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HIGH COURT OF DELHI
ICICIBANK LTD Petitioner : . Through Mr.Punit K.Bhalla,Adv.
•
HIGH COURT OF DELHI
ICICIBANK LTD Petitioner : . Through Mr.Punit K.Bhalla,Adv.
•
VERSUS
< 1 n n : - LALIT KUMAR Respondent ' \ Through '
CORAM:
HON'BLE MR.JUSTICE JAYANT NATH ^ ORDER 21.12.2016
CM No.47198/2016lexemption)
'Exemption allowed,subject to alljust exceptidns.
CMnvn 1350/2016 An advance copy ofthe petition has been sent to,the respondent but none is present on behalfofthe respondent. . , T. By the present petition under Article 227 ofthe Constitution ofIndia the petitioner seeks to impugn the order dated 8:12.2016 ofthe trial court by" which summons were issued in the suit as well as.notice on the application
. under Order 40 Rule' 1 CPC for appointment of Receiver for the hypothecated vehicle.
2: The petitioner has filed a suitforrecovery ofRs.9,15,074/-.It is stated that the respondent had approached the petitioner for grant of^loan for
\ purchase ofa vehicle"Nissan/Terrano XLD"bearing Registration No.UP-
C1V1(M)1350/2016 ' Pagel 2016:DHC:9289 ' ,i4CU-9438.and entered into a loan Agreement under.the ioan-cum- hypothecation scheme ofthe petitioner bank. The respondent was to repay ' ^
/ the loan in-bO equated monthly instalrnents ofRs.2G;003/-. The money was
" disbursed to the,respondent. Various dpcumerits were executed by the: respondent. The respondent failed to adhere to the firiaricial discipline and several equated monthly instalments were not paid. On account,of default, - the petitioner recalled the loan facility by sending a recall,nddce dated
. 20.6:2016. - ' n ' . - , - ; 3. ' In the petition filed it is urged that -sale, disposal, transfer of the n vehicle, which is the only security with the petitioner, would Cause
• "irreparable loss and daniage to the petitioner and deprive the petitioner ofits , r -
' legal and contractual rights The petitioner strongly apprehends that the only , .'security shall,be disposed.by the petitioner. Hence, it iS:urged that:the triaT court oughttO'have appointed a Receiverto possess the vehicle in question. • n 4., Reliance is placed on a
CM No.47198/2016lexemption)
'Exemption allowed,subject to alljust exceptidns.
CMnvn 1350/2016 An advance copy ofthe petition has been sent to,the respondent but none is present on behalfofthe respondent. . , T. By the present petition under Article 227 ofthe Constitution ofIndia the petitioner seeks to impugn the order dated 8:12.2016 ofthe trial court by" which summons were issued in the suit as well as.notice on the application
. under Order 40 Rule' 1 CPC for appointment of Receiver for the hypothecated vehicle.
2: The petitioner has filed a suitforrecovery ofRs.9,15,074/-.It is stated that the respondent had approached the petitioner for grant of^loan for
\ purchase ofa vehicle"Nissan/Terrano XLD"bearing Registration No.UP-
C1V1(M)1350/2016 ' Pagel 2016:DHC:9289 ' ,i4CU-9438.and entered into a loan Agreement under.the ioan-cum- hypothecation scheme ofthe petitioner bank. The respondent was to repay ' ^
/ the loan in-bO equated monthly instalrnents ofRs.2G;003/-. The money was
" disbursed to the,respondent. Various dpcumerits were executed by the: respondent. The respondent failed to adhere to the firiaricial discipline and several equated monthly instalments were not paid. On account,of default, - the petitioner recalled the loan facility by sending a recall,nddce dated
. 20.6:2016. - ' n ' . - , - ; 3. ' In the petition filed it is urged that -sale, disposal, transfer of the n vehicle, which is the only security with the petitioner, would Cause
• "irreparable loss and daniage to the petitioner and deprive the petitioner ofits , r -
' legal and contractual rights The petitioner strongly apprehends that the only , .'security shall,be disposed.by the petitioner. Hence, it iS:urged that:the triaT court oughttO'have appointed a Receiverto possess the vehicle in question. • n 4., Reliance is placed on a
JUDGMENT
of this Court m ICICI Bank Ltd.
