1 mst IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.3717 OF 2010 IN SUIT NO.2606 OF 2010 M/s.SBI Global Factors Limited Plaintiff (Formerly known as M/s.Global Trade Finance Limited) versus M/s.Minaxi Weaving Mills Pvt.Ltd. and others Defendants Mr.Chirag Balsara a/w Mr.Rajesh Talekar i/by K.Ashar & Co. for plaintiff. Ms.Rita Yadav i/by Raval Shah & Co. for defendants. CORAM : S.J.KATHAWALLA, J. DATE : 15th June 2011 PC : 1. The plaintiff is a subsidiary of State Bank of India. They are carrying on business of providing international factoring, domestic factoring and other trade finance services. The defendant no.1 is a private limited company carrying on the business inter alia of manufacturing, processing, fabricating etc. in all kinds of textiles, yarns, threads, fibers and other textile and fibrous products etc.. The defendant nos.2 to 6 are the guarantors who have guaranteed the repayment of the dues of the plaintiff. 2. Pursuant to the request made by the defendant no.1, the plaintiff by their letter of sanction dated 11th February 2008 granted trade finance facility for an amount of Rs.10,00,00,000/- to the defendant no.1 on terms and conditions set out therein. 3. The defendant no.1 duly executed the documents set out in clauses (i) to (xv) of paragraph 4 of the plaint in favour of the plaintiff for 2 availing the said facility. For the purpose of securing the repayment of said trade facility, the defendant nos.2 to 5 issued joint and several letters of guarantee dated 12th February 2008, 14th February 2008 and 20th February 2008 as set out in paragraph no.5 of the plaint. 4. The defendant nos.5 and 6 (represented through their constituted attorney Mr.U.K.Nambiar-the defendant no.4) executed a Deed of Mortgage dated 22nd February 2008 bearing registration no.02415 of 2008 with respect to the property situate at Plot No.11, Nirav Industrial Estate, Sativali, Vasai (E), District : Thane in favour of the plaintiff as more particularly set out in paragraph 6 of the plaint. 5. The defendant no.1 vide resolution passed by its Board of Directors in their meeting held on 15th June 2008 resolved that 9,00,000 equity shares of the defendant no.1 company shall be pledged in favour of the plaintiff as per the schedule contained therein and pursuant thereto the defendant no.3 through his constituted attorney i.e. defendant no.4 executed a deed of pledge of the equity shares dated 5th June 2008 in favour of the plaintiff as more particularly set out in paragraph 8 of the plaint. 6. The plaintiff vide their various sanction letters dated 10.6.2008, 18.6.2008, 30.6.2008, 25.9.2008, 10.10.2008 carried out certain amendments in the terms and conditions more particularly revising the service charges/interest rates. However, it was always clarified in the revised sanction letters that all the terms and conditions contained in the initial sanction letters and subsequent amendments would continue to remain unchanged except to the extent of the sanction letter amending the said terms. The defendant no.1 approved and accepted the terms and conditions in all the subsequent revised sanction letters as more particularly set out in the plaint. 7. The defendant no.2 as collateral security to the said facility granted 3 to the defendant no.1 by the plaintiff, by depositing the title deeds of the immovable properties situate at White Waters, Ernakulum, Kochin created a mortgage in respect of the said property in favour of the plaintiff as more particularly set out in paragraph 11 of the plaint. 8. As the defendant no.1 failed to regularize the loan account and as the defendant nos.2 to 6 despite the plaintiff's follow ups failed to repay the outstandings guaranteed by them, the plaintiff filed the present suit for a declaration that a sum of Rs.19,20,90,868.12 Ps. (Rs.Nineteen Crores twenty eight lacs ninety thousand eight hundred sixty eight and twelve paise only) is due and payable by the defendants to the plaintiff in respect of the trade finance facility as per particulars of claim being Exhibit-XX with further interest thereon @ 18% p.a. with quarterly rests on the said amount from the date of the suit till decree and payment and/or realization thereon and for an order and direction against the defendant nos.1 to 6 to jointly and severally pay