Appeal No. 26 of 2007. Case: The National Small Industries Corporation Ltd. Vs Small Industries Development Bank of India and Ors.. Mumbai Debt Recovery Tribunals

Case NumberAppeal No. 26 of 2007
JudgesK.J. Paratwar, Presiding Officer
IssueNegotiable Instruments Act, 1881 - Section 138
Judgement DateSeptember 22, 2008
CourtMumbai Debt Recovery Tribunals


K.J. Paratwar, Presiding Officer

  1. The Appellant was the Intervener in Recovery Proceeding [R.P.] No. 54 of 2002 in favour of Respondent No. 5. He is aggrieved by order Dt. 30.03.2007 passed by Recovery Officer [R.O.] [Mr. P.K. Chaturvedi] of this Tribunal below application at Exh. 14 for releasing, (i) one Blister Packing Machine Model BP - 100 (E) with Automatic universal feeding system including over Printing Station and vacuum pump sets of complete charge parts consisting of forming and sealing drum (ii) Diesel Generating Set of 160 KVA, attached by the learned R.O. in the R.P. and under custody of the Tribunal Receiver Mr. Ajay Kala. The said machinery was attached alongwith other movables of the Certificate Debtor [Respondent No. 2] in the R.P. in favour of Respondent No. 1 & is custody of the Tribunal Receiver. The Appellant herein took out application [Exh. 14 in the R.P.] before leaned R.O. contending that the machines belonged to it. They were given to the Respondent No. 2 on lease basis under Lease Agreement Dt. 17.11.1998 for a period of 60 months. The Respondent No. 2 however failed in paying lease rentals. The Appellant had therefore inter alia initiated criminal proceeding u/s. 138 of Negotiable Instrument Act against Respondent Nos. 3 & 4 for dishonour of cheque on account of lease rentals and the proceeding is pending. It is stated that the present out standings of lease rentals of Rs. 22,59,800/- for recovery of which the Intervener is initiating the proceedings. In sum and substance, the Appellant's case before the learned R.O. [and before this Tribunal] is that it is the owner of the equipments/machineries and as such entitled to possession thereof.

  2. The Respondent No. 5 resisted the application before learned R.O. on the ground that the Certificate Debtor Company [Defendant No. 2] had hypothecated all its movables including machineries whether existing or acquiring in future. It is submitted that the machineries, which came into possession of the Certificate Debtor Company subsequent to the Deed of Hypothecation in favour of Respondent No. 5 [and Respondent No. 1] are also covered by the Hypothecation Deed. As such the machineries cannot released.

  3. The learned R.O. [Mr. Udai Pal Singh] heard the parties and was pleased to pass the order on 14.12.2005. The learned R.O. held the Intervener [Appellant] to be owner of the machineries since they were in the premises of the Respondent No. 2 Company only as...

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