TAX RECOVERY OFFICER Vs. PUNJAB AND SIND BANK

JUDGEMENT

(1.) PUNJAB and Sind Bank is the plaintiff in a suit for recovery of Rs. 22,76,091.85 against defendant No. 1, M/s Gold Field Manufacturing Company, and its two partners defendants, Nos 2. and 3. The suit is under the provision of Order XXXVII of the Code of Civil Procedure. As per the averments, the defendants were allowed the availment of cash credit hypothecation limited to the extent of Rs. 7,50,000 and a bill purchase/discounting limit to the extent of Rs. 3,75,000 on their furnishing and executing the loan documents consisting of demand promissory note, Form No. 106 agreeing that the facility would continue according to the bank's pleasure, Form No. 56 agreeing that the promissory note shall remain as a security with the bank for the repayment of the entire balance amount, Form No. 216 stating that the amounts would not be utilised for any purpose connected with or incidental to that of agriculture, Form No. 219 agreeing to pay interest at 2.05 per cent per annum in addition to the nominal rate, executing the deed of hypothecation agreeing that the borrower's present and future plant and machinery, stock -in -trade lying at the business premises shall remain hypothecated. Defendants Nos. 2 and 3 also created an equitable mortgage by deposit of title deeds of the immovable property known as J -12, Green Park, New Delhi, in favour of the bank as security for repayment of all the loans advanced to the defendant. During the course of business transaction, the defendants failed and neglected to comply with the terms of the advance as a result of which the plaintiff had to file the present suit.

(2.) ALONG with the suit, the plaintiff also filed an application I.A. No. 2974 of 1985 under Order 40, r. 1 r/w Order 39, rr. 1 and 2 of the CPC. The plaintiff was granted ad interim temporary injunction restraining defendants Nos. 1 to 3 from alienating in any manner or parting with the possession or creating any charge on the property No. J -12, Green Park, New Delhi, as also the hypothecated plant and machinery, etc. In spite of the service of the summons of the suit and the injunction order, the defendants have not filed the written statement so far, even though sufficient time was allowed to them.

(3.) THE ad interim injunction as prayed for in the application was granted by order dt. 28th May, 1985. The IT authorities have contested the application and have preferred to rely upon the affidavit of Shri D. L. Bhatia, TRO, New Delhi. A number of preliminary objections have been raised to the maintainability of the present application. Some of them are: