Delhi High Court
Icici Bank Ltd vs Kasmeera Devi on 27 January, 2017
$~A-53
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 27.01.2017
+ CM(M) 99/2017 and CM No. 3047/2017
ICICI BANK LTD ..... Petitioner
Through Mr.Puneet K.Bhalla,
Ms. Chetna Bhalla, Advs
versus
KASMEERA DEVI ..... Respondent
Through
CORAM:
HON'BLE MR. JUSTICE JAYANT NATH
JAYANT NATH, J. (Oral)
CM No.3047/2017 (Exemption)
Exemption allowed, subject to all just exceptions.
CM(M) 99/2017
1. An advance copy of the petition has been sent to the respondent but
none is present on behalf of the respondent.
2. By the present petition under Article 227 of the Constitution of India
the petitioner seeks to impugn the order dated 13.01.2017 of the trial court
by which summons were issued in the suit and no orders were passed in the
application filed by the petitioner for appointment of a receiver in taking the
custody of the hypothecated vehicle.
3. The petitioner has filed a suit for recovery of Rs.3,72,012.90/-. It is
stated that the respondent had approached the petitioner for grant of loan for
purchase of a vehicle „HYUNDAI GRAND I-10 MAGNA 1.1‟ bearing
Registration No. HR 38 V 4043 and entered into a loan Agreement under the
loan-cum- hypothecation scheme of the petitioner bank. The respondent
was to repay the loan in 36 equated monthly instalment of Rs.13,162/-. The
money was disbursed to the respondent. Various documents were executed
by the respondent. The respondent failed to adhere to the financial discipline
and several equated monthly instalments were not paid. On account of
default, the petitioner recalled the loan facility by sending a recall notice
dated 11.07.2016.
4. In the petition filed it is urged that sale, disposal, transfer of the
vehicle, which is the only security with the petitioner, would cause
irreparable loss and damage to the petitioner and deprive the petitioner of its
legal and contractual rights. The petitioner strongly apprehends that the only
security shall be disposed by the petitioner. Hence, it is urged that the trial
court ought to have appointed a Receiver to possess the vehicle in question.
5. Reliance is placed on a judgment of this Court in ICICI Bank Ltd.
Vs. Updesh Nagar in FAO 7/2016 dated 5.1.2016. In that judgment passed
under somewhat similar facts, this court observed as follows:-
"6.1 In my opinion, issuance of a mere notice can, in certain set
of circumstances, cause prejudice to the applicant; the present
matter is one such case.
6.2 On the aspect as to how a court is to proceed where a
request, for appointment of a receiver, is made by a bank or a
financial institution - the following observations of the Full
Bench of the Bombay High Court, in the case of State Bank of
India vs Trade Aid Paper and Allied Products (India) Pvt. Ltd.
& Ors. AIR 1995 Bom 268, being instructive are required to be
noticed.
6.3 Briefly, the court in its judgment exhorts adoption of a
practical approach while exercising power of appointment of a
receiver in the case of banks and financial institutions having
regard to the fact that they deal in public funds :-
"...Indeed, it is the duty and function of the Court
entertaining the suits instituted by Banks and financial
institutions to ensure that efforts are made to dispose of
the suits as early as possible and even during the
pendency of the 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 of the Court under Order
40, Rule 1 of the Code of Civil Procedure are to be
exercised to advance cause of justice and what is „just
and convenient‟ depends upon the nature of the claim
and the surrounding circumstances. The Court should not
close eyes to the realities and blindly follow the
principles laid down 50 years before when the suits by
Banks and financial institutions were a novelty. The
economic liberalization and the policy of the Government
to grant loans for various activities have increased the
number of suits 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 involved in these suits and how long the
Nationalised Banks and financial institutions are
deprived of their 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 abovementioned Full Bench judgement of
the Bombay High Court in State Bank of India vs Trade Aid
Paper and Allied Products (India) Pvt. Ltd. & Ors. case was
taken up in appeal to the Supreme Court only on one issue
which was qua the embargo put in place by the court on the
aspect of sale of the property by the receiver prior to a decree
being passed in the suit. The Supreme Court over-ruled the Full
Bench judgement on this aspect and stated, in no uncertain
terms, in its judgement in the case of ICICI Ltd. & Ors. vs
Karnataka Ball Bearings Corpn. Ltd. & Ors. (1999) 7 SCC
488, that no such fetter is contemplated on the powers of the
receiver appointed under the provisions of Order 40 Rule 1 of
the CPC. In other words, 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 is passed in the suit. This, according to the
Supreme Court, is discernable on a plain reading of provisions
of Order 40 Rule 1 of the CPC. (See : ICICI Bank Ltd. v.
Collage Estates Pvt. Ltd. & Ors., 2015 SCC Online Del 12143)
6. Having regard to the above, to the extent, the impugned order does not
deal with the application of the petitioner for appointment of a receiver; that
part of the order, is modified. Consequently, Mr. Kunal Mishra is appointed
as a receiver.
6.1 The receiver, while 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 where the
subject vehicle is taken possession of. If, at the time of taking possession,
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 the police assistance is required, the receiver will approach the
Station House Officer manning the nearest police station, who, in such an
eventuality, shall render due assistance to enable compliance in the matter.
6.4 The receiver will file his report with the trial court within ten days of
taking possession of the subject vehicle.
6.5 In case the receiver is successful in obtaining possession of the subject
vehicle before the next date of hearing, the trial court will pass appropriate
orders on the next date of hearing.
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 applications, if any, also
stand disposed of accordingly.
JAYANT NATH, J
JANUARY 27, 2017
