OFFICIAL RECEIVER Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) Th State Bank of India, Ambala City (hereinafter referred to as the Bank), through its Agent Shri R.S. Taneja Iachhupani, submitted an application in the Court of Insolvency Judge (Senior Sub-Judge), Ambala, for the issuance of a direction restraining the Official Receiver, representing the estate of Brij Mohan Lal, from interfering in the Act of removal of the pledged machinery by the Bank. According to the petitioner, Brij Mohan Lal insolvent had a cash credit account with the Bank. According to the petitioner-respondent, Brij Mohan Lal had executed an agreement on 27th April, 1961 in favour of the Bank and pledged his machinery with the Bank and the Bank agreed to advance him a loan of Rs. 35,000/-. The machinery was put in possession of the Bank and the Bank had put its own name 'S.B.I." thereon. A list of the machinery so pledged was signed by Brij Mohan Lal insolvent and handed over to the Bank. Further according to the petitioner-respondent Bank. Brij Mohan Lal had also delivered the title deeds of the workshop, building No. 11371A/10319A, situate in ward No. 6 in Radha Krishanan Bazar, Ambala City, besides the machinery and thereby created an equitable mortgage of the same. On 5th January, 1962 Brij Mohan Lal insolvent executed a fresh agreement with the Bank, as the constitution of his business had been changed from sole proprietorship to a Joint Hindu Family firm and in the agreement he confirmed the pledge of the machinery etc. and also of the equitable mortgage as mentioned above. It was alleged by the petitioner-respondent Bank, that an amount of Rs. 1,76,871.34 Ps. is payable by Brij Mohan Lal insolvent to the Bank. It was further pleaded by the petitioner-respondent Bank that Brij Mohan Lal had written a letter to the petitioner-respondent Bank on 26th September, 1962, admitting that the said machinery and goods etc. were in possession of the Bank and also authorised it for the sale of the same and to adjust the sale proceeds towards the loan. The petitioner-respondent Bank, therefore, claimed that it has a legal right, to exclusively possess the pledged machinery and goods and desired to remove the machinery and to keep safe custody till it is disposed of but the Official Receiver is interfering with its right and, therefore, he be restrained from interfering in the Act of the removal of the pledged machinery.

(2.) The Official Receiver contested this application and denied that the insolvent had delivered the title deeds of the buildings or created an equitable mortgage of his immovable property in favour of the Bank. The Official Receiver also denied the power of the Bank to possess the machinery or to remove it from the premises of the insolvent. The Official Receiver further pleaded that it appears that Shri Brij Mohan Lal colluded with the Bank and as a result of the collusion and to save his property, he (Brij Mohan Lal) handed over the title deeds of his immovable property to the Bank otherwise no equitable mortgage had been created by him.

(3.) M/s. Calcutta Ropes Stores, Bazar Radha Krishanan, Ambala City, one of the creditors of Brij Mohan Lal insolvent also contested the application of the Bank and denied the claim of the Bank over the machinery and the immovable property of Brij Mohan Lal insolvent.