Y L Sable vs The Royal Bank Of Scotland N.V.
2012 Latest Caselaw 4658 Del

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.

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





 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.

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

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

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