Allowed

L and T Finance Ltd. v. Shiv Singh S/O Girwar Singh and Anr.

Bombay HC19 Mar 2013ARBP/248/2013

Case brief

AI extract

What is this about?

In an unopposed hearing, the Bombay High Court exercised its power under Section 9 of the Arbitration Act to appoint a Court Receiver to safeguard a hypothecated truck belonging to Loan Finance Ltd. against defaulting borrowers, while imposing an interim restraint on alienation.

What did the court decide?

Appointment of Court Receiver to take forcible possession of the Tipper; interim injunction restraining alienation; grant of option to respondents to act as agents.

L and T Finance Ltd. Vs Shiv Singh S/O Girwar Singh and Anr. — Arbitration | Bombay HC (2013)

38-ARBPL-1582.2012

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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 (L) NO.1582 OF 2012.

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L.& T. FINANCE LTD.

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... Petitioner.

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V/s.

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Mr. Shiv Singh and anr. ... Respondents.

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Ms Shakuntala Joshi i/b M/s S.I.Joshi & Co., for Petitioner. None for Respondents.

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CORAM : R.D.DHANUKA J. DATED : MARCH 19, 2013.

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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 Respondents.

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The Petition is served on the Respondents. The learned Counsel appearing for the Petitioner tenders Affidavit of service proving service dated 22^nd February, 2013. The same is taken on record. Today the Petition is taken up for final hearing however, none appears for the Respondents.

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The Petitioner had provided a loan of Rs.12,00,000/- (Rupees Twelve

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Lac only) to the first Respondent under a Loan-cum-Hypothecation Agreement

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.. 2 .. 38-ARBPL-1582.2012

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entered into on 30^th April, 2011. The loan was repayable with interest @ 7.50% per annum in 35 monthly installments of Rs.42,000/-. The second Respondent has guaranteed the due repayment of the loan. Clause 12 of the Agreement provides for the events of default; Clause 13 provides consequences of default and Clause 14 provides for the rights of the Petitioner on default including repossession of the asset. Clause 17 provides for arbitration. There has been a default on the part of the Respondents. The Respondents were liable to pay to the Petitioner a sum of Rs.13,96,991/-. The Petitioner has invoked the provision of 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-F to the Petition. In absence of any defence or contest by the Respondents, the averments contained in Petition would have to be accepted. There has been a default in 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,

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.. 3 .. 38-ARBPL-1582.2012

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the Court Receiver is appointed as Receiver in respect of the Tipper, more particularly described in Exhibit-F to the Petition, with direction to take forcible possession of the said Tipper with police assistance, if required, and 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 Respondents 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)

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

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.. 4 .. 38-ARBPL-1582.2012

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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 right in respect of the Tipper described in Exhibit-F to the Petition.

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The Arbitration Petition is accordingly disposed of.

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( R.D.DHANUKA, J.)

L and T Finance Ltd. v. Shiv Singh S/O Girwar Singh and Anr.

Case brief

What is this about?

What did the court decide?

L and T Finance Ltd. v. Shiv Singh S/O Girwar Singh and Anr.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

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