the same to the plaintiff. The plaintiff has also sought a declaration that the repayment of the aforesaid trade finance facility with outstanding interest thereon is duly secured by a valid and subsisting mortgage on the said immovable properties standing in the names of defendant nos.2, 5 and 6 as described in Exhibit-DD and Exhibit-X to the plaint and for an order and decree against the defendants to pay to the plaintiff their dues as may be fixed for redemption by this Court and in the event of their failure to make such payments, the said mortgaged properties be sold and the net sale proceeds be paid over to the plaintiff in or towards the satisfaction of the entire dues claimed in the suit. The plaintiff has also prayed that the pledged shares described in Exhibit-AA to the plaint be sold. 9. In the Notice of Motion the plaintiff has sought appointment of Court Receiver to take possession of the mortgaged properties as well as pledged shares and to sell the same. Mr.Balsara, learned advocate for the plaintiff has after pointing out the aforesaid facts submitted that the Notice of Motion be allowed in terms of prayer clauses (a) and (b). 4 Mr.Balsara has also submitted that in view of Full Bench Judgment of this Court in case of State Bank of India Vs. Trade Aid Paper & Allied Products (India) Pvt.Ltd. (AIR-1995-BOM-268), the plaintiff is entitled to appointment of Court Receiver, High Court, Bombay in terms of prayer clause (a). 10. Though the respondents have filed an affidavit wherein they have denied the averments/allegations made in the plaint, the only submission made by the learned advocate appearing for the defendants before this Court is that the mortgaged property is not in possession of the defendants. However, no particulars are set out in the affidavit and/or are mentioned across the bar as to who is in possession of the suit property. Similar contention was raised by the sister concern of the defendants at the time of hearing of Notice of Motion No.965 of 2010 in Suit No.2823 of 2009 which contention was rejected by a detailed order of this Court (Coram : S.C.Dharmadhikari, J.) vide order dated 25th October 2010. 11. I have considered the submissions advanced on behalf of the plaintiff and have perused the affidavit filed on behalf of the defendants. I have also considered the submission advanced on behalf of the defendants that the mortgaged properties are not in possession of the defendants. Prima facie, I am satisfied that an amount of Rs. 19,20,90,868=12 Ps. with interest is due and payable by the defendants to the plaintiff. I am also prima facie satisfied that the properties described in Exhibit-DD and Exhibit-X to the plaint are mortgaged by defendant nos.2, 5 and 6 for securing the amounts due by the defendant no.1 to the plaintiff. I am also prima facie satisfied that the shares described in Exhibit-A to the plaint are validly pledged by the defendant no.1 in favour of the plaintiff. In the circumstances, I pass the following order :- (a) The Court Receiver, High Court, Bombay is appointed as Receiver of the mortgaged properties more particularly described in Exhibit-DD and 5 Exhibit-X to the plaint; (b) The Court Receiver shall at this stage take only symbolic possession of the said mortgaged properties described in Exhibit-DD and Exhibit-X to the plaint; (c) The Court Receiver shall also take possession of the shares pledged by the defendant no.1 in favour of the plaintiff more particularly described in Exhibit-AA to the plaint, but shall not sell the same at this stage; (d) The Court Receiver shall after complying with the order set out hereinabove submit his report to this Court informing compliance of clauses (b) and (c) above, and seek further directions, if any, after forwarding a copy of his report to the plaintiff as well as the defendants; (e) Pending compliance of the order in clauses (a) to (c) above by the Court Receiver, the defendants are restrained from in any manner selling, disposing of, alienating, encumbering, creating third party rights and/or parting with possession of the immovable properties described in Exhibits- DD and Exhibit-X to the plaint and also the shares described in Exhibit-AA to the plaint; (f) The Notice of Motion is accordingly disposed of with costs. (S.J.KATHAWALLA, J.)