Nagaraja S.J vs Shriram Transport Finance Co. Ltd

Abdul Rehim, J

Challenge in this appeal filed under Section 39 of the Arbitration and Conciliation Act (herein after referred to as the 'Act' for short) is against an order passed by the District Court, Kasaragod in OP No.76/2017, dated 31-01-2018. The appellant herein is the 1st respondent before the court below. The original petition before the District Court was instituted by the 1st respondent herein, invoking Section 9 (1) of the Act, seeking interim attachment of a vehicle bearing Registration No.KL 14Q 8727. Averments in the original petition is that, the 1st respondent company had advanced Rs.19,00,000/- to the appellant herein for purchase of the above said vehicle based on an agreement executed on 31-10-2012. The 2nd respondent stood as guarantor for due repayment of the loan. The appellant along with the guarantor had undertaken to repay a total amount of Rs.25,12,458/-, in 46 monthly installments starting from 05-12-2012 onwards. It is alleged that the appellant had defaulted payment of the monthly installments and a total amount of Rs.3,00,176/- is due to the 1st respondent company, as on 04-10-2016. It is stated that, the 1st respondent had initiated steps to refer the matter for arbitration. In the meanwhile, it is averred that, the appellant may sell the vehicle in question in order to defeat and drag the claim. Therefore the 1st respondent sought for attachment of the vehicle, in order to preserve the subject matter of the arbitration.

The court below after consideration of the documents produced by the 1st respondent company, had arrived at a prima facie conclusion that the appellant had defaulted payment of Rs.3,00,176/- as on 04-10-2016. Therefore a conditional order of attachment was issued directing to attach the vehicle and to keep the same in custody till the amount due as mentioned above is paid by the appellant.

The impugned order is attacked mainly contending that, the appellant was not issued with any notice from the court below. But it is specifically mentioned in the impugned order that the appellant as well as the 2nd respondent remained ex-parte. According to learned counsel for the appellant he is ready and willing to settle the claim of the 1st respondent by making payment of the arrears in the loan account, for which some time is required. It is submitted that, if the vehicle is attached and kept in custody of the court, that will put the appellant to severe prejudice. Therefore interference of this court is appealed for in order to stay the order from being executed.

From the very nature of the order impugned, it is revealed that, only a conditional order of attachment was passed by the court below. There is nothing to indicate that the original petition was disposed of or closed. The order of attachment only directs to keep the vehicle till the amount due under the loan transaction is paid. We are of the considered opinion that, the court below is perfectly within its jurisdiction to issue such an order of conditional attachment in order to preserve the property (goods) which is the subject matter of the arbitration proceedings. We do not find any ground to interfere with the impugned award by invoking the appellate jurisdiction. It will be left open to the appellant to approach the District Court itself seeking appropriate relief to get the conditional order of attachment vacated, in any manner permissible under law. It will be also left open to the appellant to offer security for the amount equivalent to the value of the vehicle or to pay off the liability, for getting the order vacated. It will also be left open to the appellant to approach the court seeking appropriate orders granting time for such payment, if so advised. We do not find any reason to think that, if any such approach is made, the same will not be entertained or considered by the District Court.

Under the above mentioned circumstances, the appeal deserve no merit and the same is hereby dismissed, with liberty reserved to the appellant to move the District Court for appropriate relief.