JUDGMENT - Smt. K.K. BAAM, J.:---The petitioners have filed this petition praying that the Court Receiver, High Court, Bombay or some other fit and proper person be appointed Receiver of the leased equipment described in the Schedule being Exhibit "A" to the petition with all powers under Order 40, Rule 1 of the Code of Civil Procedure, 1908 including the power to take actual and physical possession of the leased equipment more particularly described in Exhibit "A" to the petition and to hand over the same to the petitioners without any deposit or royalty. 2.The petitioners have, in the petition as filed, also prayed for an order of injunction restraining the respondents, their servants, agents, officers, directors, representatives and/ or otherwise howsoever be restrained by an order and injunction of this Court from in any manner dealing with and/or disposing of and/or parting with possession and/or alienating and/or encumbering and/or creating third party right, title and interest in respect of the leased equipment more particular description of which is set out in the schedule being Exhibit "A" to the petition or any part thereof, and for interim and ad-interim reliefs in terms of prayers (a) and (b) above. 3.The petitioners carry on business, inter alia, of leasing, having their registered office in Bombay. The respondents carry on the business of, inter alia, manufacturing and selling polyester filament yarn, polyester chips and cotton yarn. By an agreement dated August 16, 1994 (Exhibit B to the petition) executed by and between the petitioners as the owners and the respondents as the lessee, the petitioners gave on lease to the respondents the said leased equipment, namely, the DG set consisting of engine and alternator (Unit II) of Wartsila ABB make with the particulars set out and described in schedule Exhibit A to the petition, on terms and conditions as contained in the said Lease Agreement. The said agreement sets out the terms and condition with regard to the lease rentals, the right of the petitioners to terminate the agreement in the event of the respondents failing to pay the lease rentals and the right to recover back the possession of the leased equipment. It is the case of the petitioners that the title in the property remained with the petitioners only. It is the case of the petitioners that the title in the property remained with the petitioners only. 4.According to the petitioners the respondents failed and neglected to pay lease rentals falling due on January 7, 1997 and thereby committed default in payment of the amounts due and payable by them under the lease agreement. Though the respondents were called upon to make payment, the respondents failed and neglected to make payment for the same and, therefore, by the letter of August 28, 1997 (Exhibit K to the petition) the petitioners recorded various defaults and breaches committed by the respondents and called upon the respondents to pay to the petitioners an aggregate sum of Rs. 2,26,77,266.50 ps. within a period of seven days from the receipt of the said letter, failing which the lease agreement would stand terminated. The said letter was forwarded to the respondents at their registered office as well as at their Mumbai office at Regent Chambers, Nariman Point, Mumbai. The respondent, though received the said letter, failed to reply to the said letter or to comply with the requisitions contained therein. By reason of the respondents failure to pay the amount as aforesaid, the said lease agreement stood terminated. 5.It is the case of the petitioners that in view of the fact that the lease agreement stood terminated, the petitioners have become entitled to recover possession of the leased equipment and a sum of Rs. 2,96,89,701.50 Ps. inclusive of sum of Rs. 2,23,33,826.50 ps. being the amount of existing arrears of lease rentals and a further sum of Rs. 70,12,435 being the amount of liquidated damages calculated at the rate of 2 per cent per month compounded at monthly rests and further sum of Rs. 3,43,440/- being the liquidated damages calculated at the rate of 2 per cent per month compounded at the monthly rests on the delays payments of lease rentals as set out in paragraph 18 of the petition. 6.According to the petitioners, by virtue of the fact that the disputes and differences arose between the petitioners and the respondents, the matter was, as per the arbitration clause, referred to the sole arbitration of Shri Justice Kania (Retired). 6.According to the petitioners, by virtue of the fact that the disputes and differences arose between the petitioners and the respondents, the matter was, as per the arbitration clause, referred to the sole arbitration of Shri Justice Kania (Retired). 