Gurcharan Singh vs State of Haryana

M.L. Singhal, J.

This is criminal Misc. petition No. 22578M of 1997 whereby Gurcharan Singh petitioner has prayed to this Court for the grant of anticipatory bail to him in case FIR No. 221 dated 26.5.1997, registered at Police Station City, Jagadhri, under Section 406 of the Indian Penal Code.

According to the prosecution, Haryana Financial Corporation agreed to advance term loan of Rs. 5,07,000/ to the industrial concern known as M/s Amrit Stcel Industries, behind Ram Lila Ground, Jagadhri, District Yamuna Nagar, as per terms and conditions of the Deed of Hypothecation dated 15.9.1994 executed by the industrial concern in favour of Haryana Financial Corporation. Gurcharan Singh petitioner was the sole proprietor of M/s Amrit Steel Industries, Jagadhri. Out of the said loan, a sum of Rs. 5,05,750/ was availed by the industrial concern and a sum of Rs. 7,51,226/ with future interest at the rate of 25% per annum from 12.9.1994 became outstanding against M/s Amrit Steel Industries to the Haryana Financial Corporation. Plant and Machinery of the concern was hypothecated to the Haryana Financial Corporation through the said deed of hypothecation dated 15.9.1994 to secure the recovery of loan together with interest. According to the prosecution, Gurcharan Singh who is sole proprietor of the said industrial concern removed the following plant and machinery installed in the industrial concern and thus violated the terms and conditions of Hypothecation Deed dated 15.9.1994.

Deep Drawing Double auction power pressone.

Power Press single Auctiontwo.

Electric motor for Deep. Drawing pressone.

JMT Bench power shearing machine pressone.

Shinning Lathe Machine completeone.

Electric motors for shinning lathetwo.

Polish Addaone

Vide terms and conditions of hypothecation deed, the borrower cannot without written consent of the Corporation remove the hypothecated good from their factory premises except temporarily for the purpose of overhauling or repairs and in case that is removed the owner shall replace the same by hypothecated good of equivalent value thereof.

It has been submitted by the learned counself for the pettioner that as per the terms and conditions of the hypothecationdeed, the amount of loan shall be repaid within five years to be counted from the date of execution of Hypothecation deed in ten half yearly instalments, The first nine instalments being of Rs. 50,000/ each and last one instalment being of Rs. 57,000/. Each of the first of such instalments was to be paid within six months from the date of execution of hypothecationdeed on first March, June, September and December as the case may be. The loan will be secured by hyopothecation of all the items, plant and machinery and fixtures to be financed under scheme of factory situated in Jagadhri standing in the name of the concern, which shall be free from encumbrances.

It has been submitted that the Haryana Financial Corporation has taken over possession of the premises and has put iron locks and now the entire machinery is with them.

Haryana Financial Corporation had with them hypothecation of plant and machinery by way of security for the loan. Industrial concern was to raise the production by running factory with plant and machinery. Haryana Financial Corporation is concerned only with the recovery of loan together with interest. Plant and machinery was got hypothecated by the Corporation with a view to secure its loan. If by the act of the borrower whole of the security or part thereof has become dissipated, the court has to devise ways and means so that value of the security or part thereof, as the case may be, is assured to the Corporation from the borrower. It is, therefore, ordered that the petitioner shall deposit Rs. two lacs with the Haryana Financial Corporation on or before 25.2.1998. If this condition is complied with, the Investigating officer in case he chooses to arrest the petitioner, he will call upon him to furnish bail with personal bond of Rs. 10,000/ together with surety amount of this amount. If the aforesaid condition is not complied with within stipulated time, this criminal petition shall be deemed to have ben declined and the direction given earlier revoked.