ICICI Bank Limited Vs. Nidhi Sharma - (High Court of Delhi) (23 Dec 2019)

When the application for appointment of Receiver or for permission for sale is moved, Trial Court shall consider the same expeditiously

MANU/DE/4415/2019

Banking

The present petition has been preferred by the Petitioner/Plaintiff ("Bank") challenging the impugned order by which Trial Court has simply adjourned the application filed by the Bank under Order XXXIX Rule 6 of Code of Civil Procedure, 1908 (CPC), seeking permission to sell the hypothecated vehicle, which is currently in the Bank's custody.

The Respondent/Defendant ("Defendant") had entered into an agreement for financing of the vehicle. Due to defaults in payment by the Defendant, a suit for recovery was filed by the Bank, along with an application under Order XL Rule 1 of CPC, for appointment of a receiver for the hypothecated vehicle, with power to sell. It is submitted that, the receiver has already been appointed and the bank official has taken possession of the vehicle. Since, the Defendant continued to not appear before Court, the application under Order XXXIX Rule 6 of CPC came to be filed by the Bank seeking permission to sell the vehicle.

In general, whenever the Court finds that the availment of the loan itself is admitted, either due to the payment of some instalments or on the basis of documents, the Court can appoint a Receiver for taking the possession of the vehicle. The vehicle can be taken either from the address given in the loan application or from any other location where it may be found. The directions given in M/s. ICICI Bank Ltd. v. Kamal Kumar Garewal can be prescribed as a general procedure to be followed for taking possession of the vehicle, precautions to be taken during the same, preservation of evidence as to the status of the vehicle and maintenance of the safe custody of the vehicle. The Court's judgment has also made adequate provisions for payments by the Defendant even after the possession is taken. If the payments are not made, a proper course of action would be permission for sale by public auction.

The procedure laid down in M/s. ICICI Bank Ltd., ought to be followed generally by the Trial Court while dealing with the Banks' suits, which involve vehicle loan. The preservation of the vehicle initially and thereafter permitting the public auction is essential in order to ensure that the value of the vehicle is not eroded and the Bank does not incur the additional expenses, maintenance for parking space etc. Thus, whenever the application for appointment of Receiver or for permission for sale is moved, the Trial Court shall consider the same expeditiously.

It is directed that, the Bank would be entitled to sell the vehicle through a proper public auction with written notice to the Defendant. The notice would be served by way of speed post at the known address(es) of the Defendant, as also the location from where the possession of the vehicle was taken. The Defendant is also permitted to participate in the auction. The petition and all pending applications are disposed off.

Tags : VEHICLE SALE AUCTION