7.It is the case of the petitioners that so far as the respondents are concerned, they are heavily indebted to the petitioners but the respondents Company are otherwise also in a precarious financial condition and that one of the leading public financial institution, namely, Industrial Credit and Investment Corporation of India Limited (I.C.I.C.I.) has filed a suit on the Original Side of this Court being Suit No. 3287 of 1997 wherein Receiver has been appointed in respect of almost all the moveable and immoveable properties of the respondents. According to the petitioners, as per the special audit conducted by the plaintiffs, namely, I.C.I.C.I. in the said suit, it is revealed that there is a large scale siphoning out of funds by the management of the respondents Company. The respondents have not paid insurance on the assets and therefore in order to protect the petitioners' rights, the petitioners have filed this petition and have sought appointment of the Court Receiver. 8.The respondents have filed their reply and it is urged on their behalf that so far as this petition is concerned, this Court does not have the jurisdiction to entertain this petition inasmuch as the petitioners have not obtained leave under Clause XII of the Letters Patent as the respondents were having their office at Delhi at the relevant time when this petition was filed and further that the property, which is the subject matter in dispute, is also at Dhar, Madhya Pradesh. The correspondence has been addressed to Delhi; agreement was executed at Delhi and, therefore, it is urged on behalf of the respondents herein that as per section 2(e) of the Indian Arbitration Act this Court would not have the jurisdiction to entertain the petition and, therefore, this petition is not maintainable. The correspondence has been addressed to Delhi; agreement was executed at Delhi and, therefore, it is urged on behalf of the respondents herein that as per section 2(e) of the Indian Arbitration Act this Court would not have the jurisdiction to entertain the petition and, therefore, this petition is not maintainable. For that purpose, on behalf of the respondents, reliance has been placed upon Clause XII of the Letters Patent which provides that in case of suits for land or other immovable property, if such land or property shall be situated, or in all other cases if the cause of action shall have arisen, either wholly, or, in case the leave of the Court shall have been first obtained, in part, within the local limits of the ordinary original jurisdiction of the Court, the said Court shall be empowered to receive, try and determine suits of every description. 9.It is, therefore, urged on behalf of the respondents that the petitioners herein have not obtained leave under Clause XII of the Letters Patent and, therefore, so far as the present petition is concerned, the same is not maintainable. In support of their contention, the respondents have placed reliance on a ruling in the case of (Shiv Bhagwan v. Onkarmal)1, reported in A.I.R. 1952 Bombay 365, wherein it has been observed : "(h) Letters Patent (Bom.) Cl. 12. Suit for land-Averment in plaint. In the case of a suit for land, the Court has jurisdiction to entertain the suit even though some of the lands are situated outside jurisdiction; provided some lands are situated within jurisdiction and leave has been obtained under Clause 12. But the very foundation of the jurisdiction of the Court is leave granted on the basis of some immovable property situated within jurisdiction. The granting of leave is a judicial act, and the Court must judicially consider the fact of some property being within jurisdiction and, on the consideration of that fact, proceed to give leave under Clause 12. But the very foundation of the jurisdiction of the Court is leave granted on the basis of some immovable property situated within jurisdiction. The granting of leave is a judicial act, and the Court must judicially consider the fact of some property being within jurisdiction and, on the consideration of that fact, proceed to give leave under Clause 12. Where at the date of the inception of the suit no immovable property was, in fact, situated within jurisdiction although, leave was granted under Clause 12, it was not granted for the purpose of enabling the Court to entertain a suit for land." 10.Reliance has also been placed on behalf of the respondents on a ruling in (Noorjahan v. Sadrunnisa)2, 1993(1) Bom.C.R. 501 in support of their contention that requirement of obtaining leave under Clause XII of the Letters Patent cannot be ignored. So far as this issue is concerned, a perusal of the pleadings pertaining to the jurisdiction reflects that the petitioners carry on business and have their office in Bombay. Under the agreement, the lease rentals were payable by the respondents to the petitioners in Bombay; the respondents also have their office in Bombay, though it is urged on behalf of the respondents that at the material time their office at Bombay was closed. The mere fact, that the office of the respondents at Bombay was closed at the relevant time, does not entitle the respondents to contend that this Court has no jurisdiction. It is not the case