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Madhya Pradesh High Court · body

1992 DIGILAW 349 (MP)

Print and Pack Corpn. v. Dena Bank

1992-06-30

R.K.VERMA

body1992
JUDGMENT This is an appeal filed by the borrowers/defendants against the order dated 19.11.1986, passed in Civil Suit No. 46-A/85, by the District Judge, Jabalpur, whereby the application of the plaintiffs for temporary injunction has been allowed restraining the appellant/defendant No. 1 and 2 from receiving any payment of the insured amount from the Insurance Company (defendant No. 10) and restraining the defendant No. 10 from making any payment of the insured amount to the defendants No.1 and 2. The facts giving rise to this appeal, briefly stated, are as follows:-- The respondent/plaintiff Dena Bank has filed the instant suit for recovery of a sum of Rs. 1,07,268/-. The plaintiff had advanced a term-loan of Rs. 48,800/for purchase of machinery for printing press to the defendants under the scheme of M.P. Government for granting soft loan to the educated unemployed persons. The amount of loan was agreed to be repaid in quarterly instalments of Rs. 2,500/each. The movable property including machinery and furniture was hypothecated with the plaintiff Bank as security for securing repayment of the loan. As the amount of loan was not repaid, the plaintiff filed the inst1nt suit. The said hypothecated goods including machinery were insured with the defendant No. 10 (respondent No.9), the Oriental Insurance Company Limited. In the riots which erupted after the assassination of late Prima Minister Indira Gandhi, the hypothecated property was destroyed and the appellant/defendants claimed the amount under the Insurance Policy from respondent No.9, Insurance Company. The plaintiff-bank apprehending that if the amount of insurance is paid by the Insurance Company to the defendants, the security of hypothecation for repayment of loan would vanish completely and it will not be possible for the plaintiff to recover the amount of loan from the defendants. In this case, the account of term-loan advanced to the defendants and the hypothecation of machinery etc. as security for repayment of loan and the insurance of the hypothecated property are not in dispute. In the aforesaid circumstances, the plaintiff-hank filed an application for temporary injunction for restrining the defendants-borrowers from receiving any payment of the insurance amount in respect of hypothecated property which is destroyed in the riots aforesaid. The learned lower Court finding a prima facie case and balance of convenience in favour of the plaintiff-bank allowed the plaintiff's application for temporary injunction by the impugned order dated 19.11.1986. The learned lower Court finding a prima facie case and balance of convenience in favour of the plaintiff-bank allowed the plaintiff's application for temporary injunction by the impugned order dated 19.11.1986. Being aggrieved by the said order, the defendants have filed this appeal. After hearing learned counsel for the parties, the learned counsel for the appellant/defendants has conceded that the outstanding amount of loan with interest due to the plaintiff-bank from the appellants/defendant would in any case exceed the amount of insurance which is stated to be Rs.55,000/-. The learned counsel for the appellants, therefore, fairly concedes and agrees that the amount of insurance which is said to have been deposited by the Insurance Company in the C.C.D. in the lower Court may be paid to the plaintiff-Bank for adjusting that amount towards the loan account of the appellant/defendants. The learned counsel for the appellants, however, made a grievance that the insurance amount was deposited in C.C.D. pursuant to the order dated 7.2. 1987 made by the learned lower Court instead of depositing the same in a Bank where interest would have accrued on the insurance amount to the benefit of the defendants/borrowers, who had hypothecated the insured goods. However, that question is not pertinent at this moment since it could be considered at the time of final adjustment of the balance amount found due after adjusting the insurance amount of Rs. 55,000/-. In view of the candid statement made by the learned counsel for the appellants/defendant acknowledging the liability under term- loan account which would in any case exceed the amount of insurance deposit in C.C.D. and the statement that the said insurance amount can be adjusted towards the term-loan account of the appellants/defendants with the plaintiff-Bank, I find that no controversy survives in this appeal. Accordingly, it is directed that the aforesaid amount of insurance be paid to the plaintiff bank towards the loan account of defendants/appellants, with the above direction this appeal of the appellants is dismissed with no order as to costs.