INDUSTRIAL FINANCE CORPORATION OF INDIA Vs. THAKUR PAPER MILLS LTD

JUDGEMENT

(1.) The writ application under Article 227 of the Constitution and the civil revision application under Section 115 of the Code of Civil Procedure, both filed by the petitioners, arise put of the same proceeding before the District Judge, Darbhanga, under Section 30 of the Industrial Finance Corporation Act (XV of 1948), hereinafter called 'the Act', read with Order 40, Rule 1 and Section 151 of the Code of Civil Procedure, hereinafter called 'the Code'.

(2.) M/s. Thakur Paper Mills Ltd., respondent-opposite party No. 1, hereinafter referred to as 'the Company', applied for, and requested the petitioner, the Industrial Finance Corporation, of India, hereinafter referred to as 'the Corporation', for, lending and advancing a sum of Rs. 20 lakhs, to which the Corporation agreed- The company executed a registered deed of English mortgage in favour of the Corporation on the 28th June, 1962, mortgaging its entire assets in favour of the Corporation, and the Corporation advanced a sum of Rs. 18,76,000/- in various instalments. The Company failed to make the payments as stipulated in the aforesaid mortgage. The Corporation filed a case under Section 30 of the Act before the District Judge of Darbhanga for realisation of the entire dues, then amounting to Rupees 19,61,476.36 paise by sale of the mortgaged properties. The case was registered as Miscellaneous Case No. 33 of 1967 of that court.

(3.) It is stated in the applications that the General Manager, the Chief Technical Officer and the Branch Manager of Calcutta, all of the Corporation, made a local inspection of the factory site of the Company situated at Samastipur and found that the plant and machineries were not properly maintained. It is also stated in the applications that as a result of the inspection and enquiries, it became known that the Company had leased out the buildings and structures, being parts of the mortgaged properties, to various persons without the consent of the Corporation- The application filed for appointment of a receiver also contained statement that under Clause 5 (10) of the mortgage, the Company was precluded from exercising its powers of granting lease in respect of any part of the mortgaged property without the prior consent in writing of the Corporation. It was further stated in the applications that due to the deteriorating condition of the plant and machineries, there was imminent danger of rapid diminution in their value, and, as such, the Corporation was entitled to have a receiver appointed by the Company under Section 69-A of the Transfer of Property Act and under Clause 5 (7) of the mortgage deed. It was claimed that in the case of an English mortgage the mortgagee was entitled to sell the property for default of payment of interest and so the appointment of a receiver should be made almost as a matter of course. The Company, on the other hand, objected that the Act did not contain any provision for appointment of a receiver, nor had the case for appointment of a receiver been made out.