of the respondents that they had no office at Bombay at relevant time but the contention is that their office at Bombay was closed at relevant time. Further, so far as the arbitration proceedings are concerned, in respect of which this petition has been filed under section 9 of the Arbitration and Conciliation Act, 1996, the proceedings are being conducted in Bombay and, therefore, so far as the respondents are concerned, there is no substance in the arguments advanced on behalf of the respondents that this Court would not have the jurisdiction or that the petitioners are required to obtain leave under Clause XII of the Letters Patent inasmuch as the question of obtaining leave under Clause XII would arise only in the event of suit having been required to be filed in Bombay. 11.The next issue that arises for consideration is the issue pertaining to the objection raised on behalf of the respondents that the petitioners are not entitled to file the present petition by virtue of the fact that so far as the respondents are concerned, the matter is before Board for Industrial and Financial Reconstruction (B.I.F.R.), and therefore under section 22 of the Sick Industrial Companies Act (S.I.C.A.) the petitioners are required to obtain leave or consent of the Board or the Appellate Authority. So far as the bar under section 22 of the S.I.C. Act is concerned, the same would not be applicable to the present case and the respondents would be entitled to the advantage of this provision provided the proceedings have been filed as contained in section 22 of the S.I.C. Act in respect of any properties of the Industrial company or for an appointment of the Court Receiver in respect thereof. So far as the respondents are concerned, it cannot be contended that the property, in respect of which the petitioners seek direction for appointment of the Court Receiver, is the property of the respondent for, so far as this property, namely, the equipment is concerned, the same has been leased to the respondents under the agreement dated August 19, 1994. 12.A perusal of the said agreement reveals that so far as the recital clause is concerned, the petitioners are called "lessor" whereas the respondents are described as "lessee". Even so far as the terms of the lease agreement are concerned, Clause 2.1 provides that lessor agrees to allow the lessee as from the commencement date the right to use the asset by way of lease and the lessee hereby agrees to take on lease the Equipment. Clause 2.5 makes a provision that upon termination of this agreement by efflux of time or otherwise, the lessee shall at its own cost and expense forthwith deliver or cause to be delivered to the Lessor. Equipment at such time and place as may be directed by the lessor in good working order and condition (subject to normal wear to tear). This clause, therefore, provides that the equipment is to be returned to the lessor, being the petitioners herein, who have the ownership right in respect thereof and that this agreement does not confer any right, title or interest in the equipment to the lessee, namely, the respondents herein. This clause, therefore, provides that the equipment is to be returned to the lessor, being the petitioners herein, who have the ownership right in respect thereof and that this agreement does not confer any right, title or interest in the equipment to the lessee, namely, the respondents herein. 13.Clause 6.2 of the agreement provides that the lessee shall have to affix a name plate or other mark on the equipment identifying the sole and exclusive ownership thereof the lessor and not allow or permit the same to be removed or defaced. Clause 6.4 provides that the respondents, who are the lessees, will hold the equipment as the bailee of the lessor and not claim any right, title or interest in the equipment other than that of a lessee or contest the lessor's sole and exclusive ownership thereof. Clause 6.12 provides that lessee, namely, the respondents herein, shall not transfer, assign or otherwise dispose of or purport to transfer, assign or dispose of the lessee's rights or obligations or interest hereunder by way of mortgage, change, sub-lease, sale or other assignment, hypothecation, pledge, hire, encumbrance, conducting arrangement, license or otherwise in any manner part with the possession of the Equipment or part thereof or allow or purport to allow or create any lien, charge, attachment or other claim of whatsoever nature on the equipment or any part thereof. 