BANK OF INDIA Vs. TECHNOCRAT CHEMICALS

JUDGEMENT

(1.) This application has been filed by the plaintiff bank under Order 40 Rule 1 read with Section 151 of the Code of Civil Procedure (Code for short) to appoint a Receiver to take possession and control of the hypothecated plant and machinery owned by defendant No. 1, detailed in Annexure A and lying at plot No. 27, Gurgaon Industrial Estate, Gurgaon Haryana as well as the book debt of the defendant. The application also seeks interim injunction to restrain the defendant from parting with the aforesaid plant and machinery or from selling the stock and raw materials and finished goods etc. It is alleged in this application that -the plaintiff bank has filed a suit for recovery of Rs. 12,15,706/30 p. outstanding under term loan facility against hypothecation of Plant and Machinery, together with pending and future interest at the rate of 13.5^ per annum with quarterly rests. The plaintiff also seeks declaration that there is a valid and subsisting charge in favour of the plaintiff on the hypothecated plant and machinery. The bank has serious apprehensions of the defendant surreptitiously and illegally alienatine the aforesaid hypothecated goods by way of sale or otherwise as it has come to the knowledge of the bank that the defendants are heavily indebted and are facing serious financial stringency, so that under the terms it has become necessary for the bank to seek appointment of a Receiver or otherwise there was every liklihood of the plaintiff bank losing the valuable security. It may become impossible for the plaintiff bank to recover from the defendants the amount claimed in the suit in case of a decree.

(2.) In reply to this application on behalf of defendants 1 and 2 it is stated that the plaintiff's suit is liable to be dismissed and there is every likiihood of a counter claim being decreed in favour .of the defendants No declaration was liable to be passed in favour of the plaintiff regarding the alleged hypothecated goods because there was no subsisting charge.

(3.) In brief the case of the plaintiff is that in or about February, 1973, defendants 2, 3 and 4 as partners of defendant No. 1 approached the plaintiff bank for grant of a term loan facility against hypothecation of plant and machinery for a sum of Rs. 1,15.000.00 . The loan was granted and by way of security defendants executed demand promissory note for Rs. l,15,000.00 payable with interest at 4j^ over the bank rate with a minimum of 10^ with quarterly rests, a continuing security letter, a deed of hypothecation hypothecat- ing plant and machinery lying at defendant No. l's factory at plot No. 27, Gurgaon Industrial Estate and other documents. The deceased B.S. Aneja husband of defendant No. 4 and father of the remaining defendants executed and delivered a letter of guarantee for that amount. In October, 1975, at the request of defendants 2 to 4, additional loan against hypothecation of plant and machinery for Rs. 45.000.00 was granted, thus increasing the total loan to Rs. l,60,000.00 . Usual additional documents were executed on 3rd October, 1975. In April, 1980 it was discovered that defendant No. 1 had over drawn the loan by a sum of Rs. 33,000.00 . Therefore, defendants I to 4 were requested to execute further documents creating further security for the exceeded amount of Rs. 33,000.00 , which was done on 1.4.1980. An undertaking was also executed to repay the enhanced loan of Rs. 1,93,000 in instalments of Rs. 5000.00 per month from June, 1980 onwards. The defendants, however, failed to fulfil their obligations with regard to repayment and continuously defaulted. The account became highly irregular. Defendants 2 to 4 acknow- ledged their liability by executing various letters of acknowledger of debts and security on defferent dates between 31.3.1975 and 28.1.1985 by which time the liability increased to the suit amount.