Finance lease characterization governs custody and account settlement, not automatic surrender of leased cars to a custodian.

A lease arrangement may be treated as a finance lease where its substance shows financing rather than a mere hiring of assets: the lessee selected and used the cars, bore the risks and expenses, and the asset was substantially paid for through the lease structure. In such a case, property under the relevant Act remains subject to obligations incurred by the notified party, unless the transaction is fraudulent or designed to defeat the Act. If any balance remains unpaid, the proper course is to settle accounts and direct payment of the deficit, rather than order surrender of the cars to the custodian.

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Issues: Whether the lease arrangement was a finance lease and, if so, whether the Special Court could direct delivery of the cars to the custodian instead of confining the matter to determination of any balance still payable under the agreement.

Analysis: The transaction was examined on its substance and commercial features, which showed that it was a finance lease and not a mere lease. The lessee had selected and used the cars, bore the risks and expenses, and the arrangement operated as a financing device with the asset substantially paid for through the lease structure. Once the notified party's property was under the Act, the custodian was bound by the obligations incurred by the notified party unless the transaction was fraudulent or intended to defeat the Act. If any amount still remained due, the proper course was to determine the deficit on accounts and direct payment of that amount, not to require surrender of the cars to the custodian.

Conclusion: The direction to hand over possession of the cars to the custodian was unsustainable, and the matter had to be restored to the Special Court only for settlement of accounts, if any balance remained payable.

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