ESCORTS FINANCE LIMITED Vs. SOUTHEM INVESTIGATION

JUDGEMENT

(1.) This is an application under Section 9 of the Arbitration & Conciliation Act, 1996 for appointment of Receiver.

(2.) Put briefly the facts giving rise to this application are that the petitioner, a public company, is engaged in the business of lease financing and hire purchase of vehicles, equipments and machineries and also deals in inter corporate deposits and bill discounting and is, therefore, a non-banking Finance company.

(3.) The respondent company approached the petitioner in the month of November, 1995 for taking one number Anthos 2010 Antos Microplate Photometer from M/s Jaunach International, 5, Subody Mullick Square(North), Calcutta and authorised the petitioner company vide letter dated 8/11/1995topaytoM/sJunach International a sum of Rs. 2,88,660.00 on their behalf for the purchase of the above referred medical equipments. Accordingly the said medical equipments were purchased by the petitioner company from M/s Junach International, Calcutta vide proforma invoice No. JI/PI/88/95-96 dated 4/11/1996 for a sum of Rs. 2,88,660.00 and paid the entire consideration price vide receipt dated 9/11/1995. The delivery of the said medical equipment was taken by the respondent No. 1 from M/s Junach International, Calcutta vide Challan dated 20th November, 1995 in good order and condition. The equipments were given under the Hire Purchase Agreement dated 8/11/1995 to the respondent No.1 as the hirer on the guarantee of respondent No.2 on the terms and conditions mentioned in the Hire Purchase Agreement dated 8/11/1995. The Hire Purchase Agreement was duly executed by the respondents 1 & 2 at the registered office of the petitioner company at New Delhi for a total sum of Rs.3,83,904.00 including the value of the medical equipments and hire charges for a period of 36 months amounting to Rs.95,244.00. As per Schedule contained in the said agreement besides the payment of over-due interest/compensation' charges for late payment @ 2.5% per month were payable. The respondents also deposited a sum of Rs.72,165.00 towards security amount. Thus ownership of the machinery had remained with the petitioner company and it was agreed that the hirer shall keep the goods in his own possession at the place mentioned in the Schedule and shall not take or allow the same to be taken or removed therefrom without the previous consent in writing of the owner and maintain it and if necessary put the goods into proper repair and good working condition. It was also agreed that the hirer shall not hold himself out as the owner nor shall sell, offer for sale, part with possession of the goods, assign or charge the goods for the benefit of the agreement nor shall create or cause to be created any lien on the goods unless and until the hirer becomes the owner of the goods. The other terms of the agreement provided as under:- "8. The Hirer may at any time determine this agreement by notice in writing to the owner and by returning the goods to the owner at such address as the owner may specify, at his (the hirer's) risk and expense whereupon the provisions of Clause 9 shall apply. If the Hirer shall make default in payment of any of the sums payable 140 hereunder within seven days of the due date or shall fail to observe or perform any of the terms and conditions of this agreement whether express or implied, the owner may, without prejudice to the pre-existing liability of the hirer to the owner, determine this agreement without notice and the hiring hereby constituted shall for all purposes determine and thereafter the hirer shall no longer be in possession of the goods with the owner's consent. The owner may be giving notice either orally or in writing to the hirer terminate the hiring under any other agreement between the owner and the hirer."