Disposed

Shriram Equipment Finance Co. Ltd. v. Mahesh N. Ingale and Namdev B. Ingale

Bombay HC1 Aug 2012ARBP/534/2012

Case brief

AI extract

What is this about?

In an arbitration petition under Section 9 of the Arbitration and Conciliation Act, 1996 regarding a defaulted loan, the Court appointed a Court Receiver to take possession of hypothecated equipment and granted an interim injunction restraining the respondents from alienating the asset pending the receiver's decision on agency or sale.

What did the court decide?

Appointment of Court Receiver to take possession of hypothecated TIPPER with direction to offer respondents an option to act as agents; interim injunction restraining alienation.

Shriram Equipment Finance Co. Ltd. Vs Mahesh N. Ingale and Namdev… — Arbitration | Bombay HC (2012)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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ORDINARY ORIGINAL CIVIL JURISDICTION

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ARBITRATION PETITION NO. 534 OF 2012

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Shriram Equipment Finance Co. Limited … Petitioner

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Versus

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Mahesh Namdev Ingale & Anr.

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...Respondents

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Pramod Bhosle i/b Ms. Disha Karambar for the Petitioner. None for the Respondent.

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P.C.:

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This Petition is filed by the Petitioner under section 9 of the Arbitration and Conciliation Act, 1996 seeking reliefs as prayed against the Respondent. By an Order dated 09.03.2012, an adinterim order was passed in the above Petition by the Court. The Petition is served upon the Respondents, Affidavit dated 14.06.2012 proving service is on record. The said order is served upon Respondent No. 1 & 2 and Affidavit will be filed within 2 weeks undertaking is accepted proving service. The Petition is today taken up for final hearing. However, none appear for the Respondents.

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The Petitioner had provided a loan of Rs. 11,42,861/- to the first Respondent under a Loan-cum-Hypothecation Agreement

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entered into on 01.02.2011. The loan was repayable with interest at the rate of @8.33% per annum in 35 monthly installments, 1^st installment of Rs. 42,211 and 2^nd to 34^th installments of Rs. 40,539/and 35^th installment of Rs. 40,536/-. The second Respondent has guaranteed the due repayment of the loan. Clause 5 of the agreement provides for the events of default; Clause 6 of the consequences of default and Clause 7 provides for the rights of the Petitioner on default including repossession of the asset. Clause 15 provides for arbitration. There has been default on the part of the Respondents. The Respondents are liable to pay to the Petitioner a sum of Rs. 11,52,661/-. The Petitioner has invoked the provision for arbitration.

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In the present Petition, the Petitioner has sought appointment of the Court Receiver as Receiver of the hypothecated TIPPER, more particularly described in Exhibit “E” to the Petition. In absence of any defense or contest by the Respondents, the averments contained in the Petition would have to be accepted. There has been a default in the payment of the outstanding dues. It would, therefore, be necessary to safeguard the interest of the Petitioner by appointing the Court Receiver as Receiver of the hypothecated TIPPER. The appointment of the Receiver is necessary in order to ensure that the TIPPER is not wasted or alienated, thereby defeating the rights of the Petitioner. Section 9 empowers the Court to pass an interim measure of protection. Hence, the following order :-

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(i) Pending the hearing and final disposal of the arbitration proceedings, the Court Receiver is appointed as Receiver in respect of the TIPPER, more particularly described in Exhibit “E” to the Petition, with direction to take forcible possession of the said TIPPER with police assistance, if required, & without any prior notice to the Respondents;

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(ii) The Court Receiver shall within a period of two weeks after taking possession, give an option to the Respondent in writing to act as agents of Receiver in respect of the said TIPPER. The Respondents shall be given two weeks time by the Court Receiver from the date of receipt of the Court Receiver’s communication/letter to exercise such option. In the event of the Respondent / s being desirous of acting as agents of the Receiver, they shall be appointed as agents of the Receiver, subject to security and royalty. The Receiver shall determine the quantum of security and royalty having regard to the terms and conditions contained in the loan – cum – hypothecation agreement (Exhibit –“A” to the Petition);

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(iii) In the event that the Respondents do not communicate their willingness to the Receiver to act as agents within a period of two weeks from the date of receipt of the

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communication from the Court Receiver, it would be open to the Petitioner to apply to the Court for further orders including for sale of the TIPPER by private treaty.

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(iv) Until the Receiver takes possession, there shall be an interim injunction restraining the Respondents from alienating, encumbering, parting with possession or creating any third party rights in respect of the TIPPER described in Exhibit “E” to the Petition.

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The arbitration petition is accordingly, disposed of.

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All parties, including the Court Receiver to act on a copy of this order duly authenticated by the Associate of this Court.

Shriram Equipment Finance Co. Ltd. v. Mahesh N. Ingale and Namdev B. Ingale

Case brief

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Shriram Equipment Finance Co. Ltd. v. Mahesh N. Ingale and Namdev B. Ingale

Case brief

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