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1986 Supreme(Kar) 119
Karnataka High Court
K.Kunhambu - Appellant
Versus
Syndicate Bank, Manipal - Respondent
Decided On : 03-07-86
Immediate action to prevent disposal of properties and deterioration of security, and the appointment of a Receiver when the security might not be sufficient to meet the debt.
Headnote:
C. R. P. - Recovery of Loan - O. S. No. 250/1983 - O. 39, R. 7, O. 40, R. 1 C. P. C. - 7, 8, 6 - The court discussed the orders passed in O. S. No. 250/1983, including detention and preservation of properties, appointment of a Receiver, and sale of hypothecated moveables. The court interpreted the provisions of O. 39, R. 7 and O. 40, R. 1 C. P. C. and emphasized the need for immediate action to prevent disposal of properties and deterioration of security. The court found that the value of the hypothecated properties was deteriorating, and the security might not be sufficient to meet the debt, justifying the appointment of a Receiver. The court dismissed the revision petitions and the appeal, confirming the orders passed by the trial court.
Fact of the Case:
The plaintiff filed a suit to recover a loan of Rs. 56,72,778.75 from the defendants, who had pledged properties as security. The plaintiff also filed applications for detention and preservation of properties, appointment of a Receiver, and sale of hypothecated moveables. The defendants resisted the applications, claiming they had no intention of disposing of the properties and that the machinery was deteriorating.
Finding of the Court:
The court found that the properties were at risk of disposal and deterioration, justifying the detention, preservation, and sale of properties, as well as the appointment of a Receiver. The court also found that the security might not be sufficient to meet the debt, warranting the appointment of a Receiver. The court dismissed the revision petitions and the appeal, confirming the orders passed by the trial court.
Issues: Detention and preservation of properties, appointment of a Receiver, and sale of hypothecated moveables.
Ratio Decidendi: Immediate action was necessary to prevent disposal of properties and deterioration of security. The appointment of a Receiver was justified as the security might not be sufficient to meet the debt.
Final Decision: The court dismissed the revision petitions and the appeal, confirming the orders passed by the trial court.
( 1 ) C. R. P. No. 56/1984 by the 1st defendant is directed against the order dt. 20-12-1983 passed by the Principal Civil Judge, Mangalore, in O. S. No. 250/1983 rejecting I. A. No. 4.
( 2 ) C. R. P. No. 2328/1984 by the 1st and 2nd defendants is directed against the order dt. 18-7-1984 passed by the Principal Civil Judge, Mangalore, in O. S. No. 250/1983 allowing I. A. 6.
( 3 ) M. F. A. No. 1587/1984 by the 1st and 2nd defendants is directed against the order dt. 18-7-1984 passed by the Principal Civil Judge, Mangalore, in O. S. No. 250/1983 allowing I. A. No. 5.
( 4 ) AS all these matters arise out of the orders passed in O. S. No. 250/1983, I deem it proper to dispose of these matters by a common order.
( 5 ) THE plaintiff filed O. S. No. 250/1983 against the revision petitioners in both the C. R. Ps. and the appellants in the M. F. A. to recover Rs. 56,72,778. 75 alleging that the 1st defendant, for the purpose of his business, approached the plaintiff-bank for two types of facilities viz. , Secured Loan in a sum of Rs. 8. 50 lakhs and secured overdraft in a sum of Rs. 6. 50 lakhs. The plaintiff agreed to grant the necessary accommodation to the defendants. After mutual discussion, the plaintiff made available to the defendants the said facilities. The 1st defendant pledged the stock-in-trade and the machineries and mortgaged his property in Mangalore and immoveable landed property situated in Kodagu District as security. Defendant 2 stood as co-obligant. Both of them pledged the stock-in-trade and the machinery and mortgaged the property in Mangalore and immoveable property situated in Kodagu District as security for the said loans. After giving deduction to all the payments made by the defendants, still Rs. 56,72,778. 75 are due from the defendants. Hence the suit.
( 6 ) AFTER filing the suit, the plaintiff filed an application I. A. No. 2 under O. 39, R. 7 for an order of detention and preservation of the hypothecated stock-in-trade and the machineries.
( 7 ) THE trial court passed on 30-11-1983 an order of detention and preservation of 'a' and 'b' schedule properties by seizure thereof and issued notice of I. A. 2 to the defendants.
( 8 ) THE defendants filed I. A. 4 to modify/discharge/rescind/recall the order of seizure, detention and preservation made by the Court on I. A. 2.
( 9 ) THE court below, on consideration of the materials, rejected I. A. 4. Hence the revision in C. R. P. 56/1984.
( 10 ) THE plaintiff filed an application I. A. No. 5 under O. 40, R. 1 C. P. C. for the appointment of a Receiver in respect of the immoveable properties described in plaint Schedules-A (item No. 2), C. D. E and F.
( 11 ) THE defendants resisted it. The plaintiff also filed an application I. A. No. 6 under O. 39, R. 6 C. P. C. for the sale of the hypothecated moveables seized as per the ex parte order on I. A. 2. It was also resisted by the defendants.
( 12 ) THE court below passed an order on 18-7-1984 allowing both I. As. 5 and 6. Being aggrieved by the order passed on I. A. No. 5, the defendants have approached this court with M. F. A. No. 1587/1984. Being aggrieved by the order passed on I. A. No. 6, the defendants have approached this court with C. R. P. No. 2328/1984.
( 13 ) THE defendants have borrowed in all about Rs. 15 lakhs from the plaintiff-Bank by hypothecating the properties mentioned in the suit-schedule 'a', 'b', 'c', 'd', 'e' and 'f'. The plaintiff after giving deductions to the amounts paid by the defendants, has filed the suit to recover a sum of Rs. 56,72,778. 75, from the defendants.
( 14 ) I. A. 2 was filed by the plaintiff under O. 39, R. 7 C. P. C. for the detention and preservation of the hypothecated stock-in-trade set out in Schedule-A of the plaint and of the hypothecated machinery set out in Schedule-B of the plaint, and to direct the seizure of the said items and hand over the same to the custody of the plaintiff-bank or to such other person as the court deems fit alleging that as
