Axis Bank Ltd. Vs Pritha P — Arbitration | Madras HC (2025)

Axis Bank Ltd. Vs Pritha P — Arbitration | Madras HC (2025)

What the court decided

AI extract

Outcome

Application disposed of; the respondent having paid the amount due under the interim order, the applicant was left free to initiate proceedings for appointment of arbitrator in respect of any subsequent default.

Issue for consideration

Whether a prima facie case was made out by the applicant for appointment of an Advocate Commissioner under Section 9 of the Arbitration and Conciliation Act, 1996 to seize and take possession of the equipment financed under the Loan-cum-Hypothecation Agreement dated 31.10.2022. +1 more

Court's answer

A prima facie case was made out by the applicant for appointment of an Advocate Commissioner to seize and take possession of the equipment; once repossessed, the respondent was to be put on terms for getting back the equipment from the applicant.

Ratio / Principle

The interim order required the applicant to initiate arbitration in accordance with the arbitration clause within 90 days, failing which the order would stand automatically vacated and the repossessed equipment would be redelivered to the respondent unconditionally.

Key takeaways

The respondent having complied with the interim order and paid the amount, the application was disposed of; in respect of any subsequent default, it was left open to the applicant to initiate proceedings for appointment of arbitrator and proceed further in accordance with law.ratio¶35

Detailed headnote1 paragraphs

Arbitration and Conciliation Act, 1996 - S.9 interim measures - appointment of Advocate Commissioner for repossession of hypothecated equipment - Axis Bank Ltd., a Non Banking Financial Institution, lent money to the respondent under a Loan-cum-Hypothecation Agreement dated 31.10.2022 containing an arbitration clause; the respondent defaulted, with arrears of three instalments of Rs.3,94,600/- and total dues of Rs.30,96,378/- per the Statement of Accounts, prompting a loan recall notice dated 04.07.2024. By interim order dated 26.06.2025 the Court found a prima facie case and appointed Ms. P. Suganthi, Advocate, as Advocate Commissioner to seize and repossess the equipment, with police aid and power to break open locked premises; the respondent was to be intimated of the arrears and entitled to return of the equipment on payment within three days; the applicant was to initiate arbitration within 90 days failing which the order would stand automatically vacated and the equipment redelivered unconditionally; the Commissioner's initial remuneration was fixed at Rs.25,000/- with expenses borne by the applicant. At the hearing on 04.09.2025, the Commissioner reported that the respondent had effected payment and the account stood regularized, though the vehicle remained untraced; counsel stated a fresh default had occurred. The Court held the respondent had complied with its order and disposed of the application, leaving the applicant open to initiate proceedings for appointment of an arbitrator on any subsequent default.

THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 04.09.2025

CORAM:

THE HON'BLE MR. JUSTICE N ANAND VENKATESH

Arb. Appln. No.819 of 2025

AXIS Bank Ltd., Rep. by its Deputy Manager, Selvaraj

. .. Applicant

vs

Pritha P ... Respondent

For Applicant : Ms.Uma Vijayan M.R.

ORDER

When this application came up for hearing on 26.06.2025, this Court passed the following order:-

This application has been filed under Section 9 of the Arbitration and Conciliation Act, 1996, seeking for appointment of an Advocate Commissioner to seize and take possession of the equipment morefully described in the schedule to the Judges Summons from the respondent or wherever it is available.

2. The applicant is a Non Banking Financial Institution. The applicant has lent money to the respondent under the Loan cum

https://www.mhc.tn.gov.in/judis

Hypothecation Agreement, dated 31.10.2022. The respondent had availed loan from the applicant for the purchase of equipment morefully described in the schedule to the Judges Summons.

3. The respondent is a defaulter in the repayment of the loan to the applicant. Supporting documents have been filed by the applicant to substantiate the same. As on date, the respondent is in arrears of three (3) instalments, which works out to Rs.3,94,600/-. The applicant has also recalled the loan granted to the respondent through their loan recall notice dated 04.07.2024. As seen from the Statement of Accounts, a sum of Rs.30,96,378/- is due and payable by the respondent to the applicant which includes future installments, arrears of installments, penal interest and other charges payable as per the terms and conditions of the contract. The applicant is empowered to repossess the equipment from the respondent, as per the terms of the said loan agreement, in case, he commits default in the repayment of the loan. The applicant claims that they are having difficulties in repossessing the equipment on their own. Only under those circumstances, they have filed this application seeking for appointment of an Advocate Commissioner to repossess the equipment from the respondent or wherever available. The Loancum-Hypothecation Agreement, dated 31.10.2022 contains an arbitration clause. The applicant has expressed its willingness to go for arbitration in accordance with the arbitration clause.

4.This Court is of the considered view that a prima facie case has been made out by the applicant for appointment of an Advocate Commissioner. Once the equipment is repossessed by the Advocate Commissioner, to enable the respondent to use the equipment once

https://www.mhc.tn.gov.in/judis

again, he must be put on terms for getting back the equipment from the applicant after re-possession. In order to strike a balance, the following order is passed by this Court:

a) Ms. P. Suganthi, Advocate, having office at BBC Villa, Door No.66, 6^th Floor, Prakasam Road, Broadway, Chennai – 600 108 (Mobile No.9840114728) is appointed as the Advocate Commissioner to re-posses the equipment morefully described in the schedule to the Judges Summons from the respondent or wherever it is available;

b)The Advocate Commissioner is permitted to obtain the police aid whenever required and she is also permitted to break open the premises in case the equipment is kept in a locked premises in the presence of the police after taking proper inventory.

c) On repossession of the subject equipment, the Advocate Commissioner shall send a Communication to the respondent intimating that a sum of Rs.3,94,600/- is due and payable by the respondent to the applicant in respect of the aforesaid loan agreement.

d) On receipt of such intimation, the respondent shall pay the aforesaid amount within a period of three days from the date of receipt of the communication from the Advocate Commissioner and on payment of such sum, the applicant shall handover the equipment back to the respondent and the Advocate Commissioner shall cooperate with the applicant for the same.

e)The applicant shall initiate arbitration in accordance with the arbitration agreement contained in the contract within a period of 90 days from the date of receipt of a copy of this order. In case,

https://www.mhc.tn.gov.in/judis

the applicant fails to initiate arbitration within the stipulated time, the order passed by this Court today shall stand automatically vacated and the re-possessed equipment shall also be redelivered back to the respondent by the applicant unconditionally;

f) The Advocate Commissioner shall be paid an initial remuneration of Rs.25,000/- by the applicant, within a period of one week from the date of receipt of a copy of this order. All the boarding, lodging and travelling expenses for the Advocate Commissioner shall be borne by the applicant.

5. Notice to the respondent, returnable by 29.07.2025. Private Notice is also permitted.

Post the matter on 29.07.2025.

Pursuant to the above order, the matter was listed for hearing today. The learned Advocate Commissioner filed the report along with the relevant documents. In the report, it has been stated that the respondent has effected payment towards the loan amount but however the vehicle remains untraced till date.

The learned counsel for applicant submitted that the respondent made the payment and the loan account was regularized but however the respondent has once again committed default.

In the considered view of this Court, the respondent had complied with the order passed by this Court and had paid the amount. If any subsequent default has taken place, it is left open to the

https://www.mhc.tn.gov.in/judis

applicant to initiate proceedings for appointment of arbitrator and proceed further in accordance with law.

This application is disposed of in the above terms.

04.09.2025

rka

N ANAND VENKATESH, J.

https://www.mhc.tn.gov.in/judis

rka

Arb. Appln. No.819 of 2025

04.09.2025

https://www.mhc.tn.gov.in/judis