SPACE CAPITAL SERVICE LIMITED Vs. PRAKASH INDUSTRIES LIMITED

JUDGEMENT

(1.) This petition has been filed by the petitioner under Section 9 of the Arbitration &Conciliation Act, 1996. The petitioner has prayed that interim orders be passedrestraining the respondents from selling,' parting with possession or transferring theWaste Heat Recovery System Equipment, leased by the petitioner to the respondentsand has further sought relief due to the defaults of the respondents in repayment ofLease rentals and, therefore, sought permission for the Receiver to be appointed bythis Court to take over the possession of the said equipment which was given onlease to the respondents under Lease Agreement dated 24/03/1993. Thisapplication has been resisted by the respondents/lessees by stating in their reply thatthe appointment of a Receiver is hit by the provisions of Section 22 of the SickIndustrial Companies (Special Provision) Act, 1985 (hereinafter referred to as thesaid Act).

(2.) The learned counsel for the petitioner has relied upon a judgment of the learned Single Judge of this Court in M/s Credit Capital Finance Corporation Vs. M/s Foremost Industries Limited reported as AIR 1996 Delhi 310. Construing the judgment of Chamundi Mopeds (supra), the learned Single Judge of this Court held:-

(3.) The learned counsel for the petitioner has further relied upon a judgment of the learned Single Judge of this Court in GE Capital Transportation Financial Services Ltd. Vs. Dee Pharma Limited reported as 76(1998) DLT 273 to contend that in case of ownership of machinery which vested with the financial company by which the equipment has been leased out, the provisions of Section 22 would not apply because such provisions only apply to the property of the lessee company and the equipment which was leased could not be said to be the property of the company.The learned Single Judge has after construing the Clauses of the lease of the equipment held as follows:-