FAO Nos.365-366/2009 Page 1 of 6 * HIGH COURT OF DELHI : NEW DELHI FAO Nos.365 & 366/2009 % Judgment reserved on: 3rd December, 2009 Judgment delivered on: 11th December, 2009 1. FAO No.365/2009 HDFC Bank Limited A Banking Company Incorporated and Registered Under the Companies Act, 1956 Having its Registered Office AT: HDFC Bank House, Senapati Bapat Marg, Lower Parel (West), Mumbai-400013 AND BRANCH OFFICE AT: 9th Floor, Ansal Classique Tower, Plot No.1, J-Block, Community Centre, Rajouri Garden, New Delhi. ….Appellant Through: Mr. Rajat Katyal, Adv. Versus Kanhaiyalal Lal Chib B-49, LIC Colony, Paschim Vihar, New Delhi-110063. .... Respondent Through: Nemo. 2. FAO No.366/2009 HDFC Bank Limited A Banking Company Incorporated and Registered Under the Companies Act, 1956 Having its Registered Office AT: HDFC Bank House, Senapati Bapat Marg, Lower Parel (West), Mumbai-400013 AND BRANCH OFFICE AT: 9th Floor, Ansal Classique Tower, Plot No.1, J-Block, Community Centre, Rajouri Garden, New Delhi. ….Appellant Through: Mr. Rajat Katyal, Adv. Versus FAO Nos.365-366/2009 Page 2 of 6 Yogesh Yadav H.No.-66, Bagdola Village, Sector 8, Dwarka, New Delhi-110075. .... Respondent Through: Nemo. Coram: HON'BLE MR. JUSTICE V.B. GUPTA 1. Whether the Reporters of local papers may be allowed to see the judgment? Yes 2. To be referred to Reporter or not? Yes 3. Whether the judgment should be reported in the Digest? Yes V.B.Gupta, J. Since common question of fact and law is involved in both these appeals, these appeals are being disposed of by this common judgment. 2. Brief facts are that at the request of respondent, appellant granted Higher Purchase cum Loan Facility, vide Loan cum Hypothecation cum Guarantee Agreement dated 30th November, 2006 for purchase of vehicle by respondent. The loan amount was to be repaid in 36/35 equated monthly instalments. 3. However, respondent defaulting in making payment of these instalments and despite repeated request did not clear the dues. Appellant sent a legal notice to respondent and in spite of that, respondent did not pay any heed. 4. Appellant, thereafter filed recovery suit under Order 37 of the Code of Civil Procedure (for short as „Code‟). Along with it, an application under Order 40 Rule 1 of the Code was also filed for appointment of receiver. FAO Nos.365-366/2009 Page 3 of 6 5. Trial court, vide impugned order dated 12th November, 2009 refused to appoint the receiver to take possession of vehicle in question and instead issued notice to respondent. Aggrieved with the impugned order, appellant has filed the present appeal. 6. It is contended by learned counsel for appellant that under the agreement executed between the parties, appellant has all the rights to take over the possession of the vehicle as financed by it to the borrower, in case of any default in the payment of monthly instalments. 7. Other contention is that respondent is hell bent upon misappropriating/selling the vehicle, which is corroborated by the conduct of respondent, since he has failed to pay the monthly instalments, in spite of repeated request and after service of legal notice. 8. In support of its contention, learned counsel cited decision of this Court; (i) M/s. Kotak Mahindra Finance Limited v. Ashok Kumar & Ors., FAO(OS). 262/02 decided on 21st August, 2002 and (ii) Citicorp Finance (India) Limited v. Neeraj Jain & Anr., FAO No.283/05 decided on 20th September, 2005. 9. Relevant portion of impugned order reads as under; “Issue summons of the suit on prescribed performa Under Order 37 CPC along with notice of the application Under Order 40 Rule 1 CPC on filing of PF and RC for 19.12.2009.” 10. As per appellant‟s own case, Loan cum Hypothecation cum Guarantee Agreement was executed on 30th November, 2006 and amount was to be paid by FAO Nos.365-366/2009 Page 4 of 6 way of 36/35 monthly instalments. Now three years after the execution of the agreement, appellant has filed suit for recovery. 11. Order XL of the Code deals with appointment of receivers. This provision reads as under; “1. Appointment of receivers.-(1) Where it appears to the Court to be just and convenient, the Court may be order- (a) appoint a receiver of any property, whether before or after decree; (b) remove any person from the possession or custody of the property; (c) commit the same to the possession, custody or management of the receiver; and (d) confer upon the receiver all such powers, as to bringing and defending suits and for the realisation, management, protection, preservation and improvement of the property, the collection of the rents and profits thereof, the application and disposal of such rents and profits, and the execution of documents as the owner himself has, or such of those powers as the Court thinks fit. (2) Nothing in this rule shall authorise the Court to remove from the possession of custody of property any person whom any party to the suit has not a present right so to remove.” 12. Principles regarding the appointment of receivers are well-settled, that is; (i) It is discretionary; (ii) Plaintiff must show that he has a very excellent chance of success; (iii) He must show a case demanding immediate action; (iv) No order will be made to deprive the defendant of de facto possession and; FAO Nos.365-366/2009 Page 5 of 6 (v) Court will usually refuse to interfere unless the conduct of the party is free from blame. 13. In S. Saleema Bi v. S. Pyari Begum and Anr. AIR 2000 Supreme Court 3513, it was observed; “We find that the defendant is in physical possession of the property in dispute. The Receiver can only be appointed when it is just and convenient and also when there is a prima facie case in favour of the plaintiff- respondent and the case calls for taking of urgent measure like appointment of a Receiver. The High Court has not gone into these questions while appointing Receiver for the property in dispute.” 14. In the present case, there is no urgency for ex parte appointment of receiver, as appellant itself is to be blamed, as it did not approach the court earlier for recovery of the monthly instalments. As stated above, the agreement was executed more than 3 years back and suit for recovery has been filed by the appellant just before expiry of period of limitation. Keeping in view delay and latches on the part of appellant, there is no urgency in the matter. 15. Secondly, apprehensions of appellant that respondent will dispose of the vehicle are wholly unfounded, since vehicle is already hypothecated with the appellant. Respondent has already executed Loan cum Hypothecation cum Guarantee Agreement with the appellant. 16. The judgments cited by learned counsel for appellant are not applicable to the facts of present case, as there has been delay and latches, on the part of appellant in seeking the relief for appointment of ex parte receiver. 17. There is no merit in these appeals and both these appeals are dismissed. FAO Nos.365-366/2009 Page 6 of 6 18. Copy of this judgment be sent to trial court. 11th December, 2009 V.B. GUPTA, J. RB