14.Even in respect of sell, mortgage, charge, demise, Clause 6.15 of the agreement provides that lessee shall not sell, mortgage, charge, demise, subject or otherwise dispose of any land or building on or in which the equipment is stored, installed, used or operated or entered into any agreement or arrangement to do any of the aforesaid, without giving the lessor at least six weeks' prior notice in writing. The lease shall in any event ensure by giving such notice as may be necessary that any such sale, mortgage, charge, demise, sub-lease or other disposition as the case may be, is subject to the rights of the lessor as the owner of the equipment to repossess the Equipment at any time whether or not the same or any part thereof shall have become affixed to the said land or building and for that purpose to enter upon such land or building and reclaim and repossess the equipment lying thereat. The lessee shall obtain declaration/undertaking containing "no lien/charge", over the equipment and recognizing the right and access of the lessor to the equipment, from such transferees. 15.A perusal of the terms of the lease agreement and various clauses contained therein, clearly reflect and supports the case of the petitioners that so far as the leased equipment is concerned, the ownership right is that of the petitioners who are the owners of the equipment and that the respondents do not have any property rights in respect thereof. 16.It is vehemently urged on behalf of the respondents that they have paid customs duty, excise duty and have also incurred other expenses. However, just because the respondents have incurred expenses towards customs duty, excise duty or other expenses, that by itself does not vest or confer any ownership right in favour of the respondents in respect of the leased equipment. If the respondents do not have right in the property which belongs to the petitioner, the respondents cannot claim protection of bar under section 22 of the S.I.C. Act. In that respect, on behalf of the petitioners, reliance has been placed upon a ruling in the case of (Ananta Udyog P. Ltd. v. Cholamandalam Invest)3, 1993 Vol. 83, Company Cases 498 wherein it has been observed as follows :-- "The proceedings which can be stayed under section 22 of the Act are the proceedings against the properties of the industrial company alone. The property to be seized and sold in pursuance of the order obtained by the respondent in the suit was not the property of the appellant-company and would not fall within the scope of section 22(1) of the Act. Since no appeal had been filed against this order, it had become final, and the respondent was free to have it enforced. Further proceedings in the suit, however, being for recovery of money, were liable to be stayed under section 22 of the Act." 17.On behalf of the petitioners, reliance has been placed upon a judgment in Notice of Motion No. 1154 of 1991 in Suit No. 1163 of 1991, delivered on August 23, 1996 by Shri Justice Variava, wherein it has been observed as follows :--- "This question has arisen often before this Court. It is no longer res integra. It is no longer res integra. The Supreme Court has in the case of (Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association, Madras)4, reported in A.I.R. 1992 S.C. pg 1439 held that a leasehold interest of a Company cannot be regarded as property of the company for the purpose of section 22 of the said Act. A Division Bench judgment of our Court has followed this judgment in its judgment dated 1st July, 1996 in Appeal No. 132 of 1996 in Notice of Motion No. 25 of 1994 in Suit No. 4433 of 1993 (S.B.I. Capital Markets Ltd. v. Foremost Industries India Ltd.)5. This had also been so held in by an Order dated 24th October, 1991 in Notice of Motion No. 1026 of 1991 in Suit No. 1092 of 1991 wherein the plaintiffs herein were also plaintiffs therein. The law now laid down is that in case of lease, the machinery or the property cannot be said to be the property of the concerned Company. It is held that the provisions of the said Act do not apply to such properties. All these judgments are binding on me." 18.Reliance has also been placed by the petitioners upon the Judgment of Justice Dhanuka (as he then was) in Notice of Motion No. 1026 of 1991 wherein also the question that was considered was concerning application of section 22 of the S.I.C. Act in respect of the properties of the Sick Industrial Company. In the case under reference the question that arose was whether the leased equipments which were merely leased to the defendant therein to the plaintiff therein were the properties of the defendant in any sense of the term. The suit agreement under reference provided that the plaintiff in the said suit was the sole and exclusive owner of the said equipments. The suit agreements were lawfully terminated by reason of non-payment of rentals by the defendants therein for a period of about three years after serving requisite notices of demand. It was held, prima facie it was impossible to hold that the suit equipments were the properties of the defendant and not the properties of the plaintiff therein. The suit agreements were lawfully terminated by reason of non-payment of rentals by the defendants therein for a period of about three years after serving requisite notices of demand. It was held, prima facie it was impossible to hold that the suit equipments were the properties of the defendant and not the properties of the plaintiff therein. 