Allowed

M/S. Saumya Mining Ltd. and Anr. v. L and T Finance Limited and 2 Ors.

Bombay HC15 Sept 2014APP/378/2014

Case brief

AI extract

What is this about?

Two appeals challenging an order under Section 9 of the Arbitration Act restricting the use of hypotechated equipment were disposed of. The High Court accepted a consensual arrangement where appellants acted as agents of the Receiver, paying royalty equivalent to an EMI, thereby avoiding forcible possession.

What did the court decide?

Appeals disposed of; Appellants to act as agents of Court Receiver, pay royalty, and execute Agency Agreements; no forcible possession to be taken.

M/S. Saumya Mining Ltd. and Anr. Vs L and T Finance Limited and 2… — Arbitration | Bombay HC (2014)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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ORDINARY ORIGINAL CIVIL JURISDICTION

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APPEAL NO. 378 OF 2014 IN

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IN ARBITRATION PETITION NO. 341 OF 2014 WITH NOTICE OF MOTION NO. 1110 OF 2014 IN APPEAL NO. 378 OF 2014

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AND

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APPEAL NO. 388 OF 2014 IN

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IN ARBITRATION PETITION NO. 290 OF 2014 WITH

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NOTICE OF MOTION NO. 1111 OF 2014 IN APPEAL NO. 388 OF 2014

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AND

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APPEAL NO. 379 OF 2014 IN

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IN ARBITRATION PETITION NO. 993 OF 2014 WITH

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NOTICE OF MOTION NO. 1113 OF 2014 IN

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APPEAL NO. 379 OF 2014

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AND

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APPEAL NO. 383 OF 2014 IN

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IN ARBITRATION PETITION NO. 946 OF 2014 WITH

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NOTICE OF MOTION NO. 1114 OF 2014 IN

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APPEAL NO. 383 OF 2014

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skc 2 APP-378-14-group M/s. Saumya Mining Ltd. & Anr. .. Appellants versus L & T Finance Ltd. & Ors. .. Respondents

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Mr. Rohit Das, Mr. Aayush Singhvi i/b. Rohit Das & Associates for Appellants.

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Mr. Anand Poojari with Ms Shakuntala Joshi, Ms Nikita Pawar and Mr. Nilesh Gala i/b. S. S. Joshi & Co. for Respondents. Mr. S. S. Deshpande – Court Receiver present.

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CORAM: MOHIT S. SHAH, C. J. & M. S. SONAK, J. DATE : 15 September 2014

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P.C.:

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These appeals are directed against the common order dated 8 July 2014 of the learned Single Judge of this Court in petitions under Section 9 of the Arbitration and Conciliation Act, 1996 (“the Act”) for interim measures during pendency of the contemplated arbitration proceedings arising from the loan cum hypothecation agreements between the appellants and the respondent (L & T Finance Ltd.). The learned Judge has disposed of four such petitions under Section 9 of the Act by common order as same parties are involved in all the four matters.

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2] In the petitions, the final directions given by the learned Single Judge are in the following terms:-

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i) The Court Receiver appointed by this order, shall give an option to the respondent no. 1 and 2 in writing to act as agents of Receiver in respect of

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the said equipments. The Respondent nos. 1 and 2 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 nos. 1 and 2 being desirous of acting as agents of the Receiver, they shall be appointed as agents of the Receiver, on usual terms and conditions including 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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ii) 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, Court Receiver to take forcible possession of the equipments and if necessary with the assistance of police from the respondent. It would be open to the Petitioner to apply to the Court for further orders including sale of the equipments by private treaty.

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iii)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 equipments described in Exhibit G in so far as Arbitration Petition No. 290 of 2014, Arbitration Petition (L) No. 271 of 2014 and Arbitration Petition (L) No. 269 of 2014 and hypothecated equipments described in Exh. H in so far as Arbitration Petition No. 341 of 2014 is concerned.

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Petitioner is directed to approach the office of the Court Receiver for enforcement of this order within three weeks from today.”

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3] Having heard learned counsel for the appellants (respondents in the arbitration petitions) and the learned counsel for the respondents (original petitioners in arbitration petitions), we are of the view that the interests of justice would be served if all these four appeals are disposed of in terms of the following consensual arrangement arrived at between the parties :

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I. Without prejudice to the claims, rights and contentions of the parties in the contemplated arbitration proceedings, the appellants shall act as agents of the Court Receiver in respect of the equipments, which are subject matter of the four arbitration petitions;

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II. The appointments are made on usual terms and conditions including security and royalty. During pendency of the contemplated arbitration proceedings, the quantum of monthly royalty shall be equivalent to the quantum of one EMI which was payable by the appellants under the terms and conditions of the respective loan cum hypothecation agreements, which are subject matter of the four arbitration petitions giving rising to the present appeals;

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III. In view of the agreement on the part of the appellants to act as agents of the Court Receiver in respect of the above equipments, the Court Receiver shall take only symbolic possession of the equipments tomorrow i.e. on 16 September 2014 and shall not take forcible possession of the equipments;

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IV. In view of this agreement, there will be no question of the Court Receiver or the respondents herein (L & T Finance Limited) taking any steps for sale of equipments during pendency of the arbitration proceedings;

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V. The appellants shall execute Agency Agreements in the above terms without prejudice to their claims, rights and contentions in the arbitration petitions, within two weeks from today;

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VI. The above protection is given to the appellants in view of their agreement to pay the royalty amount equivalent to an amount of EMI, and, in case of two defaults, the respondents herein L & T Finance Limited will be at liberty to enforce the order dated 8 July 2014 of the learned Single Judge in the concerned arbitration petition;

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VII. It will be open to any of the parties to move the learned Arbitrator for any further interim directions under Section 17 of the Act during the pendency of the arbitration proceedings and the learned Arbitrator will be at liberty to pass such orders as may be required in the facts and circumstances of the case including variation of any of the above directions.

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4] Appeals are accordingly disposed of.

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5] In view of the disposal of the appeals, the notices of motion does not survive and are disposed of accordingly.

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( CHIEF JUSTICE)

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(M. S. SONAK, J.)

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Chandka

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M/S. Saumya Mining Ltd. and Anr. v. L and T Finance Limited and 2 Ors.

Case brief

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M/S. Saumya Mining Ltd. and Anr. v. L and T Finance Limited and 2 Ors.

Case brief

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