The tribunal heard two appeals by SBI regarding rival claims to hypothecated machinery between SBI and Canara Bank. Examining the timeline and clauses of the hypothecation deeds, the court found the lower court's decision correct and dismissed the appeals with no merit.
The appeals were dismissed as they were found to have no merit.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr Justice Ashok Menon, Chairperson
Appeal No. 335/2015
Between
State Bank of India … Appellant/s V/s. Canara Bank & Ors. …Respondent/s
And
Appeal No. 339/2015 Between State Bank of India … Appellant/s V/s. M/s. S.J. Poly Plast Pvt. Ltd. & Ors. …Respondent/s Mr Pravin Patel, Advocate for Appellant.
-: Common Order dated: 16/10/2023:-
The State Bank of Hyderabad which later merged with the State Bank of India (SBI) is the Appellant in both these appeals. Appeal No. 335 of 2015 arises from Original Application (O.A.) No. 58 of 2007 filed by Canara Bank while Appeal No. 339 of 2015 arises from Original Application (O.A.) No. 118 of 2010 filed by the State Bank of Hyderabad. The first Defendant in O.A. No. 58 of 2007 was a company named Dynamic Plast-O-Pack Pvt. Ltd. while the first Defendant in O.A. No. 118 of 2010 was a company named S. J. Poly Plast Pvt. Ltd. Both these companies are sister concerned owned by common Defendants read as Defendants Nos. 2 to 5 in O.A. No. 58 of 2007 and Defendants Nos. 2 to 4 in O.A. No. 118 of 2010.
1
Defendants Nos. 4 & 5 in O.A. No. 58 of 2007 are not parties in O.A. No. 118 of 2010 while Defendant No. 4 in O.A. No. 118 of 2010 is not a party to O.A. No. 58 of 2007. The State Bank of Hyderabad was arrayed as the sixth Defendant in O.A. No. 58 of 2007 filed by the Canara Bank while in O.A. No. 118 of 2010 filed by the State Bank of Hyderabad, the Canara Bank is arrayed as the fifth Defendant.
2
point of time. The State Bank of Hyderabad is aggrieved and hence, in appeal.
3
“(vi) that hypothecated articles whether present or future, whether now belonging to the borrower or which may be manufactured or acquired in future are and shall be the absolute and unencumbered property of the borrower with full and absolute power of disposition over all such goods including the right to hypothecate and/ or create any charge thereon in any whatsoever manner and the borrower undertakes not to deal with/dispose of any part of the said hypothecated articles otherwise than in the ordinary course of business but the manner only in and to the extent stipulated herein.” (emphasis supplied)
From this recital, it is adequately clear that the goods to be acquired in future are also subject to hypothecation. Hence, the Appellants do not have any right to claim hypothecation over the goods which has already been sold by the Canara Bank. I find no irregularity or error in the findings of the Ld. Presiding Officer in the impugned judgments requiring interference.
The appeals are, therefore, without any merits and hence, are dismissed.
Sd/Chairperson
mks-1&2
4
2 issues framed by the court
Whether the Appeals filed by SBI regarding rival claims of hypothecation over machinery had any merit.
Whether the findings of the Presiding Officer allowing hypothecation in favour of Canara Bank were legally unsustainable.
State Bank of India
Canara Bank & Ors.
M/s. S.J. Poly Plast Pvt. Ltd. & Ors.
Ashok Menon
As recorded by the court registry
4 orders share this CNR
Judgements on the same questions, provisions and authorities, from every court
