Disposed

Shriram Transport Finance Co. Ltd. v. Azhar Mohd. Umar Mohd Qureshi

Bombay HC4 Sept 2014ARBP/862/2013

Case brief

AI extract

What is this about?

This petition, filed under Section 9 of the Arbitration and Conciliation Act, 1996, sought interim relief to appoint a Court Receiver for a hypothecated vehicle due to loan default. The Court appointed the Receiver, directed possession and sale options, and restrained alienation.

What did the court decide?

Appointment of Court Receiver, direction for forcible possession, two-week option for respondent to act as agents, and interim injunction against alienation of the vehicle.

Shriram Transport Finance Co. Ltd. Vs Azhar Mohd. Umar Mohd Qureshi — Arbitration | Bombay HC (2014)

Nitin

ARBP-862-2013

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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ARBITRATION PETITION NO. 862 OF 2013

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Shriram Transport Finance Company Limited … Petitioner Versus

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Azhar Mohd. Umar Mohd. Qureshi & Anr. … Respondents

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Mrs. Disha Karambar i/b. M/s. Disha Karambar for the Petitioner. None for the Respondents.

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CORAM: S.J. KATHAWALLA, J. DATE: 4TH 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. By an Order dated 9^th July, 2013 an ad-interim order was passed in the above Petition by the Court. The said order alongwith the Petition is served upon the Respondent and an Affidavit proving service dated 3^rd September, 2014 is taken on record. 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. 10,69,100/- to the first Respondent under a Loan-cum-Hypothecation Agreement entered into on 29^th August, 2012. The loan was repayable with interest at the rate of @ 11.17% per annum in 59 monthly equated installments. The second Respondent has guaranteed the due repayment of the loan. Clause 5 of

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ARBP-862-2013

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the agreement provides for the events of default; Clause 6 for 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. 12,01,054/-. 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 vehicle, 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 vehicle. The appointment of the Receiver is necessary in order to ensure that the vehicle 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 vehicle, more particularly described in Exhibit “F” to the Petition, with

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Nitin 3 ARBP-862-2013

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direction to take forcible possession of the said vehicle 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 vehicle. 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 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 vehicle 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 vehicle described in Exhibit “F” 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

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order duly authenticated by the Associate of this Court.

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( S.J.KATHAWALLA, J. )

Shriram Transport Finance Co. Ltd. v. Azhar Mohd. Umar Mohd Qureshi

Case brief

What is this about?

What did the court decide?

Shriram Transport Finance Co. Ltd. v. Azhar Mohd. Umar Mohd Qureshi

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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