Allowed

SBI Capital Markets Ltd. v. Glit Pack Ltd.

Bombay HC3 Oct 2007APP/71/2001

Case brief

AI extract

What is this about?

An appeal against an order rejecting a notice of motion for appointment of a Court Receiver on machinery. The appeal was allowed. The Court set aside the impugned order, granted the notice excluding the part on security, and directed the Court Receiver to take symbolic possession and offer agency to the defendants.

What did the court decide?

Notice of motion No.3341 of 2000 granted excluding prayed portion on security; Court Receiver to take symbolic possession and offer agency to defendants.

IN	THE ORDINARY	HIGH	COURT OF ORIGINAL	JUDICATURE CIVIL	AT BOMBAY JURISDICTION
		APPEAL	NO.71		OF 2001
			IN
	NOTICE	O	F MOTION	NO.3341	OF 2000
			IN
		SUIT	NO.4771		OF 2000
SBI Capital Mar Gilt Pack Ltd.	kets Ltd. v/s			...App ...Res	ellants pondents
Mr Pravin	Diwan	i/b	M/s Kanga	and Co.	for Appellants.
Mr H.N	. Thak	ore	i/b M/s	Thakore	Jariwalla and
Associates			for		Respondents.
CORAM DATE	: D.K.	DE :	SHMUKH AND 3RD	J.H. OCTO	BHATIA JJ. BER 2007.

THE
ORDINARY

HIGH

COURT
OF
ORIGINAL

JUDICATURE
CIVIL

AT
BOMBAY
JURISDICTION

APPEAL

NO.71

OF
2001

NOTICE

F
MOTION

NO.3341

OF
2000

SUIT

NO.4771

OF
2000

SBI Capital Mar
Gilt Pack Ltd.

kets Ltd.
v/s

...App
...Res

ellants
pondents

Mr
Pravin

Diwan

i/b

M/s
Kanga

and
Co.

for
Appellants.

Mr
H.N

.
Thak

ore

i/b
M/s

Thakore

Jariwalla
and

Associates

for

Respondents.

CORAM
DATE

:
D.K.

DE
:

SHMUKH
AND
3RD

J.H.
OCTO

BHATIA
JJ.
BER
2007.

1.		By this appeal, the appellants challenge	the
order	dated	1st December 2000 passed	by	the	learned
Single	Judge	of this Court in notice	of motio	n	No.3341
of	2000.	By that order, the learne	d Single	Judge	has
rejected	the	notice of motion taken	out	by	the
appellants	-	plaintiffs. The plaintif	fs have	filed	the
suit	seeking	a decree of possession	of the		machinery,
which	according	to the plaintiffs, is	owned	by	the
plaintiffs	and	has been given on	lease	to	the
defendants	.	There is no dispute that	the	plaintiffs	are
owners	of	the machinery and that it	has been	given	on
lease	to t	he defendants. There is	also no	disput	e that
the	defendants	have committed default	in	payment	of
agreed	lease	rentals. It appears	that the		defendants
were	sick	industrial company, therefore	proc	eedings	were
started	before	the B.I.F.R., but	pendency	of	the
proceeding	s before	the B.I.F.R. could	not	have	affected
the	claim o	f the plaintiffs because	the	plaintiffs’	suit
was	for	recovery of their own property.	A	scheme	for
rehabilitati	on of	the defendant - Company	was	formed	and
the	appellants	had given their consent	to t	he	scheme.
The	learned	Single Judge has rejected	the	notice	of
motion	in	view of the consent given	by the		plaintiffs.

By this appeal, the appellants challenge

the

order

dated

1st
December
2000
passed

the

learned

Single

Judge

of
this
Court
in
notice

of
motio

No.3341

2000.

By
that
order,
the
learne

d
Single

Judge

has

rejected

the

notice
of
motion
taken

out

the

appellants

plaintiffs.
The
plaintif

fs
have

filed

the

suit

seeking

a
decree
of
possession

of
the

machinery,

which

according

to
the
plaintiffs,
is

owned

the

plaintiffs

and

has
been
given
on

lease

the

defendants

There
is
no
dispute
that

the

plaintiffs

are

owners

the
machinery
and
that
it

has
been

given

lease

to
t

he
defendants.
There
is

also
no

disput

e
that

the

defendants

have
committed
default

payment

agreed

lease

rentals.
It
appears

that
the

defendants

were

sick

industrial
company,
therefore

proc

eedings

were

started

before

the
B.I.F.R.,
but

pendency

the

proceeding

s
before

the
B.I.F.R.
could

not

have

affected

the

claim
o

f
the
plaintiffs
because

the

plaintiffs’

suit

was

for

recovery
of
their
own
property.

scheme

for

rehabilitati

on
of

the
defendant
-
Company

was

formed

and

the

appellants

had
given
their
consent

to
t

scheme.

The

learned

Single
Judge
has
rejected

the

notice

motion

view
of
the
consent
given

by
the

plaintiffs.

