Allowed

L and T Finance Limited v. Siddhershwar Logistics (Borrower) and 4 Others

Bombay HC25 Sept 2014ARBP/1211/2014

Case brief

AI extract

What is this about?

In an arbitration petition filed under Section 9 of the Arbitration and Conciliation Act, 1996, the Court appointed a Court Receiver to take forcible possession of two hypothecated vehicles due to the petitioner's loan default. The order granted injunctions against alienation and outlined the receiver's powers regarding the appointment of agents by respondents or sale of assets.

What did the court decide?

Appointment of Court Receiver to take forcible possession of two vehicles; injunction restraining alienation; option for respondents to act as agents of the receiver.

L and T Finance Limited Vs Siddhershwar Logistics (Borrower) and… — Arbitration | Bombay HC (2014)

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943-ARBP-1211-2014

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION PETITION NO. 1211 OF 2014

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L and T Finance Ltd. … Petitioner

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Versus

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Siddhershwar Logistics & Ors.

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… Respondents

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Mr. Vivek Patil alongwith Mr. Sandesh Godse i/by M/s.Vivek Patil & Associates for the Petitioner. None for Respondents.

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CORAM : S. J. KATHAWALLA, J. DATED : 25TH SEPTEMBER, 2014

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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. The Arbitration Petition is served on the Respondent and an Affidavit proving service is on record. The Petition is today taken up for final hearing. However, none appear for the Respondent.

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The Petitioner had provided a loan of Rs. 30,00,000/- to the first Respondent under a Loan-cum-Hypothecation Agreement entered into on 24.07.2013. The loan was repayable with interest at the rate of 6.87% per annum in monthly installments in Two schedules i.e. (1) An amount of Rs. 18,09,150/- in 35 equated installments of Rs. 51,350/- x 1 (First Month) and of Rs. 51,700/- x 34

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(remaining Thirty Four Months). The Second Respondent has guaranteed the due repayment of the loan. Clause 12 of the agreement provides for the events of default; Clause 13 of the 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.31,45,613/. 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 2 Nos. of Assets/Vehicles being (1) Ashok Leyland 4019 bearing Registration No. MH-06-AQ-7902, Chassis No. MB1TLDJB3ARNC3204 and Engine No. PAH639773 and (2) Ashok Leyland 4019 bearing Registration No. MH-06-AQ-7920, Chassis No. MB1TLDJB7ARNC3514 and Engine No. NAH640462, more particularly described in Exhibit – F to the Petition. In absence of any defense 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 2 Nos. of

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Assets/Vehicles being (1) Ashok Leyland 4019 bearing Registration No. MH-06-AQ-7902, Chassis No. MB1TLDJB3ARNC3204 and Engine No. PAH639773 and (2) Ashok Leyland 4019 bearing Registration No. MH06-AQ-7920, Chassis No. MB1TLDJB7ARNC3514 and Engine No. NAH640462. The appointment of the Receiver is necessary in order to ensure that the 2 Nos. of Assets/Vehicles being (1) Ashok Leyland 4019 bearing Registration No. MH-06-AQ-7902, Chassis No. MB1TLDJB3ARNC3204 and Engine No. PAH639773 and (2) Ashok Leyland 4019 bearing Registration No. MH-06-AQ-7920, Chassis No. MB1TLDJB7ARNC3514 and Engine No. NAH640462 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 2 Nos. of Assets/Vehicles being (1) Ashok Leyland 4019 bearing Registration No. MH-06-AQ-7902, Chassis No. MB1TLDJB3ARNC3204 and Engine No. PAH639773 and (2) Ashok Leyland 4019 bearing Registration No. MH-06-AQ-7920, Chassis No. MB1TLDJB7ARNC3514 and Engine No. NAH640462, more particularly described in Exhibit F to the Petition, with direction to take forcible possession of the said 2 Nos. of Assets/Vehicles being (1) Ashok

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Leyland 4019 bearing Registration No. MH-06-AQ-7902, Chassis No. MB1TLDJB3ARNC3204 and Engine No. PAH639773 and (2) Ashok Leyland 4019 bearing Registration No. MH-06-AQ-7920, Chassis No. MB1TLDJB7ARNC3514 and Engine No. NAH640462 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 Respondent in writing to act as agents of the Receiver in respect of the said 2 Nos. of Assets/Vehicles being (1) Ashok Leyland 4019 bearing Registration No. MH-06-AQ-7902, Chassis No. MB1TLDJB3ARNC3204 and Engine No. PAH639773 and (2) Ashok Leyland 4019 bearing Registration No. MH06-AQ-7920, Chassis No. MB1TLDJB7ARNC3514 and Engine No. NAH640462. 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 LoancumHypothecation agreement (Exhibit A to the Petition);

943-ARBP-1211-2014

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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 communication from the Court Receiver, it would be open to the Court Receiver to apply to the Court for further directions including sale of 2 Nos. of Assets/Vehicles being (1) Ashok Leyland 4019 bearing Registration No. MH-06-AQ-7902, Chassis No. MB1TLDJB3ARNC3204 and Engine No. PAH639773 and (2) Ashok Leyland 4019 bearing Registration No. MH06-AQ-7920, Chassis No. MB1TLDJB7ARNC3514 and Engine No. NAH640462 by public auction or 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 2 Nos. of Assets/Vehicles being (1) Ashok Leyland 4019 bearing Registration No. MH-06-AQ-7902, Chassis No. MB1TLDJB3ARNC3204 and Engine No. PAH639773 and (2) Ashok Leyland 4019 bearing Registration No. MH-06-AQ-7920, Chassis No. MB1TLDJB7ARNC3514 and Engine No. NAH640462 described in Exhibit-F to the Petition.

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The Arbitration Petition is accordingly, disposed of.

L and T Finance Limited v. Siddhershwar Logistics (Borrower) and 4 Others

Case brief

What is this about?

What did the court decide?

L and T Finance Limited v. Siddhershwar Logistics (Borrower) and 4 Others

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

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Statutes considered

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