S. K. AGARWAL ( 1 ) THE plaintiff has filed the suit for possession of specific moveable assets, Annexure-l (Exhibit P6) in the alternative a decree for recovery of Rs. 31,83,350. 00 being costs of lease equipment and for recovery of Rs. 25,79,7127- towards outstanding lease rentals interest insurance charges due as on the date of filing of the suit, alleging therein: that the plaintiff is a company incorporated under the Companies Act, having its registered office at Jeewan Bharti Building, Tower II, Level III, Connaught Circus, New Delhi-110001. It has been dealing in the business of leasing capital equipments used for manufacturing purposes. It purchases the equipments as per the requirement of their clients and leases out the same to them on mutually agreed terms and conditions. The defendant No. 1 is also a company duly incorporated under the Companies Act, having its registered office at Vadodara dealing in the manufacturing of steel; defendant no. 1 approached plaintiff in September, 1989 representing that they were in need of machinery/equipment consisting of 7. 5 MT/20 MT Cranes and 50 Tonne Gantry, to be installed at their factory at Halol and requested the plaintiff to give on lease the machinery and equipment described in schedule attached to the lease agreement. After considering the request of the defendant no. 1, the plaintiff sanctioned the lease finance to the extent Rs. 32 lakhs for purchase of the aforesaid machinery/equipment to be given on lease basis. The equipment was purchased at cost of Rs. 31,83,350. 00 which was directly supplied by the supplier to defendant no. 1, who acknowledged the receipt thereof. The equipment/ machinery was given to the defendant as per the lease agreements dated 16. 9. 89 and dated 5. 2. 1990. Defendants again approached the plaintiff company that they were in need of more finances for equipment, and requested for another crane on lease basis. The plaintiff, enhanced the finance to Rs. 32 lakhs on the existing terms and conditions and payment of lease rentals were re-scheduled. The defendant company agreed to pay lease rentals of the aforesaid equipments in 20 equal quarterly instalments commencing from 1. 2. 90. The total lease period was fixed at 60 months from the date of commencement of the lease. The defendants was required to pay the lease rentals in the sum of Rs. 46,03,124. 00 over a period of 60 months. The defendant no. 2. 90. The total lease period was fixed at 60 months from the date of commencement of the lease. The defendants was required to pay the lease rentals in the sum of Rs. 46,03,124. 00 over a period of 60 months. The defendant no. 1 executed two demand promissory notes dated 16. 9. 89 and 5. 2. 90 for Rs. 38,68,050 and for Rs. 7,59,150. 00 respectively for that purpose. Defendants further agreed to pay interest @ 24 p. a. compounded monthly on overdue amount of the lease rentals if defendant No. 1 fails to pay the lease rentals on the dates and in the manner stipulated in the schedule within 10 days of their becoming due. Defendant nos. 2 and 3 stood guarantors for the due repayment of the lease rentals, interest, and other charges and executed the agreement of guarantee dated 5. 2. 90, in terms of the said guarantee agreements, liability of the defendants 2 and 3 is joint and several with that of the defendant no. 1. The capital equipment was installed in the factory premises of defendant no. 1 on the terms and conditions as contained in the lease agreement dated 16. 9. 89 and 5. 2. 90. The first defendant paid lease rentals only upto 1. 2. 91 and thereafter failed to pay the lease rental from 1. 5. 91 as a result of which a sum of Rs. 18,41,280. 00 became due and payable towards lease rentals upto 1st May, 93, which the defendants failed to pay despite repeated demands. The defendant had vide their letter dated 14. 8. 92 stated that they had suffered huge cash losses to the extent of Rs. 9 crore and they were facing financial crises, suffering liquidity crunch and production loss at Bhavnagar plant on account of accident. They agreed to clear up the loan amount shortly. The insurance cover of the lease equipment lapsed on 6. 1. 93. The defendants failed to get the insurance renewed despite requests by the plaintiff so as to avoid any unforeseen risk to the equipments. Consequently, the lease agreement was terminated by the plaintiff vide notice dated 24. 3. 93 and the 1 st defendant was called upon to hand over the possession of the lease equipment and also to pay the outstanding amount of lease rentals. Consequently, the lease agreement was terminated by the plaintiff vide notice dated 24. 3. 93 and the 1 st defendant was called upon to hand over the possession of the lease equipment and also to pay the outstanding amount of lease rentals. It is stated that the plaintiff is owner of the lease equipments and is entitled to re-posses the same in terms and conditions of the lease agreement. ( 2 ) IT is alleged that defendant no. 1 is not entitled to the possession of those equipments and is liable to hand over the same to the plaintiff who is owner thereof under Section 7 of the Specific Relief Act. The equipment is valued at Rs. 32,52,324/ - and the outstanding lease rentals were claimed to be Rs. 18,41,280. 