3
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ Date of Decision: 07.08.2012
% W.P.(C) 7191/2011 & C.M. No.16372/2011
Y L SABLE ..... Petitioner
Through: Mr. Kishore Lambat, Advocate
versus
THE ROYAL BANK OF SCOTLAND N.V. ..... Respondent
Through: Mr. Ramesh Sharma, Advocate
CORAM:
HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON'BLE MR. JUSTICE VIPIN SANGHI
VIPIN SANGHI, J. (Oral)
1. The petitioner seeks to assail the orders dated 04.03.2011 and 24.03.2011 passed by the Debts Recovery Tribunal II, Delhi (DRT) and the order dated 29.08.2011 passed by the Debts Recovery Appellate Tribunal (DRAT) in the present writ petition.
2. The petitioner is a proprietary concern of Sh. Yashwant Laxman Sable. The petitioner availed of loan facilities from the respondent bank and admittedly, the petitioner was not able to maintain financial discipline and became a defaulter in the matter of repayment of the loan and advances. The respondent filed three different original applications being O.A. Nos.42/2011, 44/2011 and 45/2011 in DRT.
W.P.(C) 7191/2011 Page 1 of 6
3. On the application of the respondent bank, on 07.02.2011, the DRT passed a common order against the petitioner, restraining the petitioner from transferring, alienating or parting with possession of the hypothecated movable properties/vehicles. A local commissioner was appointed by the DRT to prepare an inventory of the hypothecated equipments after physical verification, and to take photographs of the same.
4. On 04.03.2011, the aforesaid order was clarified. The details of the hypothecated movable properties covered by O.A. Nos.42/2011 and 45/2011 are as follows:
O.A. No.42/2011
Construction Registration Chasis No./ Engine No.
Equipment/Vehicle Number Machine SI No.
CATERPILAR 320-E NA HKT00667 MAE01985
(Hydraulic
Excavator)
TATA TIPPER KA-35-8260 396522FT2213339 60F62483832
TATA TIPPER KA-35-8244 396522GTZ217580 60G62495802
TATA TIPPER KA-35-8243 396522GTZ217811 60G62496451
TATA TIPPER KA-35-8245 396522FTZ214209 60F62483717
TATA TO[[ER KA-35-8246 396522GTZ217710 60G62496090
W.P.(C) 7191/2011 Page 2 of 6
O.A. No.45/2011
TEREX PEGSON METRO TRACK QM032008
MOBILE CRUSHER 2007
SCHWING STETTERBPL 350 D BP350DXT 2122
SCHWING STETTERBPL 350 D BP350DXT 2117
5. The DRT directed the receiver Sh. Dipesh Sharma, Advocate to take into his custody the movable properties aforesaid as also the hypothecated movable properties, i.e. Volvo L-90E bearing Machine Sl. No.21948 and Engine Sl. No.10062249 covered by O.A. No.44/2011.
6. The petitioner filed I.A. No.171/2011 and 172/2011 in the aforesaid two O.A. Nos.42/2011 and 45/2011 to seek variation of the aforesaid order dated 04.03.2011. On 24.03.2011, the DRT considered these applications and disposed them of by directing that, subject to deposit of 50% of the total outstanding amount i.e. Rs.2,19,29,833.32 claimed in the aforesaid O.As, and further filing an affidavit of the M.D. of the defendant (i.e. the proprietor - the petitioner herein) undertaking to deposit the balance amount in ten equal installments beginning June 2011, the operation of the order dated 04.03.2011 shall remain stayed. It was directed that in case these conditions are not complied with, the said order shall stand vacated. W.P.(C) 7191/2011 Page 3 of 6
7. Being aggrieved by the orders passed by the DRT, the petitioner preferred Misc. Appeal No.203/2011 before the DRAT. The DRAT disposed of the said Misc. Appeal on 24.06.2011. The DRAT ordered that the respondent bank can sell the entire machinery with the consent of the petitioner. In case the petitioner did not produce a better buyer, the bank would be at liberty to sell the machines according to its choice.
8. The petitioner moved a further application being Misc. Case No.471/2011 before the DRAT in the disposed of appeal, to seek release of the vehicles. After taking note of the order dated 24.06.2011, as aforesaid, the DRAT emphasized that the vehicles are to be sold by the bank and not by the petitioner. Consequently, the prayer made by the petitioner to seek release of the vehicles was disallowed, and the application was dismissed being meritless.
9. The submission of learned counsel for the petitioner is that he had deposited one installment of Rs.25 lacs with the respondent bank and therefore, he was entitled to the release of machinery/vehicles worth Rs.25 lacs for being sold in the market. He submits that once the said vehicle is sold by the petitioner after release by the respondent bank, he would deposit further installment of Rs.25 lacs, and so on. In this respect, he places reliance on the order passed by W.P.(C) 7191/2011 Page 4 of 6 the DRAT dated 19.04.2011.
10. We do not find any merit in this petition and there is no justification to permit the petitioner to sell the said hypothecated vehicles on his own. Since the vehicles have been hypothecated to the respondent and the petitioner is in default, it is the respondent bank which is entitled to deal with the said assets. All that the petitioner is entitled to say is that the said equipment should be sold in a transparent manner, so that the best price is realized by the respondent bank.
11. Reliance placed on the order dated 19.04.2011 of the DRAT appears to be misplaced in the light of the subsequent order dated 24.06.2011 passed by the DRAT. The earlier order obviously merged with the subsequent order which came to be passed on account of the failure of the petitioner to deposit the installment of Rs.25 lacs. So far as the right of the petitioner to produce a better buyer is concerned, that right is preserved in the order dated 24.06.2011 passed by the DRAT.
12. The petitioner being a defaulter cannot be permitted to undertake a private sale of the hypothecated vehicles on his own in a non-transparent manner. Even according to the petitioner, the liabilities of the petitioner far exceed the realizable value of the W.P.(C) 7191/2011 Page 5 of 6 hypothecated machinery/vehicles. Therefore, the interest of the respondent bank needs to be sufficiently protected to ward of the possibility of the petitioner resorting to underhand dealing while selling the hypothecated vehicles, on its own, on a lesser apparent consideration than the actual price at which they are sold.
13. For the aforesaid reasons, we find no merit in this petition. Dismissed.
VIPIN SANGHI, J SANJAY KISHAN KAUL, J AUGUST 07, 2012 sr W.P.(C) 7191/2011 Page 6 of 6