Vs. Updesh Nagar in FAO 7/2016 dated 5.1.20l6.Tn that'judgment p^sed, under somewhatsimilarfacts,this bourt observed as follows:-
. ; - • "b.llnniy opinion,issuance ofa mere notice can,in certain set of circumstances, cause prejudice to the applicant; the present. . . :
V V: matter is one such case. / , ' ' 6.2'On the aspect as to how a courtIs to. proceed where a ,, /- request,for appointment ofa receiver, is made by a bank or 4
' financial institution'- the following observations of the Full '
. Bench ofthe iBOmbay High Court,in the case ofState,Bank of
India vs Trade Aid Paper and Allied Products(India).Pvt;Ltd. - "
& Ors.AIR 1995 BOrn 268,being instructive.are rCiquired to-be n noticed. . '. . , ;
' - ' . 6.3 Briefly, the.court in its.judgment, exhorts 'adoption of a
TM(M)1350/2016 'Page2 practical approach while exercising power-of appointment ofa receiver in the case of banks and financial institutions having
- regard to the fact thatthey deal in public funds, . ... "...Indeed, it is the dutv and function of the Court entertaining the suits instituted bv Banks and financial institutions to ensure that efforts are made to dispose of, the suits as' early as possible, and even during the. pendency ofthe suits, ensure that not only the properties are protected but.the defendant is made to repay the - amount, if desirous of enjoying the'benefits secured by
.obtaining the loan. The powers ofthe:.Gourt under Order'
40, Rule 1 of the Code of Civil Procedure are to be exercised to advance cause ofjustice and what is ,just , and'convenient" depends upon the mature of the claim ; and.the surrounding circumstances. The Court should not close eves to the realities and -blindly follow the
' principles laid down 50 years before wheii the suits by
- Banks and financial institutions were,a novelty." The
. economic,liberalization and the policy ofthe Gdvemment to grant,loansvfor various activities have increased the
, number ofsuitis by Banks and financial institutions and in this Court every year more than 2;000.suits are instituted.
It would not be difficult to imagine how much public money is involyed in these suits arid how long the -
Nationalised Banks and financial institutions are , deprived oftheir dues. The Court should be conscious of these facts and should be more pragmatic in exercising powers under Order 40. Rule 1 of the Code of Civil
- Procedure." - . ' . " . ' (Emphasis is mine), , 6.4 To be noted,the abovementiohed Full Benchjudgement of the Bombay High Court m State Bank ofIndia vs Trade Aid
Paper and Allied Products(India)Pvt. Ltd. &,Ors. casQ was taken up in appeal to the Supreme Court only on.one issue which Was qua the embargo put in place by the coiirt ort the aspect ofsale ofthe property by the.receiver prior to.a decree
CM(M)1350/201.6 ' , Page3 M - r ,being passed in the suit. The Supreme Court over-fiiled the Full
"Bench judgernent on this aspect and Sitated, in, no uncertain
. terpis,'in its judgement in the case ofICICI Ltdi &\Ors. ys ^
Karnataka Ball Bearings Corpn. Ltd. & Ors. (1999) 7SCC.
. - that no-such fetter is contemplated on the powers ofthe .
. . receiver appointed Under the provisions of Order 40 Rule 1 of the CPC. In other word's, the Supreme Court went as far as-to,^ - ' observe that a receiver, pursuant to the directions issued by the - ^ court in that behalf, is empowered to sell the property even; :
• before a decree iis passed in the suit.'This, according to ,the
; Supreme Court, is discemable on a plain reading ofprovisions -' of Order 40 Rule 1 of the CPC.(S&q iJCICI Bank Ltd. v.
