Disposed¶33

Ms Smfg India Credit Company Limited Represented by its Authorized Signatory Mr G Sankararaman v. Ayyappan P

Madras HC9 Sept 2025OA/578/2025

Case brief

AI extract

What is this about?

Section 9 Arbitration and Conciliation Act 1996 interim injunction; manifest intention to arbitrate; Ashok Traders (Firm) v. Gurumukh Das Saluja (2004) 3 SCC 155; SMFG India Credit Company Limited; Ayyappan P; loan cum hypothecation agreement dated 30.05.2022; Rs.15,26,777 loan; chronic defaulter 17 of 24 installments; loan recall notice; Section 21 notice dated 16.11.2024; first charge M/s ICICI Home Finance Limited; Section 17 application before Arbitrator; Madras High Court OA No. 578 of 2025; N. Anand Venkatesh J.; disposed on 09-09-2025.

What did the court decide?

No interim injunction granted; liberty given to the applicant to take steps to appoint an arbitrator and thereafter file an application under Section 17 of the Act before the learned Arbitrator. ¶33

Ms Smfg India Credit Company Limited Represented by its… — Arbitration | Madras HC (2025)

What the court decided

AI extract

Outcome

No interim injunction granted; liberty given to the applicant to take steps to appoint an arbitrator and thereafter file an application under Section 17 of the Act before the learned Arbitrator.

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Issue for consideration

Whether the applicant is entitled to an order of interim injunction under Section 9 of the Arbitration and Conciliation Act, 1996 restraining the respondent from transferring, alienating, encumbering or selling the schedule mentioned property to any third party. +1 more

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Court's answer

Out of 24 installments, the respondent had paid only 17 installments and thereby became a chronic defaulter; a recall notice cum Section 21 notice was issued on 16.11.2024, yet till date no steps have been taken by the applicant to appoint an arbitrator.

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Ratio / Principle

The dispute between the parties was going on at least from the beginning of 2023 and the trigger notice was issued during November 2024, but no steps were taken to appoint any arbitrator; this clearly showed there was no manifest intention for the applicant to arbitrate, and therefore the Court was not inclined to grant the relief sought under Section 9.

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Key takeaways

Liberty was granted to the applicant to take steps to appoint an arbitrator, and thereafter an application can be filed under Section 17 of the Act, which will be considered by the learned Arbitrator on its own merits and in accordance with law.ratio¶31

Detailed headnote1 paragraphs

Madras High Court (N. Anand Venkatesh J.), by order dated 09-09-2025, disposed of OA No. 578 of 2025 filed by M/s SMFG India Credit Company Limited under Section 9 of the Arbitration and Conciliation Act, 1996 seeking an interim injunction restraining the respondent Ayyappan P from transferring, alienating, encumbering or selling the schedule property. The respondent had paid only 17 of 24 monthly installments of a Rs.15,26,777/- loan under a loan cum hypothecation agreement dated 30.05.2022 and became a chronic defaulter; a loan recall notice cum Section 21 notice was issued on 16.11.2024, and a first charge existed over the schedule property in favour of M/s ICICI Home Finance Limited. Relying on Ashok Traders (Firm) v. Gurumukh Das Saluja (2004) 3 SCC 155, the Court held that although the dispute subsisted at least from the beginning of 2023 and the trigger notice issued in November 2024, the applicant took no steps to appoint an arbitrator, showing no manifest intention to arbitrate; the Section 9 relief was accordingly declined and the application disposed of with liberty to appoint an arbitrator and thereafter seek relief under Section 17 of the Act before the learned Arbitrator.

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OA No. 578 of 2025

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED: 09-09-2025

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CORAM

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THE HONOURABLE MR JUSTICE N. ANAND VENKATESH

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OA No. 578 of 2025

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M/s SMFG India Credit Company Limited Represented by its Authorized Signatory Mr G Sankararaman Having its Registered Office at Commerzone IT Park Tower B 1st Floor No 111 Mount Poonamallee Road Porur Chennai 600116 Tamil Nadu

Applicant(s)

Ayyappan P

2nd Floor, No.41 BBC Home, A Block BBC Home South Boag Road Bus Stop, Chennai, Tamilnadu 600 017.

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Respondent(s)

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PRAYER

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To pass an order of Interim Injunction restraining the Respondent, or his men, agents or anybody acting on his authority to transfer, alienate, encumber or sell the property morefully described in the Schedule hereunder to any third party.

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

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OA No. 578 of 2025

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For Applicant(s): Ms.K.Indhumathi

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ORDER

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This original application has been filed under Section 9 of the Arbitration and Conciliation Act, 1996 (for brevity referred to as “the Act”) seeking an order of interim injunction restraining the respondent from in any manner transferring, alienating, encumbering or selling the schedule mentioned property to any third party.

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This Court heard the learned counsel for applicant and carefully perused the materials available on record.

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The respondent availed finance facility from the applicant and entered into a loan cum hypothecation agreement dated 30.05.2022. A total sum of Rs.15,26,777/- was disbursed as loan amount, which was repayable in 24 monthly installments with interest, starting from 04.07.2022 and ending with 04.06.2024.

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The specific case of the applicant is that the respondent paid only 17 installments and thereafter became a chronic defaulter. In view of the same, loan recall notice with the combination of a notice under Section 21 of the Act was issued on 16.11.2024. In spite of the same, the amounts were not settled. The applicant came to know that the respondent is keen on the disposal of the

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

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OA No. 578 of 2025

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property in collusion with third parties. It also came to the knowledge of the applicant that there is already a first charge created over the schedule property in favour of M/s ICICI Home Finance Limited. It is under these circumstances, the present application has been filed before this Court to safeguard the interest of the applicant over the schedule property, which has been identified by the applicant.

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In the considered view of this Court, out of 24 installments, the respondent had paid only 17 installments and thereby became a chronic defaulter. Recall notice cum Section 21 notice was issued on 16.11.2024. Till date, no steps have been taken by the applicant to appoint an arbitrator.

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While invoking Section 9, the Court must be satisfied that there is a manifest intention on the part of the applicant to arbitrate. Useful reference can be made to the judgment of the Apex Court in Ashok Traders (Firm) v. Gurumukh Das Saluja (2004) 3 SCC 155. The dispute between the applicant and the respondent is going on at least from the beginning of 2023 and the trigger notice was issued during November, 2024 and till date, no steps have been taken to appoint any arbitrator. That clearly shows that there is no manifest intention for the applicant to arbitrate. Therefore, this Court is not inclined to grant the relief as sought for by the applicant.

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In the light of the above discussion, liberty is granted to the applicant

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

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OA No. 578 of 2025

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to take steps to appoint an arbitrator and thereafter, an application can be filed under Section 17 of the Act, which will be considered by the learned Arbitrator

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on its own merits and in accordance with law.

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