19.So far as above judgment of Shri Justice Dhanuka is concerned, the same applies to the facts of the present case, inasmuch as, as per the lease agreement in the present case, the ownership right in the property, namely, the equipment, was not conferred upon the respondents and the petitioners are having the absolute and exclusive ownership rights in respect of the leased equipment. Further, the lease agreement was terminated by the petitioners, by virtue of the fact that the respondents did not pay the rentals and, therefore, so far as the property is concerned, it is not possible to hold that the respondents had any right in the property as the same is of the exclusive ownership of the petitioners. In order to invoke the bar under section 22(1) of the S.I.C. Act, it is absolutely essential that the assets in question must belong to the industrial company. So far as the property in the present case is concerned, the same is not the property of the respondents, ownership in respect thereof being that of the petitioners. 20.On behalf of the petitioners, reliance has also been placed upon a judgment delivered by Shri Justice V.R. Datar on December 23, 1997 in Arbitration Petition No. 188 of 1995, (Toefer International Asia v. Hindustan Agro Chemical)6. There also the question under consideration was that since the petitioner had not obtained leave under section 22 of the S.I.C. Act and, therefore, they are not entitled to maintain the arbitration petition. However, so far as this judgment is concerned, the same does not apply to the facts of the present case, inasmuch as the question involved therein was filing of the foreign award and making the same rule of the Court. This judgment is relied upon for the purpose of determining whether the proceedings under the Arbitration Act pertaining to the filing of the petition for filing of the foreign award to make it a rule of the Court, would fall within the definition of the word "suit" as considered by the Honourable Supreme Court. This judgment is relied upon for the purpose of determining whether the proceedings under the Arbitration Act pertaining to the filing of the petition for filing of the foreign award to make it a rule of the Court, would fall within the definition of the word "suit" as considered by the Honourable Supreme Court. It was observed therein that the petition would not fall in the category "suit" as the petition was only for making the award rule of the Court and, therefore, the decision of the Supreme Court in (Maharashtra Tubes Ltd. v. State Industrial and Investment Corporation of Maharashtra and another)7, 1995 Bank.J. 52 (S.C.) would not apply to the facts of the case. 21.As against the arguments and ruling relied upon by the petitioners, on behalf of the respondents, reliance has been placed upon a decision in the case of Maharashtra Tubes Ltd. v. S.I.I. Corporation of Maharashtra Ltd., reported in 1993(2) S.C.C. 144 wherein it has been observed as follows :-- "The expression "proceedings" under section 22(1) must be widely construed. It cannot be confined to legal proceedings understood in the narrow sense of proceedings in a Court of law or a legal tribunal for attachment and sale of the debtor's property, notwithstanding the use of that expression in the marginal note." So far as the aforesaid ruling is concerned, the same does not apply to the facts of the present case inasmuch as in the cited case it was a suit filed by the State Financial Corporation by virtue of the right conferred on the creditor corporation itself which is permitted to take over the management and possession of the properties and deal with them as if it were the owner of the properties. It was observed thus : "If the Corporation is permitted to resort to the provisions of section 29 of the 1951 Act while proceeding under sections 15 to 19 of the 1985 Act are pending it will render the entire process nugatory. In such a situation the law merely expects the corporation and for that matter any other creditor to obtain the consent of the B.I.F.R. or, as the case may be, the appellate authority to proceed against the industrial concern. The law has not left them without a remedy. In such a situation the law merely expects the corporation and for that matter any other creditor to obtain the consent of the B.I.F.R. or, as the case may be, the appellate authority to proceed against the industrial concern. The law has not left them without a remedy. We are, therefore, of the opinion that the word "proceedings" in section 22(1) cannot be given a narrow or restricted meaning to limit the same to legal proceedings. Such a narrow meaning would run counter to the scheme of the law and frustrate the very object and purpose of section 22(1) of the 1985 Act." 22.The aforesaid ruling does not apply to the facts of the present case inasmuch as the petitioners herein have filed arbitration proceedings which are being conducted and which are in progress and during the pendency of the said proceedings, by virtue of the fact that the petitioners claim ownership rights in respect of the leased equipment in question, the petitioners have sought necessary protection of their rights. 