Disposed

L and T Finance Limited v. Mr. Ashish Sampatlal Jain and Anr.

Bombay HC20 Dec 2014ARBP/623/2014

Case brief

AI extract

What is this about?

In an unopposed arbitration petition filed by L & T Finance Ltd. for non-repayment of a loan secured by hypothecated vehicles, the High Court appointed a Court Receiver to take possession of the vehicles and granted an interim injunction restraining the respondents from alienating them pending final disposal.

What did the court decide?

Appointment of the Court Receiver as Receiver of hypothecated vehicles; injunction restraining respondents from disposing of or alienating the vehicles.

L and T Finance Limited Vs Mr. Ashish Sampatlal Jain and Anr. — Arbitration | Bombay HC (2014)

¶1

KPPNair

¶2

¶3

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

¶4

ORDINARY ORIGINAL CIVIL JURISDICTION

¶5

ARBITRATION PETITION NO. 623 OF 2014

¶6

L & T Finance Ltd. ..Petitioner

¶7

V/s.

¶8

Mr. Ashish Sampatlal Jain & Anr. ..Respondents

¶9

Ms. Shakuntala Joshi along with Ms. Nikita Pawar i/b M/s. S.I. Joshi & Co. for the Petitioner. None for Respondents.

¶10

P.C.

¶11

1. The above Petition is filed by the Petitioner under section 9 of the Arbitration and Conciliation Act, 1996 seeking reliefs as prayed against the Respondents. The Petition is served on

¶12

the Respondents and an Affidavit proving service dated 15.12.2014 is on record. The Petition is today taken up for final hearing. However, none appear for the Respondents.

¶13

2. By a Loan-cum-Hypothecation Agreement dated 15.03.2011, the Petitioner provided a loan of Rs.72,80,000/- to the first Respondent for purchase of four Vehicles more particularly

¶14

¶15

KPPNair

¶16

described in Exhibit “F” to the Petition and the said vehicles were hypothecated with the Petitioner by the Respondent No.1.

¶17

3. The Loan amount of Rs.72,80,000/- was repayable by the Respondents to the Petitioner with interest @6.51% p.a. in 47 monthly installments commencing from 15.04.2011 and ending on 15.02.2015. Therefore, the aggregate amount payable by the Respondents to the Petitioner under the Loan-cum-Hypothecation Agreement was Rs.89,79,200/-.

¶18

4. Respondent No.2 has guaranteed due repayment of the loan. Clause 12 of the Agreement provides for the events of default; Clause 13 for the consequences of default; 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 and the Respondents failed to pay to the Petitioner a sum of Rs.46,44,451/- (Rupees Forty Six Lakhs Forty Four Thousand Four Hundred Fifty One only) The Petitioner therefore invoked the arbitration clause in the Agreement dated 15.03.2011.

¶19

5. In the present Petition, the Petitioner has sought appointment of the Court Receiver, High Court, Bombay as the Receiver of the hypothecated vehicles, more particularly

¶20

¶21

KPPNair

¶22

described in Exhibit “F” to the Petition. The Respondents have not filed their Affidavit in Reply and are also not present before the Court. In the absence of any defense or contest by the Respondents, the averments contained in the Petition have remained uncontroverted. I see no reason why the statements/submissions made by the Petitioner in the Petition should not be accepted. Since the Respondents have defaulted in the repayment of the outstanding dues, it is just and necessary to safeguard the interest of the Petitioner by appointing the Court Receiver as Receiver of the hypothecated vehicles. The appointment of the Receiver is necessary in order to ensure that the hypothecated vehicles is not wasted or alienated, thereby defeating the rights of the Petitioner. Section 9 empowers the Court to pass interim measures of protection. Hence, the following order:

¶23

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

¶24

¶25

KPPNair

¶26

(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 an agent of the Receiver in respect of the said vehicles. 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 an 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 deposit of security and payment of royalty. The Receiver shall determine the quantum of security and royalty having regard to the terms and conditions contained in the Loan Agreement (Exhibit “A” to the Petition);

¶27

(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 Petitioners to apply to the Court for further orders including sale of the said vehicles by private treaty;

¶28

(iv) There shall also be an interim injunction restraining the Respondents from disposing of, alienating, encumbering, parting with possession or creating any third party rights in respect of the vehicles as described in Exhibit “F” to the Petition.

¶29

KPPNair

¶30

¶31

6. The Arbitration Petition is accordingly disposed of.

¶32

(S.J. KATHAWALLA, J.)

L and T Finance Limited v. Mr. Ashish Sampatlal Jain and Anr.

Case brief

What is this about?

What did the court decide?

L and T Finance Limited v. Mr. Ashish Sampatlal Jain 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

Case details

Similar cases

M/S. Ishi Marketing and Advertising Pvt. Ltd. and 4 Ors. Vs M/S. Oracle Home Textile Ltd. (Cin U70102MH1985PLC036047)

Balkrishna Ganesh Thite Vs Official Liquidator of M/S. Swastik Rubber Products Ltd. (in Liqn.)

Irishman Steels Private Limited Vs -

Mr.Sanjeev Gupta Vs M/S.Radium Keysoft Solution Pvt.Ltd., Cin NO.U74900MH2000PTC128825

Mr.Madanmohan Chandrabhan Gupta,Huf through M/S.Advance Adevertisers. Vs M/S.Radium Keysof Solution Pvt.Ltd., Cin NO.U74900MH2000PTC128825

Shibu Manayathumalil Thomas Vs M/S.Techfast Rebuild Pvt. Ltd.