CANARA BANK Vs. LAXMI FOOD INDUSTRIES
LAWS(DR)-2004-12-5
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on December 15,2004

Appellant
VERSUS
Respondents

JUDGEMENT

K.S.Kumaran, - (1.) APPELLANT-Canara Bank (hereinafter referred to as 'the appellant-Bank') has filed O.A. 241/1999 before the Debts Recovery Tribunal, Delhi (hereinafter referred to as 'the DRT') against respondents 1 to 3, 5, 6 and another for the recovery of the money allegedly due to it. The appellant-Bank filed I.A. 2/2000 before the DRT with the prayers to appoint a Receiver to take possession of the hypothecated plant and machinery, the details of which have been given in para 5(vii) of the O.A., to appoint a Commissioner for the preparation of inventory of the hypothecated stocks, plant and machinery lying at the office of the 1st defendant at 1-5 and 1-6, Surajpur Industrial Area, Site-C, Greater Noida, District Gautam Budh Nagar, U.P., and to restrain the 7th respondent herein, namely, Small Industries Development Bank of India (hereinafter referred to as 'the SIDBI') from selling the plant and machinery, which are hypothecated with the appellant-Bank, the details of which have been given in para 5(vii) of the O.A. (and described in detail in the application). The learned Presiding Officer of the DRT, by the impugned order dated 21.8.2001, dismissed the said application observing that the plant and machinery, which are sought to be sold by the SIDBI, are duly hypothecated with it and charge has also been registered with the Registrar of Companies, that there is nothing on record to show that the said machinery and plant are the same plant and machinery hypothecated by the 1st defendant with the appellant-Bank. Aggrieved, the appellant has preferred this appeal, and the 7th respondent SIDBI has filed a suitable reply opposing the same.
(2.) I have heard the Counsel for both the sides, and perused the records. The learned Counsel for the appellant-Bank contends that the 1st respondent M/s. Laxmi Food Industries was a partnership firm consisting of respondents 2 and 3, but subsequently it was converted into a private limited company by name M/s. Mathur Food Products Pvt. Ltd. (6th respondent herein). The learned Counsel for the appellant-Bank contends that this was done to cheat the money due to the appellant-Bank, and that the 6th respondent thereafter raised a loan from the SIDBI on the basis of the same plant and machinery, which were already hypothecated with the appellant-Bank. The learned Counsel for the appellant contends that the appellant-Bank came to know from an advertisement published in the newspaper on 6.12.2000 that the SIDBI proposed to sell the plant and machinery. That was why the appellant-Bank filed I.A. 2/2000 before the DRT with the prayers as indicated above. But, the learned Counsel for the 7th respondent SIDBI contends that before advancing the loan to the 6th respondent it (SIDBI) had addressed a letter to the appellant-Bank, in response to which the appellant-Bank had sent a reply dated 21.3.1995 mentioning that M/s. Laxmi Food Industries had only a current account, and no other account with the appellant. The learned Counsel for the 7th respondent SIDBI points out the letter dated 21.3.1995 sent by the appellant-Canara Bank, especially, column 5 wherein the nature of the accounts has been mentioned as "Savings', 'Current', 'Cash Credit' and 'Others', and that the tick mark has been placed against the word 'Current'. Therefore, the learned Counsel for the 7th respondent-SIDBI contends that in June, 1995 SIDBI had advanced the loan to the 6th respondent on the charge of the movable and immovable properties, which have been registered with the Registrar of Companies. The learned Counsel for the 7th respondent-SIDBI points out the copy of the certificate issued by the office of the Registrar of Companies dated 25.8.1995 showing the registration of the mortgage/charge created on 15.6.1995 by the 6th respondent M/s. Mathur Food Products Pvt. Ltd. for Rs. 55 lakhs. But, the learned Counsel for the appellant-Bank points out that the 6th respondent M/s. Mathur Food Products Pvt. Ltd. took over all the assets and liabilities of the 1st respondent M/s. Laxmi Food Industries, and, therefore, the plant and machinery which were hypothecated with the appellant-Bank were only subsequently hypothecated with the 7th respondent-SIDBI. He also contends that the letter dated 21.3.1995 stated to have been sent by the appellant is a forged document.
(3.) BUT, as pointed out already, the learned Presiding Officer of the DRT has pointed out that there is nothing on record to show that the same plant and machinery which were hypothecated with the appellant-Bank were later on hypothecated with the 7th respondent-SIDBI. The learned Counsel for the appellant-Bank also contends that the letter dated 21.3.1995 relied upon by the 7th respondent-SIDBI is a forged document. Therefore, the burden is upon the appellant-Bank to prove that the same plant and machinery, which were hypothecated with the appellant-Bank, were later on hypothecated with the 7th respondent SIDBI, and that the 7th respondent- SIDBI has advertised the very same plant and machinery to be sold. Since the 7th respondent relies upon the letter dated 21.3.1995, the 7th respondent has to prove that the same was sent by the appellant-Bank. Therefore, in my view, both sides should be given an opportunity to lead evidence in this behalf and in support of their rival contentions. Interests of justice require that the appellant-Bank should be given an opportunity to establish that the same plant and machinery, which were hypothecated to it, were later on, hypothecated with the 7th respondent-SIDBI, and they are sought to be sold by the latter. Similarly, interests of justice require that 7th respondent-SIDBI should be given an opportunity to establish that the letter dated 21.3.1995 was in fact sent by the appellant-Bank.;


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