Application moved by a bank for sale of a vehicle in recovery suits shall be disposed of within 60 days: Orders Delhi HC

Application moved by a bank for sale of a vehicle in recovery suits shall be disposed of within 60 days: Orders Delhi HC

Case: M/S ICICI Bank Limited vs. Priya Baveja

Case No.: CM (M) 16/2020

Coram: Justice Prathiba M. Singh

Delhi HC exercised its power under the purview of Order XXXIX Rule 6 which says that the Court may, on the application of any party to a suit, order the sale, by a person named in such order, and in such manner and on such terms as it thinks fit, of any movable property being the subject matter of such suit (which is a car i.e., Honda City SV/MT Diesel hypothecated against a vehicle loan in this case) or attached before judgment in such suit which is subject to speedy and natural decay, or for any other just and sufficient cause it may be desirable to have sold at once.

Brief Facts

The facts say that the defendant had availed vehicle loan from the plaintiff in respect of the car which was disbursed by the petitioner under the loan cum hypothecation scheme of the Bank. The defendant had agreed to repay the loan amount (Rs.8, 94,000/-), with interest @10.5%, in 60 equal instalments of Rs.19, 216/- each.

For the said loan, defendant in terms of the loan documents executed had paid an amount of Rs.5,38,832/- (28 EMIS) and defaulted for an amount of Rs.1,14,512/- (06 EMIS) and Rs.13,394/- towards late payment and cheque bouncing charges totaling to Rs.1,27,906/- besides future instalments of Rs.4,99,616/- as on 21.02.2018.

The plaintiff in terms of the loan documents executed by the defendant issued a notice upon the defendant calling to repay the loan amount. Further, when plaintiff got no response from the defendant, they filed an application under Order 40 Rule 1 r/w Section 151 CPC for appointment of receiver which was duly appointed by the Court in the order which also stated that the taking of possession of the vehicle was subject to the condition that the vehicle shall not be sold/disposed of/parted with without the permission of the Court. Since then, the vehicle has been lying in the control of the Bank.

Key Features

  • The concerned application moved by the bank for sale of vehicle in this recovery suit under Order XXXIX Rule 6 CPC made the prayer to the court to exercise its power to order interim sale and direct the plaintiff to sell the said vehicle and further adjust the sale proceeds towards the outstanding amount due and payable by the defendant to the plaintiff.
  • The issue to this petition arises here when the application continues to remain pending even though the suit itself has come to be decreed in favour of the petitioner by the Trial Court for a sum of Rs.6, 04,552.73 with interest.
  • The question of the sale of the mortgaged property of the defendant still remained unanswered by the Court. Despite the application under Order XXXIX Rule 6 CPC having been filed, even in the final decree permission has not been given to the Bank for selling the vehicle.


To this, Delhi HC was of the view that –

  • There is no doubt that the application under Order XXXIX Rule 6 CPC ought to have been decided by the Trial Court at the time of the final order in the suit itself. To keep the application pending, while the suit itself has been decreed, is completely irrational.
  • The car has a limited life value which deteriorates with each passing day. The Bank ought to be permitted to sell the car to recover whatever amount it can to satisfy the decree.
  • The manner in which the application for Receiver is being treated by the Trial Court is completely unsatisfactory. Ideally, when the Trial Court is satisfied that the case for appointment of a Receiver has been made out and the Bank has taken control of the car for repayment, when the Bank approaches the Trial Court for permission to sell the vehicle, the same should be directed to be considered expeditiously.
  • In petition for suits both at the interim stage and at the final stage wherein the applications under Order XXXIX Rule 6 CPC, for permission to sell the vehicles, it is deemed appropriate to direct that applications for sale of the vehicle, whenever filed, shall be disposed of within 60 days especially in those cases where the defendant(s) remain ex-parte and does not contest the proceedings.
  • No useful purpose would be served by leaving the vehicle to deteriorate and letting the Bank incur further charges to store and preserve the vehicle (except in case of any unusual or exceptional circumstances)

Edited by Vartika Gajendra Singh

Approved & Published – Sakshi Raje