In a suit for recovery, Bank would be entitled to sell the hypothecated vehicle even if the Defendant is ex-parte

The Delhi High Court in the case of M/s ICICI Bank Limited vs Nidhi Sharma (CM (M) 1814/2019) decided on 23.12.2019 held that the Bank would be entitled to sell the hypothecated vehicle where the Defendant is ignoring the proceedings going on before the Court.

Facts :
Defendant had entered into an agreement for financing of the vehicle. Due to defaults in payment by the Defendant, a suit for recovery was filed by the Bank, along with an application under Order XL Rule 1 CPC, for appointment of a receiver for the hypothecated vehicle, with power to sell. The Defendant from the beginning continued to remain away from the Court, the Trial Court has repeatedly directed the filing of fresh process fee and service by publication which lead to unnecessarily delaying the suit.

Issue:
Application filed by the Bank under Order XXXIX Rule 6 CPC seeking permission to sell the hypothecated vehicle currently in the custody of the Bank

Ratio:
The Court relied on the judgment of their own Court in M/s. ICICI Bank Ltd. vs Kamal Kumar Garewal, [FAO 49/2015, decided on 29th May, 2015] which took consideration of factors like that the value of vehicles is likely to deteriorate as time passes on, steep maintenance cost on the Bank for preservation of the vehicles, the Court under similar circumstances had appointed a Receiver.

The Court, in the present case further held that the directions given in judgment above can be prescribed as a general procedure to be followed for taking possession of the vehicle, precautions to be taken during the same, preservation of evidence as to the status of the vehicle and maintenance of the safe custody of the vehicle. Thus, whenever the application for appointment of Receiver or for permission for sale are moved, the Trial Court shall consider the same expeditiously.

The Court directed the Bank would be entitled to sell the vehicle through a proper public auction with written notice to the Defendant. The notice would be served by way of speed post at the known address(es) of the Defendant, as also the location from where the possession of the vehicle was taken. The Defendant is also permitted to participate in the auction, in the manner explained in paragraph 14 of the judgment.