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ICICI BANK LIMITED v. NIDHI SHARMA CM (M) 1814/2019
The petition has been filed by the petitioner ICICI Bank Ltd. hereinafter referred to as "Bank" in the High Court of New Delhi with the Corum headed by Justice Prathiba M.Singh challenging the impugned order dated 27.11.2019 by which the trial court has adjourned the application which was filed by the bank under CPC Rule 6 Order XXX1X , seeking permission to sell the hypothecated vehicle, which is in bank's custody. The respondent had entered into an agreement for financing the vehicle. Due to default in payment, a suit of recovery was filed by the bank, along with an application under CPC order XI of Rule 1, for the appointment of a receiver for the hypothecated vehicle, with power to sell. It was submitted that receiver has already been appointed and the bank official has taken possession of the vehicle. Since the respondent did not appear before the court, the application was filed by the Bank seeking permission to sell the vehicle.
The grievance of the learned counsel for the Bank is that the application was simply adjourned to 19.05.2020. Counsel further submitted that in ICICI Bank Ltd. v. Kamal Kumar Garewal(2015) in which the court has already laid down directions for cases to be dealt with where there is a default in payment in respect of loan transaction. Despite these guidelines being laid down, the trial court is not following the directions and unnecessarily delaying the suit.
After hearing the counsel the court observed that the Bank has already taken possession of the vehicle. Since the respondent was not appearing before the court, the trial court has directed the filing of a fresh process fee and service by the application.
The learned judge of this court under similar circumstances has passed the direction in ICICI Bank Ltd v. Kamal Kumar Garewal (2015) considering the fact that the cost of maintenance is paid by the Bank and the value of the vehicle will reduce eventually. In the case above mentioned the court laid down directions
- By appointing a receiver and handing over the address of the respondent to take possession of the vehicle from the address, in case the vehicle is not found at the address of the respondent then the receiver will be at liberty to recover the vehicle wherever it is found. The receiver is not allowed to forcibly take the possession of the vehicle and the receiver is not allowed to block the path or stop the moving vehicle.
- In case the vehicle is driven by a woman who is unaccompanied by a male or elderly then the receiver cannot take possession of the vehicle at the time.
- The receiver shall be at liberty to take the assistance of the police
- There should be no disturbance of the peace by the receiver in the process. If there is any disturbance caused, the receiver shall be accompanied by the police
- At the time of reoccupying the vehicle, the receiver shall take pictures if the vehicle from different angles with the picture of the person occupying and a picture of the place from where it was occupied.
- The receiver shall make a list of the article found in the vehicle and give the copy to the person from whom possession is taken.
- The vehicle should be kept in safe custody.
- If the respondent makes a payment on the day of possession of the vehicle, the receiver shall release the vehicle with subject to an undertaking not to default monthly instalments till the tenure expires.
- If the respondent is not in a position to pay all the outstanding instalment the receiver shall give another 30 days if the payment is done within the period the receiver shall release the vehicle.
- If the respondent does not make the payment within 60 days, the receiver has the authority to sell the vehicle in a public auction with a notice given to the respondent.
After looking into the above directions in the matter the court suggested that other district courts follow the given directions in similar cases. Whenever courts find out that there is a default in payment of loans, the court can appoint a receiver for taking the possession of the vehicle. The vehicle can be taken from the address given or wherever it may be found. The directions must be followed while taking possession of the vehicle. The judgement given by the Hon'ble court further adds the provisions for payment by the respondent even after the possession is taken. If the instalments are still not paid receiver can sell the vehicle by public auction.
Thus, the procedure laid down in ICICI bank Ltd (2015) must be followed by the trial court while dealing with the suit which involves a vehicle. Because of the non-payment of instalments, it is directed that the bank would be entitled to sell the vehicle at public auction. The respondent is also allowed to take part in the auction. It was further directed that the judgement in the case along with the judgement in ICICI Bank Ltd v. Kamal Kumar Garewal(2015) be circulated by the worthy Registrar general to all the District judges for proper circulation among the lower courts. Since there is an involvement of public money, all steps should be involved to ensure the recovery to the possible extent.
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