Srei Equipment Finance Limited vs Golam Anoware Azom

The Court : In this application under Section 9 of the Arbitration & Conciliation Act, 1996, as amended by the Act 3 of 2016 (in short, ""the Act of

1996"") at the instance of the financier, an order has been sought, inter alia, for appointment of a receiver to take possession of the hypothecated asset

from the sole respondent. The petitioner has also prayed for an order of injunction restraining the respondent from creating any third party right or

interest in respect of the hypothecated asset mentioned hereinafter.

It is the case of the petitioner that in terms of an agreement dated October 23, 2014 (hereinafter referred to as ‘the said agreement’) the

respondent obtained financial assistance of Rs.18,91,438/- from the petitioner for purchasing a backhoe loader mentioned in paragraph 3 of the

application. The said agreement also contains an arbitration agreement providing for settlement of all disputes between the parties by a sole arbitrator.

The respondent was obliged to repay the loan amount together with agreed rate of interest amounting to Rs.25,03,354/to the petitioner in 46 monthly

instalments, the first of which was for Rs.25,249/- and the remaining instalments were of Rs.55,069/- each. According to the petitioner, the respondent

after paying the first 24 instalments and part of 25th instalment, failed to pay the balance instalments. Therefore, the petitioner terminated the said

agreement and invoked the arbitration agreement by appointing an arbitrator for adjudication of the disputes between the parties. The petitioner filed

an application under Section 17 of the Act of 1996 before the arbitrator who passed an order appointing a Receiver to take possession of the

hypothecated asset from the respondent.

The respondent also filed an application, AP No.638 of 2017, before this Court, under Section 9 of the Act of 1996 in which a learned Single Judge

passed an order dated September 7, 2017 appointing Joint Receivers to take possession of the hypothecated asset. By the said order the learned Single

Judge, however, directed that in the event the respondent would pay Rs.4 lakhs to the petitioner, the Joint Receivers would only take symbolic

possession of the hypothecated asset. Subsequently, by an order dated November 17, 2017 this Court allowed the present respondent to pay Rs.4

lakhs to the advocate of the present petitioner and directed the present petitioner to forthwith make over possession of the hypothecated asset to the

respondent herein either from the custody of the Joint Receivers appointed by the order dated September 7, 2017 or the Receiver appointed by the

Arbitrator. Admittedly, in terms of the said order dated November 17, 2017 the present petitioner caused delivery of possession of the hypothecated

asset to the petitioner.

In this application it is the case of the petitioner that after the respondent herein took possession of the hypothecated asset he has not paid any of the

balance instalments in terms of the said agreement. He has further removed the hypothecated asset from Goalpara in the State of Assam. From the

affidavit of service filed on behalf of the petitioner, it appears that the petitioner has forwarded a copy of this application to the respondent and the

latter has received the same. The respondent, however, remains unrepresented. Having considered the facts of the case, I am satisfied that after

obtaining delivery of possession of the hypothecated asset the respondent has stopped making payment of the balance instalments to the petitioner.

Therefore, the petitioner has made out a prima facie case for obtaining orders as mentioned hereinaove. Accordingly, there shall be an order of

injunction in terms of prayer (d) of the Notice Motion. Further, Mr. Suman Dutta, Advocate of Bar Library Club (First Floor), is appointed as the

Receiver to take possession of the hypothecated asset mentioned in paragraph 3 of the application from the respondent. 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 1600 GMs by the petitioner. The petitioner shall also bear the travelling expenses of the Receiver,

including air fare and shall provide him with a befitting accommodation at the relevant place in the State of Assam. Needless to mention that a

competent officer of the petitioner shall all along accompany the Receiver in the State of Assam.

If necessary, the Receiver shall approach the concerned Superintendent of Police of the concerned district of Assam for police assistance to

implement this order. If the petitioner deposits the requisite fees with the concerned authorities, the Police Authorities shall render all necessary

assistance to the Receiver to carry out this order. Let this application appear two weeks after reopening of the Court after summer vacation.

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 all 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.