23.Reliance has also been placed on behalf of the respondents in (Real Value Appliances v. Canara Bank)8, reported in 1998(4) Bom.C.R. 606 (S.C.) wherein it was observed that once the reference is registered after scrutiny, it is mandatory for the B.I.F.R. to conduct an inquiry and from that time, action against the company's assets must remain stayed till final decisions are taken by the B.I.F.R. So far as the assets, which are the subject matter of the petition are concerned, the same do not belong to the respondents nor have the respondents any right in respect of the said assets. Hence, so far as this ruling is concerned, the same does not have any application to the facts of the present case. 24.On behalf of the respondents, a reference is also made to a ruling in the case of (Blue Star v. Hindustan Photo Films Mfg. Co.)9, 1998 Bank.J. 52 wherein it has been observed thus : "The object of section 22 of the Act has been made crystal clear. Even a person, whose right to recover is beyond any shadow of doubt, is rendered incapable of instituting proceedings for recovery. Co.)9, 1998 Bank.J. 52 wherein it has been observed thus : "The object of section 22 of the Act has been made crystal clear. Even a person, whose right to recover is beyond any shadow of doubt, is rendered incapable of instituting proceedings for recovery. A person, whose claim against a company is yet to be established, cannot by way of interim relief, obtain an order, which would prevent the company from making use of its own assets or which would affect its finances." 25.In view of the fact that the respondents did not have any ownership rights in respect of the leased equipment, it is not open to the respondents to plead that no proceedings can be filed against them in respect of the subject matter of this petition. Further, it is urged on behalf of the respondents that the agreement is not registered and, therefore, the petitioners are not entitled to enforce their rights. However, so far as this argument is concerned, it may be noted that the property, which is the subject matter of the petition, is not immovable though it is contended on behalf of the respondents that the same is affixed to the flooring. Merely because the property is nailed down to the flooring in order to have efficacious functioning, the same does not and cannot be said to be immovable property. In view of the fact that under the lease agreement the petitioners are conferred the right to take back the leased equipment, it is not open to the respondents to contend that merely because the equipment is nailed down to the flooring, it becomes immovable property. So far as the leased equipment is concerned, it is not the case of the respondents that the same is embedded to the earth. So far as this equipment is concerned, the same is to be used for the beneficial working of the machinery and the same is temporarily affixed or nailed down to the ground and, therefore, the same cannot be considered as being the immovable property as the right of the lessor to remove the equipment on termination of the lease has not been affected by reason of the equipment being nailed down to the flooring. So far as the respondents are concerned, the object of fixing the equipment to the flooring with nuts and bolts is only with a view that the same is better used but the same does not create any right in favour of the respondents in respect of the said equipment. 26.Further, it is contended on behalf of the respondents that the equipment is not in a working condition and on the contrary, they have placed an order for replacement in February, 1997. If the said equipment was not in working condition and there is a breakdown as mentioned by the respondents in their affidavit dated March 19, 1998 and a letter addressed to M/s. Wartsila Diesel Oy. Finland dated September 16, 1996 (Exhibit 4 to the said affidavit in reply) requesting them to deputy their ABB experts to chalk out the action plan immediately, so far as the respondents are concerned, in that event the same should have been returned to the petitioners instead of accrediting the lease rentals to their account and, therefore, the argument advanced on their behalf cannot be sustained and, therefore, in view of the fact that the ownership rights vest in the petitioners, the petitioners have a right to seek protection of their property. 27.Hence, the petition made absolute in terms of prayer (a) by which the Court Receiver is appointed in respect of the equipment described in the Schedule Exhibit A to the petition. Receiver will appoint the respondents as Receiver's agent on such terms and conditions as to the royalty but without security. Petition allowed accordingly. *****