BOOZ-ALLEN AND HAMILTON INC. Vs. STATE BANK OF INDIA
LAWS(DR)-2007-11-9
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on November 15,2007

Appellant
VERSUS
Respondents

JUDGEMENT

S.S. Parkar, J. (Chairperson) - (1.) A short question that arises in this appeal for consideration is whether the appellant company had voluntarily surrendered or otherwise lost possession of the flat No. 9 -B in Brighton Cooperative Housing Society, Napean Sea Road, Mumbai -400 006 because initially, Official Liquidator and subsequently Court Receiver took possession of the flat. The said question arises in the following circumstances: The respondent No. 1 Bank filed suit initially in the High Court which was transferred to the D.R.T -II, Mumbai for recovery of its debts due from the respondent Nos. 2 to 4 and for enforcement of the mortgaged properties including the aforesaid flat. The appellant was impleaded to that suit as defendant No. 4 because of the agreement dated 5th April, 1996 entered into between the appellant, the respondent No. 2 company and the respondent No. 1 Bank recognizing right of the appellant which was licensee of the flat, to continue in possession of the said flat till the refund of its security deposit. While decreeing the claim of the respondent No. 1 Bank the D.R.T. have given finding that the appellant had wilfully and voluntarily surrendered the possession of the said flat and, therefore, it had no possessory right in respect thereof. That finding is under challenge in this appeal filed by the appellant/ the original defendant No. 4.
(2.) ON behalf of the appellant it is argued that the appellant never surrendered the possession of the flat in question to its licensor the respondent No. 2 nor to the respondent No. 1 Bank, the mortgagee of the said flat. After the borrower company went into liquidation the Official Liquidator put his own lock on the premises on 10th February, 2003 without removing the appellant's lock. In support of the said contention reliance is placed on the report of the Official Liquidator dated 10th February, 2003 in which it is stated that the flat was already locked and the Official Liquidator put his lock and seal and took the possession. It is, therefore, contended that the appellant had not handed over possession of the flat to the Official , Liquidator and by putting his lock over the lock of the appellant the Official Liquidator had only taken a symbolic possession. It is also the case of the appellant that the appellant was not given notice by the Official Liquidator before putting his lock over the lock of the appellant on the flat nor the appellant was aware of the fact that the Official Liquidator had put his lock to the said flat. In any event it is argued that since the Official Liquidator had put his own lock it can be said that he took symbolic and not actual possession of the flat because the articles of the appellant continued to be in the said flat.
(3.) THEN , placing reliance on the judgment of the Bombay High Court in the case of Maharashtra State Financial Corporation, Bombay and Ballapur Industries Ltd. v. The Official Liquidator, High Court, Bombay and Liquidator of Atrois Chemicals Private Ltd. , it is contended that the possession of the Official Liquidator is custodia legis and therefore also, it does not amount to surrender of possession. In the said case the Division Bench of the Bombay High Court has held that the property of the company does not vest in the Official Liquidator but he has only the custody of the property of the company by virtue of Section 456 of the Companies Act. Subsequently in the suit filed by the respondent No. 1 Bank from which the present appeal arises the custody of the flat was taken by the High Court Receiver and latter on the flat was transferred to the custody of the D.R.T. Receiver as per the order passed by the D.R.T. According to the appellant the custody of the flat by the High Court Receiver or the D.R.T. Receiver is also in the nature of custodia legis and, therefore, it cannot be said that the appellant had voluntarily surrendered the possession of the flat and, thus, lost its possessory right in respect of the said flat.;


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