Callage EstatesPvt.Ltd,& Ors.,2015seeOnlinePel12143)'
,5.. Having regard to the above,to the extent,the impugned order declines the/prayer made for an ex parte appointment of a receiver; that part of the , ■order, is set aside. Consequently, Mr.Rameshwar Sahu is appointed as a
't • ■ ' receiver. • ■
6;! The receiver, taking possession of the subject vehicle will ensure that the due courtesies are extended to the respondent/defendant.
6.2 The receiver'will also keep in mind the.time and the place whereThe,;, subject vehicle is takenpossession of. If, at the timeof takingpossession, the, - respondent/ defendant were to pay the sums, which are due and^payable then, the receiver, will issue a receipt in that behalf to The respondent/ defendant
,and release the vehicle on superdari to him. , . - - /
6.3 In case thfe police assistance is require,d, the receiver will approach the,!;.
" Station House Officer manning the nearest police station, who,' in. such an ■ eventuality,' shallrender due assistance to enable compliance in the mattef .
6.4 The receiver will file his report with the trial court within ten days of ;, takingpossession of the siibject vehicle. ,. .~
: CMtM)1350/2016. . : • ^ ' > Page4
6.5 In case the'receiver is successful in obtaining possession ofthe subject vehicle before the next date of hearing, the trial court will pass appropriate orders on the next date ofhearing.
6.6 However,in case the subject vehicle is not traced till the next date of hearing,the trial court will, accordingly, extend.the period for locating the. vehicle and," in that behalf, pass appropriate;orders' ,in the pending application." , .' -
Vs. Updesh Nagar in FAO 7/2016 dated 5.1.20l6.Tn that'judgment p^sed, under somewhatsimilarfacts,this bourt observed as follows:-
. ; - • "b.llnniy opinion,issuance ofa mere notice can,in certain set of circumstances, cause prejudice to the applicant; the present. . . :
V V: matter is one such case. / , ' ' 6.2'On the aspect as to how a courtIs to. proceed where a ,, /- request,for appointment ofa receiver, is made by a bank or 4
' financial institution'- the following observations of the Full '
. Bench ofthe iBOmbay High Court,in the case ofState,Bank of
India vs Trade Aid Paper and Allied Products(India).Pvt;Ltd. - "
& Ors.AIR 1995 BOrn 268,being instructive.are rCiquired to-be n noticed. . '. . , ;
' - ' . 6.3 Briefly, the.court in its.judgment, exhorts 'adoption of a
TM(M)1350/2016 'Page2 practical approach while exercising power-of appointment ofa receiver in the case of banks and financial institutions having
- regard to the fact thatthey deal in public funds, . ... "...Indeed, it is the dutv and function of the Court entertaining the suits instituted bv Banks and financial institutions to ensure that efforts are made to dispose of, the suits as' early as possible, and even during the. pendency ofthe suits, ensure that not only the properties are protected but.the defendant is made to repay the - amount, if desirous of enjoying the'benefits secured by
.obtaining the loan. The powers ofthe:.Gourt under Order'
40, Rule 1 of the Code of Civil Procedure are to be exercised to advance cause ofjustice and what is ,just , and'convenient" depends upon the mature of the claim ; and.the surrounding circumstances. The Court should not close eves to the realities and -blindly follow the
' principles laid down 50 years before wheii the suits by
- Banks and financial institutions were,a novelty." The
. economic,liberalization and the policy ofthe Gdvemment to grant,loansvfor various activities have increased the
, number ofsuitis by Banks and financial institutions and in this Court every year more than 2;000.suits are instituted.
