documents, the Court can appoint a Receiver for taking the possession of the vehicle. The vehicle can be taken either from address given in the loan application or from any other location where it may be found. The directions given in paragraphs 5 to 15 above can be prescribed as a general procedure to be followed for taking possession of the vehicle, precautions to be taken during the same, preservation of evidence as to the status of the vehicle and maintenance of the safe custody of the vehicle. The Court’s judgment above has also made adequate provisions for the payments by the Defendant, even after the possession is taken. If the payments are not made, a proper course of action would be permission for sale by public auction as per paragraphs 13 and 14 of the judgment extracted above.
8. The procedure laid down in M/s ICICI Bank Ltd. (supra), thus, ought to be followed generally by the Trial Courts while dealing with the Banks’ suits, which involve vehicle loan. The preservation of the vehicle initially and thereafter permitting the public auction is essential in order to ensure that the value of the vehicle is not eroded and the Bank does not incur the additional expenses, maintenance for parking space etc. Thus, whenever the application for appointment of Receiver or for permission for sale are moved, the Trial Court shall consider the same expeditiously.
9. Under these circumstances, it is directed that the Bank would be entitled to sell the vehicle through a proper public auction with written notice to the Defendant. The notice would be served by way of speed post at the known address(es) of the Defendant, as also the location from where the possession of the vehicle was taken. The Defendant is also permitted to participate in the auction, in the manner explained in paragraph 14 of the judgment in M/s ICICI Bank Ltd. (supra). Once the auction has taken place, strictly in terms of the said judgment, a report shall be filed before the Trial Court for further proceedings.
10. It is further directed that this order along with the judgement in M/s ICICI Bank Ltd. (supra) be circulated by the worthy Registrar General to all the District Judges, for proper circulation amongst all the Commercial Courts Judges and Civil Judges, to enable the courts to follow the broad procedure laid down therein. In cases of this nature, since public money is involved, all steps ought to be taken to ensure that recoveries to the extent possible, ought to be enabled in accordance with law.
11. The petition and all pending applications are disposed of in the above terms. Dasti.
PRATHIBA M. SINGH JUDGE DECEMBER 23, 2019dk