State Bank of India Vs. Shri Sunder Singh Tula and Anr.
EmailInsurance claim – Compensation for loss of vehicle in accident – Award of Arbitrator in favour of respondent-claimant made rule of the Court – Court directing the amount to be credited to the account of the respondent in appellant-Bank – Bank claiming before executing court for appropriation of the money deposited with it in the account of the respondent towards the loan dues of the respondent for the purchase of the vehicle which was de-stroyed in accident – Executing court directing payment to be made to respondent holding that remedy of the appellant-Bank was not before the executing court. Held, view of the executing court suffered from no illegality. However, since order of injunction was passed subsequent to passing of the order directing payment to respondent, it would be open to the appellant to file fresh application before the executing court if permissible under the law.(Para 3)
1. The appellant herein granted a term loan credit facility for Rs. 1,80,000/- to respondent no. 1, who executed an agreement in favour of the appellant, for Medium Term Loan (Hypothecation of Vehicles). The vehicle met with an accident. Respondent no. 1 claimed compensation for damages/loss of vehicle from the In-surance Company, i.e. respondent no.2. Ultimately, the Arbitrator gave an Award in favour of respondent no. 1 for a sum of Rs. 1,82,140/-. Subsequently, the Award was made rule of the Court. The District Judge directed that the amount under Award may be sent to the appellant-Bank for crediting the same in the name of respondent no. 1. In between time the appellant filed a suit for recovery of the amount under the agreement. During the pendency of the civil suit, respondent no. 1 moved an application in the executing court for payment of money. The said application was opposed by the appellant on the ground of Clause 8 of the Agree-ment entered into between the appellant and respondent no. 1, which runs as thus:
“The Borrower shall keep the said vehicle fully insured against loss and damage … All sums of money received under or by virtue of any such insurance as aforesaid shall, at the option of the Bank, either be applied towards replacement thereof as far as possible or towards satisfaction of the Bank’s dues as hereunder.”
2. The appellant, under Clause 8 of the Agreement claimed before the executing court to appropriate the said money deposited with the appellant-Bank in the name of respondent no. 1. However, the application of respondent no. 1 was allowed and objection filed by the appellant was rejected on the ground that the remedy of appellant lies elsewhere and not before the executing court. It is against the said order, dated 29.12.89, the appellant is in appeal before us.
3. Learned Counsel appearing for the appellant urged that in view of the subsequent orders, dated 22.2.90 and 5.3.90 passed by the District Judge, Srinagar, issuing an order of status quo in regard to the payment of money to respondent no.1, the executing court may be directed to stop payment to respondent no. 1 depos-ited with the Bank. It is not disputed that when the order under appeal was passed, no injunction order was in existence. There-fore, the executing court, was right in holding that the remedy of the appellant is not before the executing court, but is elsewhere. This view of the executing court cannot be said to suffer from any illegality. However, we may like to observe that since order of injunction was passed subsequent to passing of the impugned order, it would be open to the appellant to file fresh application before the executing court, if it is permissible under law.
4. With these observations, we dismiss this appeal. No costs.