It would not be difficult to imagine how much public money is involyed in these suits arid how long the -
Nationalised Banks and financial institutions are , deprived oftheir dues. The Court should be conscious of these facts and should be more pragmatic in exercising powers under Order 40. Rule 1 of the Code of Civil
- Procedure." - . ' . " . ' (Emphasis is mine), , 6.4 To be noted,the abovementiohed Full Benchjudgement of the Bombay High Court m State Bank ofIndia vs Trade Aid
Paper and Allied Products(India)Pvt. Ltd. &,Ors. casQ was taken up in appeal to the Supreme Court only on.one issue which Was qua the embargo put in place by the coiirt ort the aspect ofsale ofthe property by the.receiver prior to.a decree
CM(M)1350/201.6 ' , Page3 M - r ,being passed in the suit. The Supreme Court over-fiiled the Full
"Bench judgernent on this aspect and Sitated, in, no uncertain
. terpis,'in its judgement in the case ofICICI Ltdi &\Ors. ys ^
Karnataka Ball Bearings Corpn. Ltd. & Ors. (1999) 7SCC.
. - that no-such fetter is contemplated on the powers ofthe .
. . receiver appointed Under the provisions of Order 40 Rule 1 of the CPC. In other word's, the Supreme Court went as far as-to,^ - ' observe that a receiver, pursuant to the directions issued by the - ^ court in that behalf, is empowered to sell the property even; :
• before a decree iis passed in the suit.'This, according to ,the
; Supreme Court, is discemable on a plain reading ofprovisions -' of Order 40 Rule 1 of the CPC.(S&q iJCICI Bank Ltd. v.
Callage EstatesPvt.Ltd,& Ors.,2015seeOnlinePel12143)'
,5.. Having regard to the above,to the extent,the impugned order declines the/prayer made for an ex parte appointment of a receiver; that part of the , ■order, is set aside. Consequently, Mr.Rameshwar Sahu is appointed as a
't • ■ ' receiver. • ■
6;! The receiver, taking possession of the subject vehicle will ensure that the due courtesies are extended to the respondent/defendant.
6.2 The receiver'will also keep in mind the.time and the place whereThe,;, subject vehicle is takenpossession of. If, at the timeof takingpossession, the, - respondent/ defendant were to pay the sums, which are due and^payable then, the receiver, will issue a receipt in that behalf to The respondent/ defendant
,and release the vehicle on superdari to him. , . - - /
6.3 In case thfe police assistance is require,d, the receiver will approach the,!;.
" Station House Officer manning the nearest police station, who,' in. such an ■ eventuality,' shallrender due assistance to enable compliance in the mattef .
6.4 The receiver will file his report with the trial court within ten days of ;, takingpossession of the siibject vehicle. ,. .~
: CMtM)1350/2016. . : • ^ ' > Page4
6.5 In case the'receiver is successful in obtaining possession ofthe subject vehicle before the next date of hearing, the trial court will pass appropriate orders on the next date ofhearing.
6.6 However,in case the subject vehicle is not traced till the next date of hearing,the trial court will, accordingly, extend.the period for locating the. vehicle and," in that behalf, pass appropriate;orders' ,in the pending application." , .' -
7. Petition stands disposed of. All pending applicationsj if any, also stand disposed ofaccordingly.
8. Dasti.., n n. 'v." n n, JAYANT NATH,J," DECEMBER 21,2016 n (:M(M)1350./2016- ^ ' ' Page[5] $-41 * + IN THE HIGH COURT OF DELHI AT NEW DELHI CM APPL.No.6385/2017 in CM(M)1350/2016 ICICIBANK LTD ru t Through Mr.Punit K.Bhalla & Ms.Chetna Bhaila,Advocates versus LALIT KUMAR •n••• Respondent Through CORAM: HON'BLE MR.JUSTICE JAYANT NATH ORDER 0/„ 17.02.2017 CM APPL.No.6385/2017 By the present application filed under Section 151 ofthe CPC,the petitionerseekscorrection oftypographicalerrorinthe nameofthereceiver appointed by this courtvide order dated 21.12.2016. The learned counsel for the petitioner submits that this is a typographical error and the name of the receiver should be read as 'Kameshwar Sahii'instead ofRameshwar Sahii'. Accordingly,the application is allowed. The order dated 21.12.2016 T is rectified andthenameofthereceiveriscorrected as'KameshwarSahU. A copy ofthis order be given dasti under the signature ofthe court master to the parties.
JAYANT NATH,J.