MAGMA FINCORP LTD. vs MANOJ KUMAR SINGH & ANR.

This is an application under Section 9 of the Arbitration & Conciliation Act, 1996 as amended by the Act 3 of 1996 (in short ''the Act of 1996''). None appears on behalf of any of the respondents to oppose this application.

From the affidavit of service filed on behalf of the petitioner, it appears that the copies of this application were sought to be served upon both the respondents by way of personal service, but they refused to accept the same.

Since the respondents have refused to accept the copies of this application, this Court has no option but to take up the application for hearing in the absence of the respondents. Let the affidavit of service be kept with the record.

It is the case of the petitioner that in terms of the agreement dated October 14, 2015 (hereinafter referred to as ''the said agreement'') the respondent no.1 obtained a loan of Rs.20,92,985/- and acquired a JCB 3DX Excavator mentioned in paragraph 3 of the application. The said JCB excavator remains hypothecated in favour of the petitioner. The respondent no.2 is the guarantor and is a party to the said agreement which also contains an arbitration clause.

Under the said agreement, the respondent no.1 was obliged to repay the amount financed by the petitioner togetherwith the agreed rate of interest and other charges by way of 44 instalments of Rs.62,067/- each, but after paying the first 15 instalments, he failed to pay the balance instalments. In spite of being called upon by the petitioner, the respondents failed to repay the dues of the petitioner or to make over possession of the hypothecated asset to the petitioner. Therefore, the petitioner terminated the said agreement and filed this application to enforce its rights against the hypothecated asset.

According to the petitioner, as on the date of filing of this application, there remains an amount of Rs.19,67,802/- due and owing by the respondents to the petitioner. It is submitted on behalf of the petitioner that the hypothecated asset is presently lying at Barabanki in the state of Uttar Pradesh.

Having considered the materials on record, I find that the petitioner has made out a prima facie case and the balance of convenience also lies in favour of the petitioner for obtaining an order for appointment of a Receiver to take possession of the hypothecated asset.

Accordingly, Mr. Indradeep Pal, Advocate of Bar Association Room No.16, is appointed as the Receiver with a direction upon him to take actual physical possession of the hypothecated asset. After taking possession of the hypothecated asset, the Receiver shall keep the same, in his custody, at a safe place to be provided by the petitioner.

The Receiver shall be paid an initial remuneration of 1500 GMs by the petitioner. The petitioner shall also bear the travelling expenses of the Receiver and shall provide him a befitting accommodation at the relevant places in the State of Uttar Pradesh. Needless to mention that a competent officer of the petitioner shall all along accompany the Receiver in the State of Uttar Pradesh.

If necessary, the Receiver shall approach the Superintendent of Police of the concerned District for obtaining police assistance to implement this order. If the petitioner deposits the requisite fees with the concerned authorities, the Superintendent of Police of the concerned district shall render necessary police assistance to the Receiver to take actual physical possession of the hypothecated asset from the concerned respondent.

Let this application appear after four weeks from date. The Receiver shall file his report on the next date of hearing. Urgent photostat certified copy of this order, if applied for, be made available to the parties subject to compliance with the requisite formalities. All parties, including the Receiver and the concerned police authorities shall act on the copy of the photostat certified copy of this order.