00 along with the interests along with interest @ 24% p. a. with monthly rests which comes to Rs. 7,30,138/ - upto the date of filing of the suit. Thus, total sum of Rs. 25,79,712. 00 was due and payable by defendants which they have failed to pay and failed to restore the possession of the said leased equipments to the plaintiff. Thus, the plaintiff has claimed possession of the lease equipment and in the alternative decree for recovery of Rs. 34,52,324. 00 being cost of the leased equipment and also for a decree of Rs. 25,79,712. 00 towards the outstanding lease rentals, interest, insurances charges due. ( 3 ) ON 28. 5. 93 plaint was registered. Summons/notices were issued for services on the defendants by ordinary process, registered AD post. The defendants were restrained from disposing of, selling, transferring, alienating or otherwise encumbering the equipment leased out to them by the plaintiff. None appeared on behalf of the defendants despite service. They were proceeded ex-parte on 18/02/1994 and the interim order dated 28. 5. 93 was confirmed. ( 4 ) PLAINTIFF was permitted to lead ex-parte evidence by way of affidavits. The plaintiff in support of its case has filed two affidavits of Satish Mahajan, its Manager dated 21. 4. 94 and 24. 11. 94, who has further supported the averments made in the plaint and has proved the following documents: copy of certificate of incorporation of the plaintiff company Ex-P1. General Power of Attorney executed by the plaintiff company authorising him to file the suit, Ex-P2, general power of Attorney of Mr. 4. 94 and 24. 11. 94, who has further supported the averments made in the plaint and has proved the following documents: copy of certificate of incorporation of the plaintiff company Ex-P1. General Power of Attorney executed by the plaintiff company authorising him to file the suit, Ex-P2, general power of Attorney of Mr. P. K. Malhotra who was Vice President of the company on 6. 5. 93 Ex-P3, the proposal whereby the defendants had requested the plaintiff company for said machinery/ equipment on lease basis for their factory at Halol, Ex-P4, having the signatures of the Managing Director of defendant no. 1, A. S. Bhattar; list of equipment/machinery leased to the first defendant Ex-P6 for cost of Rs. 31,83,350. 00 and its bills Ex-P7, and P-8 respectively; defendant acknowledged the receipt on the said equipment on the invoice Ex. P9. These equipments were leased out to the 1st defendant vide lease agreements Ex. P 10 and P11 dated 16. 9. 89 and 5. 2. 90 having the signatures of Mr. S. V. Phadke, an authorised officer of the defendant no. 1 vide Board resolution dated 31. 10. 90, Ex-P/11a. Letter dated 31. 1. 90 Ex-P12, duly signed by vice President of the defendant company wherein he acknowledged the lease finance to Rs. 26. 75 lakhs which was enhanced to Rs. 32 lakhs and the letter dated 21. 4. 90, Ex. P 13 whereby the lease rental were re-scheduled from 1. 2. 90 to 01. 11. 94 which has been proved as Ex-P13. Two pro-notes dated 16. 9. 89 and 5. 2. 90, signed by Mr. S. V. Phadke, 1st defendant, Ex. Ex-14 and 15. Defendant Nos. 2 and 3 executed the guarantee agreements for repayment of the loan amounts Ex-P16 and 17. The defendants failed to pay the lease rentals w. e. f. 1. 5. 91 as a result of which Rs. 18,41,280. 00 became due and payable towards the lease rentals upto 1. 5. 93. By letter dated 14. 8. 92, Ex-18, the defendants claimed that they had suffered heavy losses and sought time to regularise the account. Copy of the notice dated 24. 3. 93, Ex. P-20 vide which the defendants were asked to pay the rental and other charges and the leased equipments. In the additional affidavit, the plaintiff proved. 5. 93. By letter dated 14. 8. 92, Ex-18, the defendants claimed that they had suffered heavy losses and sought time to regularise the account. Copy of the notice dated 24. 3. 93, Ex. P-20 vide which the defendants were asked to pay the rental and other charges and the leased equipments. In the additional affidavit, the plaintiff proved. copy of the Board resolution Ex-P1/a and the copy of the Power of Attorney Ex-P2 and Ex. P-3 signed by Mr. D. K. Menon, Managing Director which was authorised to execute the said documents on behalf of the company. ( 5 ) THE case. set up by the plaintiff in the suit is duly supported by documents and the affidavits filed by the plaintiff in support of his case. The defendants have chosen not to contest the suit despite service. There is nothing on record to disbelieve the evidence led by way of affidavit. ( 6 ) THUS the plaintiff has succeeded in proving its case. The suit is decreed. The plaintiff is held entitled for possession of moveable assets/equipments which were leased to the defendant under the lease agreements on the rental basis, described in Annexure-1 Ex. P-6, attached to the plaint and in the alternative a decree for recovery of Rs. 34,52. 324. 00 in lieu thereof. The plaintiff is also held entitled to recover from the defendants a sum of Rs. 25,79,7121- towards outstanding lease rental interest. insurance charges upto the date of filing of the suit. The plaintiff would be entitled to recover interest @ 18% p. a. on the suit amount from the date, of filing of the suit till realisation and costs of the suit. The decree be prepared accordingly.