ORDER

% 25.01.2023

1. Aggrieved by the order dated 13th December, 2022 whereby again process was issued to the defendants in CS (COMM) 651/22 by the learned District Judge (Commercial Court) Central District, Tis Hazari and no receiver was appointed to re-possess the vehicle, the appellant prefers the present appeal.

2. A brief background of the case is that the respondents approached the appellant/Bank for financing a vehicle under the loan-cum-hypothecation scheme of the appellant/ Bank pursuant whereto the appellant sanctioned a loan of ₹15,61,500/- on 21st February, 2019 out of which an amount of ₹15,36,800/- was disbursed to the dealer ‘SRI DURGA AUTOMOBILES (A DIV OF LIDO COMMERCIAL CO. LTD’ on 25th February, 2019 after deducting the disbursement charges etc. Simultaneously, the vehicle namely ‘MAHINDRA XUV 500/W9’ bearing registration No. ‘DL-10CL-9218’ was hypothecated with the appellant/ Bank.

3. The respondents agreed to repay the said loan with interest @ 9.40 % in 60 Equated Monthly Instalments (EMIs) of ₹32,854/-. The respondents also agreed that in case of any default they would pay penalty as well.

4. Since the respondent defaulted in making the payments, the appellant issued recall notice and thereafter filed the above-noted suit before the learned District Judge (Commercial Court) who issued summons for settlement of issues in the suit on 13th December, 2022 for 27th March, 2023 and did not pass any order on the application of the appellant under Order XL Rule 1 CPC for appointment of a receiver by an ex-parte order.

5. Learned counsel for the appellant refers to the decision of this Court in FAO 7/2016 titled as ‘ICICI Bank Ltd. Vs. Updesh Nagar’ whereby this Court held that each day’s delay in repayment of loan causes prejudice to the appellant.

6. We have heard learned counsel for the appellant and gone through the decisions of this Court in:

(i) Citi Bank Vs. Udesh Kumar FAO (OS) 117/2002 decided on 03.04.2002.

(ii) Standard Chartered Bank Vs. Dvender Magar CRP No. 223/2004 decided on 07.05.2004 (iii) Citi Bank Vs. Bhupinder Singh FAO No. 198/2006 decided on 11.08.2006.

(iv) ICICI Bank Vs. Jal Singh FAO No. 271/2007 decided on 20.07.2007 (v) CitiCorp Finance India Ltd. Bank Vs. Varender Swaroop FAO (OS) No. 335/2008 decided on 08.08.2008 (vi) ICICI Bank Vs. Bharat Nandwani & Anr. FAO No. 408/2014 decided on 23.12.2014 (vii) ICICI Bank Vs. Updesh Nagar FAO 07/2016 decided on 05.01.2016 (viii) ICICI Bank Vs. Dharmendra CM (M) No. 384/2017 decided on 12.04.2017 (ix) ICICI Bank Ltd. Vs. Shishupal Singh W.P.(C) No. 5060/2018 decided on 29.10.2018.

(x) ICICI Bank Vs. Naveen Kalkal CM (M) No. 1821/2019 decided on 23.12.2019 (xi) ICICI Bank Vs. Nandini Acharya FAO No. 401/2018 decided on 14.09.2018 (xii) ICICI Bank Vs. Tranzlease Holding India Pvt. Ltd. FAO (COMM) No. 6/2023 decided on 10.01.2023 7. Full Bench of the Bombay High Court in State Bank of India Vs. Trade Aid Paper and Allied Produces (India) Pvt. Ltd. & Ors. AIR 1995 Bom 268 held that a practical approach should be followed while exercising power of appointment of receiver in case of bank and financial institutions having regard to the fact that they deal in public funds. It was held:

“Indeed, it is the duty and function of the Court entertaining the suits instituted by Banks and financial institutions to ensure that efforts are made to dispose of the suits as early as possible and even during the pendency of the suits, ensure that not only the properties are protected but the defendant is made to repay the amount, if desirous of enjoying the benefits secured by obtaining the loan. The powers of the Court under Order 40, Rule 1 of the Code of Civil Procedure are to be exercised to advance cause of justice and what is „just and convenient‟ depends upon the nature of the claim and the surrounding circumstances. The Court Should not close eyes to the realities and