It	is pointed	out that	under the scheme, lease	rentals
were	agreed to	be paid	by the defendants to	the
plaintiffs.	It	is also	pointed out that even	after
sanction	of the	scheme, the	defendants did not pay	lease
rentals	and	the lease	was terminated by the	plaintiffs.
It i	s not	in dispute th	at presently the lease of	the
machinery	has	been termi	nated by the plaintiffs.	The
defendants	are	in possess	ion of the machinery	even
though	the	original period	of lease has expired.	The
complaint	of	the plaintiffs	is that even after	sanction
of	the	rehabilitation sc	heme, the plaintiffs have	not
paid	either	the arrears	of lease rentals or	current
lease	rentals.	As admitt	edly the machinery belongs	to
the	plaintiffs	and the lease	of the machinery has	been
terminated,	the	in our	opinion, the plaintiffs	are
entitled	to	claim that	Court Receiver should	be
appointed	on	the machinery.	However, considering	that
there	is a	rehabilitation	scheme sanctioned and	if
defendant	-	Company is	running on the basis of	that
machinery,	then	the defe	ndants can continue	in
possession	of	the machine	ry as agents of the	Court

is
pointed

out
that

under
the
scheme,
lease

rentals

were

agreed
to

be
paid

by
the
defendants
to

the

plaintiffs.

is
also

pointed
out
that
even

after

sanction

of
the

scheme,
the

defendants
did
not
pay

lease

rentals

and

the
lease

was
terminated
by
the

plaintiffs.

It
i

s
not

in
dispute
th

at
presently
the
lease
of

the

machinery

has

been
termi

nated
by
the
plaintiffs.

The

defendants

are

in
possess

ion
of
the
machinery

even

though

the

original
period

of
lease
has
expired.

The

complaint

the
plaintiffs

is
that
even
after

sanction

the

rehabilitation
sc

heme,
the
plaintiffs
have

not

paid

either

the
arrears

of
lease
rentals
or

current

lease

rentals.

As
admitt

edly
the
machinery
belongs

the

plaintiffs

and
the
lease

of
the
machinery
has

been

terminated,

the

in
our

opinion,
the
plaintiffs

are

entitled

claim
that

Court
Receiver
should

appointed

the
machinery.

However,
considering

that

there

is
a

rehabilitation

scheme
sanctioned
and

defendant

Company
is

running
on
the
basis
of

that

machinery,

then

the
defe

ndants
can
continue

possession

the
machine

ry
as
agents
of
the

Court

2.			The	order impugned in	the appea	l is set a	side.
Notice	of	mot	ion	No.3341 of	2000	is	granted	in	terms	of
prayer	cla	use	(a)	excluding	the	brack	eted	portion.		The

The

order impugned in

the appea

l is set a

side.

Notice

mot

ion

No.3341
of

2000

granted

terms

prayer

cla

use

(a)

excluding

the

brack

eted

portion.

The

Court		Rec	eiver	shall initi	ally	take s	ymbolic p	ossession
and	offer	to	the	defendants	agency	of the	Court	Receiver
to	be	in	possessi	on of the	machin	ery on	usual terms	and
conditions		includ	ing	royalty	and	security.	If	the
defendant	s	do	not	execute	agency	agreement	within	a
period	of	six	weeks	from the	date	on which	it is	offered
to	the	def	endants,	the	Court	Receiver	shall	take
physical		possession	of	the machi	nery	and hand	it ove	r to
the		plaintiffs,	also	as agents	of	the Co	urt Receiver	on
usual		terms	and	conditions	but	without	security	and
royalty.		In	that	event,	the	plaintif	fs shall	be
entitled		to	apply	for further	reliefs.	Till	the	Court
Receiver		tak	es	possession, a	d-interim	order	in terms	of

Court

Rec

eiver

shall
initi

ally

take
s

ymbolic
p

ossession

and

offer

the

defendants

agency

of
the

Court

Receiver

possessi

on
of
the

machin

ery
on

usual
terms

and

conditions

includ

ing

royalty

and

security.

the

defendant

not

execute

agency

agreement

within

period

six

weeks

from
the

date

on
which

it
is

offered

the

def

endants,

the

Court

Receiver

shall

take

physical

possession

the
machi

nery

and
hand

it
ove

r
to

the

plaintiffs,

also

as
agents

the
Co

urt
Receiver

usual

terms

and

conditions

but

without

security

and

royalty.

that

event,

the

plaintif

fs
shall

entitled

apply

for
further

reliefs.

Till

the

Court

Receiver

tak

possession,
a

d-interim

order

in
terms

SBI Capital Markets Ltd. v. Glit Pack Ltd.

Case brief

What is this about?

What did the court decide?

SBI Capital Markets Ltd. v. Glit Pack Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

Coram

Case details

Similar cases

Mazgaon Dock Ltd. Vs Shivbrat Jagroop and Anr.

lalit construction and Ors. Vs manubhai hargovandas pated

Indian Oil Corporation Ltd. Vs Swastik Petrochem and Auto Industries and Ors.

Shri J.K.Sharma Vs Mazda International Pvt. Ltd.

Pramod Kumar Makharia Vs Dhruva Kumar Makharia and 3 Ors.

Pushpa P. Mulchandani and Ors. Vs Admiral Radhakrishin Tahiliani(Retd) and Ors.