CANARA BANK Vs. SIMPLEX WOOLLEN MILLS LTD

JUDGEMENT

(1.) THIS is a bank suit for recovering an amount of Rs.7.00 crores, which by now according to the Plaintiff's Advocate might have reached figure of Rs.10.000 crores. Prayer, today, in the Motion, that was pressed was for appointment of Receiver in respect of the property without powers of sale. It was argued that the property is not being looked after properly, there is no management of the property that there are no guards or watchman to protect the property and the workers are removing machineries causing loss of the property and consequently loss to the Plaintiff with whom the property is mortgaged by an equitable mortgage. It is also argued by the Plaintiff's Advocate that Defendant is trying to sell the property to the detriment of the interest of the Plaintiff. And considering the claim involved and the aforesaid factors, appointment of Receiver was pressed.

(2.) ON the other hand, it was argued by the Defendant's Advocate that the Defendant Company is declared as 'Sick Unit', that under the "Sick Industrial Companies (Special Previsions) Act, 1985 and Board for Industrial and Financial Reconstruction Regulations, 1987" there was an Order of the BIFR dated 25/5/1990 against which the Defendant Company preferred an Appeal and on dismissal of the Appeal the Defendant Company filed Writ Petition with Delhi High Court, wherein ad-interim order was granted on 23/9/1992 and this order was confirmed on 5/10/1993. Therefore, according to the Defendant's Advocate, in view of the order of the Delhi High Court in the aforesaid Writ Petition, no Receiver can be appointed in respect of the property Defendant-Company.

(3.) REGARDING arguments of the Plaintiff's Counsel about the loss, damage or waste of the suit property, it was argued by the Counsel for the Defendant that the Plaintiff-Bank annually inspects the property and during those inspection Bank did not find much discrepancies in the property mortgaged and property found in custody. As against this it is argued by the Plaintiff's Advocate that thefts are being committed of the machinery and other property is getting deteriorated and therefore Receiver is necessary.