Delhi High Court
The Installment Supply Ltd. vs Bellary Steels And Alloys Ltd. on 29 August, 2002
JUDGMENT S. Mukerjee, J.
1. Vide order dated 16.8.2002, respondent was proceeded ex parte.
2. The averments of the petitioner thus stand unrebutted in relation to the petition under Section 9 of the Arbitration and Conciliation Act, 1996 which averments of petitioner are also duly supported by an affidavit and documents in relation to the following aspects which were highlighted in the first order of this Court dated 31.1.2002, relevant portion of the order reads as under:
"The Petitioner/company entered into an agreement with the Respondent/company and leased out plant and machinery/assests as described in para 7(e) of the petition. The respondent failed to pay the Installments of the lease rental. According to the terms of the agreement, in the event of default in payment of the rental the Petitioner could declare the entire amount payable under the agreement and agreement could be terminated. In this case the term of lease has already expired. The petitioner served a notice on the Respondent demanding the outstanding rental and the equipment. The Respondent did reply to the notice but sought some time to arrange for the payment. They claimed that the company was in a financial crises. In reply to the notice the Respondent stated that on account of recession in the steel industry the operation of the Electric Arc Furnace was also suspended. Disputes having arisen between the parties and there being an arbitration clause in the agreement, the petitioner invoked the arbitration clause by their communication dated 23.1.2002 and appointed Mr. Abhinav Vashisht an arbitrator, requesting the Respondent to appoint the second arbitrator in terms of the agreement.
The petitioner avers that the machinery is not being properly maintained by the Respondent and if it is not kept maintained, it is likely to be damaged. In any case, the lease period has already expired. Otherwise also under the agreement since the Respondent has failed to pay the lease rental, the petitioner has a right to take possession of the equipment. The prayer is to appoint a Receiver to take the possession of the equipment and to hand over the same to the petitioner on superdari.
3. Since by the same order dated 31.1.2002 Mr. Shellen Kumar Advocate was appointed as a Receiver and he has actually carried out the work assigned to him, it is obvious that respondent, through its officials, is very well aware of the pendency of the proceedings and about the averments in the petition, as well as the aspects highlighted in the order dated 31.1.2002, and despite knowledge has chosen not to contest or rebut the same. The only inference possible is that the respondent is not in a position to rebut the averments.
4. The this view of the matter the petitioner is clearly entitled to the relief claimed in the petition considering both the un-rebutted averments of the petitioner as well as the huge outstanding to the tune of Rs. 41,20,042/-, and also the observations of learned Single Judge of this Court in the case of Wipro Finance Ltd. v. Dee Pharma Ltd.; reported in 86(2000) Delhi Law Times 45 which reads as under :-
"12. The lease equipment belongs to the petitioner. The respondent without making the payments due, not only the petitioner is deprived of their property but a valuable security would be lost/destroyed due to its use and by passage of time. In these circumstances, it is just, proper, convenient and expedient in the interest of justice that a Receiver should be appointed to seize and take possession of the aforesaid plant and machinery from the possession of the respondent wherever it is available."
5. In view of the above, I find that the case as made out by the petitioner, warrants the appointment of a Receiver under Section 9 of the Act, to take possession of the leased plant and machinery/ assets/ equipment, and for the said purpose I direct the appointment of Shri Rishi Kapur, Manager of the petitioner company as a Receiver for the purposes of this order allowing the present petition. He will stand duly authorised to seize and take possession of the plant and machinery/ assets/ equipment in question as described in para 7(e) of the petition being:-
SGCI ROLLS' 485 MM XL 1300 1 mt 485 MM XL 760 5 mt 400 MM XL 1020 18 mt lying at the respondent's premises at S-10/11, Anantapur Road, Bellary 583101 (Karnataka), where it is stated to be lying, or from any other place where it may be found/ available.
6. The Receiver shall stand duly empowered to take all necessary steps and actions for removal/ detachment of the said plant and equipment/ assets from any fastening in the foundation/ floor and/ or from any other connected machinery and equipment which may be other than or beyond the leased plant and equipment.
7. The Receiver will be entitled to enter any premises for the said purposes by opening or breaking of any locks or doors/ obstruction of any kind whatsoever.
8. The Receiver shall prepare an inventory of the plant and equipment Along with accessories which are so seized and removed from the said premises. The Receiver will obtain atleast five photographs from different angles both before and after carrying out his functions.
9. The Receiver will be entitled to take away and/ or remove the said plant and equipment to any other premises belonging to the petitioner and will ensure that the said plant and equipment/ machinery/ assets are properly preserved by adopting all required means and measures for ensuring that the said plant and equipment/ machinery/ assets are kept safe both in the sense of remaining intact and as regards the condition thereof at the time of taking possession.
10. The Receiver will be entitled to avail the assistance of the local police authorities, who will extend necessary assistance and protection upon request being made in that behalf by the Receiver. Upon relocating the plant and machinery/ assets/ equipment, the Receiver will inform this Court and the respondent about' the location and details of arrangements regarding upkeep thereof including expenditure thereon.
11. The petition stands disposed of as allowed. Parties are however left to bear their own costs.