Srei Equipment Finance Limited vs Vasistha Equipments And Ors.

In application, A.P. No.1242 of 2018 under Section 9 of the Arbitration & Conciliation Act, 1996, as amended by Act 3 of 2016 (in short, ""the Act of

1996"") this Court passed an order on May 3, 2018 directing the Receiver to take possession of the hypothecated asset from the concerned respondent.

In the said order this Court recorded that according to the petitioner the respondents had defaulted to pay the monthly instalments towards repayment

of the dues on account of the hypothecated asset under the agreement dated November 15, 2016. It was further recorded that according to the

petitioner as on October 25, 2017 Rs.1,18,33,639/- remained due by the respondent no.1 and/or its partners to the petitioner. In terms of the said order

dated May 3, 2018, the Receiver appointed by this Court took possession of the hypothecated asset. Thereafter, one of the partners of the respondent

no.1 partnership firm filed an application, GA No.1242 of 2018 praying for recalling of the said order dated May 3, 2018.

On June 8, 2018 when the said application, GA No.1242 of 2018 was taken up for hearing, learned counsel for the applicant submitted that in fact as

on that date Rs.79,00,000/- remained due and payable by the respondent no.1 to the petitioner. It was further submitted by the present respondent no.1

out of the said sum of Rs.79,00,000/- the respondent no.1 firm and/or its partners they had already caused deposit of Rs.30,00,000/- to the

petitioner’s bank account and the balance amount of Rs.49,00,000/- would be paid within fifteen days.

There is no dispute that the said sum of Rs.79,00,000/- has already been paid by the respondent no.1 to the petitioner. However, it is now contended

on behalf of the respondent no.1 that with the payment of the said sum of Rs.79,00,000/- it is not liable to pay any money to the petitioner and, as such,

the Receiver appointed by this Court on May 3, 2018 should be directed to return possession of the hypothecated asset to the respondent no.1. On the

other hand it is submitted on behalf of the petitioner that after payment of the said sum of Rs.79,00,000/- the respondent no.1 is liable to pay a sum of

Rs.6 lakh and the current monthly instalments under the said agreement dated December 15, 2016. According to the petitioner, if the respondent no.1

pays the current monthly instalments commencing from the month of July, 2018, it can obtain possession of the hypothecated asset from the Receiver.

At this stage, it is submitted by the respondent no.1 that without prejudice to its rights and contentions in the arbitration proceeding, it is ready to

continue to pay the monthly instalments under the said agreement dated December 15, 2016 to the petitioner from the month of July, 2018. In view of

the above submission made on behalf of the respondent no.1 for payment of the monthly instalment under the said agreement dated December 15,

2016 without prejudice to its rights and contentions in the arbitral proceeding, I find that the prayer of the respondent no.1 in GA No.1242 of 2018

should be considered.

Accordingly, subject to payment of the monthly instalment for the month of July, 2018 under the said agreement dated December 15, 2016 within July

11, 2018 to the petitioner, the Receiver shall return possession of the hypothecated asset in its present condition to the concerned respondent.

Needless to mention that the respondents in A.P. No. 28 of 2018 shall also continue to pay the current monthly instalments for all months subsequent

to the month of July, 2018. All such payments by the respondents Shall be without prejudice to their rights and contentions in the arbitral proceeding.

The petitioner in A.P. No.28 of 2018 will pay the final remuneration of the Receiver of 2000 GMs. Thereafter, the Receiver appointed on May 3, 2018

shall stand discharged. At this stage, both Mr. Banerjee and Mr. Srinivas appearing for the petitioner and the respondents respectively submitted that

the disputes between the parties to be referred to arbitration. Mr. Banerjee appearing for the petitioner submitted that Mr. Suman Dutt (senior),

Advocate of Bar Library Club, 1st Floor, High Court, Calcutta be appointed as the arbitrator to adjudicate the disputes between the parties. Mr.

Srinivas after taking instruction from the respondent no.3, who is present in court, agreed to the proposal made by Mr. Banerjee.

In view of the above agreement between the parties, the disputes between them are referred to arbitration and Mr. Suman Dutta, Advocate (senior)

of Bar Library Club, 1st Floor, High Court, Calcutta is appointed as the sole Arbitrator to adjudicate the disputes between the parties. The learned

Arbitrator will be free to fix his remuneration and engage the secretarial staff for conducting the arbitral proceeding. The fees of the Arbitrator and

the remuneration of the secretarial staff shall be borne by the parties in equal share. The learned Arbitrator is requested to conclude the arbitral

proceeding within three months from the date of completion of the pleadings by the respective parties.

Let it be recorded that both Mr. Banerjee and Mr. Srinivas assured this Court that the parties will render full assistance to the learned arbitrator for

expeditious conclusion of the arbitral proceeding. It is, however, made clear that in the event of any failure on the part of the respondent no.1 to pay

the monthly instalment for any month, the petitioner will be at liberty to approach the learned Arbitrator for appointment of a Receiver to take

possession of the hypothecated asset. With the above direction, the applications, AP No.28 of 2018 and GA No.1242 of 2018 stand disposed of

accordingly without any order as to costs. Urgent certified website copies of this order, if applied for, be supplied to the parties upon compliance with

all requisite formalities.